Welfare Reform Bill
Orders of the Day
2:10 pm

Lords amendments considered.

New Clause

Lords amendment: No. 1.

2:17 pm
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Jim Murphy (Minister of State (Work), Department for Work and Pensions; East Renfrewshire, Labour)

I beg to move, That this House
agrees with the Lords in the said amendment.

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Jim Murphy (Minister of State (Work), Department for Work and Pensions; East Renfrewshire, Labour)

I am pleased to report to the House that just as the Bill left this place in a good condition, with a strong consensus, that approach was maintained in the other place, where all of those with a keen interest in this important issue played an important part in helping to maintain that consensus. There has been continued engagement with stakeholders, disability organisations and others. It is fair to say at the outset that that has been assisted by the consensus approach across political parties in this and the other place. The one exception is the Scottish National party, which played no role whatsoever in our proceedings at any part of the process. Indeed, today SNP Members have not shown up to their work.

There are five areas of the Bill and its policy aims that are the subject of amendment. I would like to talk about each briefly in turn. First, I will talk about the issue of the annual report on the operation of the revised personal capability assessment. Amendment No. 1 concerns the operation of the new benefit, the employment and support allowance. The amendment introduces a requirement for the Secretary of State to lay an annual independent report before Parliament on the operation of the revised personal capability assessment.

As I previously confirmed, it has always been our intention that there should be ongoing monitoring of the effectiveness of the revised PCA. I gave an undertaking on Report that there would be ongoing independent monitoring by the technical working groups for the first two years following implementation of the revised assessment. My noble Friend Lord McKenzie of Luton gave a similar undertaking in the other place and made a further commitment that monitoring would continue for the first five years following implementation and report to Parliament. That is reflected by the duration of reporting required by the amendment.

Lords amendments Nos. 2, 13, 15, 16 and 55 relate to health care professionals other than doctors carrying out a medical examination to provide information used in making a decision on entitlement to benefits. From the outset, the Bill provided for the use of heath care professionals in assessments for ESA. However, shortly after the Bill left the Commons, it became clear that the current legislation did not include the power to make full use of health care professionals in the provision of medical services for customers claiming other benefits, such as disability living allowance, attendance allowance and industrial injuries benefits. Lords amendment No. 13 will enable us to take full advantage of the skills that health care professionals offer in the delivery of medical services for purposes involving social security benefits.

Lords amendment No. 2 will commit us to using only health care professionals who are members of regulated professions. It gives a consistent definition of a health care professional across the benefit system. All health care professionals will, of course, be given full training. They will need to be approved by the Secretary of State before they are able to carry out assessments. Lords amendment No. 55 will ensure that all health care professionals carrying out medical examinations will be bound by the same duties of confidentiality as departmental staff with respect to information about individual customers.

Lords amendments Nos. 3 to 7 relate to the contracting out of welfare to work services. They will ensure that the Secretary of State cannot authorise a contractor to undertake decision making that could lead to sanctions under the ESA conditionality regime. The Government made such amendments to the Bill in response to concerns expressed about the possible problems associated with the contracting out of sanctions decision making. While, of course, there are potential advantages in moving decision making closer to front-line services, we accept that there is more to be done before we will be aware of how that will work in practice. We will thus not take such a power in the Bill.

The fourth group of amendments covers sanctioning following an eviction for antisocial behaviour. Lords amendment No. 9 relates to the housing benefit sanction following an eviction for antisocial behaviour and a refusal to accept support. We believe that the sanction will be an important power for local authorities to use in tackling antisocial behaviour in our communities. The amendment provides for a limit to the piloting period. The Government will thus be allowed to press ahead with piloting the scheme, but if there is to be a scheme in place after 31 December 2010, further primary legislation will be required.

We have made a commitment that piloting will be a key element of our plans. If the measure works as we intend and the threat of sanctions encourages antisocial households and families to engage in support programmes, the end date of 31 December 2010 that is specified in the amendment will mean that we will have sufficient time to learn lessons that could inform national design and possible implementation.

The fifth group is, by necessity, made up of technical drafting amendments. The Joint Committee on Human Rights and the Delegated Powers and Regulatory Reform Committee reported on the Bill and we tabled appropriate amendments following those reports. Lords amendments Nos. 8, 22 and 23 will mean that the regulations that will be made under the identified powers relating to entitlement to components and the loss of benefit will be subject to the affirmative procedure. Lords amendments Nos. 10 and 11 make it explicit that the powers in clause 40 relating to the use of social security information are to be used solely to encourage people to claim the benefits to which they may be entitled.

