Report received.

Clause 1 [Employment and support allowance]:

3:07 pm
Photo of Lord Skelmersdale

Lord Skelmersdale (Shadow Minister, Work & Pensions; Conservative)

moved Amendment No. 1:

Clause 1 , page 2, line 4, after second "his" insert "overall"

Photo of Lord Skelmersdale

Lord Skelmersdale (Shadow Minister, Work & Pensions; Conservative)

My Lords, I shall speak also to Amendments Nos. 2, 4, 5, 7, 8, 12 and 13. All the amendments on today's Marshalled List are predicated on the fact that the Bill introduces a new, albeit replacement, social security benefit. Although the Ministers made a very good fist in Committee of explaining how the Government expect the employment and support allowance to work, I am afraid that there is still more to discover.

This first group of amendments covers a point that was made crystal clear in Committee; that is, the same system of points used for incapacity benefit is to be used in the future. I am grateful to the Minister for arranging for some of us to see a presentation by the computer firm which is to design the program to make this happen. The customer will be asked a whole series of questions—they are called descriptors in the jargon—about his daily life and any physical and mental problems he has. On Second Reading, the Minister made a welcome announcement that the descriptors are to be added together to produce a final score which will inform the social security office whether the customer has a right to the benefit and, if so, at what level.

We have had numerous debates on this issue in this House and another place, so I do not need to reiterate the arguments for this approach. I am sure that the Minister will say that these amendments are unnecessary; the Bill as it stands allows the accumulation of mental and physical limitations and the Government have given repeated assurances that the points from both mental and physical disabilities will be added together. However, those assurances have only been won by strong lobbying from outside lobby groups as well as opposition from all sides in both Houses. I would like to make sure that the Government do not suffer a change of heart on the principle at any point in the future.

I have changed the drafting of these amendments significantly since Committee to make sure that they do not in any way prevent the Government doing what they want to do. I hope that the Minister will accept these amendments as confirmation that his assurances will indeed be acted on in the long term. I also trust that he will accept that it would be quite wrong for the Government to change their mind at some point in the future and decide that only one set of descriptors should be used to make this judgment—in other words, that there is never a case to be made that physical barriers cannot carry mental impediments with them. I beg to move.

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Lord McKenzie of Luton (Parliamentary Under-Secretary, Department for Work and Pensions; Labour)

My Lords, these amendments and the arguments put forward by the noble Lord are very similar to those that we discussed in Committee, as he acknowledged. The noble Lord, Lord Skelmersdale, wants to ensure that we consider the effects of both physical and mental health conditions when deciding whether a customer is eligible for either employment and support allowance or access to the support group—the tests of limited capability for work and limited capability for work-related activity respectively.

I will deal with limited capability for work first. Under Clause 8, customers are awarded points depending on the functional effects of physical and mental health conditions. They are determined as having limited capability for work where they score 15 points or more. The details of this are set out in the draft regulations under Clause 8, which were shared with noble Lords before Committee. As noble Lords will recall, and as the noble Lord, Lord Skelmersdale, acknowledged, I announced at Second Reading that we will allow points scores for mental health and physical descriptors to be added together in the Clause 8 assessment. This decision has been reflected in Regulation 3(3) of the draft Clause 8 regulations, which I published for noble Lords.

The Clause 8 and 9 assessments assess very different concepts in very different ways. Limited capability for work-related activity cannot be based on the Clause 8 points scores, as there is no direct correlation between these scores and whether a person is likely to have limited capability for work-related activity—the purpose of the Clause 9 assessment. Instead, customers are determined as being eligible for the support group where they satisfy one of 46 functional descriptors found in the schedule to the draft regulations under Clause 9. Customers need to meet only one of the 46 descriptors to qualify for entitlement to the support group regardless of whether this relates to physical functioning or mental functioning. We will consider the effects of both physical and mental conditions when considering whether customers meet these functional descriptors. Hence, in carrying out both the assessments under Clauses 8 and 9, we will consider the effects of physical conditions and mental health conditions on a person's functional capability. That is the assurance the noble Lord is seeking.

During Committee, I also explained that we do not need to make changes to the Bill to allow us to consider both physical and mental conditions in these assessments, as the use of "physical or mental condition" does not limit us to considering these conditions separately. In fact, changing the wording in the Bill to "physical and mental condition", as the noble Lord proposes in his amendment, could be interpreted as meaning that customers would have to have both a physical and mental health condition before they could be determined as having either limited capability for work or limited capability for work-related activity. That is clearly not appropriate and I am sure is not what he wants to happen.

As I said, our draft regulations set out very clearly our intentions on this matter, and particularly that we will combine physical and mental health scores when determining whether a customer has limited capability for work.

As noble Lords are aware, the revised PCA is based on the recommendations made by the technical working groups involved in its review, a copy of which was published last September. Following the initial limited evaluation carried out last October, a further and more detailed evaluation is about to start. This will be carried out by the technical working groups, which are independent of the department, but members of the PCA consultative group will also take part. A report of that phase 2 evaluation is due to be published in the summer and copies will be placed in the Library.

I hope that that gives the noble Lord the assurance that he seeks about our intentions and the fact that there is a process of review under way—and, accordingly, that that will enable him to withdraw his amendment.

3:15 pm
Photo of Lord Skelmersdale

Lord Skelmersdale (Shadow Minister, Work & Pensions; Conservative)

My Lords, I am very grateful to the Minister for going rather further than he did in Committee in explaining this matter. It is clear to me at least that the Government of the day would have to come back to Parliament to change the regulation to achieve the use of a single descriptor at any one point. The Minister is looking at me very questioningly, however, so I shall give way.

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Lord McKenzie of Luton (Parliamentary Under-Secretary, Department for Work and Pensions; Labour)

My Lords, it is true that if we wanted to change what we said in how the draft regulations are currently prepared we would need revised regulations. That is certainly the case.

Photo of Lord Skelmersdale

Lord Skelmersdale (Shadow Minister, Work & Pensions; Conservative)

My Lords, that is exactly what I thought. I am also grateful for the confirmation that any one descriptor, either physical or mental, will be used to meet the criteria under Clause 8. I look forward to the evaluation of the technical groups that he mentioned when it appears on my horizon. The Minister has been most helpful and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 2 not moved.]

Photo of Baroness Thomas of Winchester

Baroness Thomas of Winchester (Liberal Democrat)

moved Amendment No. 3:

After Clause 1 , insert the following new Clause—

"Public involvement

(1) This section applies where a person in receipt of employment and support allowance who is a service user is asked by a public, charitable or educational body concerned with health or social care to advise on service standards and delivery.

(2) The Secretary of State may make regulations providing that—

(a) a person who provides advice under subsection (1) shall be treated as having limited capability for work under section 8 in relation to the activities undertaken in pursuance of subsection (1) if he would otherwise be so treated; (b) in the case of contributory allowance or an income related allowance, any fee received in recognition of the service undertaken shall be subject to such disregard and averaging as may be prescribed; (c) in the case of contributory allowance or an income related allowance, reimbursed expenses shall be disregarded as income in such cases as may be prescribed; and (d) regulations made under section 16(3)(a) shall not apply in relation to advice undertaken in accordance with this section.

(3) In this section "service user" means a person with current experience of using or requiring public services relating to their ill-health, disability or caring responsibilities."

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Baroness Thomas of Winchester (Liberal Democrat)

My Lords, this is very similar to the amendment that I moved in Grand Committee. I seek to clarify the problem and set out what I believe is the solution. The Minister said in Committee that the amendment was unnecessary as the Bill contained relevant powers, but I was not reassured by his response. That is why I have tabled the amendment again.

