Danny
Alexander: I am grateful to the Minister for his reply; it
reassured me on almost all my points, so I shall not press any of my
amendments. The
Minister did not, however, answer my question about fee reductions and
waivers. Although he might not have an answer now—I see from his
expression that he might not—I should be grateful if he would
give the matter further consideration because it is important to ESA
recipients given the additional cost of some educational provision,
particularly that which might not be counted as work-related activity
in the way that he described. It would be useful to have some
reassurance that the Minister at least will consider what can be done
about that. In
relation to the contributory part of the allowance, I note that
paragraph 4(1) of schedule 1 on conditions relating to youth
reads: “The
third condition is that...he is not receiving full-time
education”. Again,
perhaps the Minister will reflect on that in relation to the
contributory part of the
allowance. I beg to
ask leave to withdraw the
amendment. Amendment,
by leave,
withdrawn. Schedule
1, as amended, agreed
to.
Clause
2Amount
of contributory
allowance
The
Chairman: I would like to inform the Committee that given
the wide-ranging amendments, it is not my intention to allow a clause
stand part debate after we have discussed the
amendments.
John
Robertson (Glasgow, North-West) (Lab): I beg to move
amendment No. 180, in clause 2, page 2, line 20, at end
insert ‘irrespective of
the age of the claimant’.
The
Chairman: With this it will be convenient to discuss the
following amendments: No. 181, in
clause 2, page 2, line 25, at
end insert— ‘(1A) The total
amount payable under subsection (1) above may not be less than the
relevant rate or rates of benefit payable under paragraph 2A of Part 1
and paragraph 2 of Part 2 of Schedule 4 to the Social Security
Contributions and Benefits Act 1992 which would have been payable to
the claimant on the day immediately before section 2 of this Act comes
into effect had he made a claim for and otherwise been entitled to
those
amounts.’. No.
182, in
clause 2, page 2, line 35, at
beginning insert ‘subject to subsection
(1A)’. No. 177,
in
clause 2, page 2, line 40, leave
out paragraph
(c).
John
Robertson: May I, too, welcome you to the Chair,
Mr. Hood? I know that your words of wisdom about temptation
will be taken on board by every Member, even myself. There are three
kinds of MP in the Room today—the good, the bad and the weak. I
might be weak, but I am never bad, so I shall do my best to adhere to
your instructions. I
tabled my amendments in order to probe the Government and to tease out
some more information from them. Clause 2(1) deals with the amount of
contributory allowance. The amount of the contributory ESA is
not set out in the Bill, but will be set out in regulations. Page 42 of
the Green Paper states that the additional amount for the work-related
activity group “will fix
the total received by a claimant at a rate above the current long-term
rate”. In respect of the
support group it
continues: “After
the assessment phase, they...will receive more money than they do
now.” It
is important that while we are asking people to take part voluntarily,
we look after them to ensure that they are not worse off and that we
protect the most vulnerable at all times. Under the IB scheme,
additional amounts can be paid if conditions are met. They are
age-related and adult dependent additions. The intention is that the
ESA will not contain those
additions. To ensure
that people on ESA are not worse off than on the current scheme and
taking the statements in the Green Paper to mean that no one will lose
out financially, the amount of contributory allowance must be at least
equal to the stated rate of the IB scheme, including any additions to
which they will be entitled; otherwise, the effect will be to push more
people into the means-tested element of ESA. That might be the
Government’s wish and unless someone has come up with a better
way of assessing whether people need allowances, I appreciate that we
must go down the road of means-testing. I hope that the Minister can
assure me that the effect on those who most need help will be
considered individually.
In conclusion, these amendments
are small but the amount of money that people receive in cases of
hardship must be looked at and taken care of. These are probing
amendments because I want to hear from the Minister that the Government
will always consider the people who most need
help.
Mr.
