The amendment implies that the objective of universal credit is as a savings measure. Nothing could be further from the truth. We are spending more and have huge ambitions to change people’s lives. In any case, we will be monitoring outcomes very carefully. We published a high-level evaluation framework in December 2012, which sets out our proposed evaluation approach and our key aims and objectives. I am happy to reassure the noble Baroness, Lady Lister, that the evaluation of universal credit comprises part of a continuous programme of analysis. It provides real-time evidence and information, as well as a measure of overall impact and success further down the line, although it will take time to assess how different groups experience universal credit and to build up a clear evidence base.

Implementing a system that is dynamic and responsive is at the heart of these reforms. That is why the welfare Act contains a provision to enable the piloting of changes to the system that aim to achieve simplification or change claimant behaviour to improve their labour market outcomes. I am happy to reassure my noble friend Lord Kirkwood that I will personally value continuing the dialogue with this House. I know that this House knows how much it has put into the creation of universal credit.

13 Feb 2013 : Column 696

There were a huge number of points and I will do my best in the limited time to touch on them. The noble Lord, Lord Touhig, requested a lot of detailed figures on IT. I think I will write to him with details, as I have dealt with quite a few of those points in recent PQs, but I will make sure that the noble Lord has an up-to-date list of exactly what we are spending in each year. As I said, I will not go into detail, but we are on time and on budget, we are pushing ahead and we are starting with a pathfinder, to make it work, in April.

6 pm

The noble Baroness, Lady Sherlock, queried how self-reporting would work. Employers will be expected to provide earnings data at the same time as making the payments of earnings to their employees. If that does not occur, we will have arrangements in place to ensure that payments of the universal credit are not delayed. We can use either self-reporting or estimated earnings.

On the severe disability premium, it is estimated at just over 230,000 households are in receipt of that, as the noble Baroness suggested. We will not make any savings from the restructuring of disability support in the universal credit. As I said, we will be monitoring carefully the impact of this measure on disabled people.

On the related point raised by the right reverend Prelate the Bishop of Worcester about disabled children, we will be looking closely at the routes by which disabled children qualify for additions in the universal credit—there are two levels now—and when we debated this during the progress of the Act, the real concern that I took from it was that we might not be passporting children into the right groups. I have committed to looking at those passporting arrangements closely in time for when the bulk of people may be affected.

The hearing for the Burnip case, raised by my noble friend Lord German, is scheduled for 9 and 10 December. In practice there will be virtually no cases before we know what the answer is under the universal credit. Whatever happens, that is winter, unless someone moves the seasons on me.

My noble friend and the noble Baroness, Lady Hollis, raised the question of monthly payments. Clearly they will be a challenge for some, and we do not underestimate the difficulties of managing on a tight budget. That is why we have the exceptions process, which will allow the Secretary of State to adjust the payment frequency on a case-by-case basis.

On the point about weightings, they are not being weighted; rather, they are classed as level one or level two, with level one being an indicator of a high likelihood that the claimant will require an alternative payment while level two suggests a lower likelihood.

On the question from my noble friend on progress to produce new financial products, we have been working closely with financial providers across the private, social and third sectors, and we will consult them and other stakeholders about next steps, which I hope to be announcing in due course.

On the point raised by the noble Baroness, Lady Lister, about the claimant commitment and the refusal to sign—if one refuses to sign, that implicates the whole household—that underpins the policy principle

13 Feb 2013 : Column 697

that the universal credit is a household benefit, and it is a basic condition of entitlement that all working-age members of the household must agree to reasonable requirements to take up a job.

On the lengthy set of points about conditionality for lone parents, raised by the noble Baroness, Lady Lister, we are carrying forward 10 of the 12 current protections and have done so, where appropriate, through legislation. The primary legislation protects claimants’ children under one and then the regulations protect those under five. Regulation 88(2)(b) protects parents of children under 13 to limit their hours to fit with the work. I see the noble Baroness shaking her head sadly; I suspect that we will go on with this debate.

I need to assure the noble Baroness, Lady Sherlock, that we do not expect lone parents to leave children to work a night shift, nor will lone parents be sanctioned if they cannot find appropriate childcare. We will ask parents do everything that they can to look for suitable work that fits with their caring role and to demonstrate that they have taken all reasonable steps to secure suitable childcare.

On the self-employment monthly reporting issue, raised by the noble Baroness, Lady Sherlock, I take her point about the carrying forward of losses. We are looking at the feasibility of introducing a carry-over function for self-employed income, and this will come a little later but in time for when it is required.

My noble friend Lord Eden made the overarching point about the need for, and the importance of, the adviser and the adviser’s training. We have a huge investment in that training, and one of the things that we are testing in the pathfinder areas is getting the support systems for our staff right.

I assure my noble friend Lady Thomas on looking at ensuring that the word “consult” is appropriately interpreted. I also assure the noble Countess, Lady Mar, that the tests of limited capability for work have not changed substantially in the universal credit. The intention is to ensure that consistency is applied in these tests across the universal credit and the employment support allowance.

The noble Baroness, Lady Lister, was concerned about some of the technical points made by the JCSI. Out of three of them, we intend to amend the regulations at the next suitable opportunity. We actually feel that the explanatory element is valuable so there is still a slight disagreement between us on that, but the others we will sort out.

On the points about the kind of support for the advice centre sector, we are looking closely at the role, particularly in the light of the local support service network. The Cabinet Office and the Big Lottery Fund have created a £65 million advice services transition fund to support this period, and our aim is to work with the advice sector partners to share information with them and encourage them to help us with the successful introduction of universal credit.

The funding arrangements for the local support services are in place. They will be agreed locally with the local authorities that will be running the local partnerships. That is in phase one; in the pathfinder in phase two we are looking at how that is being done in

13 Feb 2013 : Column 698

practice. The DWP will be providing the funding for the appropriate local partnership network provision. Beyond that, we need to take the lessons of the local authority pilots that we are currently conducting and which will be completed in September.

The noble Baroness, Lady Hollis, was concerned about direct payments. I hope I can give her some reassurance that we are going to take a very prudent approach on this. I am not going to set any targets, but we expect a significant proportion to be able to handle this, and where they cannot, we will have mechanisms, which we are currently developing, to make sure that housing associations do not have an arrears problem. Interestingly, we are discovering in the pilots that it is not that people are not paying at all, but that they just do not pay quite enough. That is the issue.

We have moved the 52-week protection. There have been protections for different elements of benefits all over the place. For some, there has been no time protection, for some, there is 12 months, such as on housing. In practice, we have moved them all to the same three months. Do not forget that in the case that the noble Baroness was citing, there would be no change if a partner died. There would still be the same bedroom provision whether it was a single person or a couple.

On non-dependants, there is no deduction for any non-dependant aged under 21 whether they are on benefit or not, but we expect over-21s to make a contribution. The standard allowance in universal credit for someone under the age of 25 is £246 a month, of which they would be expected to contribute £68 a month for rent. Of course, a flat-rate deduction is very encouraging in terms of moving into employment.

The noble Baroness, Lady Sherlock, asked about mortgages and the zero-earnings rule. In practice, only about 5% of claimants who receive SMI work part time because people with mortgages know that they need to get into full-time work. Claimants will not have a good reason for refusing works on the grounds that they will lose their mortgage support.

We are working to produce a passporting strategy, and I hope to make an announcement pretty soon.

I cannot handle all the questions. I have got through a good two-thirds of them, I think. I will write where I have not answered. This is a huge topic, and that is why this is an overlong debate. I will be the first to admit that we might not have got every single detailed provision quite right. We have been given the task of reducing literally hundreds of pages of regulations into a set of just over 100 pages, so it would not be surprising if there were not room for improvement in some areas. I am always prepared to look at how we can improve it. The essential thing is that we have got a basic architecture that will be viable for the long term.

Finally, I should repeat the point that the Universal Credit (Transitional Provisions) Regulations 2013 are the first in a series of transitional regulations in keeping with the phased rollout of universal credit. That approach will enable us to adjust the exact timing and sequencing of the rollout as we learn from each phase.

13 Feb 2013 : Column 699

The Earl of Listowel: Before the Minister sits down, if it is in order in this procedure of the House, may I ask him a question? I was grateful for his reassuring reply to the noble Lord, Lord Eden, about the great efforts he is making in looking at the administrators and the support and training they need. If he will write to me with some idea of the minimum standards for the supervision of administrators that he might be considering, I will appreciate it.

Lord Freud: I will be pleased to write.

Baroness Sherlock: My Lords, I thank the Minister for trying to answer our questions. Of course he could not answer them all in the time because there were so many. I have never been through a two-and-a-quarter-hour debate over one set of regulations with so many powerful speeches from every set of Benches in this House. I understand it is complicated, but we are running out of time. This is not simply a rough sketch of the architecture; these regulations describe what will happen to real claimants when the system starts operating in April. I understand that the Government are doing something that will revolutionise payments to all working-age claimants. We support that principle, but we cannot experiment on the lives of ordinary men and women in this country and on their children. The Minister has been unable to answer, despite his best efforts, concerns from all around the House about the impact on disabled people, childcare, free school meals, vulnerable people, of forcing people to claim online and so much more. We have to let these regulations go through because that is the nature of our House, but we do not have to allow them to go through without making a very clear signal to the Government that they need to get these things right. To that end, I wish to test the opinion of the House. I urge all noble Lords to come with me.

6.16 pm

Division on Amendment to the Motion.

Contents 169; Not-Contents 239.

Amendment to the Motion disagreed.

Division No.  1


Adams of Craigielea, B.

Ahmed, L.

Alli, L.

Alton of Liverpool, L.

Anderson of Swansea, L.

Andrews, B.

Bach, L.

Bakewell, B.

Bassam of Brighton, L. [Teller]

Bew, L.

Bilston, L.

Blackstone, B.

Bragg, L.

Brookman, L.

Browne of Ladyton, L.

Campbell-Savours, L.

Carter of Coles, L.

Christopher, L.

Clancarty, E.

Clark of Windermere, L.

Clarke of Hampstead, L.

Clinton-Davis, L.

Collins of Highbury, L.

Corston, B.

Crawley, B.

Davies of Coity, L.

Davies of Oldham, L.

Davies of Stamford, L.

Dean of Thornton-le-Fylde, B.

Desai, L.

Donaghy, B.

Donoughue, L.

Drake, B.

Dubs, L.

Eatwell, L.

Elder, L.

Elis-Thomas, L.

Elystan-Morgan, L.

Evans of Parkside, L.

Falconer of Thoroton, L.

13 Feb 2013 : Column 700

Falkland, V.

Farrington of Ribbleton, B.

Faulkner of Worcester, L.

Ford, B.

Foulkes of Cumnock, L.

Freyberg, L.

Gale, B.

Gibson of Market Rasen, B.

Glasman, L.

Golding, B.

