Welfare Reform Bill - 2nd Reading
24 July 2006 : Column 698
Mr. David Ruffley (Bury St. Edmunds) (Con): T his has been a constructive debate marked by good intentions from all parts of the House. Members of my party believe that those who can work should havethe barriers in their way removed. Getting out of dependency and leading a more fulfilling life is what many of the 2.7 million people who are on incapacity benefits desperately wish to do.
That is why we believe in active labour market policies. However, we also believe that security must be guaranteed for those whose level of disability is so great that they cannot work; that is one of the hallmarks of the civilised society in which we all wish to live.
We have also agreed in our debate about regulations. In the Bill’s 76 pages, there are more than 240 references to regulations. That is part of a trend over the past nine years: some Ministers have sought to make major policy changes via statutory instruments, which are not amendable. Therefore, I hope that the Minister will agree tonight with his hon. Friends the hon. Members for Kingswood (Roger Berry) and for Burton (Mrs. Dean) that the draft regulations should be published well before the Committee stage. Will the Minister tell us tonight what the draft regulations will be and when we can expect to see them, in the interests of having a grown-up and mature debate?
The Bill is in the form that it is in, and is being somewhat rushed through this House, because of earlier delays. Before the last election, we were promised a Green Paper sometime in the summer of 2005, but it did not see the light of day until January 2006. That probably had something to do with theNo. 10 policy unit sticking its oar in and pushing for welfare changes that were so draconian that not even the then Secretary of State, the right hon. Member for Sheffield, Brightside (Mr. Blunkett), approved of them. An e-mail of last October from the Prime Minister to the then Secretary of State infamously demanded more means-testing for all incapacity benefit recipients, the time-limiting of incapacity benefit, naming and shaming GPs who allegedly signed off too many sick notes, and commuting a portion of the incapacity benefit amount into a non-cashable voucher with which claimants would have to buy rehabilitative care. Thankfully, none of that saw the light of day, but what we do have today is a Bill whose level of generality raises many questions, many of which have been posed in our debate.
First, we must be clear about the Government’s target of removing 1 million people from incapacity benefit by 2016. On March 6, the Secretary of State said:
“we are starting from 2.7-2.72 million. By 2015/2016 I would like to see that figure down to 1.72 million, so it is a net figure. We are not trying to do any clever statistical sleight of hand on this.”
But in a parliamentary written answer to me on 16 June, the Under-Secretary of State for Work and Pensions, the hon. Member for Stirling (Mrs. McGuire) published figures—she should listen because she probably does not remember what she put in Hansard—showing that if there were no changes at all, in 10 years’ time there would be only 2.36 million incapacity claimants anyway. [Interruption.]
The Secretary of State says, “Is this a serious debate?” It certainly is, because the point that we are making—my hon. Friend the Member for Runnymede and Weybridge (Mr. Hammond) made it earlier—is that the Government will have to assist only 640,000 people, not the 1 million whom the Secretary of State said he would help. [Interruption.]
That is a serious point, and if the Secretary of State does not think so, it is him who should grow up.
Secondly, this Bill gives insufficient help to existing claimants, half of whom have been trapped on IB for more than five years. They risk being left out in the cold.
Justine Greening rose—
Mr. Ruffley: A June Department for Work and Pensions consultation report confirms that existing claimants will be migrated to the new allowance “in time”, and “as resources allow”. That seems unfair to many outside bodies, so will the Secretary of State publish a date by which existing claimants will be able to access support under his new regime? Is he prepared to do that?
Justine Greening rose—
Mr. Ruffley: This problem has particular relevance —[Interruption.] The Secretary of State may not think that the plight of existing claimants is a problem, but many people do.
Justine Greening rose—
Mr. Ruffley: I am very happy to give way to my hon. Friend.
Justine Greening: I am delighted that my hon. Friend has given way; my persistence has paid off. Does he agree that one other problem with the 1 million target is that it was set when the Green Paper was issued, and that between then and now, the Government have said that they will assist existing claimants on to the employment and support allowance in order to help them back into work? So in theory, the 1 million figure should surely be adjusted to reflect the new cohort of people on IB who will get help who were not going to get it before.
Mr. Ruffley: My hon. Friend makes an excellent point, and I hope that the Minister will answer the question about the 1 million target: are we talking about 1 million people, or some 650,000?
Hugh Bayley: Will the hon. Gentleman give way?
Mr. Ruffley: I need to make progress because time is short; I might give way in a minute.
The Bill is meant to deliver the Green Paper’s further aim of increasing the number of older workers by1 million. Age Concern said:
“We recommend the Department sets interim targets so it has an incentive to support people who are too old to count towards targets that are a decade or more away. We recommend the Government states its employment aspirations for older people for the short and medium term by setting a clear, stretching target for the end of the next CSR period.”
Will the Secretary of State agree to that request?
Thirdly, many welfare stakeholders openly wonder whether the funding for the Bill is adequate. The chief executive of the Disability Alliance said that the roll-out could end up as “pathways lite”. The Select Committee said:
“There are widespread concerns that the funding
“may not be sufficient without services being watered down.”