I shall first explain what "public involvement" is in connection with the Bill. It is involvement in the planning and delivery of public services by someone in receipt of disability benefits. That could be membership of a committee that monitors the quality of services or that seeks to develop good practice standards; it could mean participation in a focus group or research projects, social work training or staff recruitment panels; it could also mean participation in inspection teams and social care and health services by advising on what is important to people using those services.

The amendment is important because involvement is a statutory requirement for all public bodies concerned with the delivery of social care and health services and must now include all people who use those services, which includes disabled people. There are, of course, disabled people who willingly take part in all those activities who are not on benefits; the problem that the amendment addresses does not lie with that group of people. The amendment is important because it tries to remedy real injustices uncovered in the sort of participation that I have described for those on benefits.

Before going any further I must explain that the kind of public involvement that I spoke about is likely to be intermittent. Meetings of these bodies are nearly always occasional; if they are regular it might be for a few weeks or months, or even six months, but they are never as regular or often as, say, once a week for a year, so this involvement must never be confused with paid work. This is not "therapeutic work", which was the term used to describe work that people on incapacity benefits were allowed to do up to 2002; nor should it be muddled up with work-related activity under the Bill. Involvement might lead to work-related activity but, in itself, should be regarded as an entirely separate matter.

The amendment puts forward four remedies. The first is that disabled service users are not ready to come off benefits just because of their public involvement. Job centres often believe that, if a disabled person agrees to public involvement, especially if the committee sounds rather grand, it means that they are no longer incapable of work. That misunderstands the whole reason that a person has been asked to participate, which is their ill health—which is often severe—or their disability. The amendment therefore makes it clear that a person who is so involved cannot have their benefits taken away simply because of this involvement. It puts them on the same footing as local authority councillors, who cannot be taken off incapacity benefit just because they are councillors.

The second remedy is to allow a modest payment to be made to people on means-tested benefits—under the Bill, income-related ESA—within the amount allowed by the permitted work rules. Those on a contributory strand of ESA are allowed to be paid up to £86 in any one week, but the poorest people, those on means-tested ESA, can be paid only £5, £10 or £20 a week, depending on their circumstances, before their benefits are reduced. Under the amendment, payments received would be averaged over an appropriate period and the amount for those on means-tested benefits raised as prescribed in regulations. This would mean that the poorest people on benefits would not be excluded from offering their advice on public services.

The third remedy is to reimburse expenses incurred by a disabled person attending meetings of a public body. Unbelievably, reimbursed expenses for travel to meetings for those on benefits are treated as earned income, and so are deducted from such a person's benefits unless that person has volunteered. Under the amendment, reimbursed travel expenses would be just that and could be accepted by those receiving a modest payment for involvement.

The final remedy that the amendment seeks is to disapply the notional earnings rule for service users participating in meetings. At present, if service users volunteer to help by involving themselves in the ways described, they must tell Jobcentre Plus staff, who must ask them whether they could have been paid. If the answer is yes but they decided not to accept payment because they did not want any benefits deducted, this amount is deducted anyway from their benefits. I shall repeat that because it is so outrageous: an amount that the person in question has not received is deducted from their benefits as though it had been received. That extraordinary state of affairs is called the notional earnings rule. The amendment would disapply it for such a group of volunteers.

As was pointed out in Committee, local authority councillors do not have to worry about whether they will be allowed to keep their benefits, as they are specifically singled out for special treatment under the Bill, as is the case now. Council work is treated as exempt and may not be used to assess capacity for work. What is more, reimbursed travel expenses for the journey from a councillor's home to the place of their duties are ignored. Why should those who participate in advising public bodies be treated differently? One of my correspondents wrote:

"It is a classic case of no joined up thinking in government. They want more disabled people in public service but won't consider the benefits implications".

It is difficult to estimate how many people we are talking about, but it could be around 10,000. This is of course a tiny percentage of the 2.7 million people who currently claim incapacity-based benefits.

Will this be a cost to the public purse? No, it will not, because, in practice, people decline involvement rather than risk having their benefit continuity disrupted. The current rules mean that every other person on the public body is likely to be able to receive modest payment for their participation, but that a disabled person on means-tested benefits is barred for the reasons that I have given. I have not wearied the House with illustrations from the files of the Disability Rights Commission, but I have many with me which show that this is a growing problem. The amendment is modest, but it is important, and I urge the Minister to consider it sympathetically. I beg to move.

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Baroness Meacher (Crossbench)

My Lords, I support the broad thrust of the amendment. My perspective is that of a chairman of a mental health trust. As such, I am regularly involved in committees, where we make every effort to involve service users. However, it is incredibly difficult to persuade service users to become involved in our work. As I understand it, one key issue making it so difficult is the consequence of small payments on people's benefits. Most of our service users receive income support and a disability premium. Most have never been well enough for long enough to qualify for the contributory incapacity benefit; therefore, they are subject to a very tight earnings disregard—precisely £5 per week in many cases. As a result, their benefits are affected if they attend more than one meeting a week.

That terrifies people. Any change of circumstance can cause all sorts of problems, with which I know the Minister is familiar. Our people simply cannot cope with all that uncertainty and fear; therefore, they keep their involvement down to a level where their benefits will not be affected, and that, as you might imagine, is minimal. Please excuse my throat; I am losing my voice.

As the noble Baroness, Lady Thomas, argued, some way needs to be found to disregard those small earnings of people with severe and enduring mental health problems, for whom building up the capacity to take a job is a complex and often slow process. I am not suggesting a general increase in earnings disregards, as I realise that that would be extremely costly. I understand the implications of that. I appreciate that what is right for this group might then be demanded for others. However, I think that some special arrangements would be reasonable for those with enduring and severe mental health problems—and perhaps for one or two other small groups with particularly difficult problems and fluctuating symptoms—who are so difficult to reintegrate into work.

Another development might be directly affected by this amendment, and it would be very sad if it were. We plan to develop a team of service users to operate our foundation trust membership office. We thought we would need four full-time people, all of whom would be service users, but we want to take on six, eight or even more, depending on the degree of their disability. The aim is that they will work part time for as many hours as they can manage but that the required number of people will be available each day to cover the work. We hope that, over time, people could increase their hours gradually, ultimately getting back into employment. The team would provide ongoing opportunities to gain work experience. If it worked, it could be repeated across the trust and, no doubt, across the country. We have a capacity to try to assist the Government's welfare reform agenda in preparing people with severe and enduring mental health problems for work.

At the beginning, we can perfectly reasonably pay the permitted earnings and no more. I think we can argue that. However, over time, as people began to build up their capacity to contribute more fully, it would be incredibly unfair to pay just that tiny amount. If their benefits are adjusted to take account of small increments in income—and, in many cases, on a very irregular basis, as the noble Baroness, Lady Thomas, said, together with all the uncertainties that that entails—our job preparation project and, no doubt, many others like it simply will not happen.

I have to confess that it is hard to imagine the benefit system coping with such initiatives in a constructive and flexible way. However, could the Minister's department consider an approach to severe and enduring mental illnesses and explore whether some method can be found to enable us to overcome the difficulties that we see? If flexibility could be achieved for the most disadvantaged groups, more severely mentally ill people could find their way back into a normal life.

As I have suggested, a similar approach might be available to other very small, particularly disadvantaged groups. It is of the utmost importance that, regardless of what is done about benefit disregards, service users in our membership office group and others like it who undertake small pieces of work must not be deemed capable of work and expected to apply for jobs before they are capable of managing.

The fact that someone can work 15 hours a week in a mental health trust as a service user does not mean that they are ready to take a job. Our trust and others like it will make all sorts of allowances by having extra staff to cover for late arrivals at work, underperformance or absences. If sanctions are applied in that situation, the ability of the mental health trust, as I have suggested, to contribute to the Government's welfare reform agenda would simply be destroyed. As a mental health trust our objective will be to place such service users in open employment just as soon as we feel that they can cope; in fact, we take them on ourselves as members of staff. It will be important for the DWP and trusts to work together to ensure that the entire project and others like it are not torpedoed by the use of blunt benefits instruments. The question for the Minister is therefore whether the legislation can be sufficiently flexible to allow sensible decisions on the ground. I look forward to hearing his response to this important amendment.