Gordon of Strathblane, L.

Gould of Potternewton, B.

Grantchester, L.

Grenfell, L.

Grey-Thompson, B.

Grocott, L.

Hameed, L.

Hanworth, V.

Hardie, L.

Harris of Haringey, L.

Harrison, L.

Hart of Chilton, L.

Haskins, L.

Haworth, L.

Hayter of Kentish Town, B.

Healy of Primrose Hill, B.

Henig, B.

Hilton of Eggardon, B.

Hollins, B.

Hollis of Heigham, B.

Howarth of Newport, L.

Howe of Idlicote, B.

Howie of Troon, L.

Hoyle, L.

Hughes of Stretford, B.

Hughes of Woodside, L.

Hunt of Chesterton, L.

Hunt of Kings Heath, L.

Irvine of Lairg, L.

Jones, L.

Jones of Whitchurch, B.

Judd, L.

Kennedy of Southwark, L.

Kennedy of The Shaws, B.

King of Bow, B.

Kinnock, L.

Kinnock of Holyhead, B.

Kirkhill, L.

Lea of Crondall, L.

Levy, L.

Liddle, L.

Lipsey, L.

Lister of Burtersett, B.

Listowel, E.

Low of Dalston, L.

Lytton, E.

McAvoy, L.

McConnell of Glenscorrodale, L.

McDonagh, B.

McFall of Alcluith, L.

McIntosh of Hudnall, B.

MacKenzie of Culkein, L.

Mackenzie of Framwellgate, L.

McKenzie of Luton, L.

Mandelson, L.

Mar, C.

Martin of Springburn, L.

Massey of Darwen, B.

Maxton, L.

Meacher, B.

Mitchell, L.

Monks, L.

Moonie, L.

Morgan, L.

Morgan of Huyton, B.

Morris of Aberavon, L.

Morris of Handsworth, L.

Morris of Yardley, B.

Neuberger, B.

Noon, L.

Nye, B.

O'Neill of Clackmannan, L.

Palmer, L.

Patel of Bradford, L.

Pendry, L.

Pitkeathley, B.

Prescott, L.

Prosser, B.

Radice, L.

Rea, L.

Rees of Ludlow, L.

Reid of Cardowan, L.

Rendell of Babergh, B.

Richard, L.

Rosser, L.

Rowlands, L.

Royall of Blaisdon, B.

Sandwich, E.

Sawyer, L.

Sherlock, B.

Simon, V.

Smith of Basildon, B. [Teller]

Smith of Finsbury, L.

Soley, L.

Stevenson of Balmacara, L.

Stoddart of Swindon, L.

Stone of Blackheath, L.

Symons of Vernham Dean, B.

Temple-Morris, L.

Thornton, B.

Touhig, L.

Triesman, L.

Turnberg, L.

Turner of Camden, B.

Uddin, B.

Wall of New Barnet, B.

Walpole, L.

Warnock, B.

Warwick of Undercliffe, B.

West of Spithead, L.

Wheeler, B.

Whitaker, B.

Whitty, L.

Wills, L.

Woolmer of Leeds, L.

Worcester, Bp.

Young of Hornsey, B.

Young of Norwood Green, L.

Young of Old Scone, B.


Addington, L.

Ahmad of Wimbledon, L.

Anelay of St Johns, B. [Teller]

Armstrong of Ilminster, L.

Ashcroft, L.

Ashdown of Norton-sub-Hamdon, L.

Ashton of Hyde, L.

Astor of Hever, L.

Attlee, E.

Avebury, L.

Baker of Dorking, L.

Ballyedmond, L.

Barker, B.

Bates, L.

Benjamin, B.

Berridge, B.

Bilimoria, L.

13 Feb 2013 : Column 701

Black of Brentwood, L.

Blencathra, L.

Bonham-Carter of Yarnbury, B.

Brabazon of Tara, L.

Bradshaw, L.

Bridgeman, V.

Brinton, B.

Brittan of Spennithorne, L.

Brooke of Sutton Mandeville, L.

Brougham and Vaux, L.

Browne of Belmont, L.

Browning, B.

Burnett, L.

Buscombe, B.

Byford, B.

Caithness, E.

Carlile of Berriew, L.

Cathcart, E.

Cavendish of Furness, L.

Chidgey, L.

Clement-Jones, L.

Colwyn, L.

Cope of Berkeley, L.

Cotter, L.

Courtown, E.

Crathorne, L.

Cumberlege, B.

De Mauley, L.

Deben, L.

Deighton, L.

Denham, L.

Dholakia, L.

Dixon-Smith, L.

Dobbs, L.

Doocey, B.

Dundee, E.

Eames, L.

Eaton, B.

Eccles, V.

Eccles of Moulton, B.

Eden of Winton, L.

Edmiston, L.

Elton, L.

Falkner of Margravine, B.

Faulks, L.

Feldman, L.

Fink, L.

Flight, L.

Fookes, B.

Forsyth of Drumlean, L.

Fowler, L.

Framlingham, L.

Fraser of Carmyllie, L.

Freeman, L.

Freud, L.

Garden of Frognal, B.

Gardiner of Kimble, L.

Gardner of Parkes, B.

Garel-Jones, L.

Geddes, L.

German, L.

Glasgow, E.

Glenarthur, L.

Glendonbrook, L.

Glentoran, L.

Goodlad, L.

Grade of Yarmouth, L.

Green of Hurstpierpoint, L.

Greenway, L.

Griffiths of Fforestfach, L.

Hamilton of Epsom, L.

Hamwee, B.

Hanham, B.

Harris of Peckham, L.

Harris of Richmond, B.

Henley, L.

Higgins, L.

Hill of Oareford, L.

Hodgson of Astley Abbotts, L.

Home, E.

Howard of Rising, L.

Howe, E.

Howe of Aberavon, L.

Howell of Guildford, L.

Hunt of Wirral, L.

Hurd of Westwell, L.

Hussain, L.

Hussein-Ece, B.

Inglewood, L.

James of Blackheath, L.

Janvrin, L.

Jenkin of Kennington, B.

Jenkin of Roding, L.

Jolly, B.

Jones of Cheltenham, L.

Kakkar, L.

Kilclooney, L.

King of Bridgwater, L.

Kirkham, L.

Kirkwood of Kirkhope, L.

Kramer, B.

Laming, L.

Lang of Monkton, L.

Lawson of Blaby, L.

Leach of Fairford, L.

Lexden, L.

Lindsay, E.

Lingfield, L.

Liverpool, E.

Loomba, L.

Lothian, M.

Lucas, L.

Luke, L.

Lyell, L.

Macfarlane of Bearsden, L.

MacGregor of Pulham Market, L.

Mackay of Clashfern, L.

Maclennan of Rogart, L.

McNally, L.

Maddock, B.

Magan of Castletown, L.

Maginnis of Drumglass, L.

Mancroft, L.

Marks of Henley-on-Thames, L.

Marland, L.

Marlesford, L.

Mawhinney, L.

Mayhew of Twysden, L.

Methuen, L.

Montrose, D.

Moore of Lower Marsh, L.

Morris of Bolton, B.

Moynihan, L.

Nash, L.

Neville-Jones, B.

Newby, L. [Teller]

Newlove, B.

Noakes, B.

Northbrook, L.

Northover, B.

Norton of Louth, L.

O'Cathain, B.

Oppenheim-Barnes, B.

Palmer of Childs Hill, L.

Palumbo, L.

Pannick, L.

Parminter, B.

Patten, L.

Pearson of Rannoch, L.

Phillips of Sudbury, L.

Popat, L.

13 Feb 2013 : Column 702

Rana, L.

Randerson, B.

Razzall, L.

Reay, L.

Redesdale, L.

Rennard, L.

Ridley, V.

Risby, L.

Roberts of Llandudno, L.

Rodgers of Quarry Bank, L.

Rogan, L.

Roper, L.

Rotherwick, L.

Rowe-Beddoe, L.

Ryder of Wensum, L.

Sanderson of Bowden, L.

Sassoon, L.

Scott of Needham Market, B.

Seccombe, B.

Selborne, E.

Selkirk of Douglas, L.

Selsdon, L.

Sharkey, L.

Sharp of Guildford, B.

Sharples, B.

Shaw of Northstead, L.

Sheikh, L.

Shephard of Northwold, B.

Shipley, L.

Shrewsbury, E.

Skelmersdale, L.

Smith of Clifton, L.

Spicer, L.

Stedman-Scott, B.

Stephen, L.

Sterling of Plaistow, L.

Stewartby, L.

Stoneham of Droxford, L.

Stowell of Beeston, B.

Strasburger, L.

Strathclyde, L.

Taverne, L.

Taylor of Goss Moor, L.

Taylor of Holbeach, L.

Thomas of Gresford, L.

Thomas of Winchester, B.

Tonge, B.

Tope, L.

Trefgarne, L.

Trenchard, V.

Trimble, L.

True, L.

Tyler, L.

Tyler of Enfield, B.

Ullswater, V.

Verma, B.

Vinson, L.

Wakeham, L.

Waldegrave of North Hill, L.

Wallace of Saltaire, L.

Wallace of Tankerness, L.

Walmsley, B.

Walton of Detchant, L.

Warsi, B.

Wasserman, L.

Wei, L.

Wheatcroft, B.

Wilcox, B.

Williamson of Horton, L.

Willis of Knaresborough, L.

Younger of Leckie, V.

Motion agreed.

Jobseeker’s Allowance Regulations 2013

Motion to Approve

6.31 pm

Moved by Lord Freud

That the draft regulations laid before the House on 10 December 2012 be approved.

Relevant documents: 15th Report from the Joint Committee on Statutory Instruments, 24th Report from the Secondary Legislation Scrutiny Committee.

The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud): My Lords, I can confirm that, in my view, the statutory instrument is compatible with the European Convention on Human Rights. These regulations are designed to work alongside the introduction of universal credit by removing all the existing income-related provisions from jobseeker’s allowance. They also work alongside the Welfare Reform Act 2012, which removed the existing income-related provisions from other Acts.

Under JSA, there are currently two elements—namely, a contribution-based element and an income-based element. The first element is for people who have paid sufficient national insurance contributions. The second element is for people who have low or no incomes. From this April, the income-related elements of JSA will gradually be phased out for any cases where universal credit has been rolled out. The new regulations

13 Feb 2013 : Column 703

will remove the income-related elements and make provision for an award of JSA based solely on national insurance contributions.

In addition, to further align with universal credit, the regulations will introduce revised conditionality and sanctions regimes into JSA. We have of course already largely aligned the JSA sanctions regime with the universal credit sanctions model. Noble Lords will recall that last October, we introduced a number of changes to JSA, including sanctions of up to three years for those who persistently fail to comply with the most important job-search requirements. The changes we made last year have helped staff and claimants to prepare for the introduction of UC and for the revised JSA regime. These regulations now complete the alignment with universal credit.

