New Clause 14
Welfare Reform Bill
9:45 pm

Jeremy Hunt (Shadow Minister (the Disabled), Work & Pensions; South West Surrey, Conservative)

I beg to move, That the clause be read a Second time.

I appreciate that we are getting to the end of a long day and hope that I might be able to persuade Ministers to consider the new clause. Let me explain it briefly: it asks the Secretary of State to set up a pilot whereby people in the support group should not be subject to the restrictions that currently exist on permitted hours. The thinking is that people in the support group will have been objectively assessed as having the most severe disabilities according to the 46 descriptors that the Minister has explained to us. Many of them are unlikely ever to be off the support element for the length of their lives. Therefore, for those people, breaking down any barriers that could prevent them from taking steps towards the world of work not only would be beneficial, but might not, I suggest to the Committee, cost the taxpayer any money at all. Because of the nature of the disabilities that those people have they are unlikely to move out of the support group. It may happen, but for many it is unlikely.

Will the Minister consider the fact that for people in the support group, particularly those subject to the lower £20 earnings disregard limit, it is unlikely that they will be able to move from just three and a half hours work at the minimum wage to full-time employment, but they may be able to manage part-time employment. If they are concerned about losing their benefits package, which is vital for the independence it gives them, they are unlikely to want to make that transition.

I have tabled the new clause providing for a pilot because I recognise that we are in uncharted territory and that it is possible that there could be public spending commitments because we are talking about relaxing the permitted hours for a significant number of people. It depends slightly on what proportion of people are actually put in the support group.

Adam Afriyie (Windsor, Conservative)

I suspect that my hon. Friend was coming to this point, but it might also mean a spending reduction for the DWP if a certain proportion transfer and take up part-time or full-time work. So this could actually be a net benefit to the Exchequer rather than a net deficit.

Jeremy Hunt (Shadow Minister (the Disabled), Work & Pensions; South West Surrey, Conservative)

I am grateful to my hon. Friend because that is my belief. As I have argued on earlier clauses, relaxing the earnings disregard is likely to encourage more people to move closer to the world of work and therefore reduce the number of people on the benefit.

This is uncharted territory, which is why we have phrased the new clause as a pilot. We might learn things about relaxing the permitted hours with the support group which it might be possible to apply at a later stage to the work-related activity group. We will not learn any of those things unless we have a pilot. I ask the Minister to give careful consideration to having this pilot.

I have received many representations, as I am sure all members of the Committee have, from disability organisations who are concerned that people in the  support group might not have the same opportunities as those in the work-related activity group. We have discussed that endlessly and I do not want to return to those debates, but having a pilot that showed a bit of flexibility over the permitted hours for people in the support group might teach everyone a little bit about how human motivation works in these situations. If it helped people in the support group—who are, by definition, the most disadvantaged in society—to move closer to the world of work, and to develop a degree of independence and self respect it would be admirable.I hope that the Government will give it generous consideration.

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

Remarkable progress is being made. I shall respond, hopefully in a similar tone to that of the hon. Gentleman when he raised his genuine point. As he knows, there is a greater propensity and likelihood of continued poverty among those who are assessed to be in the support group. That is the major reason why we anticipate having two tiers of benefit payment on the basis that it would provide a degree of financial support to those in the support group that otherwise would be missing.

Customers in receipt of incapacity benefit can undertake part-time work up to a maximum of16 hours a week and earnings must not exceed £86 a week. We intend to carry forward similar permitted work provisions for the employment and support allowance. I recognise that there may be people in the support group who are able to work in excess of the 16-hour limit. The fact that someone on the support group is able to work is not of itself a reason why he or she should be removed from the support group. A PCA would assess whether someone should still be in the support group. It is important to get that across when we try to encourage those in the support group who wish to work to have the chance to do so.

The 16-hour limit is there for two reasons. First, it is there to make a distinction between allowing part-time work while on benefit as a stepping stone to independence and to top up earnings. Secondly, 16 hours is the recognised boundary between the out-of-work benefits system and the in-work tax credits system. We do not need the power in the Bill to do what the hon. Gentleman wishes to do. We have the powers to be flexible in this sort of area already. We are looking at ways to continue to be flexible and to improve the permitted work rules.

Jeremy Hunt (Shadow Minister (the Disabled), Work & Pensions; South West Surrey, Conservative)

The Minister mentioned £86 as being the upper earnings limit for people on IB. Will he confirm that that will be case for people on ESA, even if they are coming on to ESA on an income-related basis? Currently those people have an earnings disregard of just £20, which is significantly less.

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

On the contributory level it will be £86. I cannot confirm that in terms of the income-related scheme. The hon. Gentleman put his specific question pretty fairly: the phrase he used was “careful consideration”. I can assure him that we continue to look at the most effective way of enabling improvements and flexibilities in permitted work. We will look at the very carefully indeed in advance of 2008 and the national roll-outof ESA.

Adam Afriyie (Windsor, Conservative)

Will the Minister give way?

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

No. I am going to conclude.

In terms of the specific point, we will give careful consideration to the matters that the hon. Member for South-West Surrey raised. I hope that he accepts that we do not need in the Bill the type of power that he seeks to give us to do the type of thing that he wishes. We already have that power to implement the flexibility. We will look at additional schemes for permitted work that may reassure him and others in future.

Jeremy Hunt (Shadow Minister (the Disabled), Work & Pensions; South West Surrey, Conservative)

I am grateful to the Minister for that response. I am somewhat reassured, and for the purposes of this sitting I am happy to ask leave to withdraw the new clause.