3:30 pm
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Baroness Howe of Idlicote (Crossbench)

My Lords, I support the amendment, because, having read all the information from the Disability Rights Commission, I think this is an extraordinary situation. If I am wrong, I will be pleased to hear from the Minister. First, the very sensible passage of a previous Act that compelled such bodies to consult users was an excellent thought. It also reflects the human rights legislation in a number of ways, so that individuals, whether children or patients, have a right to have their views considered. Now we have a situation where those providing services actually want to involve users, whether in research, focus groups or recruitment sessions. It is a bit odd that there seems to be a difference between how local councillors are treated and how members of this group are treated. I am concerned that the very poorest users, those on means-tested benefit, are likely to suffer the worst deprivation and therefore their voices should be heard. They are disadvantaged far more than anyone else.

If the Minister was applying the councillor test in all these areas, where would there be a difference? Is there a difference in the way that some of these groups are treated? If so, why? Can it really be justified? It would be important for the debate to hear the Minister's answer on that point.

Photo of Lord Skelmersdale

Lord Skelmersdale (Shadow Minister, Work & Pensions; Conservative)

My Lords, I was not going to intervene in this debate, but two things occur to me, having heard the discussions between the noble Baronesses. The duty to consult disabled people and users of a particular service is quite different from employing them, either for cash or for free. Secondly, the Minister could perhaps use this opportunity to explain what he thinks is involved in work-related activity. I agree with the point made by the noble Baroness, Lady Meacher, that unpaid work—employment is the wrong word because it carries with it the idea of payment—for the service bodies might well lead to full-time employment. That could therefore come under the heading of work-related activity. It would be extremely helpful if the Minister could respond to that point.

Photo of Baroness Hollis of Heigham

Baroness Hollis of Heigham (Labour)

My Lords, like other noble Lords, I very much hope that my noble friend will be able to support the amendment or that, if he cannot do so in its present shape, he can see how far he can meet these concerns by Third Reading. I hope that he can do that for three reasons. First, as services need to be reviewed and assessed continually by the users, we must engage users of services—they own them and they can shape them, with the result that the services would be improved. We have surely learnt that over the past 20 years in all our public service activity.

Secondly, when a service user is engaged in reviewing services, he should not be out of pocket. A well established social security rule is that, if you can be paid, you are deemed to have been paid whether you have accepted payment or not. I understand the complexities associated with that; without it, we would have manipulation between income and capital, between capital and income and so on. None the less, there is a perfectly good read-across to local authority work in relation to this and no one should be out of pocket. Ideally, people should have modest recompense for their time and their activity.

Thirdly—this is absolutely right—one of the problems, which we know from people on disability benefit, is that their world becomes smaller. They lose the knowledge network of jobs and of capacities for entering the world of work, and they lose the confidence to enter the world of work. Although it may take one year, three years or 10 years before someone is ready to return to remunerated work, with tax credits and so on, this proposal is a useful step.

We have made these moves with volunteering; we have already established in previous legislation that, if someone volunteers for something, that will not mean that they are regarded as ready for work. We have established those rules for local authorities, too. There are plenty of precedents, so I hope that we will do the same in this case. Other people have rightly said that ultimately we should recast the whole of the earnings disregard rules. No cost is established on this; no benefits will be "less paid" than they would be otherwise. In practice, people will not expose themselves to a loss of benefit. This is a nil-cost amendment.

If my noble friend feels that he cannot go all the way—I would understand that on the earnings disregard—at least the rule should be extended to non-departmental public bodies, where we want the input of service users across the board, not just for mental health trusts and the like, but also for other public bodies and public quangos, where we want to expand the world of disabled people, lone parents and so on and get the quality and value of their experience. I very much hope that, if my noble friend cannot go all the way with the amendment, he will take it away with the understanding that he will seek to make movement towards the spirit that I am sure the entire House shares.

Photo of Lord Oakeshott of Seagrove Bay

Lord Oakeshott of Seagrove Bay (Spokesperson in the Lords, Treasury, Spokesperson in the Lords, Work & Pensions; Liberal Democrat)

My Lords, that was a very positive and perceptive intervention by the former Minister, the noble Baroness, Lady Hollis. I was particularly struck by her comment that this is a nil-cost amendment. Whether there is a cost will be very significant in relation to whether Members from many Benches will support it. I specifically ask the Minister to address that point. In practice, does he believe that there will be costs in accepting it? In theory there might be, but we on these Benches believe that, in practice, it is a nil-cost amendment.

Photo of Lord McKenzie of Luton

Lord McKenzie of Luton (Parliamentary Under-Secretary, Department for Work and Pensions; Labour)

My Lords, I thank the noble Baroness, Lady Thomas, for raising this matter and giving us a chance to debate again an extremely important issue. It gives me an opportunity to make an announcement that will go some way towards addressing the concerns raised by noble Lords.

The amendment provides a new power to disregard payments received and to ensure that activity undertaken as part of the service-user involvement would not be taken into account in calculating benefit entitlement or payments. The Government recognise the importance and value of encouraging participation in public life and in learning new skills, gaining experience and building confidence. Service-user involvement involves many of the skills and activities in which people routinely engage in everyday employment. Indeed, that could count as part of a person's work-related activity when a requirement is introduced in time.

The noble Lord, Lord Skelmersdale, asked me to define "work-related activity". I refer him to Clause 12(7) of the Bill, where it is defined in a wide manner:

"In this Part, 'work-related activity', in relation to a person, means activity which makes it more likely that the person will obtain or remain in work or be able to do so".

That point has been touched on by a number of speakers. I was interested in what the noble Baroness, Lady Meacher, said about using the foundation trust as an opportunity for people to job-share, to help them to gain confidence and to get closer to employment.

We are aware of the concerns that have been raised about how current benefit rules can make it difficult to ensure service-user involvement. However, we believe that, in relation to receiving benefits to participate in such activity, the benefit rules provide a fair balance between encouraging participation and creating the correct work incentives, while also protecting the public purse.

It is important to remember that encouraging people to work, build skills and increase their confidence is the foundation on which ESA is built. Our goal is to help as many people as possible to leave benefit dependency and to support themselves through work, with all the advantages that that brings. As part of this process, we recognise that part-time work can be important to well-being and to developing self-worth, and that it can act as a stepping stone to sustained work off benefits. That is why we have the permitted work rules in incapacity benefit. We think that they serve an important purpose, so we plan to bring them forward to ESA customers. These rules aim to act as a valuable gateway into the world of work and give claimants the opportunity to explore what kind of work is right for them. Moreover, the permitted work rules are generous and, combined with the voluntary work rules, provide customers with a wide range of opportunities to try out work for themselves.

We have been looking for more flexible ways of helping people to take up opportunities and to increase their options without fear of their benefits being removed straightaway. One of the advantages of introducing a new, unified benefit is that it provides the opportunity to peel back the complex layers and rebuild, making improvements where we can. We have looked in particular at how the permitted work higher limit, which generally applies only to the contributory benefit, could help more people to try out work. As a result, I can announce today that, within ESA, we will be aligning the existing permitted work higher earnings limit between the contributory and income-related elements of the benefit. This will be a significant step in addressing the issues raised. Anyone claiming ESA will be able to earn up to £86 per week for up to 52 weeks, without it affecting their benefit entitlement. This is an important change, which will provide many more people with the opportunity to realise their aspirations. I am sure that noble Lords will join me in welcoming the change.