However, beyond these changes people will find that the effect of the existing JSA benefit regime is unaltered. Noble Lords may find it helpful if I provide more detail on how these changes will be applied. As noble Lords will know, JSA is a benefit payable to people who are out of work and seeking employment. The work-related requirements in these regulations will apply where the claimant claims only jobseeker’s allowance. Where a claimant receives both jobseeker’s allowance under these regulations and universal credit, the work-related requirements provided under the universal credit regulations will apply. That will ensure that even where a claimant is in receipt of the two benefits, they will have only one clear set of requirements placed on them at any time. As these regulations align JSA to UC, there will be little difference between the respective conditionality regimes if they move between the two benefits.

People claiming JSA under these regulations will, as with UC claimants, generally be expected to be available for full-time work immediately, depending on their commitments and capabilities, and to treat their day-to-day work search as if it were a full-time job. This means that they will be expected normally to demonstrate that they are spending 35 hours per week finding a job. However, requirements can be tailored to meet a wide range of circumstances. For example, their requirements can be reduced if the claimant is a carer or disabled, or has recently been a victim of domestic violence.

Under these regulations there will be three levels of sanctions in the JSA regime—high, medium and low level. These sanctions will broadly work in the same way as equivalent sanctions within the universal credit regime. The universal credit sanctions regime, which is mirrored in these JSA provisions, is designed to provide greater clarity for claimants and to ensure that there are proportionate consequences for failing to meet requirements, especially repeat failures. For example, to act as a deterrent, the sanction periods escalate where a claimant repeatedly fails without good reason to comply with a reasonable requirement. This more robust but proportionate model is designed to be more effective in encouraging claimants to engage with the requirements which help them to move into or to prepare for work.

It is important to remember that our focus will not be on imposing sanctions but on ensuring that claimants meet the requirements that will support them into or

13 Feb 2013 : Column 704

towards work. The requirements expected of claimants should be reasonable and will help claimants to understand and meet the requirements so that they can move into work as soon as they are able to do so. Using the claimant commitment, we will clearly communicate both requirements and the sanction consequences of not meeting them. Only if they fail to meet a suitable requirement without good reason will a sanction be imposed.

These regulations were subject to statutory formal consideration by the Social Security Advisory Committee. The committee decided that formal referral was not necessary but raised a number of points, all of which were considered, and changes were made where appropriate. As the sanctions and conditionality rules for JSA were being brought broadly into line with universal credit, these regulations were included as part of the Social Security Advisory Committee’s wider universal credit consultation exercise.

Therefore, the views expressed during the consultation period regarding the proposals for the universal credit conditionality and sanctions regime also applied to the reform of JSA. Those views were considered and changes were made. For example, we decided to remove a reference to long-term impairments in Regulation 9 of the JSA regulations. This change takes into account a range of physical and mental impairments that a claimant may have when considering any limitations that may be placed on a JSA claimant’s work-related requirements.

I should also like to thank the Secondary Legislation Scrutiny Committee for its earlier consideration and analysis of these regulations. As noble Lords will be aware, the committee drew attention to the importance of guidance for our staff in operating a fair and effective conditionality and sanctions policy. Therefore, we have placed in the House Library copies in draft of key chapters of the guidance covering approaches, including that for good reason for sanctions. Today we have published a draft of the claimant commitment.

In conclusion, I can assure noble Lords that, beyond the changes I have outlined, the rules for the new-style JSA will be very similar to the existing rules for the contributory element of JSA. In particular, there have been no changes to the national insurance contribution conditions which need to be satisfied to qualify for entitlement and the fundamental structure of JSA remains untouched. I seek noble Lords’ approval of the regulations and commend them to the House.

Baroness Donaghy: The Minister will remember that I raised a number of issues in the debate on 17 January concerning the self-employed and the quasi self-employed. These were mainly around the requirement for monthly reporting, the burden of different systems being applied for tax and benefit purposes, and the need to recognise that not all self-employed people were in a position to choose their employment status. If I had had time, I also would have raised the problems caused by the different criteria used by HMRC and the DWP for claiming reasonable expenses, as well as the need to recognise seasonal variations for those working in agriculture and preparation periods for freelance writers.

13 Feb 2013 : Column 705

I made the point that under generally accepted accounting principles, a true and fair statement of how a business is doing involves accounting for business receipts and expenditure over a period to which they relate. The huge advantage of working tax credits was that this principle was also adopted, enabling claimants to draw up one set of accounts that keeps administration costs down and matches the support given by the benefits system to the actual state of the business. The universal credit regulations have departed completely from these generally accepted principles by requiring a month by month reporting system and not allowing any carryover of a previous month’s loss. This artificially short period does not present a true and fair picture and does not allow for events beyond the claimant’s control.

No provisions have been made in the regulations for seasonal gains and losses or periods of economic difficulty, and there is no recognition that a business may experience low or no profits. Added to this, there is no facility for carrying forward a loss made in one month to subsequent months. This is a fundamental flaw in the design of the regulations for the self-employed. The Government see the need for this facility, but have not made any changes, because the IT system has not been designed to allow carry-forward. In reply to the point about carryover in January, the noble Lord, Lord Freud, assured the House that,

“I am aiming to introduce something for that to work efficiently; that will be in time for when the people who need it will be using it”.—[Official Report, 17/01/13; col. 832.]

The noble Lord made a similar remark earlier this evening. I believe that the Minister is looking for a solution, but it is not yet there and I have a number of real concerns.

My first concern is the Minister’s statement that, “It will be in time for when the people who need it will be using it”. I am not so sure that the Government have the luxury of the six months’ grace or the year’s lag. What happens if the wife or husband of the self-employed person puts in a claim for universal credit first? Surely the information on the self-employed person’s earnings will be required straight away. Secondly, the regulations could have a damaging impact on particular industries. I use the example of farmers and the farm industry, although other examples could be writers and actors. A farm could have a negative cash flow for eight or nine months a year, as cited in the Social Security Advisory Committee’s recent report, and its entire income could be concentrated in a three or four-month period when the farm’s produce is sold. Even a quarterly reconciliation would not work in these cases, let alone monthly assessment.

There are also a range of factors beyond the farmer’s control, such as the weather and inability to move stock, which would affect the profitability of a farm. In answer to a Parliamentary Question on 28 February last year, we find that in excess of 90% of farmers in England and Wales are self-employed; and between 31% and 43% of all farmers earned less than the national minimum wage over the past five years. Imagine the scene at the assessment interview, where there is a framed motto on the wall which reads:

“Universal Credit should support people to be self-employed but only insofar as self-employment is the best route for them to become financially self-sufficient”.

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This is a point that the Minister has already raised. I realise that it is a long motto to have on the wall, but it is important to quote the Government’s response to the Social Security Advisory Committee in full.

So the farm worker, possibly self-employed or technically self-employed, is sitting there and told by the assessor that his way of life is not “the best route for them to become self-sufficient” and that he should go back and look for work. Remember that 60% of farmers’ income already comes from taxpayer subsidies. That is the self-employed in the farming industry down the pan for starters. Obviously we should not accept that a third of all farmers should seek alternative work without considering a number of factors, many of which I have mentioned. How qualified will the assessors be in making these judgments, and how detailed will the guidelines need to be to ensure consistent standards of application? The Government have apparently turned their back on a pilot scheme, which is regrettable.

A third concern is the construction industry, where bogus or quasi self-employment is anything from 40% to 90%. It suits the contractor because it gives flexibility to hire and fire and it sometimes suits the individual for tax reasons. Other workers accept self-employed status as the only way to get a job. Contractors must submit monthly returns detailing all their subcontractors’ pay during the tax month and certifying that none of them is an employee. The view of the Business, Innovation and Skills Committee in 2008 was that,

“the questions asked of a contractor to establish whether any of their sub-contractors are self-employed, are remarkably similar to the criteria used for identifying direct employment”.

As I said in my report on the underlying causes of fatal accidents in construction, the current system,

“relies too much on HMRC monitoring and enforcement resources which are likely to come under pressure in any economic down-turn”.

6.45 pm

The Government have accepted the recommendation by the Social Security Advisory Committee about the importance of correctly identifying those who are technically self-employed and would be more appropriately treated as an individual seeking employed work, and those who are self-employed and developing their business. The initial gateway interview will determine this. Referring back to the BIS committee definition of self-employment, how will this work for construction workers? The gateway interview will decide that they are not in gainful employment and send them off to seek work. They will turn up at the building site and if they get a job they will be regarded as self-employed—with or without their knowledge. As the Low Incomes Tax Reform Group said,

“employers treat them as self-employed, even though the relationship between the worker and the engager is in reality, strictly and probably legally, one of employment. The workers have no real choice in the matter—either they work for that employer on those terms, or they look elsewhere for work and face whatever sanctions are imposed for failure to take up the work that is offered”.

I am seriously concerned that many workers—particularly building workers—will find themselves in a no man’s land where these regulations are concerned. The uncertainty of their employment status is endemic in the construction industry and it has been tolerated

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by successive Governments. As the Social Security Advisory Committee saw for itself when it visited a jobcentre, the practice,

“of ‘jobs’ being advertised on ‘self employed’ terms … appears to be most common in casual or temporary employment and often involves the more vulnerable and lower paid”.

The committee recommended that,

“the Government should provide further clarity on the responsibilities of the Government, employers and their intermediaries, and individual jobseekers in determining the employment status of posts, in particular for the purpose of reporting income”.

This is an important recommendation, because it recognises that potential claimants should not be expected to take on the whole burden of the idiosyncrasies of their industry. For over four decades, successive Governments have failed to tackle the wild west employment world in the construction industry. Not only does it have an impact on claimants, it means that we have lost billions in tax revenue over the years. It could all end up with an out-of-work construction worker sitting in an office with an assessor, possibly a very junior grade civil servant, being cross-examined about whether he is,

“in a situation of seeking work rather than developing a business”.

I am not saying that an attempt should not be made to distinguish between the two. In fact, I am pleased that more attention is being given to the subject of the self-employed and more information is now being sought. However, if successive Governments could not disentangle the real employment status of workers in the construction industry, how will jobcentre staff achieve it and who will be the potential losers? The self-employed and those who are employees, but designated self-employed because of the nature of their industries or their lack of bargaining power, deserve answers and practical solutions when they get into difficulties.

Finally, the Prince’s Trust survey of its successful businesses cited two entrepreneurs who said that working tax credit, which is going to be replaced by the UC rate, has been a life saver and was “a real lifeline”. I hope that the eventual verdict on these regulations by the self-employed will not be that they were left to sink or swim.

Baroness Lister of Burtersett: My Lords, I want to make a very brief point. However, it is a positive point, after having been rather critical of the Universal Credit Regulations.