Hunt: I want to speak briefly because the hon. Gentleman
has raised some interesting points. On the precise level of the
benefit, can the Minister confirm
whether he intends that people who go on to ESA on an income-related and
contributory basis will be given the same level of benefit? Obviously,
the income-related basis will take them up to a certain level of
income, but the intention is that that level should be the same. I am
concerned about minimising complexity in a system that is already
complicated. On the
level of benefits and ensuring that people do not lose out, I notice
that the intention is that people on the support element of the package
will receive slightly more than those on the work-related element. It
is extremely welcome that people with the severest disabilities will be
given additional help, but it is also the Government’s intention
that people should transfer from the support element of the package to
the work-related element. One case study in the regulations is of
someone who transfers from one to the other. Was there any evidence in
any of the pilots that people are deterred from transferring from the
support element to the work-related element because of the small
reduction in benefits? That would be of great concern as the purpose of
the Bill is to move people towards the world of
work.
Mr.
Murphy: In response to the brief points that have been
fairly raised by my hon. Friend the Member for Glasgow, North-West
(John Robertson), as he said, the amendments refer to the rate of
benefit and we said throughout the process—in the Green Paper
and since—that all existing customers will have their rate of
benefit protected and new customers will have a higher rate of benefit
than the current long-term rate of incapacity
benefit. Amendment No.
180 would introduce benefit rates into the Bill, but the
Government’s commitment is about protecting rates for existing
claimants and putting future customers on a higher rate than the
current long-term IB
rate. There was an
important concession on benefit rates in the Green Paper. We had
initially intended to set a youth rate in the main phase. Not
unreasonably, representations from the TUC and others said that that
would be the wrong thing to do, so we announced that we would not be
introducing a youth rate in the main phase, which has been welcomed as
an important
concession. Three
different rates will remain in the assessment
phase— 4.45
pm
Adam
Afriyie: On the issue of rates for ESA, can the
Minister confirm that the level will be similar, not directly
equivalent, to the ESA that has been available through the pathways to
work pilot? Will it be at the same
level?
Mr.
Murphy: We have announced our intention that the ESA rate
will be above the current long-term IB rate. The hon. Gentleman would
not expect me to go further than that today but I shall make a couple
of points on the comments made by the hon. Member for South-West
Surrey. There remain three different rates in the assessment phase: one
for customers aged under 18; another for those aged 18 to 24; and
another for
those of 25 and over. The reason for the assessment phase is to ensure
that the rates line up with jobseeker’s allowance
rates. We do not want
to make any assumptions during the assessment phase about a
person’s capability, which is why we deliberately sought to
align benefit rates with the JSA rate in the three-month assessment
phase. That means that the customers who are not entitled to the
employment and support allowance can move back on to JSA at the
existing
rate. As
the new age discrimination legislation shows, the Government are
committed to combating unfair treatment on the grounds of age; in the
case of benefit levels there are differentials because in general
younger people are likely to have fewer demands on their income. For
example, they are less likely to have dependants and more likely still
to be supported by their family. I acknowledge that those are
generalisations, but they have permeated the benefit system for many
years. We
have said that no young people on incapacity benefit now will be worse
off under the employment and support allowance. I go further: we will
continue to make special provisions so that many young people can
access the contributory allowance even without meeting the national
insurance contribution conditions. That is a small measure in the Bill
but it is very important as it removes any unforeseen penalisation of
young people on the basis that they are unable to qualify for the
contributory allowance because of their
age. We are
introducing an entirely new structure for the ESA which moves away from
a system where benefit rises with the length of incapacity, which we
believe undermines incentives to return to work. We have made it clear
that existing customers’ benefit will be fully protected and the
new structure ensures that new customers will gain after the end of the
assessment phase. The allowance has a two-tier structure because it is
important to distinguish between those whom we would reasonably expect
to participate in work-related activity and those whom it would not be
reasonable to encourage to do
so. I assure my hon.