The funding issue gets murkier when we turn to the Bill’s regulatory impact assessment. There is no statement on the proposed benefit rates for the new allowance. In addition, it proposes that certain elements of the new regime be introduced only as resources allow. It states:
“The overall cost of moving on to the new ESA will be dependent on where the benefit rate is set. In addition, it is likely there will be implementation and IT costs incurred during the transition; again these costs will vary depending on the agreed solution.”
We know that according to the Chancellor, the likely cut in the DWP baseline next year will be in the region of 5 per cent.; let us hope that he is not the road block to reform in delivering on this Bill. To clear up worries outside this place about the adequacy of funding, will the Minister undertake today to publish biannually statistics on the incapacity claimant case load and on progress toward the target reductions, and to publish estimates of the resources that will be required to achieve that target?
Fourthly, the evidence shows that payment by results can get more people back to work more quickly—an example being the providers of employment zones. As participants progress through the programme, providers receive payments throughout that activity, and additional payments are received for achieving sustainable employment. A November 2003 DWP research report found that 28 per cent. of the employment zone participants surveyed had a job of16 hours or more per week, compared with 17 per cent. of new deal 25-plus participants.
There are other examples, too. Yet the Bill does not introduce a serious payment by results regime, the objective of which would be to get more people off IB more quickly. That is why my hon. Friend the Member for Runnymede and Weybridge today proposed a radically better deal for claimants. Our no win, no fee proposal would offer providers the opportunity to get existing claimants into sustained employment, but we would pay the provider only when actual benefit savings had tangibly been realised. Significantly, that model would help to get round the comprehensive spending review constraints that the Treasury is currently imposing on the Secretary of State.
We would, of course, provide safeguards so that more modestly sized providers in the private and voluntary sector, which might be concerned about cash flow, would not be excluded from winning contracts. In particular, we understand the point made by Mencap, which said:
“Niche providers with specialist expertise in learning disability are losing contracts with Jobcentre Plus due to the current policy of awarding contracts to large, generic providers.”
That is why we would like a fuller debate about the way in which bids in the pathways scheme roll out, and how they can be structured to ensure that small providers such as Mencap and Tomorrow’s People, which my hon. Friend the Member for Tunbridge Wells (Greg Clark) referred to in his excellent speech, continue to thrive. My hon. Friend the Member for Tiverton and Honiton (Angela Browning) made similar points.
Finally on the issue of the private and voluntary sector, we know that the roll-out from October 2007 until April 2008 will extend the pathways scheme to the remaining 60 per cent. of new customers. The departmental press release said that that would happen “mainly via private and voluntary sector partners.”
Will the Minister tell us what so many providers are asking? What does “mainly” mean? Does it mean that 100 per cent. of the provision will be by the private and voluntary sector, or 90 per cent., or 80 per cent? What is the figure?
Fifthly, the sensitive operation of the new limited capability for work test in clause 8, the limited capability for work-related activity in clause 9, and the work-focused health-related assessment in clause 10, is vital to the establishment of an efficient new allowance. Under the current system, too many cases go to appeal. Concerns are already emerging about the Bill’s proposal that at least two and possibly three of those new tests will be administered not only at the same time, but by the same assessor. Stakeholders have pointed out that that could lead to inaccurate decisions because a claimant will first have to demonstrate that they are sick and then, a few minutes later, demonstrate what they are capable of doing. Any rational claimant will undoubtedly grasp that the more capability he or she demonstrates, the more that could undermine a judgment about his or her disability.
The potential for that to go wrong is great, and I was rather disappointed that the Minister talked about dummy runs, not a proper pilot. That is why the Disability Benefits Consortium has said:
“We believe that getting the interaction between these two assessments right is vital and the dummy runs the Government have proposed are inadequate for testing out such a substantial change to the entitlement system.”
Will the Minister think again on that?
I want to ask about housing benefit in part 2 of the Bill. My hon. Friends the Members for Poole (Mr. Syms) and for Hammersmith and Fulham (Mr. Hands) had much of interest to say on that. In most of the pathfinder areas, the flat rate housing allowance has reduced the shortfall experienced by claimants between the benefit that they receive and the rent that they owe. We welcome that. However, clause 27 revises the local housing allowance model. It proposes changes to the methodology used to calculate the flat local housing allowance rates, to the room size criteria and to the cap on the amount that a claimant can retain. Will the Minister agree with Shelter, and with us, that before the Committee stage, the Department for Work and Pensions should publish its detailed modelling of the anticipated impact of those adjustments in the Bill?
I also want to ask about the controversial provisions in clause 28 for the loss of housing benefit following eviction for antisocial behaviour. Will the Minister reflect on what Barnado’s has said:
“Our particular concern is about the effect on children...it is not a child’s fault that their families are in difficulties...but the withdrawal of financial benefits from the family is likely to drive more children into deeper poverty and...work against the Government reaching its target for reducing poverty. Ultimately, of course, subsequent eviction from the home might lead to an increase in the number of children entering the care system”?
The Bill will not succeed in helping people simply because it has broadly desirable aims. The nuts and bolts of reform must be right; the devil is in the detail. Conservative Members will thus challenge Government assumptions when we must. We will put forward modern Conservative alternatives when we can, such as proposing a system of payment by results, which would get more people off benefit more quickly. It is in the spirit of constructive criticism—and in that spirit alone—that we will give the Bill a Second Reading tonight.