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Welfare Reform Bill

I am a big fan of the proposals. It is not going too far to say that if we get it right, the Bill more than any other piece of legislation could be what this Labour Government are remembered for. Together with our Sure Start programme, the Bill finally gives people on incapacity benefit a chance to work their way out of poverty. I echo some of the thoughts expressed by my hon. Friend the Member for Kingswood (Roger Berry), especially the point that on average a person on incapacity benefit will receive less then £80 per week. There are an estimated 2.7 million people on incapacity benefit. That is 2.7 million people living on £80 per week. I do not think that any of us in the House can imagine what living on £80 a week must be like. People on incapacity benefit are poor. Not having a job is far more likely to mean that they are depressed and stressed. They do not have access to the social life that working can bring. Work is good for people’s mental and physical well-being. Second to winning the national lottery, it is still the best way out of poverty. Beveridge understood that when he first thought of the welfare state. His welfare state was proactive. He intended it to rid the world of want, disease, squalor, ignorance and idleness. His welfare state was founded on universal access to free health care and education, decent housing, and a benefit system that would provide security for those who could not work, and most crucially, help to find a job for those who could. From education and health to unemployment benefit and welfare, the Beveridge plan had security at its heart, but work was its lifeblood. The welfare state did just that, until Thatcher and our changing economic landscape made welfare a passive dumping ground for the victims of industrial decline. Millions of people were written off on the benefit system with no expectation that they would work. Those are not just numbers; they are people. Most of us have seen the harm, the upset and the chaos that worklessness causes. It robs people of their dignity, self-confidence and self-worth. It is no surprise that suicide rates are 35 times higher among the long-term unemployed. To leave people on incapacity benefit and not to help them find work is not an option. No one is arguing that the modern welfare state adequately reflects modern labour markets and employment patterns. We need welfare reform, but we need to get it right. The Bill recognises that the world of work has changed since the days of Beveridge, or even Thatcher. It is no longer the case that incapacity benefit claimants are all men from the industrial heartlands with bad backs. As many hon. Members have mentioned, mental health problems caused by stress at work may be as big a problem in this century as industrial injuries were in the last century. That is why it is vital that we focus on identifying mental health problems that impact on people’s ability to work and finding better ways to help people overcome them. In order to do that, we need to find better ways of engaging with employers—another issue that has been highlighted by many hon. Members. We should ensure that people do not feel forced out of work in the first place, but more importantly, we need to educate employers about mental health issues. There is still too much stigma attached both to mental health problems and to physical disability. Most employers tend to be in small and medium-sized firms. We no longer have great monolithic state institutions. Instead, we live in the age of the flexible labour market, which is fine for those who are qualified and skilled enough to be in control of it, but it is not fine for the unskilled and semi-skilled whose lives are determined by it. Flexibility means that no one size fits all, and flexibility does not suit everyone. Flexibility means that we have to tailor our welfare state to meet the work and welfare needs of individuals. That is why the pathways to work pilots have been the single most successful intervention for getting people off benefits, out of poverty and into sustainable, meaningful work. My constituency is North-East Derbyshire, which falls into the Derbyshire pathways to work pilot area, which was the first pathways area in England. A claimant who takes part in the pathways pilots gets a personal adviser who will take them through the journey from incapacity benefit to sustainable work. One of the elements that has worked best in pathways to work has been the condition management programmes. People who have been away from work for long periods often have additional needs, such as dealing with the stress caused by poverty and not working, or the pain that they are experiencing from their illness or disability. Specialists are brought in to work with claimants until they can manage their condition. Jobcentre Plus works closely with local colleges to ensure that the necessary training is given to qualify people for suitable jobs. As a result, 25,000 people nationally have entered work through the pathways pilots, which, as we heard, have been running for just over two years. People who leave IB for work in pathways areas earn on average £72 a week more than elsewhere. That is a significant statistic because it is a direct result of pathways making sure that people get the right job, not just any job. That is an important part of the welfare reforms. There is a national downward trend of 1 or 2 per cent. in people claiming incapacity benefit. In my area that figure is well over 6 per cent. The national roll-out of pathways is key to the reforms, but the most needed reform is changing the medical examination to a personal capability assessment. At present, a person claiming incapacity benefit has to go to a medical examination centre about once a year. The doctors who work at these centres are testing for incapacity. They ask questions and tick boxes. Enough so-called right answers mean that the person can stay on incapacity benefit. I have lost count of the number of people who have told me that doctors at the medical examination centres do not look at them. They do not even look them in the eye. Hopefully, that will change when doctors and personal advisers look at what a person is capable of doing, and not just for the few moments that they spend being assessed. Too many people with fluctuating conditions and mental health problems fail the test because at the time of their assessment they are feeling okay. The personal capability assessment must look at a person’s long-term history and the person must be looked at physically. Getting rid of the computer screens at medical examination centres would be a very good start to doing that. It can be the most satisfying and rewarding thing in the world to see someone’s life change because they have been helped back to work. I went with the Work and Pensions Committee to visit Derby so that we could see for ourselves how the pathways to work pilot was running. It was incredible. People who had been helped back to work were often very tearful and spoke of their lives having been given back to them. I have never seen such a dramatic difference being made to people’s lives. But there can also be deep frustration. We can work in partnership, we can work laterally, we can identify different pots of resources, but what happens when someone agrees to a back-to-work plan, they are taking part in pain and condition management, they sail through skills training and education, they are ready and eager to go to work, they are totally job ready, and then there is no job for them to go to? That is where the cities strategy comes in, which is the best bit of the Bill. Our cities have the highest concentration of incapacity benefit claimants, and it is right that we target the greater number in the cities. The cities strategy pools resources and initiatives within a city and brings together local partners to work within and as a community to improve economic regeneration through skills, employment and health. This is fantastic stuff, but what happens in rural areas such as North-East Derbyshire? We have no cities, but we do have high concentrations of incapacity benefit claimants. It is like lots of ex-mining communities where many people live in isolated, rural villages with poor transport links and no cars, and those are the people on incapacity benefit. Transport infrastructure in cities is much better than it is for people in the countryside, and someone who lives in a city will have a wider range of jobs available in a smaller area. Fundamentally, the cities strategy is about going out to the areas where we know the largest number of incapacity benefit claimants live rather than calling them in to jobcentres. There is no reason why we cannot transfer that model to a rural setting. We will be setting up a rural pilot in North-East Derbyshire, bringing together all the key stakeholders from welfare rights organisations, Jobcentre Plus, some private and voluntary training providers and job brokers, Chesterfield college and large employers. We will work together to ensure that our current labour markets and future jobs and skills needs are properly mapped. It is the only way to ensure that local people at least have a chance of getting local jobs. One final thought. The Bill can be as radical and imaginative as the very creation of the welfare state itself, but the reforms need to be carefully thought out. They must meet the needs of a wide-range of different people with minor or severe conditions, people who are recently out of a job and others who have never been able to work. If we get this wrong, we let down the most vulnerable people in our society. But if we get it right, we could lift millions of people out of poverty and give them back their lives.