Motion to Take Note

Part of Employment and Support Allowance (Transitional Provisions, Housing Benefit and Council Tax Benefit) (Existing Awards) Regulations 2010 – in the House of Lords at 5:17 pm on 20th July 2010.

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Photo of Baroness Thomas of Winchester Baroness Thomas of Winchester Chair, Delegated Powers and Regulatory Reform Committee 5:17 pm, 20th July 2010

My Lords, these regulations are about transitional arrangements for the gradual migration of people from incapacity benefits-that is, incapacity benefit, severe disablement allowance and income support on the grounds of incapacity-to employment and support allowance, which will begin in October this year with a small trial run and then, from next February, will be rolled out nationally over the next three years. At the outset I should make it clear that I support the direction of travel of these regulations. My reason for drawing them to the attention of the House is simply that they are very important to the lives of many of the most vulnerable in our society and there are questions that need answers-not least because Citizens Advice, in its evidence to the Social Security Advisory Committee, said that the goalposts appear to have shifted since the introduction of ESA. Another good reason for having this debate is that these regulations were in the previous Government's pipeline and we need to know where we are now.

Under the regulations everyone on the old incapacity benefits will be retested by an Atos healthcare professional for the work capability assessment, after which, according to the revised impact assessment for the regulations, 23 per cent of the cohort are expected to be found fit for work and therefore not entitled to any component of ESA. Another reason I was encouraged to table this take note Motion was the Merit Committee's helpful report-its first report of this Session-and, in particular, Appendix 1, which has a very useful question-and-answer section. The Merits Committee drew attention to these regulations on the grounds of interest to the House. I only wish that they were of interest to more Peers-although I must say that there is a much fuller House now than there usually is when we discuss social security regulations. Although I am extremely pleased to welcome the noble Lord, Lord Knight of Weymouth, to the opposition Front Bench-for these are really his regulations-I wonder where are all the other Peers who might be expected to speak up for the disadvantaged.

We owe a debt of gratitude to the Social Security Advisory Committee, which has published a thoroughgoing report into these regulations. The more I read the committee's report, the more I realised that there was a lot of complication in the system, although I accept that things will eventually be simpler. Even the Explanatory Memorandum says:

"The introduction of a Transitional Addition to ESA will add some complexity to the benefit system on a short term basis".

It can say that again.

The House will be delighted that I am not going to list all the complications arising from the different permutations of benefits, tax credits and pensions. Nor will I mention various anomalies resulting from migration, some of which the Government have addressed as a result of the SSAC's report. However, I will mention just one complication. Contributory ESA is a taxable benefit, whereas for those who were migrated in 1995 from the old invalidity benefit to incapacity benefit there was an income tax exemption. There is a cohort of about 500,000 claimants who theoretically could find themselves liable to pay tax, although it has not yet been decided by HMRC whether to continue to exempt them. As time goes on, that number will drop.

One glimmer of light is that the Budget has increased the amount of tax-free allowance, so I would imagine that the number of claimants owing tax by the time migration is complete will be small. Perhaps my noble friend can tell us when he expects a ruling on this. However, I accept that income tax rules are not part of the regulations but a consequence of them. One reason why this is important is that, as the Explanatory Memorandum says:

"Ministers have committed on several occasions that no existing incapacity benefit customer will see a cash reduction in their benefit on conversion to ESA".

Turning back to the SSAC's report, I note that the committee is calling for a delay in the rollout of ESA until various conditions are met. The conditions are that there is a stronger evidence base on what works and whether ESA is achieving its aims of helping more people into work; that the new regime for claimants with a health condition has bedded down; that changes have been made to the WCA as a result of the review by the DWP; and, finally, that there is an upturn in the labour market.

Not surprisingly, this Government are even keener than the previous Government to get cracking with the migration. The last thing that they want is to wait any longer, which I understand. However, the SSAC is not the only body warning about trouble ahead if changes are not made. Professor Gregg, the architect of the sanctions regime in the two most recent Welfare Reform Acts, has now added his voice to those who urge the Government to make radical changes to the way that ESA operates before the migration of IB claimants begins. In particular, he criticises the way in which the system leaves large numbers of failed WCA claimants to languish on jobseeker's allowance with no prospect of work. Professor Gregg is reported as saying:

"To start moving people who may have been on incapacity benefit for years straight onto jobseeker's- allowance-

"is ridiculous. Before wading into the stock, the system has to be right".