During our discussions on the Bill, I raised on a number of occasions my concern that there had been a suggestion that the payment of contributory benefits might be wrapped up with universal credit. That would mean that it would all go into one bank account even though contributory JSA is an individual entitlement. Therefore, I am delighted that that will not happen. I simply seek an assurance from the Minister that no step will be taken to make that happen without first debating it in both Houses of Parliament. It is an important issue and it could mean the loss of individual entitlement, particularly for many women who have now come within the contributory benefit system.

Lord Kirkwood of Kirkhope: It is still a pleasure to follow the noble Baroness because she made a point that I was going to make. I want to make two remarks

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on which I would like the Minister to reflect. The first is about the contributory system—the national insurance system. In the middle of last year, I remember listening with great attention to a lecture given by a valued friend, Malcolm Wicks, who sadly died recently. He was a great defender of the national contributory system. He gave a lecture on how he melded the concept of citizenship with the national insurance principle. He said that this involved a lifetime longitudinal commitment both ways between the state and the individual, with people paying in and people taking out, and that people understood that. He was an exponent of that all his life and I certainly miss his good counsel and wisdom. I share his view. We cannot allow these regulations to pass without remarking that this is another notch down in the diminishing of the national insurance principle. I regret that. I understand why the Government are doing it because otherwise the misalignment would be confusing. If you are introducing universal credit, I understand the rationale and it makes perfect sense. However, universal credit does not have the advantage that the national insurance contributory principle had of giving a longer-term relationship between the state and the individual. I want to put that on the record in passing.

Secondly, conditionality for people who are paying national insurance contributions suggests to me that people should perhaps pay less because they now have to submit themselves to sanctions. I have a strong view on sanctions and earlier today the noble Baroness, Lady Hollis, reflected some of that. I take the Paul Gregg view that sanctions are positive only if you can get the full commitment of the individual who might be potentially taking on a jobseeker’s commitment that will lead to sanctions, and if they feel that they are in charge of the process. That is not the case with the system of conditionality as it is currently cast, although with a bit of flexibility it might be amended in that direction to put people in a position where they feel they are more in control of what is going on. They are then much more likely to understand the rationale of a sanction being applied to them. That is work in progress. I hope it will be part of the careful evaluation that the Minister explained to us earlier this afternoon the Government will undertake.

My points really comprise two moans about national insurance that I am getting off my chest. I do not expect the Government to do anything about it. However, these regulations change things in a way that is significant for the future of the national insurance system. Indeed, perhaps in the long term, once universal credit gets into a steady state, the Government of the day—whoever they may be—may want to ask themselves whether it is sensible to continue to have a residual diminishing national insurance contributory principle set of benefits running alongside universal credit. I am agnostic about that but I certainly think that it needs to be recognised in this important debate.

Lord McKenzie of Luton: My Lords, I thank the Minister for introducing these regulations. I am fully supportive of the probing that my noble friend Lady Donaghy has done, particularly around the construction sector, on which she is very knowledgeable. I agree with the noble Lord, Lord Kirkwood, that, given the

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increasing demise of the contributory principle, it is important to consider how we re-establish that in this context, if we can. Of course, there has been an accelerated demise in various benefits. We shall talk about contributory ESA in a moment, but that is now payable for just one year and JSA is generally payable for just six months.

The Minister explained that these regulations refer just to contributory JSA and not to earnings-related JSA. I believe that he referred to my next point in introducing the regulations but, to be clear, I understand that as regards the entitlement under these arrangements, the national insurance contribution rules remain exactly the same as they are at the moment. In respect of national insurance credits, under current circumstances these can be obtained when the claimant satisfies the qualifying conditions for JSA, when he or she is not in work and earning. Will the Minister remind us what the credit and entitlement will be under universal credit when JSA is no longer with us? The Explanatory Memorandum recites that the rules for contributory entitlement are, except for the conditionality and sanctions regimes on which the Minister touched, “largely” unchanged. Will he particularise a little any other significant changes outside those two areas? As regards the alignment of the conditionality and sanctions regimes, we obviously see the merit of this and these regulations give us an opportunity to explore further how that actually works across the three benefits, including ESA.

Like others, I am grateful to Gingerbread, which briefed us on this matter, particularly as regards its focus on lone parent flexibilities, which was touched on extensively in our earlier debate. I will not go over that again except to say that I think the Minister said in response to the debate that 10 out of the 12 lone parent flexibilities are being carried forward, albeit in guidance rather than in regulations. I apologise if he covered this point earlier, but will he remind us which two are not being carried forward? We are aware that he has been pressed on flexibilities and that these should be set out clearly in the claimant commitment so that both the adviser and the single parent claimant can share the same understanding of what the regulations and guidance say about balancing work conditionality with caring responsibilities. It is understood that the noble Lord’s colleague in another place was sympathetic to this. Perhaps the Minister can say whether he agrees. It seems an ideal way of ensuring that all concerned are clear on the matter and it would help to focus the minds of advisers who may not always be up to date with the range of flexibilities available.

7 pm

Lord Freud: My Lords, I again thank noble Lords for a somewhat briefer debate although the quality remained high. Clearly, I do not have to remind the House what these regulations do. They remove the income-related element and make provision for an award of JSA based solely on national insurance contributions.

I will touch on some of the questions that were raised. I start with the issues raised by the noble Baroness, Lady Donaghy. She brought some matters to the discussion which are entirely irrelevant to this set of

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regulations, thereby rather skilfully avoiding the shorter answers that I suspect would have been given in the previous debate, given the pressure of time. I therefore take my hat off to her. She made one or two very valuable suggestions, which I have stolen from her, as she knows. I shall go on doing that. There are some interesting issues on timing. For example, do we have the luxury of time with the self-employed? I am very conscious that we may get the odd one or two people coming in, who I suspect are probably not on the pathfinder, because one of the things that the noble Baroness, Lady Sherlock, teased me on as regards our exclusions was that they made this provision difficult for a self-employed couple to obtain. We therefore have a little time plus the six-months’ grace. Given that we are starting with people probably even in the next phase who are coming in and will find a self-employed job, we would give them the year. All I am saying is that I am absolutely conscious of the noble Baroness’s main point relating to the one-month period and the need for a carryover. I have been looking at that closely, and what she said gave me a good hint about how long that carryover should last, which in her view should be a year. Noble Lords will be pleased to know that that is the kind of period that I am currently exploring.

I am talking to Defra, which is working with the NFU, on how all this works for farmers generally, and so I am very conscious of that issue. As regards the point on the construction industry, which is one of the more interesting industries, what I heard from the noble Baroness was, “Don’t get a Catch-22 situation here about people because of the way we define things”. That is a good point and one of the benefits of guidance is that we can quite flexibly get that in. I commit here to making sure that in that guidance we do not have a Catch-22 situation for this industry which I know has some odd things. If you are working, it should not matter how the position is actually defined if people are making the effort. I will look at that matter seriously.

We have dealt with the irrelevant stuff and I will now move on to the points made by my noble friend Lord Kirkwood. It is interesting, when you look at the figures, that of the approximately 1.5 million on income-related JSA or UC, only 200,000 receive the contracted amount that we are talking about, based on their contributions. Of those, only 70,000 receive it on its own, without a UC or income-related top-up. We have therefore moved a long way into means-testing, as my noble friend observed.

My noble friend’s point about feeling in control was smack right. You do not get a response of the kind that you want if people do not feel part of it. If they do not understand and have not been part of the process that has generated it, the sanction will not work as well and create the right behavioural response. That is what the claimant commitment is doing. Interestingly, the early trials of the claimant commitment are finding that it is working much better than our existing contract.

The noble Baroness, Lady Lister, asked me for another guarantee. I will give the noble Baroness a guarantee that any changes to the ESA and JSA as part of UC would require regulations. There will therefore

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be a chance to debate that. As to the point about having a contributor on a different platform, the reality is that any Government looking ahead would want to have as few platforms as possible. One will probably end up with the same platform but approval of the process of who gets paid and how would have to go through this House.

In response to the question of the noble Lord, Lord McKenzie, the two areas that were not carried forward were those where the time allowance to attend an interview was moved from seven days to 48 hours. Claimants with children over the age of 13 are expected to show that they have reasonable prospects of getting a job, but they can still have tailored requirements in line with their caring responsibilities. Those are the two specific changes. Regarding the point about national insurance credits, everyone on universal credit will have national insurance credits that count towards the state pension. The difference is that there are class 3 credits for UC, whereas JSA claimants currently get class 1 credits.

Lord McKenzie of Luton: Will the Minister drop me a line on the point he made about class 1 and class 3 contributions? I should like to reflect on it because I am not sure that I understood the import of it.

Lord Freud: Yes, I would be pleased to provide a letter laying that out for the noble Lord to consider in depth.

We started last year to align the JSA regime and universal credit with the sanctions model. These changes pull them even closer together. We will thereby have a clearer system of requirements and sanctions that are robust and appropriate, underpinned by safeguards for claimants. I seek approval of the regulations and commend them to the House.

Motion agreed.

Employment and Support Allowance Regulations 2013

Motion to Approve

7.07 pm

Moved by Lord Freud

That the draft regulations laid before the House on 10 December 2012 be approved.

Relevant documents: 15th Report from the Joint Committee on Statutory Instruments, 24th Report from the Secondary Legislation Scrutiny Committee.

The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud): My Lords, I can confirm that in my view the statutory instrument is compatible with the European Convention on Human Rights.

As with the JSA regulations we have just considered, these provisions are designed to work alongside the introduction of universal credit by removing all the existing income-related provisions from ESA. From

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April 2013, the income-related elements of ESA will gradually be phased out for any cases where universal credit has been rolled out. These regulations will introduce new conditionality and sanctions regimes into ESA benefits to align them with universal credit. The ESA sanctions regime is, following reforms made last year, already significantly aligned with the UC sanctions model. However, beyond these changes, people will find that the effect of the existing employment and support allowance regime is unaltered.

Noble Lords may find it helpful if I provide more detail on how these changes will be applied. ESA is a benefit with which all noble Lords will be familiar and is payable to people on the basis that they have a disability or health condition that affects their ability to work. As with the changes that we are making to JSA, these regulations provide new claimant responsibilities and sanctions for claimants who fail to comply with the conditionality regime.

The requirements placed on ESA claimants are also based on the universal credit model. For example, where appropriate, ESA claimants can be required to prepare for work and attend work-focused interviews. These requirements are broadly equivalent to those placed on claimants in the universal credit work preparation and work-focused interview-only conditionality groups. Therefore, ESA claimants will not be required to look, or be available, for work. I should also stress that ESA claimants can be subject only to the lowest levels of sanctions. These sanctions have an open-ended element that stops building when the claimant complies, so the quicker the claimant engages the shorter the sanction will be.

