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Employment and Support Allowance Regulations 2008

My Lords, I, too, am grateful to my noble friend Lord Kirkwood for tabling this Prayer this evening. No one would think from the sparse attendance in this Chamber that these regulations will play an important part in the lives of thousands of people throughout the country, as has been said. However, the groups which lobby for those on benefits know just that, and many of them have expressed grave misgivings about how the regulations will impact on their client group, some stating categorically—as the noble Lord, Lord Low, has said—that Parliament was misled by Ministers into believing that more money would be available than now, not just by uprating but in real terms, for the support group; that is, those furthest from the labour market. They, and we on these Benches, are very disappointed that this does not appear to be the case. The laudable aim of the parent Act—the Welfare Reform Act 2007—is, of course, to try to stop new claimants from leaving the paid workforce and subsisting on health-related benefits when, with the right help and support, they could perfectly well do some job. Thereafter, from April 2010, the case list of those already on these benefits will be tackled. The main concerns of the voluntary organisations in this field include, first, that a reduction in the number of people moving on to the new benefit, ESA, was to be achieved, according to the Green Paper A New Deal for Welfare, by ““prevention and proactive intervention””, and not simply through a ““narrowing of the gateway”” by means of the new, tougher, work capability assessment. This will result in many more people being thrown back, largely unsupported, on to jobseeker’s allowance, with as many as 40,000 more children affected by a family’s fall in income—which, as the noble Lord, Lord Low, has pointed out, will do nothing for one of the Government’s main aims of eradicating child poverty. It should be said here and now that no one can or should tolerate those who try to cheat the benefits system by feigning or exaggerating illness or disability in order to receive benefits. Whenever such a case is reported in the newspapers, it must make the many thousands of people legitimately on these benefits particularly angry. It must be stressed that those who are the keenest to keep working or get back into some sort of work are often the most afflicted—particularly people with some form of mental illness, whether it be a short episode of clinical depression or a longer term illness. The charity Mind does not mince its words. It says: "““We believe the Government is attempting to design people with so-called mild to moderate mental health issues out of the ""ESA system. In doing so, the Government is dumping them on to the much more stringent and far less supportive Jobseekers Allowance regime"." It is entirely reasonable to ask the Government to look again at the mental health element of the WCA, perhaps doing what Mind has called for by commissioning independent specialists to assess each criterion of this element of the WCA and the weighting attached to it to determine if it is as fair as the Government say it is. Will the Minister give an undertaking to monitor this aspect of the work capability assessment as soon as it is operating nationwide? The second main concern of the voluntary bodies is the injustice of how the two different groups of claimants are being treated, namely those on income-based ESA and those on contributory-based ESA. When I moved an amendment on Report during the passage of the Welfare Reform Bill in March 2007 about service users in receipt of benefits being able to receive the modest remuneration offered for meetings without compromising those benefits, the Minister announced that, in future, those on income-based ESA would be allowed to earn £88.50 per week under the permitted work rules for 52 weeks without losing benefits, to align them with those on contributory-based ESA. This was very welcome. That, however, meant that the income-based claimants had two distinct advantages over contribution-based claimants with no other source of income, namely the disregarding of the permitted work rules for full housing benefit and council tax benefit and the automatic passporting to other benefits such as free school meals. Contribution-based claimants will have a large part of their permitted earnings taken through the housing benefit and council tax benefit tapers which are set at 65 per cent and 20 per cent respectively. Those contribution-based claimants with no other income who are therefore receiving the same rate of benefit as the income-related claimants will have to apply separately for other benefits. This is manifestly unfair. Why should those who have a contributions record but no other income be much worse off than those who do not? Citizens Advice characteristically offers several practical solutions to this problem. It suggests that contribution-based claimants could still be offered a means test and, if they fulfilled the requirements, would have a marker on their benefit showing they were entitled to passporting, or, alternatively, be offered ESA income-based with the option of switching to ESA contribution-based if their circumstances changed. In any case, it calls for the housing and council tax benefit regulations to be changed to disregard earnings from permitted work. There is another important question about permitted work. Currently there are two categories of permitted work, which allow earnings of up to £88.50 a week without the 52-week time limit. These categories are supported permitted work—where people have a support worker whose job it is to help people with disabilities find work—and permitted work PCA—personalcapability assessment—exempt. Perhaps the Minister could say whether supported permitted work under ESA will be non-time-limited as at present. Turning back briefly to the issue I mentioned earlier of barriers to service-users on benefit being allowed to keep any small remuneration they are offered for helping to design and plan health and social care services, there may be a glimmer of light at the end of this particular tunnel—although I am not holding my breath, to mix a metaphor. Regulation 91 in the ESA Regulations No. 794 sets out the treatment of earnings in such a way that earnings are averaged over a pay period, whether this is monthly, quarterly or longer. I understand that this regulation came about as a result of the commissioner’s decision in a very complex case about supply teaching in 2004. This judgment should mean that service users on benefits should be able to have any money they earn for infrequent meetings ““averaged”” so that they do not lose benefit by earning too much in a short period of time. Is this the case, I wonder? Does the decision also apply to incapacity benefit, jobseeker’s allowance, housing benefit, council tax benefit or local housing allowance? If so, have Jobcentre Plus staff been advised to treat earnings in this way? These regulations are being rolled out, as my noble friend Lord Kirkwood said, at a time of extreme uncertainty in the economy. Those at the margins of the tougher medical tests are going to have to compete for jobs with many in the existing workforce who have lost their jobs in the credit crunch. The knock-on effects could be severe. The last thing that people with any kind of disability need is to find themselves even more poverty-stricken than they were before. Are there really enough jobs in the workplace for a lot of extra and quite vulnerable workers? How many more job vacancies are there now compared to the number of people looking for work? Finally, I must say a word about the complexity of these benefits. The Merits of Statutory Instruments Committee, of which I am a member, says in its summary: "““The Regulations are complex and claimants may find it difficult to understand the operation of this allowance. The Government need to do more to explain how this system will work and to address the concerns of interest groups that are in a position to offer significant assistance in helping claimants understand the new system””." It repeats that advice later on, saying that it is difficult to work out the interactions between the different components of the regulations. Hear, hear, is all I say. Are the Government confident that Jobcentre Plus staff will be sufficiently familiar with the new rules by the autumn to operate the system?