Mrs.
McGuire: Mr. Hood, may I ask whether I will be
replying to the debate on clause stand part as well as new clause
13?
Mrs.
McGuire: Thank you for that clarification, Mr.
Hood. I am delighted
to have had this discussion, because as my hon. Friend the Minister
said during the debate on clause 13, it is an important issue. He also
said that “regulations
could, for example, state that it is paymentsafter deduction
of expenses that are prescribed for the purposes of
deduction.”—[Official Report, Standing Committee
A,17 October 2006; c.
85.] He was interested in the
points made during that debate.
I shall clarify some other
points. Under incapacity benefit, as the hon. Member for South-West
Surrey said, permitted-work rules allow a person to continue receiving
benefit while they work. We recognise the importance of work. There are
two limits: the lower permitted one of £20 a week and the higher
limit of £86 a week, which is available in limited circumstances
and allows someone to start to make the move from part-time work into
full-time work in a supported environment. We have tried to look at the
spectrum of support that is
needed. There is no
evidence to show that a blanket disregard on its own is effective in
moving someone from worklessness or incapacity benefit into work. It is
a matter not just of what income should be disregarded, but of the
other mechanisms that need to be put in place. I have had discussions
with Capability Scotland and other organisations on the
confidence-building measures that we need to put in place, because the
hon. Gentleman is right: if someone is sitting on benefit for a long
time there is a security in knowing what income they have and in
knowing that they have an entitlement to certain things. If a person is
asked to leap into something that is perhaps beyond their recent
experience we need to consider how to ensure that that person has the
confidence to make the leap.
As we all agree in this
Committee, the best way out of poverty is into work. That is why we
have extended the linking rules so that someone who holds an
entitlement to a benefit has the security of knowing that, subject to
their meeting the criteria, they can move back on to that entitlement
if they try work and it does not work out. It allows confidence to be
built up with the security of knowing that they have not completely cut
the cord between themselves and the benefit system. I think that that
addresses some of the issues that were raised. I appreciate that the hon.
Gentleman wants us to give a commitment to raising the rate, but I say,
gently, in the words of my hon. Friend the Minister for Employment and
Welfare Reform, that we cannot just take the income disregard in
isolation, as a series of measures needs to be put in place.
On the point raised by hon.
Member for Inverness, Nairn, Badenoch and Strathspey, decisions on how
housing benefit, council tax benefit and so on will interact with
contributory employment and support allowance cannot, of course, be
made until the structure of the ESA has been decided. Some of those
issues will be considered further down the line and, as we have already
given a commitment, will be subject to other
debates.
Danny
Alexander: I understand the legal reasons for the
Minister’s point. She is right to say that a range of other
factors have to be taken into account; earnings disregards cannot be
treated in isolation. However, someone in receipt of housing and
council tax benefit who starts earning more than £20 a week
starts to lose benefits at the rate of 85p for every additional pound
earned, which is a substantial disincentive to work. Will the Minister
take that factor into account in thinking through how ESA should relate
to the housing benefit
issue?
Mrs.
McGuire: I have heard what the hon. Gentleman said, but I
have gone as far as I am prepared to go in today’s
discussions.
Adam
Afriyie: Is the Minister saying that she is not prepared
to link any disregards to the minimum wage, which was set by her
Government as a benchmark for minimum earnings and for many other
important things that underpin our society? Can the Minister make that
absolutely clear to the
Committee?
Mrs.
McGuire: It is lovely to hear the minimum wage being
embraced in such a wholehearted way by a party that made us sit through
a long night when we used to have all-night sittings. My hon. Friend
the Member for Dumfries and Galloway (Mr. Brown) remembers
it
well.
The
Chairman: Order. We may be drifting away from the
point.
Mrs.
McGuire: I know, Mr. Hood, but it was worth a
try.
Mr.
Ruffley: The Conservative party has moved on. Will the
hon. Lady?
Mrs.
McGuire: The proof of the pudding may be in the eating,
but I hope that we do not have to eat it for a long time. I go to my
earlier point. It is not specifically about the level of the disregard,
although as my hon. Friend said earlier, it is an important issue and
one that we will have to consider. That is probably as far as the hon.
Gentleman will tempt me today.