To illustrate the overall impact of the change and how it will be of benefit to many more people, your Lordships may find it helpful if I provide an example. A customer who is receiving income-related ESA would be able to carry out permitted work for up to 16 hours and earn up to £86 per week for up to 52 weeks—that is, at existing rates. Currently, a man in similar circumstances on income support would have his benefit removed pound for pound for anything over £20 that he earns. That is a substantial change. At week 40, let us say, the customer's self-esteem and health are such that he feels able to move into sustained full-time work, safe in the knowledge that he will be protected by the generous linking rules and supported not only by his regular wage but by the tax credits system and the return-to-work credit, which provides a generous £40 per week of additional support for 52 weeks if earnings are below £15,000.

We want to encourage participation in public life and it is right that people should be given the opportunity to help themselves whenever they can. That is why we have recently changed the guidance on applying the incapacity-for-work test to emphasise that, when people take part in service-user involvement, they should not automatically be sent for a reassessment. A reassessment should be done only where there are specific reasons for believing that the work that a customer is doing demonstrates that they no longer satisfy the conditions of entitlement to the benefit. We intend that similar guidance will apply to ESA in future.

We also believe that people should not be allowed to keep all their benefits while undertaking work or receiving remuneration for other activities, such as paid service-user involvement. That is subject to the rules that I have just outlined. There is an important balance to be struck between income from working in and representing the community, and avoiding duplicate provision from the public purse.

A number of specific points were raised. The noble Baroness, Lady Thomas, referred to service-user activities not being paid work. We do not agree that that is a helpful distinction. Service-user involvement involves many of the skills and activities in which people routinely engage in their everyday employment. In creating any distinction, we would be dismissing the value of service-user engagement in helping disabled people to feel confidence and to develop skills that will help them to find other types of work. As such, service-user involvement could count as part of a person's work-related activity.

3:45 pm
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Baroness Hollis of Heigham (Labour)

My Lords, could the Minister help me on this? He spoke very carefully; I listened to the syntax. What he said is very welcome indeed and very sensible; I am sure that we all congratulate the Government on that. But he said that that involvement "could" count as work-related activity. What people, if any, might not qualify for the £80 or so a week disregard that will otherwise be on the new employment and support allowance? Who would not come within the scope of the change?

Photo of Lord McKenzie of Luton

Lord McKenzie of Luton (Parliamentary Under-Secretary, Department for Work and Pensions; Labour)

My Lords, I believe that everybody who is on employment and support allowance will be within the scope of that change, whether they are on the income-related strand or the contributory strand; that is the key. My references to work-related activity involved other components. At the moment, the Bill does not provide for mandatory work-related activity, but there are powers in it when resources—

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Baroness Hollis of Heigham (Labour)

My Lords, is my noble friend confirming that no staff member in a local benefit office could decide that such an activity was not part of work-related activity and therefore did not come within the earnings disregard, and that therefore the person would not be a beneficiary of the change in policy? Is he saying that that could not happen?

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Lord McKenzie of Luton (Parliamentary Under-Secretary, Department for Work and Pensions; Labour)

No, my Lords. With respect, we are dealing with two separate things: one is permitted work rules and their parameters, and the other is whether or not the activity as a service user—whether it is described as paid work or not is not helpful to our discussion—could count as work-related activity when you reach the stage when work-related activity is something that people who are not in the support group would be required to participate in. My point is that service-user involvement could well qualify as work-related activity, which would be relevant in due course when that component of the Bill comes in. It has many of the features that help people to move towards the job market. I hope that that clarifies the position for my noble friend.

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Baroness Howe of Idlicote (Crossbench)

My Lords, could the Minister help me? I wonder whether there would be a difference between the two groups if we applied what I call my local authority councillor test.

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Lord McKenzie of Luton (Parliamentary Under-Secretary, Department for Work and Pensions; Labour)

Yes, my Lords. The local authority councillor test is different because the permitted work rules as they currently operate, and will continue to operate on an expanded basis, state that once you have breached the rules you are out of benefit. The local authority councillor rule will say that, once you have breached the threshold, that is deducted from your benefits. The Government are not proposing to extend those provisions relating to local councillors. I revert to our discussion about work-related activity. I stress that this would need to be judged on a case-by-case basis.

I shall comment briefly on service users who offer involvement on a voluntary basis having notional earnings attributed to them. My noble friend Lady Hollis touched on them. The notional earnings rules are an important safeguard that help to protect the benefits system from abuse. Customers are already able to undertake a wide range of activity, such as permitted or voluntary work, without their benefit being affected. As I said, we intend to build on that foundation in the ESA. We are looking at ways of modernising the rules to enable customers to make the most of their talents. For example, we have recently clarified the rules on the treatment of lunches provided to volunteers to ensure that they can continue to volunteer and receive benefit in the normal way.

On the references to rules on expenses, our key aim is to encourage people as much as possible to support themselves through work. We are always concerned about anything that discourages people from taking part in activity, and we will continue to look at how to make the rules more effective. Aligning the permitted work higher earnings limit will play an important part in enabling us to do just that. All changes that we make need to be underpinned by an understanding of the wider effects on earnings rules and work incentives.

The noble Lord, Lord Oakeshott, asked me about the cost of the amendment. We would have to look at its consequences and weigh everything up, particularly the impact on work incentives. But I hope that what we have announced today on the permitted work rules will satisfy noble Lords that we have taken a significant step forward.

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Lord Oakeshott of Seagrove Bay (Spokesperson in the Lords, Treasury, Spokesperson in the Lords, Work & Pensions; Liberal Democrat)

My Lords, as the noble Lord is telling us that he is making a significant change, what is the additional cost of the change that he has just announced compared with what he was going to do?

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Lord McKenzie of Luton (Parliamentary Under-Secretary, Department for Work and Pensions; Labour)

My Lords, I thought that the noble Lord would ask me that when I spoke earlier. Perhaps I may write to him with a figure. Again, I reassure noble Lords that we will continue to look for more flexible ways of helping people to take up beneficial opportunities without fear of their benefits being removed. Accordingly, I urge the noble Baroness to withdraw the amendment, and I can now announce that no cost is attached.

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Lord Skelmersdale (Shadow Minister, Work & Pensions; Conservative)

My Lords, before the noble Lord sits down, although aligning the earnings rules within the limit for the two streams of ESA is welcome, does this not blow a hole in Schedule 1? What else is there to distinguish between the contributory allowance and the income-related allowance?

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Lord McKenzie of Luton (Parliamentary Under-Secretary, Department for Work and Pensions; Labour)

My Lords, quite a lot. The cap on the earnings-related component is driven by the various allowances that come from applying the system. If you had a contributory allowance and other income, that other income would not change the overall level of the employment and support allowance. So there are two strands to what is a single benefit, and the difference between those two strands is not just the permitted work rules.

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Baroness Thomas of Winchester (Liberal Democrat)

My Lords, I have had to cross out the word "disappointed" in my reply. I thank all noble Lords who have spoken in this short debate. I am extremely pleased with the Minister's announcement because, the more I and other people looked at the new system, the more it seemed that it was very unfair on those on means-tested benefits. I came across some research carried out by the Minister's department that found that people who earned up to £86 a week under permitted work rules moved from benefits into work in greater numbers than those on means-tested benefits, so the system may have that very good outcome.

Did I hear the Minister say that jobcentres should never say to service users that being involved with the kind of committee that I was talking about means that they should no longer be on benefits? I think that he said that, just as people can be councillors and be on benefits, they can also be service users and still be on benefits—that is, that being involved in public life should not mean that people are automatically told that they are no longer incapable of work. Am I right?

