Welfare Reform Green Paper

Part of the debate – in the House of Commons at 3:32 pm on 24th January 2006.

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Photo of Philip Hammond Philip Hammond Shadow Secretary of State for Work and Pensions 3:32 pm, 24th January 2006

I am grateful to the Secretary of State for letting me have an advance copy of his statement and the Green Paper.

We broadly welcome the thrust of what the Secretary of State has said and we will study with great care the detail of the Green Paper. The world of work and the global economy are changing rapidly, and Britain's future prosperity depends on harnessing the skills and abilities of all its people. We cannot afford, either in social or in economic terms, to leave 2.7 million people abandoned on long-term benefits.

Incapacity benefit has operated as a crude system that condemns hundreds of thousands of people who have something to offer to inactivity, deprivation and social exclusion. It creates and perpetuates dependency and squanders ability. It is failing individuals, it is failing our economy, and it is failing our society. It is no longer fit for purpose, so we welcome the Secretary of State's shift of emphasis to the abilities and skills that people have rather than the disabilities that they suffer.

Let me be clear where we stand: we believe that work works. For those who can work, it restores self-esteem, it re-includes them in the social fabric of everyday life and it rescues them from the trap of long-term benefit dependency. It is the job of policy makers to ensure that work also pays—that the perverse disincentives of a bureaucratic benefits system are removed, so that the phenomenon of the benefit claimant who wants to work and who can work but who risks being worse off by doing so is consigned to history.

The Secretary of State has been in his post for only four months, but his Government have been there for nearly nine years. We like much of what we have heard today, but he will forgive me if I say that we have heard much of it before. Much of what he has said was trailed in the five-year plan; we were promised this Green Paper before the summer recess. Further back, at the 1997 general election, Labour proclaimed itself the party of welfare reform, but while the Labour Government have done "sweet nothing"—[Hon. Members: "Oh!"] Those are not my words but the words of his own Minister for Employment and Welfare Reform. While the Labour Government have done "sweet nothing", total numbers claiming incapacity benefit have gone up, the numbers claiming for more than five years have gone up, the number of young people under 25 claiming has gone up by 70 per cent., and the number of people claiming on the grounds of mental and behavioural problems has doubled. So we will take no lectures on legacies from the right hon. Gentleman. The test of this Secretary of State will be whether he at last can start to deliver where his predecessors failed to do so.

Unfortunately for the Secretary of State, his plans are presented against a backdrop of a slowing economy, steadily rising unemployment and an unprecedented funding crisis in NHS trusts, all of which will make it much harder now than it would have been a couple of years ago to achieve the laudable objectives of rehabilitating people and then getting them back into work.

We have not yet had time to analyse the Green Paper in detail, but we have heard enough to identify some of the key areas where we will want to satisfy ourselves that the small print matches the headline rhetoric. Reform of the system so that it delivers a focus on what people can do, rather than what they cannot do, will require changes to the personal capability assessment, as the Secretary of State said. It will also require a change in the mindset of the tens of thousands of people who administer the system. Can the right hon. Gentleman tell the House how the personal capability assessment will be reformed, in particular, to make what is still primarily a physical capacity test more responsive to the high levels of mental illness among claimants?

Effective early intervention in respect of new claimants is the key to catching them before they become trapped in benefit dependency. Does the right hon. Gentleman agree that prompt and early medical assessment, coupled with the availability of rehabilitation resources, is the key? How will those resources be delivered, given the pressure that primary care trusts are under? Will he buy in NHS services with Department for Work and Pensions funding, or will he buy in rehabilitation services from providers in the private sector? Can he assure the House that he does have, somewhere in his locker, a more subtle approach to the vital question of engaging GPs in the early intervention process than that of offering them cash inducements?

We will study the way in which the proposals, as well as dealing with new claimants, address the needs of the 2.7 million people currently on incapacity benefit. The Secretary of State may be tempted to concentrate on new claimants, but if the new focus is the right one it would be a betrayal both of those who are already on incapacity benefit and of the taxpayers funding them not to apply the same work-oriented approach to them. Off-flow rates have decreased by a third since 1997; will he set himself a specific target for getting current incapacity benefit claimants back into work?