The Government regularly review
the level of disregards, taking into account a large range of relevant
factors, one of which is the prevailing labour market conditions. We
need to ensure that we do not undermine the incentives for people who
move off benefits into full-time work if that is appropriate. It is
about getting the balance right and not creating a situation where it
is more acceptable for people to be on benefit plus a high disregard,
which either the hon. Member for Inverness, Nairn, Badenoch and
Strathspey or the hon. Member for South-West Surrey highlighted. We are
currently working on how we can achieve that balance. We will be
setting out the rules on permitted work and earnings disregards in the
regulations that follow the Bill and those regulations will be subject
to debate and discussion in the
House. I think that I
have dealt with the specific points raised in the debate. The clause
will allow us to prescribe when a customer can be treated as having
income or capital which he no longer has, for example, where it has
been disposed of deliberately; disregard certain capital and income,
for example, the value of a customer’s house or personal
possessions; and provide a capital limit so that those with capital
over this amount are not entitled to benefit. Clause 16 is a crucial
part of the Bill as it enables the value of income and capital to be
treated in a way that is similar to existing
benefits.
Mr.
Hunt: I was informed by the Clerks that I needed to let
you know, Mr. Hood, before the end of the debate on the
clause whether we wanted to press new clause 13 to a vote. May I, in
that spirit, briefly respond to the Minister and explain what our
thinking on that is?
The Minister mentioned the
minimum wage. This is central to this issue. I freely admit that I had
concerns when the minimum wage was introduced that it would price some
people out of the market. I was wrong. That has been demonstrated by
what has happened subsequently. May I praise the Minister? The minimum
wage is a brilliant mechanism to work in partnership with the pathways
to work programme. Without a minimum wage there is obviously a real
concern that employers might exploit the fact that the benefit system
exists to pay lower and lower wages and hope that the state would fill
the gap. With the minimum wage that is no longer
possible.
Mr.
Boswell: I felt I should declare an interest as some
Members may recall that I had a certain degree of responsibility both
for keeping them up all night on the minimum wage and, conversely, in
receiving their attentions in Committee over two whole nights of
debate. Whatever else one may say about that process, it was right to
bring out the issues. I simply wonder whether my hon. Friend would
reflect on the fact that the more the Government succeed in raising the
acceptable level of the minimum wage, ipso facto, if
they do not alter the provision for disregards, the proportion of time
that is available within the rubric will be
reduced.
Mr.
Hunt: As ever, my hon. Friend makes an important point,
and he does so in the Daventry style of debate, which we have got used
to in the Committee. The problem, as he rightly says, is that people
will be able to work for less and less under the earnings disregard as
the minimum wage increases.
The Under-Secretary said that
there is no evidence that a blanket earnings disregard on its own is
effective and she is absolutely right that it must be part of a whole
package of measures, including confidence-building measures. However,
it is still a significant hurdle, and the evidence from Capability
Scotland is just one indication of that. To take other, anecdotal
evidence, disabled people who are out of work will say that their
biggest fear is doing anything that could compromise their benefits
package, which is important to them and will be part of their income
for their whole lives.
The Under-Secretary also
mentioned the linking rules, which are important, but they are not
widely understood. If they are to play an important part in removing
the barrier to returning to work, the Government must make much more
progress in publicising how they work.
Finally, I ask the
Under-Secretary to correct the Department’s website. She said
that it was possible to earn £86 on the higher rate of
incapacity benefit, but the website says £81. I am sure that she
can ensure that her website is updated.
Mrs.
McGuire: It is not my
website.
Mr.
Hunt: Well, her Department’s
website.
The
Chairman: Order. We said earlier that we wanted to make
progress, but we will make a lot more if hon. Members listen to those
who are on their feet and remain in order.
Mr.
Hunt: I am grateful to you, Mr. Hood, but I do
not need to try your patience any longer. On the basis of our
discussion, Opposition Members will want to press new clause 13 to a
vote at whatever point in our proceedings you consider
appropriate. Question
put and agreed
to. Clause 16
ordered to stand part of the Bill.
Clause
17Disqualification
Mrs.
McGuire: I beg to move amendment No. 53, in
clause 17, page 14, line 41, leave
out ‘this section’ and insert ‘subsection
(1)’.
The
Chairman: With this it will be convenient to discuss
Government amendment No. 54.
Mrs.