Lords amendment No. 17 to schedule 3 will ensure that the Secretary of State will have an obligation to review the relevant ESA amounts in each tax year to determine whether they have retained their value. Lords amendments Nos. 21 to 54 will amend schedule 4 to provide a power to migrate those with an existing award of a benefit relating to incapacity or disability to ESA. The amendments do not affect the policy position that we have taken previously on the migration of existing customers.

I urge the House to agree to the Lords amendments to this important Bill. During the Bill's passage, we have managed to maintain a remarkable degree of well-considered consensus between both sides of the House. Together we can be confident that the Bill will make a real and lasting change to the lives of many people who were written off for so long in the past.

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David Ruffley (Shadow Minister, Work & Pensions; Bury St Edmunds, Conservative)

I welcome the Minister's remarks. The modern Conservative party supported the principles of the Bill, the details of which required non-partisan, thorough and vigilant scrutiny in Committee here and in another place. I believe that it has been given such scrutiny. It has been hugely assisted by the advice, wisdom and insight of many groups and bodies that work hard and tirelessly to help those who need the support of a modern welfare state. I pay tribute to them as the passage of the Bill draws to its close.

The key purpose of Lords amendment No. 1 is to ensure that the scrutiny of the Bill's operation continues long after it has been passed. The requirement for annual reports will put Ministers to the test when they explain how the new ESA is benefiting—as we hope and trust that it will—many claimants who are able to work, but need support to get back into work. We know that many such people want to work. A welcome improvement was made to the Bill in the other place—Lord McKenzie was the Minister—through the insertion of a provision requiring the Secretary of State to lay before Parliament an annual independent report on the operation of the limited capability for work test and the limited capability for work-related activity assessment for the first five years after they came into effect.

I welcome the Minister for Employment and Welfare Reform's decision not to disagree with that proposition of the Lords. However, it is important that we underscore concerns that are being expressed by outside bodies about the new PCA. There is worry that the early stages of the design of the PCA have, albeit in a well-meaning way, been subject to dummy runs. It is clear we must get right something as important as a gateway to a new incapacity benefit—ESA—because it will affect millions of people. The Government have promised that the PCA will be rigorously evaluated. The Minister has explained that a two-part evaluation is being carried out to ensure that the revised PCA constitutes a fair, robust and evidence-based assessment of limited capability for work. However, we must be vigilant. We believe that the annual reporting requirement will deliver rigorous scrutiny.

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Jim Murphy (Minister of State (Work), Department for Work and Pensions; East Renfrewshire, Labour)

I thank the hon. Gentleman for his comments. Even at this stage, it is important to reassure him and others who consider our proceedings carefully. The revised PCA test seems to be working as expected. However, to clarify intentions, there has been a need to refine some of the wording of physical function descriptors and mental health function descriptors. Some of the scores also have to be refined, so it is clear that we are learning as we go on. In the spirit of co-operation that has existed throughout the passage of the Bill, I will be happy to continue to share such information with the hon. Gentleman, as will the Under-Secretary, my hon. Friend Mrs. McGuire, the Minister for disabled people, who has played a remarkable role in the formulation of the policy over the past few months.

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David Ruffley (Shadow Minister, Work & Pensions; Bury St Edmunds, Conservative)

I thank the Minister for that. I associate myself with his charitable and generous comments about the work of the Under-Secretary. It was a delight to debate matters with her in Committee, and I think that our debates generated a lot of light. It is important to remind ourselves as proceedings on the Bill draw to a close of the critical importance of the PCA and the vital need to ensure that its operation is not just looked at over a long period of five years but is evaluated annually. The disability benefits consortium has made the point that genuine evaluation must include examination of whether the assessment of capability to work was accurate, as it does not believe that there is a check to achieve that objective under the current arrangements. It suggests that health or social care providers who know the claimant could be asked whether they believe the new score to be a fair assessment, and it asks whether that could be designed into the new PCA. It says that claimants themselves could be asked whether they agree with their new score, and that members of the PCA could be asked to convene technical groups to interview people who are disqualified by the new PCA, but who qualified under the old PCA, to gain a fuller sense of whether they should, or should not, be considered to have limited capability for work.