The two levels of sanctions broadly work in the same way as the equivalent sanctions for universal credit claimants in the work-preparation and work-focused interview requirement groups. The high and medium-level sanctions in JSA and universal credit, which are for longer, fixed periods, do not apply to ESA claimants. Our aim is not to impose sanctions. We want claimants to comply with the reasonable requirements that will prepare them for work. Therefore our focus is on ensuring that the requirements expected of claimants are reasonable and clearly communicated to them. Only if claimants fail to meet a suitable requirement without a good reason will a sanction be imposed.

As with the JSA provisions, these regulations were subject to statutory formal consideration by the Social Security Advisory Committee. The committee decided that formal referral was not necessary, but raised a number of points, which were all considered, and changes were made where appropriate. For example, the committee questioned Regulation 46 of the ESA regulations, which originally provided that the purposes of a work-focused interview included the five things in the list. The committee questioned whether this meant that the interview had other purposes that were not included in the list. We decided that the list should be exhaustive, and therefore amended the wording of the regulation to remove the word “include”.

As the sanctions and conditionality rules for both benefits were being brought broadly into line with universal credit, both sets of regulations were included as part of the Social Security Advisory Committee’s

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wider UC consultation exercise. We firmly agree with the committee that the key to an effective sanctions regime is clear communication with claimants, delivered by well trained advisers. In line with assurances sought during the passage of the Act, stakeholders were keen to ensure that the sanctions regime incorporates sufficient safeguards for vulnerable claimants.

Noble Lords will know that I share concerns that the sanctions regime incorporates robust safeguards. I would like to assure noble Lords that a number of protections will be in place, for example visiting or calling claimants with a mental health condition or learning disability before a sanction is considered.

In closing, I reiterate to noble Lords that beyond the changes I have outlined, the rules for the new style ESA will be very similar to the existing rules for the contributory element of ESA. I would also like to thank the Secondary Legislation Scrutiny Committee for its earlier consideration and analysis of these regulations. I seek noble Lords’ approval of the regulations here today, and I commend them to the House.

Baroness Turner of Camden: My Lords, very briefly, I wish to raise with the Minister the issue of appeals and appeals mechanisms. Where I live, I am often approached by people for advice, particularly by those on DLA. Of course, DLA will be transformed into the personal independence payment under the new system. At present, when people come to me to complain that they do not have the amount of DLA they thought they ought to have, I always advise them to appeal. I tell them what they ought to do, and I advise them to consult the local authorities and to proceed accordingly. The notable thing about appeals against DLA assessments is that 40% of them are successful. That raises a number of questions in my mind about the people who carry out the assessments.

What will happen under the new system? Will a private firm do the assessments, as happens with DLA, and how will the Government ensure that the private firm doing the assessment is capable of doing the job effectively? I have doubts about the way in which the present system operates when so many people are dissatisfied and so many people are successful at appeal. That is very unsatisfactory. From the point of view of those concerned, it makes them feel that the system works not for them but for the Government on behalf of people who want to diminish the amount of money that is spent in support of people who are on benefits.

As regards legal aid, after April that will not be available for anyone who is concerned to contest an appeal. There may be people who are very aggrieved because they are not getting the benefit assessment that they ought to have, even under the new system, but what course will they have to follow, and how can they follow it? Are the Government satisfied that the people doing the assessments are capable of doing them?

7.15 pm

Lord McKenzie of Luton: My Lords, I thank the noble Lord for introducing these regulations, which run parallel with those relating to JSA, which we have just considered. Before going further with my script, I would like to say that I do not think the Minister dealt

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with the point I raised earlier about flexibilities being included in the claimant commitment document. Perhaps he might pick up that issue when he responds to this debate.

As we have heard, these regulations relate to contributory ESA, which means that they are generally limited to 12 months, except for people in the support group. Can the Minister confirm that these regulations correctly reflect that position and that days in the support group do not count towards the 365-day maximum, or the days in the assessment period, followed by a period in the support group? Can he further confirm that they reflect the entitlement for someone in the support group to reconnect the contributory entitlement as provided for by Section 52 of the Welfare Reform Act 2012? It would also be helpful if the Minister could put into context the provisions in the regulations relating to youth, given the provisions of Section 53 of the 2012 Act, which preclude further claims under the youth condition.

As for JSA, the Explanatory Memorandum states that any allowance will be paid either alone or together with universal credit, a point probed by my noble friend Lady Donaghy in the earlier debate. How will this work, and who is to decide whether it is paid separately or with universal credit? Currently, universal credit is payable fortnightly in arrears, and the allowance is to be treated as unearned income for the purposes of universal credit. Presumably it is not impacted by the actual payment date. Can the Minister tell us whether ESA is to be sanctioned and whether it is the gross or net amount that is to be taken into account as unearned income? What about hardship payments and repayable hardship payments? How will they work?

The Explanatory Notes make it clear that, with the exception of the conditionality and sanctions regime, the rules will be very similar to the existing rules. I think the Minister repeated that. For the purposes of the record, can he be a little more precise about the lack of similarity?

As regards claimant obligations, the Explanatory Notes at paragraph 7.63 record that the UC model requires more of the claimant than ESA does. In particular, the paragraph suggests that claimants may be required to look for and be available for work that they are capable of doing, which is a more onerous test. Perhaps I can go back to that paragraph. I do not think it accords with what the Minister said in introducing these regulations. It states:

“The requirements placed on Employment and Support Allowance claimants are also based on the Universal Credit model, though there are again some significant differences. For example, claimants can be required to prepare for work and attend work-focused interviews, but are not required to look for work or be available for work whereas in Universal Credit, within limits, claimants may be required to look for or be available for work that they are capable of. The requirements to prepare for work and attend interviews are broadly equivalent to those requirements placed on claimants in the Universal Credit work preparation and work-focused interview only groups”.

I read that to suggest that if the universal credit rules are to apply, claimants may be required to look for, and be available for, work that they are capable of. If that is not the case, it is fine, but if that is correct, one has to ask how these more onerous requirements are

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to be derived, or are they to be derived from the same WCA process? Will revised guidance be given to Atos and decision-makers?

Similarly, in relation to sanctions, where there is an entitlement to both benefits—contributory ESA and universal credit—the latter will apply. Given that the universal credit requirement on the claimant may be higher than the ESA requirement, what will ensure that there will not be movement up the sanctions scale?

Lord Freud: The Employment and Support Allowance Regulations remove the means-tested provisions, because in future universal credit will replace the incremented employment and support allowance. With the exception of the conditionality and sanctions regime, the rules for the new employment and support allowance will be very similar to the existing rules for the contributory element of ESA under the 2008 regulations.

I will pick up some of the questions. The first was from the noble Baroness, Lady Turner, who asked about appeals. As she said, about 37% of appeals overturn the original decision. However, in the context of the total number of decisions made, the tribunal overturned around 15% of around 741,000 fit-for-work decisions. Therefore, the original decision on benefits stood in 85% of cases. Clearly, we will have a further chance to debate this issue later this evening.

All the remaining questions were asked by the noble Lord, Lord McKenzie. He asked about flexibilities for lone parents. Claimants will meet their personal adviser and discuss their circumstances, which will include the hours that the claimant is able to work, taking into account their caring responsibilities. Clearly, the claimant commitment is a living document that will change with people’s circumstances.

There will be separate payments of JSA, ESA and UC. The contributory benefits will not be paid with the same frequency as universal credit, although the monthly amount will be equivalised, and the monthly amount of the contributory benefit will be taken into account as offsetting unearned income. In other words, it will knock out the equivalent amount of UC.

I confirm that days in the support group—the WRAG—will not count towards the 365-day limit. The way in which sanctions will operate if a claimant receives both universal credit and a contributory element is that the relevant sanction will apply to their universal credit award and not to their JSA or ESA award unless they close their UC claim.

The hardship provisions have been removed from both the JSA and the support allowance because it will now be for contribution-based claimants, who will have other income and savings to live on. The noble Lord is correct that there will be no new claims for youth conditions.

I make it absolutely clear that the requirements are for work preparation such as attending a training course, preparing a CV or taking part in the Work Programme. They do not relate specifically to searching for work. Perhaps I may say that there is a bit of clumsy drafting in that paragraph, which states that UC has other elements that are not in the ESA. I know

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exactly the issue that the noble Lord seized on because I was puzzled by it myself when I read it. However, I can reassure him on that point.

As with the JSA, we are now moving the ESA and UC regimes closer together after the start last year. I commend the regulations to the House.

Motion agreed.

Social Security (Personal Independence Payment) Regulations 2013

Motion to Approve

7.25 pm

Moved by Lord Freud

That the draft regulations laid before the House on 13 December 2012 be approved.

Relevant documents: 15th Report from the Joint Committee on Statutory Instruments, 23rd Report from the Secondary Legislation Scrutiny Committee.

The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud): My Lords, this instrument was laid in draft before the House on 13 December 2012, and I confirm to the House that I consider it to be compatible with the European Convention on Human Rights.

This Government are clear that they are committed to continuing to support disabled people to play a full role in society. The reform of DLA and the introduction of the personal independence payment are central to this. We recognise that DLA plays an important role, but it is simply not working in its current form. In the past 10 years, the number of people claiming DLA rose by more than a third, from around 2.4 million to 3.2 million. That level of growth is not sustainable.

We could have reduced expenditure by simply cutting money across the board. Instead we chose the principled but more difficult option of modernising the benefit and focusing support where it is needed most—on those who face the greatest barriers to independent life. I accept that this reform will mean that we spend less money on PIP than we would have spent on DLA, and that fewer people will receive the benefit—300,000 fewer by October 2015 and 600,000 fewer in steady state. We have not hidden from this. However, this has to be put in context. The UK remains a world leader in protecting the rights of disabled people. We currently spend almost £50 billion a year on support and services for disabled people. We will still be spending more on DLA and PIP in 2015-16 than we did in 2009-10 or 2010-11.

Importantly, this reform has also allowed us to ensure that the money we are spending is used effectively and fairly, and will go to the people who need it most. More people will receive the highest rates of the benefit than at present, both in terms of the proportion and the actual number of people receiving the benefit. The proportion of individuals who receive the top rates of both DLA components is 16%. Under PIP

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this will rise to 23% and will be worth £134.40 a week, based on April’s rates. More individuals will receive the enhanced rate of the daily living component in PIP than receive the highest-rate care component in DLA.

The Government’s reforms present an opportunity to start afresh and make the benefit fit for the 21st century while keeping the best elements of DLA that disabled people value. Throughout the development of PIP we undertook extensive stakeholder engagement to ensure that disabled people and their organisations were able to feed in their views and concerns. We listened, and in many cases acted on what we were told. Our commitment to consultation was recognised by the Secondary Legislation Scrutiny Committee. We are continuing this engagement as we move into the delivery phase of PIP.

