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Improving Lives: Green Paper

I thank both noble Lords for their very thoughtful contributions and for their general welcome, with maybe a little complaint in one case about thinness. I take the point.

Both noble Lords made the point, in different ways, about the level of engagement going on now with this Green Paper. We make no apology for that. We need a process that fully brings on board the disabled groups, so that they have full impact. We want to take the time necessary to do that properly. The noble Baroness, Lady Bakewell, looked at the health and work relationship; it is confined to the area that it is because the process is not about PIP at this stage. There will be other times to look at PIP but it is not part of this consultation.

As the noble Lord, Lord McKenzie, pointed out, fundamental here is the Waddell and Burton report of September 2006. It was very valuable for me when I was writing my first piece of work on what to do with the benefits system. It turned on its head the traditional relationship between the benefits system and work when it said that work, particularly good work, is good for people. It is not one of the problems; it is one of the solutions. It has been really hard to move and change a system that is designed to protect people from work, which made sense when there was heavy industry. It now changes at every level.

We all feel that this is taking a long time, but there is a good reason for it. We are transforming a system that put people in a silo of disability and did not let them back into work. Transforming that requires universal credit as a fundamental base where you do not just have those different groupings; you have everyone able to do what they want, with their pay adjusted accordingly. That is the answer to the noble Lord, Lord McKenzie, about universal credit: it makes work pay.

If you make a comparison between what somebody who had been in the system would have got and what universal credit does, you come up with different figures. Once you are in the universal credit system, the reality is that you are incentivised to work. That will

have a behavioural effect, which we are already seeing in the way that universal credit operates. It helps and encourages people to work more. While we do not yet have many numbers of those who are disabled in the system, there are some and they are going in. Within universal credit we will build evidence as to how best for them to do so. As noble Lords appreciate, we are building the universal credit system very carefully with a “test and learn”, and it is still one of the areas about which to learn a lot.

This is a new era, of joint working. I said it, as did the noble Lord, Lord McKenzie. It is joint working not just between the two departments, which is pretty tough, but also with employers. Getting all that to work well is one of the reasons why we are taking time over our consultation. Clearly we are looking at building on the three types. We now have three tiers of employers in the new two-tick system that was relaunched in July, with the top tier being the leaders. In response to the question from the noble Baroness, Lady Bakewell, about whether there will be the demonstration employer—and we all know individual employers who really have put huge effort into supporting people—I can say that we are setting that up with tiers where the leaders will support others.

On the question from the noble Lord, Lord McKenzie, on statutory sick pay and the fit note, that is clearly at the heart of getting the relationship between health and work and the employment system in the DWP to work better. That is why consultation in this area is so important. One of the most important things is to get the health system seeing employment as one of the therapeutic outcomes for which it is looking. We have already taken that step, and it takes us a long way. I cannot at this stage tell the noble Lord what the allocation of the community partners will be, but we will work on that.

With that, I think that I have dealt with the first level of questions and would enjoy some more.

6.27 pm