Ministers may find it difficult to accept those propositions, but they are an example of the way in which an iterative process must be used when officials and practitioners at the sharp end implement the new test. We must always have an eagle eye and constantly evaluate the impact of the measures on claimants. The Minister, and Ministers generally, do not regard the new PCA as a draconian measure to choke off the flow of future employment and support allowance claimants, and I congratulate the Government on the fact that they have not used the macho rhetoric of the stick. Ministers, no more than the rest of us, want claimants, past, present and future, to be intimidated by the language that the welfare state uses about their future. I do not doubt the Minister's good intentions or those of future Ministers. The Minister might—who knows?—be moved onward and upward in the impending summer Government reshuffle in recognition of his great work on welfare reform. Whoever occupies his seat will want sensitive application and implementation of the new PCA, but annual, independent evaluation is required. A key reason is that problems may be discovered in the first year, new problems may be discovered in the second year, and yet more problems may be discovered in the third year, so in their lordships' view—and in my view, too—it is essential that a rigorous, independent annual evaluation is conducted.

We accept that the Government have listened to those entreaties in another place, and that they are going to undertake qualitative evaluations. Research studies are undertaken anyway by the Department for Work and Pensions, the rollout of pathways to work is being evaluated, and academic research is accessed on top of that. We accept that all those things were going to be done anyway—Lord McKenzie made that point—but the amendment makes provision to pull everything together in a single annual report, and stops a piecemeal analysis with bits and pieces all over the shop. It ensures rigorous, regular scrutiny of that important test.

The Minister referred to Lords amendment No. 2, which clarifies the Bill's wording to ensure that it includes a tighter, more specific definition of a health care professional. There were concerns that the original definition was too broad and that less than qualified people would fall into the category of health care professionals and be allowed to carry out medical examinations. It was thought that that would affect only a small minority of individuals. Nevertheless, the disability benefits consortium was surely right to welcome the amendment, which specifies the staff who may carry out a work-focused health-related assessment of a disabled person's ability to engage in work-related activity and the kinds of adaptation and support they may need to enable them to undertake such activity. It went on to say that concern had been expressed by disabled people and those who represent them that unsuitably trained staff with relatively little experience of disability and health-related issues might be used. However, the amendment specifies the professionals qualified to undertake interviews, and that will provide important reassurance to disabled people who go through that gateway in future and who are assessed under the new process.

We support, too, Lords amendments Nos. 3, 4, 5, 6 and 7 to clause 15. They remove from the Bill the ability to contract out decision making leading to sanctions. The category of excluded decisions includes all the decisions that can lead to sanctions, as well as decisions about the sanction itself. As a result of the amendments, decisions on sanctions will be made by Jobcentre Plus staff. The Secretary of State cannot, at this stage, authorise contracted-out providers either to deliver the sanction or to make decisions leading to sanctions. Again, it is important to reflect the non-ideological nature of the conversation that we have been having for several months. Contracting out is not an across-the-board, ideological fix. It depends on how it is used and what it is used for. It was the judgment of shadow Ministers that it was not appropriate for contracted-out providers to make those decisions. Conflict of interest could obviously arise, particularly when contracted-out providers are paid according to outcomes, and are given a fee for success, as it were. The implication is that they might be seen by claimants as having an interest in wielding the stick, applying sanctions so that people are more likely to work and the provider can earn more fees as a result.

I was never one for thinking that the private sector would be so crass as to go down that route. Most of the private sector contractors to whom I have spoken overthe past year have a genuine caring mission in taking people from welfare into work. Yes, there is a commercial advantage in their doing so, and they have to make a profit but, by and large, they do so with great skill, compassion and concern for the customer. I never thought that the possibility that Ministers would want to contract out sanctioning to the private sector would be a major problem, but insofar as it worried outside lobby and support groups that help disabled people and claimants, it was likely to worry claimants. We made it clear that we wanted the state, not a private outsourced contractor, to make those potentially sensitive decisions on sanctioning. It was interesting to read in the report, "Reducing dependency, increasing opportunity: options for the future of welfare to work", which was published in March, David Freud's recommendation that sanctions be administered though Jobcentre Plus.

The outside groups that expressed concern to me and to others—Mencap, the disability benefits consortium, Leonard Cheshire and many others—should be pleased with the outcome of their lobbying efforts and persuasion throughout the Bill, including on this point. They can say that Parliament and Ministers have been listening and have made the decision that they wanted. If Ministers want to give a power of sanction to the outsourced contractors, they will again have to argue the case in Parliament. We shall see whether that is necessary in future.