A key area where we listened to and acted on people’s views was the timetable for reassessment of the DLA caseload. We announced in December that this would take place more gradually, allowing more time to make sure that we get the implementation of PIP right. The peak period of reassessments will now not start until October 2015. This will also allow time for the first independent review of PIP to be carried out and any required changes to be implemented before reassessment of the bulk of the DLA caseload starts, from October 2015.

7.30 pm

We have also made a wide range of changes to the assessment criteria, following two extensive consultations. For example, we heard the concerns that we had not taken great enough account of the ability to read in our second draft of the assessment criteria. To rectify this we have introduced a new activity so that we can separately assess the ability to read and understand written information and the ability to communicate verbally. In addition, we have broadened our approach to aids and appliances, recognising that disabled people can be reliant on non-specialist aids to complete everyday activities, which can create costs and barriers.

I know that there is some continuing concern around the assessment, particularly in relation to the physical mobility activity—that is, moving around. We have already discussed the issue in this House. However, I would like to take this opportunity to reassure noble Lords once again that we have not tightened the rules regarding physical mobility. I must stress that, under the second draft of the assessment, being unable to walk 50 metres did not automatically entitle claimants to the enhanced rate. The policy intent behind this activity has always been that being unable to walk more than 50 metres should lead to entitlement to some rate of the mobility component. Within this, we intend that the enhanced rate should go to those individuals who face the greatest barriers to mobility and the standard rate to the remainder.

In the second draft, we differentiated by looking at the type of aid and appliance that an individual used; but we did not do it well. We used terms such as “up to” certain distances, which meant that it was not clear which descriptor applied. As such, people received variable outcomes. The strong response from our consultations and meetings with disability organisations

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was that the criteria were very unclear. Many organisations told us they believed that only people who needed to use wheelchairs could receive the enhanced rate. We heard this from the Disability Benefits Consortium, the MS Society, Parkinson’s UK and Leonard Cheshire Disability, among others. In the final version of the criteria we differentiate by distance, which we feel is much clearer. This means that, in the final draft, individuals who cannot walk 20 metres can be certain that they will receive the enhanced rate, regardless of whether they need an aid or appliance.

I must also stress that this has to be looked at in the context of whether individuals can complete activities safely, to an acceptable standard, repeatedly and in a reasonable time. So, if individuals can walk more than 20 metres but cannot do so in a safe and reliable way, they should receive 12 points and the enhanced rate. Our analysis shows that, when you compare the second and final drafts of the assessment criteria, the projected number of people who will score 12 points under the moving around activity will remain broadly the same, despite a reduction in the overall mobility caseload.

At this point I would like to reconfirm that the Government will lay an amending regulation to make clear that consideration must be given to whether individuals can complete the assessment activities,

“safely, to an acceptable standard, repeatedly and in a reasonable time period”.

I have already shared a draft of the amending regulation, and we commit to putting a final regulation before Parliament shortly.

I am aware that both the House and disability organisations are as interested in how the assessment providers will carry out the assessment as they are in the policy itself. As always, the legislation will be underpinned by guidance, and we made the relevant guidance for assessment providers available on the DWP website on 23 January so that noble Lords could consider it before today’s debate. It will remain under review and will continue to be refined. We have also shared relevant extracts of the working draft of the decision-makers’ guidance.

I would also like to address some of the concerns that have been raised about the impact that these changes will have on carers. Informal carers provide an invaluable service to some of the most vulnerable people in our communities. The Government absolutely recognise and value their contribution, and enabling carers to fulfil their potential remains central to the Government’s carers strategy. That is why we believe that welfare reform must support carers’ independence. Under universal credit there will be a carer element to support carers on a low income who provide care for a severely disabled person. Additionally, such carers will have improved opportunities to maintain links with the world of work by being able to keep more of their income from working than under the current system.

As part of our approach, the Government also announced that carer’s allowance will continue to exist as a separate benefit outside universal credit, providing carers with the support of a dedicated benefit; and we will continue to uplift it with inflation. We also made it clear more than a year ago that both rates of the daily living component of PIP will provide access to carer's

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allowance. This was welcomed by Carers UK, and we will enshrine it in primary legislation—indeed, we have shared the draft provision that does so with Carers UK. The latest available information shows that there were more than 1 million people with an established entitlement to carer’s allowance. Of these, some 269,000 have a carer’s allowance claim in payment, linked to an award of DLA in respect of someone of working age.

By October 2015, when we will have completed 560,000 DLA reassessments, the overall change in the carer’s allowance workload where benefit is in payment, will be a reduction of just 5,000 awards. It is important to put this in context. Expenditure on carer’s allowance continues to rise. On average, it has increased by 5% in real terms over the past four years and will continue to increase every year up to 2015. We currently spend £1.9 billion on carer’s allowance, and this is expected to rise to more than £2 billion by 2015. Our approach means that those caring for disabled people with the greatest needs will continue to get the support they need.

I hope that this short opening reassures noble Lords that this is a sensible reform. It has been developed in close collaboration with disabled people and their representatives. We have listened to concerns and acted on them. Therefore, I present to the House today a set of regulations that will ensure that we can provide disabled people with a new, more sustainable benefit, which will reflect modern society and allow us to continue helping disabled people to live full and active independent lives.

Amendment to the Motion

Moved by Lord McKenzie of Luton

At end to insert “but that this House is concerned about the impact of the replacement of Disability Living Allowance with Personal Independence Payment; is concerned about the lack of a full impact assessment on carers; regrets the lack of a cumulative impact assessment of all the changes hitting disabled people; regrets the fact that vital safeguards have not been introduced to ensure that additional pressure is not put on carers, that people do not lose their freedom to work and that they are not driven to already stretched NHS or social care services; believes that while Disability Living Allowance needed reform it should have been started with the needs of disabled people and not with a budget cut; notes that some 600,000 fewer people will be in receipt of Personal Independence Payment by May 2018 compared to those who would have been entitled under Disability Living Allowance; and further notes that some 25,000 disabled people could be forced to give up their jobs because they can no longer afford the extra costs of getting to work”.

Lord McKenzie of Luton: My Lords, the regulations that the Minister has introduced come at the end of a protracted process whereby the Government, in their early tenure, signalled their intention to abolish disability living allowance and substitute it with the new personal independence payment. The proposal has not been without controversy ever since. The abolition of a benefit

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that aimed to support disabled people by making a contribution to the extra costs of disability has failed to gain full support among disabled people and their organisations. Nevertheless, we acknowledge the positive changes that have been made at various stages along the way.

The fundamental problem was the starting point of this process—not how best to design a new benefit that meets the needs of disabled people but a crude attempt to reduce the benefit bill. The change was then promoted in the context of suggesting that DLA was an easy touch for so-called cheats and scroungers, when the reality was that the fraud rate was only around 0.5%.

The first time we heard that there were going to be changes to DLA was in the 2010 Budget when the Red Book said that there would be a reduction in caseload and expenditure of 20%. That figure, I think we now realise, was plucked out of the air; no analysis, but a nice round figure that sounded definite. We now know that DWP’s latest projection indicates that the reduction in caseload and expenditure as a result of these changes will be 27% to 28% by the time the PIP assessments are completed in 2018. There will be more of this later, but we should acknowledge the hard work by officials during this process and the extensive consultations and engagement which have ensued. The Government have been pushed back on a range of important issues, whether through the Bill or the various rounds of consultation: the required period condition is now three months rather than a six-month qualifying period; the mobility component for care home residents has been retained; and they have introduced two-year linking rules, as well as substantive changes to the assessment activities. Furthermore, the agreement to switch into regulations the phrase,

“safely, to an acceptable standard, repeatedly, and in a reasonable period of time”,

is certainly a reassurance for some, as is the extended reassessment process. These are all to be welcomed. Whether the Government should be congratulated on their sensitivity in responding to these points or berated for the insensitivity of their starting position is perhaps a moot point. I shall put it down to the good sense and power of persuasion of officials.

At the last minute, after consideration in the other place, we have what part of our Motion calls for: an assessment of the impact on carers of the replacement of DLA. This is hardly the time to subject it to proper parliamentary scrutiny, but it seems clear from the DWP’s own analysis and the Minister’s introduction that the projected eligible PIP number for 60 to 64 year-olds in May 2018 at 1.6 million will be 600,000 below the number who would have been eligible for DLA. Of the reassessed DLA caseload, some 450,000 out of the 1.75 million will receive no award at all. In total, almost 1 million will receive a reduced award or none whatever. Is it the contention of the Government that these individuals who are to miss out on PIP have no significant additional costs associated with their disability? One of the quoted reasons for the change from DLA to PIP has been the Government’s wish to increase support for those with the greatest needs; we have heard it again this evening. How, therefore, does that oft-repeated assertion chime with the statement that the new PIP benefits rates will be exactly the same as

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those for DLA? The Government claim that a higher percentage of claimants will receive the highest rates of PIP than would be the case under DLA, but because the caseload under PIP is much lower, this amounts to approximately the same number of individuals. That is not helping the most severely disabled more; it is helping them at the same rate while taking away financial support from many other disabled people who also have additional costs to meet as a result of their disability.

This has not proved to be a good time for many disabled people. The shutting of the Remploy factories; the failure of the Work Programme to support disabled people; the impact of the looming bedroom tax; the failure fully to protect disabled people from the uprating caps; the loss of the severe disability premium in universal credit; and concerns over the protection from the benefit cap all mean that we need to be especially cautious about the change from DLA to PIP. We have not seen any comprehensive cumulative impact assessment of all of these measures on disabled people. Are we to expect one?

We know that for some, the receipt of DLA has proved a means to get to work. This raises the concern that anyone in these circumstances missing out on PIP may have to give up their job. What reassurances can be given that this will not happen? The Minister may pray in aid the Access to Work Programme, as did his colleague at the other end. Perhaps we can be given an update on the budget. Official statistics released in January this year show declining numbers of individuals being helped under this scheme. In 2009-10 it was 37,000, a year later it was 35,000, and in 2011-12 it was 30,000. What is happening with this programme?

7.45 pm

We are hoping to be reassured that there is no adverse knock-on effect to carers, but denial of the highest or middle rate care component of DLA could take the carer out of entitlement to carer’s allowance. We know that DLA helps people to manage some of their own care needs so that their carer can undertake some work. The Minister will doubtless be aware of the reaction of Carers UK to the latest figures released last Friday. These show that there will be a net fall in carer’s allowance caseload as a result of the PIP reforms and some 25,000 individuals will lose their eligibility for the allowance. Carers UK states that:

“Carers sacrifice so much to care for loved ones and make a huge contribution to family life in our society. They contribute an estimated £119 billion to the UK economy with the care they provide, often at a cost to their health, careers and family finances. In return the Government is now cutting financial support for carers by £31 million, meaning that thousands of families now face the devastating double blow of disability and carers’ benefits. This comes on top of cuts to social care services, cuts to Housing Benefit support for carers who need a separate room to sleep in, forthcoming reductions in support with Council Tax and thousands of carers who will have their benefits capped—a perfect storm of cuts to families already struggling to care for loved ones”.