A couple of weeks ago, the right hon. Gentleman identified 100 constituencies with the highest concentration of incapacity benefit claimants, which we cross-correlated with job vacancy figures. Perhaps unsurprisingly, we found that those constituencies have very few job vacancies—in fact, there are only a quarter as many job vacancies as there are incapacity benefit claimants. Does he recognise that in those areas simply refocusing and retraining people to exploit the skills and abilities that they have will not necessarily result in their finding work? How will he deal with the geographical mismatch of work opportunities and incapacity benefit claimants?

Can the Secretary of State guarantee some concrete and effective measures that will ensure that private and voluntary sector organisations can compete on a level playing field with public sector organisations? The evidence for the contribution that they can make is clear in the results of the new deal for disabled people—a programme that has been substantially delivered by private and voluntary sector contractors—but the National Audit Office report shows that the playing field is still tilted against private and voluntary sector organisations when contracts are placed. Only if that bias is removed can such organisations play their full role—the role that the right hon. Gentleman says he wants them to play. What specifically is he doing to deal with that matter and is he willing to spend some of his political capital standing up to those who will no doubt fight tooth and nail to preserve the predominance of public sector provision in this area?

In the long run, reducing the number of people on incapacity benefit will save substantial sums of public money, but in the short term significant investment of resources will be required. Can the Secretary of State tell the House over what period the reforms that he is proposing will become self-financing?

The right hon. Gentleman referred in his statement to incapacity benefit as masking long-term unemployment figures. Can he confirm that claimants of his new benefit will be included in the unemployment count?

Finally, it has been reported in the press that the implementation of the proposals that the Secretary of State has outlined today will depend on the installation of a major new IT system. Is that true? If so, given the history of problems with IT systems in his Department, what reassurance can he give the House that the bold initiatives that he outlined will not be beset by the same kind of IT problems and delays as we have seen in the past?

The Secretary of State deserves credit for finally grasping the nettle of incapacity benefit reform, but the true test of his resolve is yet to come. Will he hold firm to the principles that he outlined today? Will he resist the temptation to tack and to trim in response to Labour Back-Bench demands? Will he take effective action to bring about the increase in private and voluntary sector involvement that he says he wants? If he performs on all those issues, we will support his proposals and work towards a consensus that is not afraid to say that for all who are capable of work, work is the best option, for individuals, society and Britain's future prosperity.


Saint Swithins-Day
Posted on 27 Jan 2006 8:00 am (Report this annotation)

Since the Conservatives obviously favour this policy (it being precisely the sort of bullying policy they would have introduced under Thatcher) I will use this space to offer quotes from the real opposition to this policy; the disabled and sick themselves. The following are all quotes from users of a Disability Forum. : : : "This will make the condition of many people who suffer mental illness deteriorate rapidly once they start to take effect, myself included. So in the end they will have to pay even more money to keep me in hospital. There is no hope anymore..." ~ ~ ~ ~ "Exactly what i predicted, everyone will be re-assessed so that you do not score enough points on the PCA. Onto jobseekers you go and if you do not accept any job they give you they simply stop your benefit. Government mission accomplished" ~ ~ ~ ~ "My consultant is adamant that I should not work because of the serious risk to myself and others, and that I am generally not physically well enough to engage in work. I will be subjected to repeated interviews where I am told I am a scrounger and then have my benefits reduced." ~ ~ ~ ~ "I'll be another one of the thousands of severely mentally ill women who live below the poverty line" ~ ~ ~ ~ ". I don't see anything in this for people with severe mental health problems but an increase in the suicide rates" ~ ~ ~ ~ "My understanding of what a green paper was has been undermined somewhat as I thought it should contain details of how the government were proposing to implement its policies instead of a vague re-iteration of what their policies might be." ~ ~ ~ ~ "I am now concerned that despite medical evidence, because my illness falls into that 22% of "back" problems, I will no doubt be called up much more often by both DLA & IB depts. I really don't need that unnecessary stress. Living with a chronic spine condition is extremely difficult." ~ ~ ~ ~ There are many, many more such comments. There's your opposition: those you disingenuously claim to be helping. You really only want to help Daily Mail readers smile.