We had an interesting debate in Committee about sanctions attaching to housing benefit. Some of us thought that there were sufficient sanctions in the system already. For totally unacceptable behaviour by tenants, the sanction is eviction. The provisions in the Bill suggested that in addition, after evictions proceedings had gone through, there would be a further benefit sanction if the recalcitrant tenant causing misery for neighbours did not mend their ways.

We then moved on to the topic of piloting. In fairness, Ministers always envisaged that the new housing benefit sanction after evictions proceedings had kicked in needed to be tested. We were concerned that the piloting would be open ended. We argued for a two-year sunset clause, in effect enabling Parliament to monitor the pilots for up to two years. I am delighted that the amendment, which the Minister supports, means that if the Government want a scheme to run after December 2010, further primary legislation will be required, as the hon. Gentleman indicated.

I conclude by endorsing the Minister's remarks about the generally bipartisan cross-party consensus on the principles of the Bill. That does not mean to say that the job is done. Pursuant to the Bill, detailed future regulations will be produced, and as we all know, the devil is always in the detail. Those regulations will not be subject to substantive amendment, but with the provisions that we have discussed today, particularly the annual report, I am confident that the Government of the day, whoever they are, will be put under scrutiny to make real the possibility of those on welfare getting a better deal in Britain in the 21st century, a better chance to get out of welfare and into work, out of dependency and living more fulfilling lives.

I am grateful to the Minister for listening to what was said in the other place on these important groups of amendments, and for contributing so well to our deliberations in this place. I hope, like him, that the Bill is at least a starting point in making Britain a better place for those who want to get out of dependency.

2:30 pm
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Vincent Cable (Shadow Chancellor, Treasury; Twickenham, Liberal Democrat)

I am new to the deliberations on the Bill. I do not claim to know as much about the Bill or the arguments behind it as the Minister or his Conservative shadow, but my colleagues who do and who have been involved with it have asked me to convey their appreciation of the fact that a consensus approach has evolved and that many of their concerns have been dealt with. As is often the case, the other place has significantly improved the Bill.

There were several specific areas of controversy that concerned my colleagues, each of which has now reached a reasonable end point. The first is Lords amendment No. 1, which relates to the evaluation of the new personal capability assessments. As we all know from our constituency work, the process of assessment is stressful and difficult. We all have numerous cases of constituents often with complex and variable conditions who, on the basis of a perfunctory interview with medical staff from the Department for Work and Pensions, have lost their benefits and begun a long and difficult process of appeal. It is a stressful business.

Under the new system there will be two basic changes, one of which is the shift from incapability to capability, which is in one sense progressive, but in many respects is more difficult to test. Also, as we know from the statistics, the number of people involved in invalidity benefits of one kind or another is increasingly people suffering from mental conditions, rather than physical disabilities. Those, as we know, are often very difficult to capture, vary from time to time and are complex and difficult to measure. The processes that will have to evolve will therefore have to be more sophisticated and more robust than has been the case in the past.

I am aware that the Department has been evaluating the new PCAs and trying to get them right, both with its internal medical staff and with the external software consultants. I believe that disability groups have expressed some concern about the outcome. As the Minister said, the DWP is constantly trying to improve the assessments. The missing element was a genuinely independent and regular evaluation. My colleagues tabled amendments about that, and I am delighted to see that the Government have accepted the principle and we have achieved a good result.

The second issue was less fundamental, but my colleague Lord Oakeshott was among those who tried to achieve a more precise definition of "medical practitioner". Again, the Government have produced their own amendment, which largely meets the case.

The third area of concern related to clause 15 and the potential that appeared to exist initially, because of ambiguity, for private contractors to make judgments on benefits and sanctions. We see no problem in principle with the private sector playing a role in the work of the Department, but it must clearly be circumscribed. This was not an appropriate area. We are glad that the role has been much more clearly defined. Again, that is a satisfactory outcome.

Finally, Lords amendment No. 9 to clause 30 relates to the linkage between housing benefit and antisocial behaviour. This is clearly a controversial subject on which people have very different views. It is right that that is proceeding through pilot studies. Our view from the outset was that the pilots should be time-limited and that a sunset clause was needed. Again, there seems to have a sensible compromise on the duration of the sunset clause. Overall, we are content with the way in which the other place has developed the Bill. I express my appreciation to all those concerned with that process.

Lords amendment agreed to.

Lords amendments Nos. 2 to 55 agreed to.