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Employment and Support Allowance Regulations 2008

My Lords, I thank the noble Lord, Lord Kirkwood, for laying these Prayers and initiating a necessary revisit to this important government programme. As has been said, the written evidence to the Merits Committee on these regulations covers some 22 pages of report. Notwithstanding the memorandums from the Department for Work and Pensions, as the noble Lord, Lord Low, has said, evidence has come from the Disability Benefits Consortium, Citizens Advice, the Chartered Institute of Taxation, the Child Poverty Action Group, the Disability Alliance and Leonard Cheshire Disability. They draw attention to the gap between the Government’s originally declared intentions and the consequences of the regulations. There is a powerful sense of bad faith. The new employment and support allowance will be paid to those whose health or disability affects their ability to work and is designed to replace incapacity benefit, the severe disablement allowance and sickness-related income support. We have supported the Government’s strategy to reduce the number claiming benefit and at the same time to help people back to work. So far, so good. However, it is clear from the submissions that while there has been an extensive consultation with stakeholders, the regulations do not match with the Government’s undertakings. Above all, their very complexity means that claimants will find it difficult to understand how they operate, as the noble Baroness, Lady Thomas, has pointed out. Whatever happens, the Government will need to do more to explain how it will all work and address the concerns of interest groups if they are to enlist their active partnership in helping claimants to understand the new system. In particular, there is a widespread view that the rate of allowance for single people—£89.50—does not exceed the current rate of incapacity benefit. That is contrary to undertakings given during the course of the Bill. The noble Lord, Lord Low, made that point powerfully. Does the Minister accept that criticism? There are also considerable consequences following on from the interaction of the allowances with the income tax system. These may well work, in a way, to reduce the incentive to return to work. What is the impact on claimants of the abolition of the 10p tax rate? Has the department modelled the likely changes in the annual cost of the scheme as a result of the latest announcements on tax allowances? As the Minister will know, those are but for one year. What will be the consequences for many claimants if the tax allowance changes are not continued? There are further anomalies between those who come to the ESA based on national insurance contributions and those who do not, as the noble Baroness, Lady Thomas, has pointed out. How does the Minister justify the different income that claimants will receive? In the same way, there are different treatments of access to passported benefits such as prescription charges, free school meals, legal aid and so on. If the ESA is income-related then the right to those benefits will be automatic, but for those on a contribution-based ESA, each of those benefits will be subject to a separate means test. I note that housing benefit and council tax benefit are an automatic entitlement either way, but how does the Minister justify the discrepancy in entitlement elsewhere? Does he feel at ease that this accords with the spirit in which he introduced the Bill? Furthermore, does the Minister feel that the way these regulations are drawn will attain the Government’s objectives in providing support for those with disability on a fair basis and help such people back to work? Finally, can the Minister put various figures on the record? What is the annual cost of the programme? What assumptions are made about the number of people who will be successfully back in work? Are savings to the Treasury envisaged and, if so, what are they? The Minister will deny that cuts are the objective. Can he tell us, therefore, what percentage of savings will emerge as reinvestment in that programme? I suspect that for the Minister the lesson is: get your deal with the Treasury before introducing legislation.