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Lord McKenzie of Luton (Parliamentary Under-Secretary, Department for Work and Pensions; Labour)

My Lords, perhaps it would be helpful if I restated precisely what I said so that there is no confusion. I said that we recently changed guidance on applying the incapacity-for-work test to emphasise that, when people take part in service-user involvement, they should not automatically be sent for a reassessment. A reassessment should be done only where there are specific reasons for believing that the work that a customer is doing demonstrates that he no longer satisfies the conditions of entitlement to the benefit.

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Baroness Thomas of Winchester (Liberal Democrat)

My Lords, once again I thank the Minister for clarifying that point. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 2 [Amount of contributory allowance]:

[Amendments Nos. 4 and 5 not moved.]

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Lord Skelmersdale (Shadow Minister, Work & Pensions; Conservative)

moved Amendment No. 6:

Clause 2 , page 3, line 4, at end insert ", or

( ) he is undergoing or recovering from treatment for a serious or life-threatening illness or is terminally ill as prescribed through regulations."

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Lord Skelmersdale (Shadow Minister, Work & Pensions; Conservative)

My Lords, this amendment has been discussed in the House before and I am retabling it to follow up on a point which I do not believe the Minister has as yet sufficiently addressed. In Committee, he said that,

"we have made provision for a limited group of people, including those who are terminally ill and people undergoing parenteral chemotherapy for cancer, to be treated as having limited capacity for work-related activity".—[Official Report, 20/2/07; col. GC 35.]

However, the question I had asked previously was whether the Government had any intention of ever expanding those two categories to include other cancer patients taking different courses of treatment, or any other people undergoing treatment of an equivalent severity. I hope that the Minister can answer that now.

There is no evidence that oral chemotherapy has less debilitating side effects than intravenous treatment. I checked that with a Member of your Lordships' House from the medical profession who advised me:

"There is no evidence that oral chemotherapy is less punishing than intravenous and indeed there is some evidence about to be published that some regimes can be easier, but they are not available outside trials as yet in bowel cancer".

Macmillan Cancer Support, in particular, is very concerned that the draft guidance that we have seen makes no mention of the limitations that cancer treatment can impose on patients, especially when appearing for work-focused interviews, which will be compulsory for many cancer patients. If the Minister cannot give us reassurances on moving all cancer patients into the support group, can he at least confirm that regulations will include guidance that assessments, interviews and activities that are subject to conditionality can be postponed for reasons relating to the claimant's treatment or condition? Currently, it appears that claimants cannot postpone a work-focused assessment unless they can show it would not be helpful or appropriate. Can the noble Lord confirm that this covers the claimant who is feeling too unwell or fatigued to appear for interview?

We do not live on the Continent, where you are presumed guilty until you have proved your innocence. In this country you are presumed innocent until you are proved guilty. Does the Minister not therefore feel that the guidance should make specific allowance for claimants to postpone an interview rather than having to go through the rigmarole of being threatened with sanctions and essentially having to prove their innocence?

Guidance on all the other aspects of ESA assessment and expectations are similarly silent on the subject of what cancer patients can be limited by. For example, fatigue and low immunity are common side effects, but they are not mentioned anywhere as a consideration on whether a claimant is capable of undertaking work-related activity. Does the Minister expect most cancer patients to be moved into the support group by the current assessment? If not, can he confirm that guidance will ensure that personal advisers will be fully aware of how debilitating cancer treatment can be? I beg to move.

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Lord Addington (Spokesperson in the Lords (Disability), Work & Pensions, Deputy Chief Whip, Spokesperson in the Lords (Sport), Culture, Media & Sport; Liberal Democrat)

My Lords, I shall briefly come in behind this amendment. The most important part is not so much that cancer groups are themselves the main claimants, but the flexibility on new groups coming in and how we expand from here. Can the Minister give us an idea about what is going on, because if a new group, new type of treatment or new awareness comes in, it would make me feel slightly easier about the whole process? If you get it wrong, the whole thing will break down and those who are most vulnerable will suffer. It is that group and the degree of flexibility that concerns me, and I would like some information about the process.

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Lord McKenzie of Luton (Parliamentary Under-Secretary, Department for Work and Pensions; Labour)

My Lords, the amendment is intended to allow people suffering from the most serious conditions and the terminally ill to automatically enter the support group. While I entirely understand the well intentioned motives of the amendment, it undermines a key principle of the new benefit and would help to maintain the concept of incapacity for work, which we are trying to remove. Our reforms are about trying to ensure that as many people as possible have the chance to engage in work. As such, the support group criteria set out in the schedule to the draft regulations for Clause 9 have been drafted to ensure that only people with the most severe levels of functional limitation arising from disabling conditions, which prove that they demonstrate limited capability for work-related activity, will be placed in the support group. The criteria are not based on specific health conditions or disabilities but instead focus on the impact that an individual's health condition or disability has on his ability to function. We strongly believe this is the fairest way of carrying out such an assessment, as different individuals can be affected by conditions in very different ways. We think it only right that we look at each person as an individual, assessing what he can and cannot do and what it is therefore reasonable to expect of him.

We have, of course, accepted that there are a small number of situations where we need to treat people as having limited capability for work-related activity even though they might not satisfy the descriptors we intend to use to test for it. As such, we have made special provision in our draft regulations for people who are terminally ill, as we do not believe it is reasonable to require a person in the last few months of his life to have to engage in work-related activity in order to receive ESA. We have made provision for people who are receiving the most debilitating forms of cancer therapy. This is because we are confident that they will all experience severe functional limitation during the course of treatment and for a period after it has ended, to the extent that it would be unreasonable to require them to engage in work-related activity—I am not sure whether the noble Lord, Lord Skelmersdale, was suggesting that that judgment might not be right and that we should not put even that group of people into the support group.

This does not mean that people receiving other forms of treatment will not be given access to the support group. We know that many other forms of treatment, including many other treatments for cancer, can be debilitating for many customers, but they will not be for everyone, which is the fundamental point. That is why, when considering whether someone has limited capability for work-related activity, we want to consider his individual circumstances and the way that his treatment affects his functional ability. Where people suffer from severe functional limitations, they are likely to satisfy one of the 46 support group descriptors and already demonstrate limited capability for work-related activity so that they are placed in the support group. Let us take the example of cancer patients suffering from severe fatigue as a side effect of their treatment. They are highly likely to meet one of the 46 descriptors that we will use to determine limited capability for work-related activity and will therefore be placed in the support group, but we will consider that on a case-by-case basis.

Meanwhile, draft Regulation 3(2)(c) makes provision to treat people as having limited capability for work-related activity if engaging in such activity would pose a substantial risk to their physical or mental health, even if they do not meet any of the descriptors. As an example, perhaps I can look once more at cancer patients. Many people undergoing cancer treatments can have a significant risk of infection because their immune system can be compromised by their treatments. I know that Macmillan Cancer Support is concerned that asking such people to engage in work-related activity could be seriously damaging to their health. Anybody who is at such serious risk of infection, whatever the cause, will be treated under these provisions as having limited capability for work-related activity and will be placed in the support group. This is again something that we want to consider on the basis of individual circumstances.

4:00 pm
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Lord Forsyth of Drumlean (Conservative)

My Lords, can the Minister give an indication of his department's estimate of the number of people who are suffering from cancer and having treatment who would not go into the support group? What percentage is likely to be outwith the support group?

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Lord McKenzie of Luton (Parliamentary Under-Secretary, Department for Work and Pensions; Labour)

My Lords, I do not believe that we can estimate that with precision. While we know the number of customers currently on IB who are suffering from cancer, I do not think we know the range of challenges that those individuals face and therefore cannot estimate it. If I am wrong on that, I will revert to the noble Lord.

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Lord Forsyth of Drumlean (Conservative)

My Lords, I am most grateful to the Minister, but I find it difficult to see how he can assess whether there is merit in the amendment of my noble friend without knowing that information. If the vast majority would fit into the support group, then there is clearly nothing to argue about. If it is a significant number, then it would undermine his general policy and I have some sympathy with that.

