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| 22 November 2005 |
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| 6.20 pm |
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| Mr. David Ruffley (Bury St. Edmunds) (Con): Just over 7.8 million of our fellow citizens are outside the labour market when they could be in it, according to the Office for National Statistics. That demonstrates that welfare under Labour is not working as well as it could. |
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| Eight years of Labour have given us chaos, complacency and false starts. Since 1997, the Department for Work and Pensions has had six Secretaries of State and we have had 28 White or Green papers. Nowhere is the Government's shambolic performance on welfare better demonstrated than in incapacity benefits. There are now 2.74 million people of working age on those benefits, 116,000 more than when Labour came to power. |
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| The Government messed up reform long before their current attempts. They reduced the value of incapacity benefit to new claimants by clumsy means-testing changes in 2001, which merely deterred existing claimants from returning to work because they feared that if they ever had to go back on to benefit they would have to do so at a much lower rate. Another change that year tightened up the IB eligibility criteria by demanding a much tougher national insurance contribution record. What was the result? A perverse effect. Certainly, people came off pure IB, but they then claimed income support with a disability premium, shoving up those numbers. |
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| Kali Mountford : Will the hon. Gentleman give way? |
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| Mr. Ruffley: Time is fearfully short, so I hope that the hon. Lady will forgive me for not giving way. |
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| There was a zero-sum game. The law of unintended consequences—classic new Labour reform. |
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| Since that reform, the proportion of IB claimants who had been receiving incapacity benefit for more than five years rose from 47 to 51 per cent.—Members should remember that the duration of the claim is at least as important as the number of claimants. The proportion of new IB claimants coming from the unemployment |
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| 22 Nov 2005 : Column 1422 |
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| register is up from 46 per cent. in 1997–98 to a staggering 60 per cent. in 2003–04. That is despite the Prime Minister rightly saying in 1999 that IB had to be reformed because it was merely |
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| "an alternative to long-term unemployment or early retirement". |
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| The problem is that he has done nothing about it. |
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| Earlier, it was said that the Conservative party had no positive proposals. Let me set Labour Members straight about that. The modern Conservative party certainly has more thinking to do on welfare reform, and the new leader in December will start that work. It will take time, but we already have positive proposals on the table, specifically those we talked about last May. There should be more payment by results, with contractors paid a fixed amount per claimant on completion of various milestones for putting claimants back into employment. We need more rehabilitation, possibly with spend-to-save measures; for example, an additional fee paid to contractors to cover the cost of expensive medical and vocational rehabilitation, such as higher level physiotherapy. We also need a greatly enhanced role for the voluntary and charitable sector as, by and large, it is more effective—certainly more so than some of the state functions that I have seen in my constituency. |
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| Miss Begg: Will the hon. Gentleman give way? |
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| Mr. Ruffley: No. I am sure that the hon. Lady will understand that other colleagues want to speak. |
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| This autumn, as the Prime Minister looks fretfully at his legacy, he seems to be thinking quite radically about incapacity benefit—at least, if his leaked October memo to the then Work and Pensions Secretary is anything to go by. I shall quote—from a transcript that appeared in a national newspaper—the words of the Prime Minister to the right hon. Member for Sheffield, Brightside (Mr. Blunkett), who was then Secretary of State for Work and Pensions. The Prime Minister said: |
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| "We should publish information on the number of sick notes signed by GPs, and audit the top ten per cent . . . Employers should have a right of appeal when an employee is signed off sick . . . We could propose taking sick note certification away from GPs and create a new specialist service . . . Incapacity benefit should be paid at £56 per week, the same rate as the jobseeker's allowance"— |
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| which would of course be a cut. The memo continues: |
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| "Claimants have to attend compulsory monthly work-focused interviews . . . Those not engaging in activity lose the entire premium." |
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| Best, and most controversially of all, the Prime Minister said in his memo: |
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| "Given the cost of employment programmes, it seems that the only funding option might be to widen the scope of means-testing the system . . . Alternatively, part of the benefit top-up could be paid as a voucher"— |
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| for "rehabilitation and training programmes". |
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| I quoted at length for a simple reason—those proposals are anathema to the majority of Labour Members. We know that they object to that radical thinking, and those proposals are certainly radical. Some of them may be worth mature and serious debate and discussion, and some of them may be to the liking of the Conservative Opposition. As my hon. Friend the Member for Witney (Mr. Cameron) said, if the Prime Minister comes up with good ideas, we will back him. The question is: will his own side back him? |
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| 22 Nov 2005 : Column 1423 |
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| As I have indicated, there is much opposition to the Prime Minister's radical thinking on welfare. We may have to support his ideas; who knows? However, we know that the right hon. Member for Oxford, East (Mr. Smith) resigned his position rather than implement radical reform as dictated by No 10. We also know that when the Secretary of State for Trade and Industry was Secretary of State for Work and Pensions he fought a pitched battle—he won that one—to rule out the time-limiting of incapacity benefit from the strategic five-year review that he published. |
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| We have already heard from our Front Bench about the delays in the Green Paper. First, the Prime Minister said that it would be published before the summer recess. Then, the Minister for Employment and Welfare Reform, who is in the Chamber, said that it would be published later in 2005. Finally, last week, the Prime Minister said that it would be published some time in January. We might think that we needed no more evidence, but there is more to come. We know that the Secretary of State for International Development did not want to take the job of Secretary of State for Work and Pensions because he knew that he was on to a loser. He would have had to defend and argue for radical reform that his own side could not stomach. Perhaps most depressing of all for the Prime Minister—it really shows that he is beleaguered—is that he cannot even install his No. 10 hawk on welfare policy, Mr. Gareth Davies—the gentleman who wrote the memo to which I referred—as a director in the DWP serving the Secretary of State, due to opposition from the civil service. As was widely reported in the Financial Times and elsewhere, Sir Richard Mottram, the permanent secretary, blocked the appointment of Mr. Davies. One of the newspapers reported: |
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| "Sir Richard put his foot down . . . In the old days Blair would have won the battle with no difficulty but this is just a sign of how weak he has become." |
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| The Prime Minister once said that in the area of welfare reform he would think the unthinkable. With the amount of opposition on his side, is not it a case of him trying to do the undoable? |
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