We know also that there are concerns that cutting support for those on the lower rate of DLA will particularly affect people with mental health and learning disabilities, with grave concerns that people with mental health problems will comprise a large proportion of those losing out. Parkinson’s UK says that this reform is causing untold anxiety to people with Parkinson’s.

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The final criteria will cause hardship for an estimated 1 million disabled people and their families, even those who are in the greatest need. Such cuts will have an inevitable knock-on effect on the budgets of health, social and other support services for disabled people. How does the Minister respond to these concerns?

Where DLA is withdrawn from a person, their automatic exclusion from the benefit cap will fall. How many more households is it estimated will fall into the cap because of this? Further, the Disability Benefits Consortium suggests that under the Universal Credit Regulations, there is a tightening of the rules that permit an additional bedroom for an overnight carer. This is currently allowed on the basis of need, whether or not someone is in receipt of DLA/PIP. Can the Minister say whether this has been tightened and what analysis has been made of the consequences, if it has? The DBC also points out that there are likely to be many disabled people who have limited capability for work or work-related activity who will not be entitled to PIP. If so, there are circumstances where the universal credit rules will operate to create a perverse incentive for this group. I will not detain the House with the numerical example that has been offered, but no doubt the Minister has had a chance to peruse it. Does he agree with the analysis, or if he has not a chance to see it, will he ensure that he takes the opportunity to do so?

On the mobility criteria, many have welcomed the Minister’s commitment to include the term,

“safely, to an acceptable standard, repeatedly, and in a reasonable period of time”,

in the regulations, and obviously we support it. However, many disabled people and their organisations remain alarmed at the hurdle that disabled people will now face before being awarded the enhanced mobility rate. The arguments they make are that the 20 metre criterion simply does not provide a practical level of mobility. It is a very short distance, approximately equivalent to the length of two buses. There is very little a disabled person can achieve outside of their home without a wheelchair if they cannot walk for more than 20 metres. Since most wheelchair users can walk a qualifying distance of only 20 metres, it is likely to lead to wheelchair users using adapted cars or very expensive converted wheelchair-accessible vehicles. This could include those whose conversions have been part funded by a grant from the Government’s Specialised Vehicles Fund which is only available to those who are eligible for the Motability Scheme.

The distance of 50 metres has been embedded for many years in guidance on access to the built environment for people with mobility difficulties. For example, the Government’s own publication, Inclusive Mobility, referenced in Approved Document M of the building regulations, recommends that seating,

“should be provided on pedestrian routes at intervals of no more than 50 metres”,

and that parking spaces for blue badge holders should preferably be provided within 50 metres of the facilities they serve. The distance of 50 metres is used by some councils for considering residents’ applications for

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advisory disabled parking bays close to their homes. Salford Council, for example, uses an application form which includes the following question:

“Is the applicant ever required to park further than 50 metres from home due to the lack of on-street parking spaces?”.

The change was the subject of a confused consultation, as the Minister himself I think recognised. If the proposed change had been spelled out in the consultation document, the DWP might have expected a somewhat different response, not least because of the points above. It is accepted that confusion may be attributed in part to the consultation around “up to 50 metres” initially, which the Minister confirmed, but there seems to be a difficulty in articulating quite why the DWP’s analysis shows that the proposed working of the new criteria would lead to broadly the same outcome that would result from applying the existing criteria. If this is true, I suggest there is a duty on the Government to spell this out in some detail. But if this is the case, what is the difficulty anyway in reverting to the 50-metre formulation?

Parkinson’s UK says in its briefing:

“In answer to a Starred Question, the Minister, Lord Freud, appeared to imply the change was the result of concerns expressed by charities including Parkinson’s UK. For the record, Parkinson’s UK’s concerns related not to the distance but to an implication that only wheelchair users could meet the criteria. It is unacceptable to use these concerns as a justification for reduction in distance. The government must reinstate the 50 metres rule for the highest rate of mobility PIP. The change to 20 metres is unacceptable. Making it tougher to get this rate of PIP would mean people with Parkinson’s, most of whom are on the high-rate mobility DLA, losing their transport lifeline of a Motability vehicle”.

For many disabled people who were and have extensive mobility issues, access to a Motability vehicle is a lifeline. What assessment has the Minister made of the effect that the 20-metre threshold will have on those disabled people in employment? Can the Minister tell us whether he sees Access to Work taking up some of the suggested previous support given through Motability? What assessment has been made of the financial implications of this? If somebody had a car under the DLA regulations because they were virtually unable to walk, they are hardly likely to be able to hop on and off the nearest bus or train, such that any support might actually be more expensive than Motability arrangements.

We have had the benefit of perusing the guidance for providers who are carrying out assessments for PIP. It is an extensive and seemingly comprehensive document, but one which invites a fundamental question. However well constructed the criteria and the processes, what matters is how the system will work in practice and, clearly, the roles of the provider and the health professional are key. It is understood that these are to be Atos and Capita. Atos is well known to the DWP and, it is fair to say, has not always come up to the mark. We welcome the early review of PIP but can the Minister say what safeguards are being built into the arrangements to judge performance and how the Government will ensure that efforts on PIP will not undermine efforts on ESA? How many health professionals are likely to be available by 2015 for this role and what would their previous roles actually have been? As we understand it, there is not an extensive

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pool of individuals with the required skills. In evaluating the contractual arrangements with these providers, can the Minister tell us about expected productivity levels for health professionals? What is the estimated average time—if it exists—for the HP to carry out their tasks, ranging from considering the client questionnaire to reporting to the case manager?

Whatever we do with this Motion tonight, the House will approve these regulations, and whatever our misgivings, we have to wish them well because they will impact on the lives of many. However, we will be rigorous in following the progress of DLA/PIP to ensure that they deliver what is promised as well as in pursuing the cause of those who are excluded. I beg to move.

Baroness Thomas of Winchester: My Lords, this has been a long journey, with many bumps and scrapes along the way. We are grateful to my noble friend and his team for listening to many representations on the whole issue of replacing DLA with the new territory of PIP—I declare an interest in that I receive DLA— and I am very pleased that the timetable for PIP’s implementation is being slowed down to ensure that it is got right. We all know that the DWP is determined to reduce the number of people eligible for PIP, but I am not going to talk about the numbers, because I am not sure anyone can really forecast with any accuracy how many people will be found to be eligible and how many ineligible. However, I would ask my noble friend whether the DWP has taken fully into account all those disabled people, like me, who receive DLA and who are now well over pension age and still going. The last thing anyone wants is for disabled people whose way of life depends on being eligible for the higher rate of mobility allowance, which opens the gate for a Motability vehicle, suddenly to have that gate slammed shut by a rigid new PIP ruling.

I shall just say a word about what my Motability car means to me. It not only transports me about but takes all my aids too, which I could not carry around in any other way. A look inside my boot would tell the story. My real fear is that those who do the utmost to help themselves may find that their determination counts against them in being eligible for the enhanced mobility rate. I echo what the noble Lord, Lord McKenzie, said about Access to Work. That is fine, and I know more money has been put into it, but it only helps people to a certain extent in getting to and from work, and it does not help all those people who live in rural or semi-rural places who need to get to hospital appointments, see friends and go to the shops—all those things that Access to Work simply cannot do.

We can only take my noble friend’s word for it that far too many people became eligible for DLA, as a whole, because of the vagueness of the application form and the stretching effect of case law. I take my noble friend’s word for it that descriptor E in activity 12—the “moving around” section of the PIP form—was changed at the last minute to make it clearer, rather than to disadvantage whole rafts of people. I am glad that my noble friend has clarified that further this evening. We all know that suddenly introducing 20 metres as the cut-off point for those walking, aided or unaided, to receive enough points for the enhanced mobility

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payment terrified huge numbers of disabled people, especially as the crucial qualifying words were only to be in guidance. I am particularly pleased that my noble friend and his colleagues listened to our pleas to embed the relevant words in regulations.

That has now been done, but I know, as the noble Lord said just now, that there is still acute worry among disabled people that “20 metres” is still there in descriptor E. Perhaps I can say how I understand the situation, in order to try to dispel some of the fog which is still around this vital descriptor, which unlocks the door to a Motability vehicle. The words that are now to be in the amending regulations—

“safely … to an acceptable standard … repeatedly … and in a reasonable time period”—

will apply to all the descriptors. That is why the Minister in another place, and my noble friend tonight, have said that people who could walk up to 50 metres might now be on either standard or higher-mobility DLA and that this will also be the case with PIP—that those who can walk up to 50 metres might qualify for either the enhanced or the standard rate. In another place, the Minister said:

“In seeking to clarify that, we have said that those who can only manage 20 metres will automatically get the enhanced rate. However, using the test of ‘safely, reliably, repeatedly and in a timely manner’, those people who can only manage up to 50 metres could also get an enhanced mobility rate”.—[Official Report, Commons, Eleventh Delegated Legislation Committee, 5/2/13; cols. 17-18.]

So it is not the case that the only people who will get the enhanced rate of PIP are those who cannot walk more than 20 metres. I hope my noble friend will confirm this. Of course, the words the Minister used in another place have now been superseded in the new draft regulations, which I warmly welcome.

8 pm

However, before leaving those words, I would be grateful if my noble friend could confirm the meaning of “repeatedly”. The Government’s response to the consultation says:

“We have also broadened the definition of ‘repeatedly’ so this is no longer limited to looking at repeatability on the same day but potentially allows longer considerations—i.e. if an individual walking on one day would prevent them doing so on the next. This reflects concerns raised in the consultation. While we accept that these terms are potentially more subjective than the previous draft, we think they are fairer, more flexible and more accurate”.

This would be of great help, for example, to those with a prosthetic leg who can walk one day but have to use a wheelchair for the next few days. This is a common occurrence and something that a lot of amputees are worried about.

In fact, quite a number of the examples given in the huge amount of material we have been given about PIP display much more flexibility than someone looking at the descriptors on their own would judge. Will the assessors be thoroughly versed in these examples that we have been given by the DWP? Just yesterday I found the PIP assessment guide on the DWP website, which we have talked about. It was very instructive. The absolute key to this whole matter is how the assessment is done and what part JCP decision-makers play in ultimately making these decisions. A lot of successful appeals will mean that the assessors and

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decision-makers have not carried out the assessment properly and have not taken medical evidence into account. Here I put in a plea for those people who suffer from severe conditions such as colitis or Crohn’s disease, whose needs are often overlooked.

The internal and external reviews of PIP that have been announced are very welcome, but Atos and Capita must ensure from the outset that their assessors are of the highest quality. Perhaps my noble friend will tell us how the DWP will ensure that PIP assessors are going to be monitored, and reassure us about the dreaded word “targets”. We are often told that targets do not exist but we need to be reassured that the companies themselves do not set informal targets that are below the radar.