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Lord McKenzie of Luton (Parliamentary Under-Secretary, Department for Work and Pensions; Labour)

My Lords, the thrust of the principle involved here is that we should look at individual cases to see how people's medical condition impacts on their individual ability to function in a range of circumstances. The principle, in a sense, is that whether it was one, 10,000 or 20,000, we would want to look at people's individual circumstances and not move them en bloc into the support group. I have outlined some exceptions to that, relating to people who are terminally ill or going through certain forms of cancer treatment, but we generally want to look at the support and circumstances of individuals and to make the judgment on that basis. That is a key part of our approach. Therefore, whether it was one, 50 or 10,000, it would not affect the answer that I would offer to the noble Lord, Lord Skelmersdale. I reiterate that anybody at serious risk of infection, whatever the cause, will be treated under these provisions as having limited capability for work-related activity and placed in the support group.

I want to comment here on those people whose condition or treatment does not affect them to the extent that they are eligible for entry to the support group. We believe, in principle, that it is right to require these customers to engage with us. However, we accept that there needs to be flexibility to deal with people's individual circumstances, and that some of these people may still have periods where they are seriously affected either by their condition or treatment. That is why personal advisers can defer interviews—the draft regulations set out that work-focused interviews can be deferred where they would not assist the customer or be appropriate in the circumstances. This may well be the case where someone is undertaking treatment for cancer, especially where there are side effects such as significant tiredness. Furthermore, the effects of health conditions or treatments, such as periods of severe fatigue, can be taken into account when considering good cause for customers not complying with requirements.

I hope that I have answered the point raised by the noble Lord, Lord Addington, within that. We are looking not at groups of people but at individual circumstances; indeed, if new treatments came along that improved people's ability to function with given medical conditions, they might give rise to judgments by people undertaking the medical assessment that were different from those today without them. I hope that the answer has been reassuring and that the noble Lord will therefore feel able to withdraw his amendment.

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Lord Skelmersdale (Shadow Minister, Work & Pensions; Conservative)

My Lords, it most certainly was not my intention to intervene or interfere with the underlying principle of the Bill, which as I have said on numerous occasions I agree with as far as policy goes. However, from all the amendments there are clearly matters of detail about which I am, shall we say, suspicious.

One thing I do not want is to undermine the key principle of the Bill—that only the most severely disabled and those in their last few months of life should go into the support group. For the others, the ability to function—perhaps for the next few weeks or months—is what matters. Earlier in our proceedings, I got the comfort that I wanted from the Minister; namely, that if they were unable to function for whatever reason—chemotherapy or anything else—they would not be expected to undertake work-related activity. I am most comforted by what the Minister has just said. I doubt that I will have to come back to this matter at the next stage of the Bill but I am afraid that, if on reflection I decide that I ought to, I will. With that, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 8 [Limited capability for work]:

[Amendments Nos. 7 and 8 not moved.]

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Baroness Greengross (Crossbench)

moved Amendment No. 9:

Page 6, line 18, leave out from "to" to end of line 20 and insert "such matters as the regulations may provide"

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Baroness Greengross (Crossbench)

My Lords, I shall also speak to the other amendments in the group up to Amendment No. 35. The amendments would not necessarily result in any changes to the current draft regulations or implementation of these welfare reforms; they would simply make provision to widen the scope of the assessment process in the future. An assessment of an individual's physical, mental and sensory functionality does not equate to an assessment of that individual's capability for work or for work-related activity. Some factors that relate to an individual's impairment will have an impact on their capability for work, and obviously this must not be neglected. However, the medical factors related to their impairment are not the sum.

The amendments are very much supported by RADAR. They would move the Bill closer to the now widely accepted social model of disability and widen its scope to reflect future advances in our understanding of what "capability for work" really means. They would allow future assessments to take account of the vast array of factors that may limit a disabled individual's capability for work. Those factors could include education, training and skills, the availability of funding for reasonable adjustments, access to the workplace, discrimination, the effect of living in an area of high unemployment and the ability to access assistive technologies and their associated training and maintenance. Similar amendments were rejected in the other place solely for technical reasons. Those reasons have now been addressed, and I can see no reason why there should not be cross-party support for the amendments as there was in the other place.

It is critical that we agree the text of the Bill to ensure flexibility in the regulations to follow. With the current terminology, regulations will always maintain a focus on impairment rather than incorporate barriers faced by a disabled individual that are beyond their control. It could be argued that the work-focused health-related assessment should not incorporate an awareness of these wider societal barriers, and that that should be done by the personal adviser in the work-related activity stages. I would argue that the personal adviser should be involved at this first stage, which represents the beginning of an individual moving towards the labour market. Indeed, as the noble Baroness, Lady Morgan, informed us in Grand Committee, the work-focused health-related assessment will advise the personal adviser looking after the customer on the kind of health-related interventions that would benefit the customer, such as a condition-management programme.

The narrow impairment focus wrongly emphasises the start of work-related activity. It could even alienate disabled people from making the most of the process. In the other place, it was noted that the work-focused health-related assessment and the medical examination process will not only look at medical issues but will have a specific and detailed approach and will examine more than just the medical barriers faced by people with disabilities who want to re-enter the labour market. This will be enabled by removing the terminology "health-related" and by not limiting any part of the assessment to healthcare professionals. The regulation must move us beyond narrow understandings of disability. We must not categorise individuals only by their impairment or medical conditions. I beg to move.

4:15 pm
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Baroness Thomas of Winchester (Liberal Democrat)

My Lords, we agree entirely with the noble Baroness, Lady Greengross, in her attempt to move towards the social model of disability. I shall speak to Amendment No. 33 in particular but I will not repeat all that the noble Baroness said. We seek flexibility in the regulations so that the kind of barriers she mentioned will be taken into account as being beyond the control of the claimant. They are just as likely to affect a person's capability for work as the kind of health-related interventions that the Minister spoke about in Grand Committee. As the noble Baroness also said, the narrow impairment focus emphasises wrongly the start of work-related activity and may alienate disabled people from making the most of the process. No one wants to be categorised as just "disabled", particularly if their confidence for work needs to be bolstered, otherwise this is how they will think of themselves. This new Bill gives us the chance to change the climate.

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Lord Skelmersdale (Shadow Minister, Work & Pensions; Conservative)

My Lords, I am sympathetic to these amendments, although jobseeker's allowance will continue alongside this Bill. I have spoken before about how pleased I am that the Bill sets into law assessments designed to determine what a disabled person can do rather than what he or she cannot do. This adjustment takes into account not only the contribution that people who will receive ESA have to offer but also the benefits that will come to them from developing their skills and confidence and moving closer to work readiness.

However, I cannot fully support these amendments. The employment and support allowance is and should be focused primarily on disabled people. These amendments would potentially open the field of claimants to anyone who is unable to find a job. For example, as I understand it, it would be possible for regulations to specify that someone who felt their education had not sufficiently prepared them for employment, or even someone who lived in an area with no suitable vacancies for them, as eligible for ESA. That is not the purpose of ESA. I look forward to hearing the Minister's response to both these amendments.

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Lord McKenzie of Luton (Parliamentary Under-Secretary, Department for Work and Pensions; Labour)

My Lords, the noble Baroness's amendments all concern the social model of disability. These amendments and Amendment No. 33, proposed by the noble Baroness, Lady Thomas of Winchester, seek to ensure that the revised personal capability assessment focuses more widely than on health conditions and disabilities, the impact that these conditions have on customers' functional capability and health interventions that might help to raise that capability.