Friend the Member for Glasgow, North-West that we are determined not to
write anyone off but we recognise that some people on ESA will have
severe health conditions and disabilities, and they will need our
support. The existence of the support component will enable us to
provide extra financial support to those who suffer the most severe
conditions. 4.49
pm Sitting
suspended for a Division in the
House. 5.4
pm On
resuming—
Mr.
Murphy: I was on the verge of drawing my comments to a
conclusion, having offered reassurance to my hon. Friend the Member for
Glasgow, North-West that the benefit rates of current customers will be
protected. In respect of new ESA customers the commitment will be above
the present long-term IBA rate, as I
said.
I want to
turn briefly to two specific questions: the first was about the income
allowance and whether the contributory level will be the same. It is
our intention to set the contributory level and if a person on the
income allowance has no other income, it will of course be at the same
level. However, with the income allowance, as with other benefits, the
state will take additional income into account in any assessment. In
general, what was suggested was
correct. We
will discuss the second point on the existence of a support group a
little later, but the hon. Gentleman asked about the evidence provided
by pilot schemes. We had not set up the structure when we started the
pilots, so the structure will not be used with the new benefit until
2008, but our manifesto stated that we would provide additional
financial support to those with the most severe disabilities. We have
to structure that carefully so that we do not write anyone off. It is
important to ensure that that when creating a support group to support
those for whom there is no conditionality—they will get a higher
level of benefit—that we do not reintroduce a version of
incapacity benefit for a relatively small but important group of
people. For example,
we are now considering how to ensure that those in the support
group—it is based on a limited capacity of work, with
assessments being made through the severe disablement
allowance—can nevertheless say that they do not want to be
written off; we are seeking to ensure that those folk can volunteer
for, and not be forced into, the support that is available to others.
We have worked through the details, but it is important to set out the
principle. Although there is no conditionality and people get a higher
rate of benefit, we also wish to say clearly to each individual in the
support group that they can volunteer for the appropriate support. That
is an important distinction when compared with incapacity benefit. I
hope that I have reassured the Committee.
With those comments, and given
the tone in which my hon. Friend the Member for Glasgow, North-West
moved the amendment, I encourage him to consider withdrawing
it.
John
Robertson: I thank my hon. Friend for his words. Needless
to say, I am convinced by his argument; however, I shall keep an eye on
future matters. I beg to ask leave to withdraw the amendment.
Amendment, by
leave, withdrawn.
Danny
Alexander: I beg to move amendment No. 184, in
clause 2, page 2, line 21, leave
out ‘support component or
the’.
The
Chairman: With this it will be convenient to discuss the
following amendments: No. 185, in
clause 2, page 2, line 22, leave
out ‘are’ and insert
‘is’. No.
186, in
clause 2, page 2, line 26, leave
out subsection
(2). No. 187, in
clause 4, page 4, line 16, leave
out ‘the support component
or’. No. 188,
in
clause 4, page 4, line 21, leave
out subsection
(4).
Danny
Alexander: My intention is to probe the Government about
the rationale and structure of the two-tier benefit and the support
group, the criteria for
including people in the support group and how it is intended to work in
practice.
Conceptually, at least, it is
an important point. In the context of our brief discussion on the
longer-term objective of simplifying the benefit system, serious
questions have to be asked about the justification for having a higher
rate of benefit for the support group. Is the Minister’s
justification that it will replace some of the income lost because of
the likelihood of someone being on benefit for longer? Is it trying to
meet the extra costs that such a person might have because they suffer
a more severe impairment or condition? If it is the latter, might it
not make more sense simply to have one rate of ESA, and to provide the
additional support through the mechanism of the disability living
allowance? That would have the further benefit that the additional
amounts would be provided on an extra-cost basis and would not
necessarily be withdrawn when the person receiving them found
work. If the
longer-term objective is to move to a single working-age benefit,
having the two different rates will be an additional complication that
might not be necessary. The objective—it is a good one—of
meeting the extra costs of people who are more severely impaired or
disabled might better be met through the disability living allowance
system. That is food for thought for the Minister, and I invite him to
explain in full the rationale behind the two
components.
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