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Employment and Support Allowance Regulations 2008

My Lords, I start by thanking the noble Lord, Lord Kirkwood, for initiating this debate. I hope that at the end of it he will feel able not to press his Prayer against these regulations because they are very important. A lot of individual points have been raised and I will try to deal with as many as I can in the time allotted, but I reject absolutely suggestions that the Government have not acted in good faith on these matters. I will explain why over the next 10 or 15 minutes. The three sets of regulations before us are an integral and essential part of a comprehensive package of wide-ranging welfare reforms. The Government have undertaken a series of reforms to address the issue of unemployment. While these have had considerable success, those on incapacity benefits have not shared in that success to the extent that we would wish. This House will be aware of the scale of the problem we need to address. In 2003, after an inexorable rise over the previous three decades, the number of working-age people on incapacity benefits reached a peak of more than 2.7 million. This neglected group of people represented an unacceptable waste—lost opportunities for the individuals concerned, damage to families and local communities and a loss to the wider economy. Also in 2003 the Government introduced their first Pathways to Work pilots, demonstrating our commitment to help those on benefits because of a health condition or disability. We wanted to give those who could work a chance to regain employment and become independent. Pathways to Work provides a holistic package of support, combined with a reasonable measure of conditionality to ensure engagement with that support to make a return to work. The pathways measures have been successful with more than 64,000 people helped into work to date. That is why pathways has now been made available to people on incapacity benefits throughout the country, representing an investment of £1.1 billion over the next three years. To listen to most noble Lords tonight, you would think the Government were cutting back on their programme rather than investing £1.1 billion as part of the current Comprehensive Spending Review for Pathways to Work. Implementation of the Employment and Support Allowance later this year will provide the legislative framework to allow us to build further on the success of pathways, and together with the cross-government health, work and well-being strategy engaging with employers and healthcare professionals, ESA will be a key part of the next steps towards our aim to reduce the number on incapacity benefits by one million. There is nothing sinister about trying to reduce the number of people on incapacity benefits. It is a question of making sure that people have the opportunity to realise their potential. That may be characterised as trying to get cuts in benefit expenditure but it has the positive attribute of helping people to have a more fulfilled life, and we are proud of that. I acknowledge the concerns expressed during debates last year, particularly on ensuring fair treatment for the most severely disabled and the most vulnerable people on the benefit. I believe that these regulations provide a reasonable balance. They place proportionate requirements on those best able to meet them with appropriate help, while giving greater financial security to those who need it most and providing the support to participate voluntarily to ensure that we do not exclude the most vulnerable. Some of the key regulations will be familiar to the House from the draft regulations we made available last year. Noble Lords will know that we are able to look in some detail at the regulations dealing with the work capability assessment, the work-focused interviews and the related conditionality requirements. We have also taken forward into the ESA Regulations many aspects of the regulations that apply to incapacity benefit and income support, but only where they clearly fit with our aims for the new benefit; for example, those dealing with income and capital linking rules, help with housing costs and urgent cases. We have also taken the opportunity to introduce flexibility where it will help people return to work; for example, in relation to permitted work, advance awards and payments for less than a week. At the heart of these reforms is a determination to change the attitude that people on incapacity benefits are effectively written off. Instead of the concept of incapacity for work, ESA entitlement will be based on limited capability for work. Most claimants of ESA will be expected to engage with a personal adviser to discuss possible steps towards their eventual return to work. These regulations give effect to the new work capability assessment for ESA claimants resulting from the review of the personal capability assessment that applied to claimants of incapacity benefits. Noble Lords, including the noble Baroness, Lady Thomas of Winchester, and the noble Lords, Lord Kirkwood and Lord Low, said that this was a tightening of the gateway. The new work capability assessment is a fairer and more accurate test of capability. Therefore, it is right and proper that we apply it across the board. We must have an assessment that is transparent and used universally. I remind noble Lords that in 2005 there was absolute consensus that the old PCA needed updating and as a Government we launched a review of the assessment using experts and stakeholders from the disability community. We accepted the findings of that review and we have committed to Parliament that we will report on the new assessment in the first five years of its operation. The noble Baroness, Lady Thomas, asked about those with mental health conditions. The new medical assessment will deal more effectively with the types of conditions that are prevalent today and lead to assessments that are more equitable for groups with different impairments. The changes to the mental function assessment will address a current gap in the assessment of cognitive and intellectual function in conditions such as learning disability, autistic spectrum disorder and acquired brain injury. The noble Lord, Lord Kirkwood, talked about fear and uncertainty around all these regulations, and the noble Lord, Lord Taylor, addressed the same point. We have already begun communicating with staff, customer representative organisations and other stakeholders to raise awareness about the ESA regime and create understanding about what it will achieve and how it will work. Our communication with customer representative groups and other key external stakeholders is based on the long-running and fruitful engagement led by Ministers and officials during consultation. This has been supplemented by ESA regional briefings and slots within national forums for key stakeholder groups. There is recognition that it would not be reasonable to expect those with the most severe conditions to be required to attend meetings with advisers as a condition of receiving benefit. Part of the new assessment will determine whether a claimant also has limited capability for work-related activity and will therefore be in the support group. ESA simplifies benefits for people with health conditions and disabilities by combining contributory and income-related strands within one overall benefit. As indicated in the drafts provided for debate last year, the ESA regulations make provision for us to require customers to engage with us. In the case of the work-focused, health-related assessment, the aim is to ensure that customers have the opportunity to discuss with a health professional the sort of health-related interventions that could help support a return to work. The work-focused interview arrangements will be broadly similar to those applying in the Pathways to Work provision. A failure to attend either a work-focused health-related assessment or a work-focused interview without good cause will lead to a sanction. Again, this will work in a broadly similar way to the sanction regime in pathways, although the maximum sanction will not exceed the amount of the work-related activity component, which is £24. Again, as with pathways, there will be safeguards to ensure that vulnerable customers are treated fairly. Where a customer has a mental health problem, or there is a likelihood of a problem with communication, contact will be made with them or their carer or healthcare professional. The purpose of sanctions is not to be punitive but to encourage engagement. The experience of sanctions in pathways shows that they are applied to very few people. The regulations set out the structure and components of both the income-related and contributory strands of ESA. The rates of benefit need to be seen in the context of a new benefit that has a different focus from the benefit that it replaces, so the read-across cannot be absolute. ESA will cost £400 million more than keeping people on IB over the next five years. This will mean that more people will be getting money sooner than is currently the case and more money will be directed to those who are most likely to need it most. That seem to me entirely inconsistent with challenges that this is going to damage our focus on child poverty. More money is going into benefits over the next five years; 1.1 billion is going into Pathways to Work.