Eligibility for employment and support allowance will depend on customers being determined as having limited capability for work. Equally, eligibility for the support component of the allowance will depend on customers being determined as having limited capability for work-related activity. Both limited capability for work and limited capability for work-related activity will be based on the impact of health conditions or disabilities on customers' functional capability. That is a fundamental concept; the allowance has been created for people currently unable to work because of a health condition or disability. Although customers could be disadvantaged by a range of other factors, such as a lack of skills, the local labour market or the attitudes of employers—points touched upon by the noble Lord, Lord Skelmersdale—these are not reasons for entitlement to the benefit.

It is therefore appropriate that the regulations we use to determine limited capability for work are defined in the Bill by reference to a specific disease or bodily or mental disablement. That is the framework that we have at the moment, and we think that it remains appropriate for the revised PCA. Focusing on functional capability also helps to ensure that the assessments are applied consistently across the country. It is a key principle of the benefits system that eligibility should be defined nationally and consistently and should not be affected by local factors. Taking into account wider social factors would effectively result in different eligibility criteria applying in different areas. This could result in customers receiving different benefit entitlement decisions depending on where they live; that is clearly unacceptable. However, we will not be ignoring social factors. I will say more on this in a moment.

The noble Baroness has proposed that we replace the term "medical examination" with "eligibility test". Again, we have used this wording for a very specific reason. The revised personal capability assessment will gather and evaluate information from a number of sources to assess whether an individual has limited capability for work or limited capability for work-related activity. As at present, we will request information from healthcare professionals and other relevant people, and customers who are not identified at this early stage as having limited capability for work-related activity will be asked to complete a self-assessment form to help us to assess their condition.

For most customers, a part of this evidence-gathering process will be a face-to-face medical examination with a healthcare professional. The phrase "medical examination" in Clauses 8 and 9 refers to this very specific element of the PCA process. The decisions on whether a customer is eligible for either employment and support allowance or access to the support group are not taken during this medical examination, nor are these decisions taken by the healthcare professional carrying out the examination. The decisions are taken subsequently by a departmental decision-maker, who considers all the available evidence, including that gained from the medical examination. Replacing the phrase "medical examination" with "eligibility test" would not make it clear that these are references to very specific parts of the PCA process. Meanwhile, calling these examinations "eligibility tests" would not make it clear to our customers that a face-to-face examination would be involved.

On the amendments concerning the work-focused health-related assessment, as part of our reforms we are adding a new stage to the personal capability assessment. This new stage, the work-focused health-related assessment, will be a positive experience that gives customers the opportunity to explore with a trained healthcare professional his or her perspective on their disabling condition. It will aim to identify as early as possible in a claim the health-related barriers that lie between customers and their engagement with work, as well as the health-related interventions that will help to improve their capability. There is good evidence about the beneficial effects on health of early intervention.

Once more, we have very specifically used the term "health-related" in the title of this assessment, as we want the focus of the assessment to be on the health-related issues I have already mentioned. We use health in its broadest sense, indicating that the focus is on matters relating to an individual's body or mind and the impact of those on that individual's capability for work; as such, we include impact on the body or mind caused by health conditions and disabilities.

We are using healthcare professionals to carry out this assessment because they have specific skills that we would not expect a personal adviser to have. For example, the assessment will identify whether any health-related interventions, such as cognitive behavioural therapy or physiotherapy, would help customers to improve their capability. It would be unrealistic to expect personal advisers or others to be able to identify these interventions as suitable for customers.

Although we want the assessment to focus on health-related issues, I assure noble Lords that this does not mean that other barriers to work will not be taken into account. For example, the healthcare professional carrying out the assessment will be able to identify, in general terms, occupational factors that are creating a barrier to return to work, such as advising whether a customer has mobility problems making it difficult to access a workplace. But at this early stage, without a specific job in mind for the customer—or, where the customer does have a specific job, without an anticipated date for a return to work—it would not be appropriate to carry out a detailed workplace assessment. That would come at a later stage, when the customer is ready to move into work and it would be in the context of a specific job. The customer's personal adviser would then arrange the necessary workplace assessment.

Meanwhile, the work-focused health-related assessment will allow customers to explore their own beliefs and perceptions about their disabling condition. We believe that this in itself will be beneficial to the customer, because we know that beliefs and perceptions can influence capability. People with a positive, coping attitude are more likely to be able to influence their level of capability than those who have perhaps lost confidence in their ability to cope.

We will ask customers about the barriers that they perceive between themselves and the labour market. Although some of these barriers will be medical, it is likely that others will be societal. Again, we do not suggest that these non-medical barriers will be ignored. Information from the work-focused health-related assessment will be given to the personal adviser for use during the work-focused interviews, which will focus on wider issues such as societal factors. Although personal advisers are unlikely to have the skills needed to identify health-related interventions, they will be able to provide help to address wider issues such as transport problems, skills needs or low confidence.

Much of the discussion in Committee was on the role of employers and the need for the Government to engage with them and help to ensure that they meet their obligations under the Disability Discrimination Act 1995 to support people with health problems and disabilities to stay in or return to work. I can assure noble Lords that we are taking this seriously, and a concerted effort is being made throughout Government with a particular focus on people with mental health problems, who can suffer a greater stigma than most. Although I would not deny that it is a big task, we are committed to it and are working together to tackle the problem.

I know that noble Lords particularly want to raise awareness of the access to work scheme among employers, and I thank them for their support for the scheme. I assure the House that we actively promote the availability of access to work and all our disability employment services. Information is freely available on our website, at jobcentres and from our voluntary sector partners.

I have explained at some length to the noble Baroness our intentions for the revised assessment and why we have used the wording we have. I also hope that I have reassured her that, although it would not be appropriate to base benefit entitlement on social factors or to deal with them directly in the work-focused health-related assessment, societal factors will be addressed. I hope, therefore, that the noble Baroness will be able to withdraw the amendment.

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Baroness Greengross (Crossbench)

My Lords, I thank the Minister for those reassurances. I am not certain why an eligibility test, if added to the conditions, should not be broad and should not incorporate certain standards at a national level. However, I accept those assurances and hope that he will ensure that the code of practice makes them very clear so that those issues are not ignored. I remind the Minister, although he does not need reminding, of the WHO definition of health, which is very broad and includes well-being and various other socially better-defined criteria. I will think again on the issue. Meanwhile, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 10 and 11 not moved.]

Clause 9 [Limited capability for work-related activity]:

[Amendments Nos. 12 to 15 not moved.]

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Lord Skelmersdale (Shadow Minister, Work & Pensions; Conservative)

moved Amendment No. 16:

After Clause 9 , insert the following new Clause—

"Report

The Secretary of State shall lay before Parliament an independent report on the operation of the assessments under sections 8 and 9 annually for the first five years after these sections come into effect."

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Lord Skelmersdale (Shadow Minister, Work & Pensions; Conservative)

My Lords, this amendment is an adjusted version of the one tabled by the noble Lord, Lord Oakeshott, in Committee. The arguments are much the same as I adverted to when I spoke for the need for more affirmative orders. In Committee, the Minister gave us some reassurances that the PCA would be fully evaluated as the pilot schemes were expanded and adjusted. We also had an assurance that there will be an evaluation two years after implementation, with the possibility of further evaluation after that. Further evaluation would be an excellent thing to happen and I hope that the Minister will be able to give us firmer promises on that today.

There has been a lot of debate and criticism of the assessments as this Bill moved first through another place and then through your Lordships' House. A lot of that was due to confusion, which has mostly been cleared up now. It has been a particularly clear indication of how pilot schemes are not enough. They provide valuable information about the failings of a draft system and are essential to work through teething problems before they are rolled out. But they do not provide a guarantee that the final version will be successful.