This sentiment is echoed by many groups, including Citizens Advice, which gave valuable evidence to the SSAC. It states:

"ESA was welcomed by many as offering support to those who face significant barriers to working, because of an illness or disability. There seems to be considerable confusion, however, as to whether it is effectively offering help to those who may be able to work with a lot of support. The goalposts appear to have shifted since its introduction, with the current implication being that if a person is able to work at all, they will not be eligible for ESA even if their illness or disability presents a very significant barrier to their finding work".

It goes on to point out that those who are found to be ineligible for ESA will be moved on to JSA, which offers a lot less support, or perhaps on to no benefits at all, and will therefore be much further away from the help and support they need if they are to return to sustainable work.

In Appendix 1 of the Merits Committee report the department states that claimants on JSA with a health condition may restrict their availability for work provided that the restrictions are "'reasonable' given their condition". It goes on to say that,

"the Department has been looking at what additional support may be required to help them return to work".

Can my noble friend elaborate on whether that additional support is going to be forthcoming?

In general, something is clearly going wrong with far too many of these work capability assessments. Is it really the case, as we have read, that thousands of vulnerable people, some suffering from terminal cancer, Parkinson's disease, multiple sclerosis and clinical depression, have had their applications for ESA declined and told to look for work? I have read the Chief Medical Officer's report published in March this year in which he called for some changes to be made to the descriptors, particularly around fluctuating conditions where exertion is a significant component. He recommended quite a lot of other changes that will have to be legislated for. I hope that this will happen quickly and that the Government will not just rely on the mantra that work is good for people's health. I, too, can quote Dame Carol Black's excellent review, published two years ago, of the health of Britain's working age population in which she says:

"Recent evidence suggests that work can be good for health, reversing the harmful effects of long-term unemployment and prolonged sickness absence".

I agree with that, but she goes on to say,

"putting people on JSA, which is designed to be a more active benefit than IB by focusing on what people can do rather than what they cannot do, is not enough".

She calls for more to be done not just to raise aspiration and motivation, but also to address health conditions. She also says quite categorically that:

"Help and support to find work will not be appropriate for all, especially those with more severe health conditions".

What is needed is a full and independent review of the work capability assessment that looks at the full picture of who should be eligible for ESA and not just at the individual descriptors.

My main questions are, first, to ask my noble friend whether the many criticisms of the way in which the work capability assessment is carried out by Atos Healthcare are being adequately addressed and, secondly, whether he is confident that Jobcentre Plus will have enough trained staff throughout the country from October to give the right support not only to those on the employment side of ESA, but also to those who have been on IB and who may, after migration, find themselves in a very different climate on JSA. Many of these new JSA recipients are likely to have a health condition or disability. Has the department factored into staff planning the increased help that the new JSA recipients will need?

While we are talking about staff, can he tell us the position of the whole of the staffing of JCP? I was alarmed to read in last week's Official Report for another place, in a debate about jobs and unemployment, that the Minister said categorically that JCP staff would be reduced by freezing external recruitment and not extending fixed-term contracts when they come to an end. Is it not the case that Jobcentre Plus will need all its staff on hand when the migration starts? Although we may be talking about what are now called "back office" staff, along with my noble friend Lord Kirkwood, I think that, in view of their open plan offices, all JCP staff are on the front line, which is splendid. Can my noble friend say whether recruitment into JCP is still going on or whether it is now up to full strength? From the impact assessment I see that a further 700 to 900 full-time staff will be needed for the migration. Does JCP ever advertise its own jobs in JCP offices? Is the sentence in the Explanatory Memorandum, "We are also discussing the allocation of additional funding", any longer applicable under the heading "Support for Local Authorities"?

Another concern identified by Citizens' Advice is that many of those currently on contribution-based IB or SDA may have no entitlement to an income-based benefit because they have a partner who is working, or a small occupational pension, or more than £16,000 in savings. If they are found fit for work, they will not be entitled to JSA and yet may be in great need of help and support to get a job. I am certainly not questioning the fact that someone in this position should be required to look for a job, but anyone who has been out of the job market for many years will need specialised help. My noble friend Lord Kirkwood will speak more about those who will provide that specialised help.

I assure my noble friend that I am in favour of the migration of people currently on the passive benefit of incapacity benefit to the more active benefit of ESA. However, it is important to get the migration right and to listen to the concerns of those who are dealing day to day with some of the most vulnerable people, who will be even more vulnerable if the WCA is not more flexible and if there is not more support and help in the system. We all want the same thing-namely, that as many people as possible should be able to do at least some paid work, with those most in need of help and support being able to access it-but how the Government go about this major step in the right direction is as important as the policy itself. I beg to move.