McGuire: The amendments enable a person
to be disqualified from receiving payment of a contributory employment
and support allowance if they are absent from the UK or in prison,
unless regulations provide otherwise. Although they will be
disqualified from receiving payment, they will still be treated as
being entitled to benefit, and we need to be clear about the difference
between entitlement and payment. The flexibility to make exceptions in
regulations would allow us to continue to pay someone a contributory
allowance where they were, for example, absent from Great Britain only
temporarily.
The clause
and the regulations will allow people who are absent from Great Britain
for short periods, and prisoners who receive short custodial sentences,
to continue to be entitled to ESA while disqualified from payment of
ESA, so they will keep the underlying entitlement. That will enable us
not to stop and start claims unnecessarily, wasting the time and
resources of claimants and staff. We intend to make provision through
regulations to limit the period of disqualification to six weeks, after
which a person will be treated as no longer being entitled to the
benefit. The policy
intent for prisoners is clear: the state should not maintain someone
who is in prison through benefits. The provision allows us to
disqualify such people for payment purposes for short periods, rather
than to disentitle them. In that way, we will not waste resources by
stopping and starting claims when people serve only a short sentence.
Where someone is in prison for longer, however, we will use powers in
paragraph 1(a) of schedule 2 to remove their entitlement to benefit
altogether. Once the
period of disqualification ends, as set out in regulations, entitlement
to ESA will cease altogether if the claimant is still abroad or
imprisoned. However, if they are no longer abroad or in prison, the
provisions will enable benefit to resume without the need for a fresh
claim. Exactly the same provision applies to incapacity benefit, and it
has been a feature of the contributory benefits system for many
years. We strongly
believe that the benefit system should not support people who are in
prison or abroad, except in specific circumstances, as they should be
supported by other means. The ability to disqualify the payment of
benefit when entitlement is retained is important to protect public
funds.
5.30
pm
Mr.
Boswell: I am sure that the Committee
will be relieved to hear that I do not object to the principle of the
amendments, and that I shall not advise my hon. Friends to oppose them.
However, I would like a moment of the Under-Secretary’s time.
First, I make the point that apparently, or overtly, the provision on
prisoners has been omitted. That may have been purely a technical
oversight, but she should acknowledge the role of my hon. Friend the
Member for Runnymede and Weybridge in drawing attention to the fact
that many of the issues involving prisoners and their benefits have
been rather overlooked by the Department. It is obviously unacceptable
for prisoners to receive benefits when they are in Her Majesty’s
custody.
That issue
prompts a slightly more substantive point, because, as the
Under-Secretary made clear when moving the amendments, we are talking
about short periods of incarceration. What is the position regarding
available support services and the pathways to work programme? Clearly
such services are not geared towards people who are resident in prison
and may not be extendable to people who are in prison, but there may be
cases in which they could be used—for example, with someone who
has a fluctuating, explosive condition, who has been put in the cells
and charged with some public order offence. There may be sensible
reasons, to do with rehabilitation, for the pathways programme to
continue at that point. If the Under-Secretary cannot give me a pat
answer, will she consider whether that should not be ruled out? I am
interested in this not in relation to the moral approbation of a crime
that has been committed, but as a realistic pathway to rehabilitation.
Many of us are interested in prisoners in that wider
context. I
pause on only one other matter now, although we may have some comments
to make in the stand part debate, which is the reference to Great
Britain. The hon. Member for Inverness, Nairn, Badenoch and Strathspey
has tabled amendment No. 201 to schedule 2, which raises the same
issue. As we will debate that amendment later, I do not wish to
anticipate or rehearse any of the comments that he might make, but I am
genuinely puzzled about one point.
This country
is the United Kingdom, with Great Britain and Northern Ireland. We
know, and clause 60 reminds us, that we are not legislating for
Northern Ireland in the Bill. That may happen either by an Order in
Council or through a procedure of the devolved Assembly if it is
reconstituted and takes up its powers. I simply make the point that
moving to another part of the United Kingdom is not the same as moving
to a UK dependency such as the Isle of Man or Guernsey; it is not
leaving the UK. It is odd, therefore, that the structure of devolved
government, or otherwise, seems to preclude Northern Ireland. There may
be a perfectly innocent explanation for that, but I am genuinely
puzzled by it. I raise this issue only for completeness, and do not
make any suggestion that I wish to oppose this particular amendment,
which seems entirely
sensible.
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