The new PCA is very different from the old eligibility test. In particular, the number of descriptors identifying physical disabilities that will be taken into account has been much reduced. There is a much wider appreciation of mental disabilities, which is good. It is unsurprising that such a large modification has caused concern among claimants and the organisations that represent them. Credible reviews that assess whether the new assessments are needed in successfully identifying claimants and putting them on to the correct components will do much to reassure these claimants and to identify any of the problems that many of them are foretelling. Similarly, there is much uncertainty about the computer system that is being used. I thank the Government and Atos Origin for giving us the opportunity to see it in action, but watching the demonstration of a program that was developed for incapacity benefit and has not yet been finalised for ESA is hardly the same as observing the latter in the field.

We all hope that the new ESA and PCA will lay people's fears to rest as they are rolled out and given a chance to prove themselves. However, I hope that the Minister will be able to provide me with further reassurances that any future blips will be picked up and addressed by a thorough review process.

As I said, this amendment states that the report should appear annually for the first five years after Clauses 8 and 9 come into effect. That should be long enough to have the new system fully up and running; if it is not working properly by then, we really will have to go back to the drawing board and it is quite possible that a new Act will be required. Even if it is not, a major reform of the regulations will be necessary. We ought to know in advance of that happening. I beg to move.

4:30 pm
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Lord Oakeshott of Seagrove Bay (Spokesperson in the Lords, Treasury, Spokesperson in the Lords, Work & Pensions; Liberal Democrat)

My Lords, having run the first lap of this amendment in Committee, I am happy to pass the baton to the noble Lord, Lord Skelmersdale, to move it here. We support him in that; perhaps he will return the compliment on Third Reading with another amendment. We shall see.

As we said in Grand Committee, there was considerable cross-party support in another place for amendments along these lines. I made it clear in Committee and do so again today that we do not regard as satisfactory the assurances from the Minister about what is effectively an internal review. It seems a classic example of a controlled review of which Sir Humphrey in "Yes Minister" and "Yes, Prime Minister" would have been proud.

The amendment is very reasonable—indeed, it is modest, as it gives the Government the opportunity to choose where the independent review comes from. I cannot see how the Government can possibly object, if they really support transparency and a proper process of post-legislative scrutiny by Parliament of what are, after all, major changes in legislation, which could affect many of the most vulnerable in our society. We are happy to support the amendment.

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Lord McKenzie of Luton (Parliamentary Under-Secretary, Department for Work and Pensions; Labour)

My Lords, I recognise the concern underlying the amendment that the revised PCA descriptors and scores should be subject to independent evaluation following the implementation of the employment and support allowance.

I repeat the undertaking given by the Minister for Employment and Welfare Reform in another place that there will be independent monitoring of the revised PCA descriptors and scores assessing limited capability for work. Moreover, I can today commit to ensuring that this covers the first five years of operation, rather than the two years to which we have already committed. I also confirm that reports of the independent monitoring will be placed in the Libraries and that as usual they will be subject to parliamentary scrutiny by means of Parliamentary Questions, Select Committees and so on.

The Government are, of course, committed to evidence-based policy making and recognise the value of seeking information that will help to establish the effectiveness of policy initiatives and their implementation. As I said in Committee, a large amount of research and review is undertaken over a whole range of policy areas and those reports are routinely published. A working paper on performance in Pathways areas was published in January last year and, as of December 2006, we have produced Pathways statistics on a quarterly basis. Furthermore, we routinely publish externally commissioned research reports as soon as they are available. Ten such reports on Pathways have been completed to date.

We are currently evaluating the impact of Pathways on both new and existing customers in the first seven areas. The focus will be on employment, benefit exits, earnings and health and we are also evaluating the impact of Pathways as it expands to cover more districts. As we progress with our evaluation over larger areas, there will be a greater opportunity to look at sub-groups. This will include further analysis of the impact of Pathways on customers with a mental health condition.

In addition to the quantitative assessments, we are exploring attitudes and experiences of Pathways participants and key Jobcentre Plus and provider staff. This planned evaluation will continue until 2009. We are due also to evaluate the impact of provider-led Pathways.

We need to maintain a balance between seeking information and monitoring that helps inform policy-making and ensuring that the information gathered is appropriate and represents a responsible use of resources. We would not, for instance, wish to be obliged to provide annual reports where it has been established that the revised PCA is effectively identifying those people who have limited capability for work.

I hope that I have reassured noble Lords that there will be an effective process of evaluation, that we will extend it over five years, and that those reports will be in the public domain and available to Parliament through the normal means. I hope that noble Lords will see that as a better route forward than an obligation to produce annual reports at fixed points in time. I ask the noble Lord to withdraw the amendment on that basis.

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Lord Skelmersdale (Shadow Minister, Work & Pensions; Conservative)

My Lords, I am grateful to the Minister. I was grateful to him when I heard of the original undertaking to carry out independent monitoring for the first two years. The Minister now announces that this is to cover the first five years. I rather wonder whether my amendment had anything to do with that. Whether it did or not, I am delighted that the results will be published and placed in the Library.

The Minister announced a whole range of "assessments"—dare I call them that?—which were to be made of the process during that five years. The trouble is that the results will come out rather piecemeal. There will be no document which puts them together appropriately as they come out and there will be no single booklet that we can read. If we are particularly assiduous in looking at these things, we will know what has happened—what has gone right and what has gone wrong. We may even know what remedies are to be proposed. However, what we will not know, at least if I correctly understood what the Minister said, is how many people the ESA has been successful in getting into work, thereby achieving their and our ambition; and we will not know how the trend in applications for the benefit is going, because, clearly, over a period, even in the first five years, one would expect a considerable drop in the number of applications for the benefit. Indeed, we have already seen a drop in the past year for which we have had figures. Perhaps it is a flash in the pan—one does not know.

Therefore, even though I accept at face value what the Minister said, his response is not satisfactory. I wish to press the amendment—

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Lord McKenzie of Luton (Parliamentary Under-Secretary, Department for Work and Pensions; Labour)

My Lords, before the noble Lord sits down, perhaps I may press him on the matter. He said that his amendment calls for an independent report. I reassured him that there will be an independent report. He said that there would be no document which pooled together all our reports. Some of those reports are independent; some are internally produced for management purposes—they will be a mixture. To require that they be fed into one independent report would in the case of some require an additional layer of work and resource which I respectfully suggest to him is not necessary.

The noble Lord asked how we will know whether the process is successful in getting people into work and said that we must have an annual report to determine it. Some people's journeys into work, and judging whether the process is successful, will not always be capable of being quantified and identified in a rigid annual cycle. That is why an independent review, to which the Government are committed, is a better way of addressing this matter than forcing a narrow annual report to be made. Particularly in the early period, such a report is unlikely to be able to judge with full effectiveness the journeys that some people are making into work, because they would not necessarily appear in employment statistics. I impress that on the noble Lord and ask him not to press his amendment.

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Lord Oakeshott of Seagrove Bay (Spokesperson in the Lords, Treasury, Spokesperson in the Lords, Work & Pensions; Liberal Democrat)

My Lords, before the noble Lord sits down again—I am not quite sure which noble Lord will sit down, but before either or both of them do—I would like to say that the business of a regular, annual report is exactly the point. It is not rigid, but a reasonable and regular period in which to report. Otherwise, I am afraid that the plethora of different reports, to which the Minister referred, will enable the Government to fix the time and the place. The report will not be properly independent and annual and it seems perfectly reasonable to ask for one which is independent, annual and fixed for the first five years.

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Lord Skelmersdale (Shadow Minister, Work & Pensions; Conservative)

My Lords, the Minister obviously does not want to come back. I have already tried to beg to press the amendment once and I am going to do so again. This time, I hope it will be for the final time. I wish to test the opinion of the House.

On Question, Whether the said amendment (No. 16) shall be agreed to?

Their Lordships divided: Contents, 150; Not-Contents, 133.

Division number 1

See full list of votes (From The Public Whip)

Resolved in the affirmative, and amendment agreed to accordingly.