Finally, will my noble friend undertake to lay further amending regulations if any of the reviews show that the weighting of the regulations before us today is seriously flawed? With that, I wish PIP well and will keep my fingers crossed for its success.

Lord Touhig: I refer noble Lords to my entry in the register of interests. As the Minister will recall, in Committee and at Third Reading of the Welfare Reform Bill, a number of colleagues, notably the noble Baroness, Lady Browning, and the noble Countess, Lady Mar—who is no longer in her place—and I all raised issues about face-to-face assessments.

I urged the Government to take a “tiered approach” to the PIP assessment. This would mean that instead of people with conditions such as autism having to undergo a stressful and often inaccurate face-to-face consultation, assessors would first consider existing medical and other evidence about their needs. On the basis of this, a decision would be made as to whether a face-to-face consultation would be necessary. We are all keen to learn the lessons of the work capability assessment for employment and support allowance, which, as the Public Accounts Committee in the other place confirmed recently, continues to be problematic at best. A tiered approach to PIP would help make it fairer and more accurate for people with autism and other complex conditions.

The guidance that has been published by the Department for Work and Pensions for the assessment providers Atos and Capita reflects this tiered approach, which is certainly most welcome. However, the guidance also makes it clear that the end-to-end assessment process should be completed within 30 days. I understand that contracts between the DWP and the providers make it clear that there is a financial incentive to work towards this timescale; indeed, if fewer than 85% are completed within 30 days the providers are at risk of losing their contract.

I share the view of the National Autistic Society, which has serious concerns about whether evidence can and will be collected within this very tight timeframe and whether as a result people with complex conditions such as autism will undergo a stressful face-to-face consultation, and a decision will be made about their needs by an assessor who may not be in possession of all the relevant evidence. A one-hour face-to-face assessment will not enable the assessor to gain a full picture of the impact of autism on the claimant. It is

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an inherent part of the condition that people with autism will present differently according to the environment in which they find themselves.

Does the Minister think that 30 days is a realistic timeframe in which to get a response to a request for further evidence from busy health and social care professionals? Is he prepared to consider extending that, in particular with regard to people with autism and other very complex conditions?

Baroness Browning: My Lords, I refer to my interests in the register and also declare an interest in that I have close relatives who are in receipt of DLA. I want to use this opportunity to put on the record again my ongoing concerns, which are very much reflected in the amendment that the noble Lord has spoken to. I continue to have these concerns about the Government’s change from DLA to PIP for three principal reasons.

First, although I recognise, as others have, that my noble friend has worked very hard and made concessions that have very much improved these regulations, in successive debates about PIP he has repeatedly reassured us that “the most vulnerable” will still be in receipt of the benefit. To me, saying “the most vulnerable” is like saying “the most pregnant”—people are vulnerable or pregnant but the degree starts to give me cause for concern.

The second area that gives me concern, which has already been mentioned, is this figure that has been attached to how many people will lose their DLA. It seems to be an arbitrary figure and nobody seems able to identify quite how that figure came about or how it will be implemented.

Thirdly, in recent years the Government have had to take account of the demographic changes relating to the cost of the care of the elderly—something on which we have had an announcement in the past week. But equally, in looking at these changes, they have ignored another demographic change: the number of people with a disability who now live independently, who 20 or 30 years ago would not have done so.

When I had the privilege of representing Tiverton in Devon, in the 1980s we had three mental institutions in that constituency. The policy to take people out of mental institutions and integrate them into the community was not without its problems, but when you saw those people eventually living in the community it was only too evident that they had become institutionalised because they had basically been locked up for decades, and that the vast majority of them should never have been there in the first place. We do not do that any more. We do not lock people away. Equally, a changing trend that I am very pleased to see is that particular groups of disabled adults no longer live into their middle or old age with even more elderly parents. There are many who still do that, but the trend has been to move them into independent living.

If one sees the cost of what is required to move vulnerable people, even if they are only a little vulnerable, one realises that it is not a cheap option if those people are to be safe and to have the quality of life which we would all aspire to. The Government should have done their homework and looked at this change

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in society whereby we now integrate people into independent living in a way that a previous generation would never have countenanced. That is not just about putting a roof over their head; it is also about providing support and sometimes even having to contrive some sort of social life, which is again supported, so that they really feel that they are integrated into society.

My noble friend said at the Dispatch Box just now that the costs of DLA have gone up greatly in the past decade. I suspect that a lot of those costs are associated with the very welcome news that people are now integrated into independent living, sometimes supported but sometimes fully independent, where previously they would either have been locked up or sitting on the sofa at home with elderly parents. There would have come a point with those adults when their parents were no longer able to look after them and when, usually in an emergency, they suddenly became dependent on the state at much higher cost than those small amounts of money needed to support them in independent living. Unfortunately, despite what any Government say, Governments work in silos, so I appreciate that what my noble friend has to look at is the budget of the DWP, when a lot of people who are now moved into independent living are dependent not just on disability benefits but on health and local authority services. It is that package that helps them attain independent living.

I am seriously concerned that many of the 600,000 people, or however many it turns out to be—as my noble friend will know, I have a particular interest in this group—who are on the autistic spectrum, as my noble friend Lord Touhig described, or who have learning disabilities and mental health problems, do not always present initially as people with deep-seated problems and needs. Rather like icebergs, they very often present with a third on the surface and two-thirds under it. When they run into difficulties with independent living or taking their place in society it is not only devastating for them personally but very expensive on the public purse. It is therefore a false economy if that particular group, many of whom may be intelligent and do not present as the most needy or the most vulnerable, lose their DLA after achieving independent living. I say that on behalf of many autistic people whom I have known and on behalf of autistic young people whom I can think of who have committed suicide because they simply could not cope with day-to-day living. It may have taken a long time to get them to independent living and if you pull the rug from under them, the whole structure collapses around them like a pack of cards. It is not the case with learning-disabled or autistic people that, once they have achieved a level of independence you can walk away and say, “Okay, they’ll be all right now for the rest of their life”. They simply do not function in that way.

The Government should look at this changing trend in independent living. It is rarely mentioned by the Government but it is just as significant as some of the challenges that we face with the ever increasing dependency of old age. Much as all of us who take an interest in these matters appreciate what my noble friend has done—he has a very good understanding of autism and is doing a lot to try to help more autistic people

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into work—none the less, the words set out in this provision give cause for concern and it is a concern that I share.

8.15 pm

Baroness Grey-Thompson: My Lords, it gives me great pleasure to follow the noble Baroness, Lady Browning, who makes some excellent points on independent living. When I was born in 1969 with spina bifida my parents were told that if I had been born even two or three years earlier, I would have been taken away, not fed and left to die. I know that we are now a long way from that treatment of disabled people, but many fear that we are returning to days of ghettoisation.

I declare an interest in that I am in receipt of DLA. I do not have a Motability car, but I know that it is a lifeline for many. It was interesting to hear the noble Baroness, Lady Thomas, talk about how important her car is to her. She made some excellent points and gave some excellent examples of fluctuating conditions which we must take into account. A debate on accessible —or rather inaccessible—public transport is for another time, but perhaps I may offer to take the Minister or the noble Baroness, Lady Stowell, when they have a little more time, on some bus and train journeys to show the scale of what we have to change in the United Kingdom. It is really not very good out there for disabled people.

I thank the Minister for being open to continued dialogue, for having several meetings with me and not least for his phone call this week, when he offered me some reassurances around the evaluation process. Like many, I am delighted that the words “reliably”, “repeatedly”, “safely” and “timely” will be in amended regulations. Moreover, their gradual implementation will give all of us in your Lordships’ Chamber an opportunity to play a part in the review. Some disabled people have been offered just a small beacon of hope by this.

I have to admit that I spent a great deal of time—in fact, right up to the deadline last night and beyond—considering whether this amendment should have been tabled as a fatal amendment, because fatalistic is how I and many other disabled people feel. I know that the noble Baroness, Lady Campbell, would have liked to be here tonight to support this debate, but the lateness of the hour makes it impossible.

I am disappointed with these regulations because of how they are going to affect real disabled people—not the media portrayal of this homogenous group of unknowns who are living the high life on benefits but disabled people who are struggling to survive and live independent lives. The Government have listened up to a point, but not as much as I would have liked. While the Minister has said, and will keep on saying, that his Government are merely providing clarity with these regulations, he will know—not least from my Question of 24 January 2013—that I was extremely disappointed by the consultation around the change from 50 metres to 20 metres. I accept that the time is now past, but we should have had the opportunity at the very least to debate it on the Floor of your Lordships’ Chamber. Parkinson’s UK has called the 20/50 metre change a “back of an envelope” calculation.

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When the regulations are combined with the outcome of the Welfare Benefits Up-rating Bill, disabled people, and many others, will be in a significantly worse position than they are now. This is not protecting the most vulnerable. Enough is enough. Once these regulations pass, we have to leave them to bed in and give disabled people a chance to deal with them. I sincerely hope that what we have here—the clarity—is not a stepping stone to something that is harsher and that the 20 metres is not going to be the upper limit for claiming the higher rate of support at some point in the undefined near future. I would like some further reassurance on this from the Minister.

The noble Lord, Lord Kirkwood of Kirkhope, talked in a wider context about the evaluation process. The right reverend Prelate the Bishop of Worcester, who is unfortunately not in his place, also made his feelings clear on this subject. Several other noble Lords, too, have raised this issue. I look forward to feeding into the review. It is vital that we have a detailed review that we can take forward and that we learn from some of the things that I still do not believe are right.

When I have talked about these changes—disabled people losing their access to transport, having to stop work and being stuck at home, it has been suggested by some that I am scaremongering. Well, I believe that it is imperative that not just the people affected by these changes but the wider public understand the implications of what we all do here today.

I am reporting back what significant numbers of disabled people are telling me about their real fears, and that fear is around disabled people’s ability to live independent lives. The most stark figure that I have seen is from the We Are Spartacus report, which suggests that around 200 Motability cars per constituency could be removed from disabled people once these changes kick in. That could be just the tip of the iceberg, as not everyone uses their DLA—or PIP in future—to pay for a Motability car.

Disabled people are going to be hit by the cuts in so many ways, not just under PIP. I do not envy the onslaught on the inboxes and postbags of Members in another place when that starts.

Perhaps the time when what these changes mean will really hit home is when our first Paralympian has their car taken away. They are not workshy scroungers; they represent our country. It is not a day that I look forward to, but I wonder what the reaction then will be—what will happen when they are no longer able to get to training or competition.

All the way through the welfare reform legislation, we heard about protecting the most vulnerable. I and many others both inside and outside your Lordships’ Chamber will be watching whether that is the case with a great deal of interest and care.

Baroness Lister of Burtersett: My Lords, it is a great pleasure to follow the noble Baroness, Lady Grey-Thompson. She and other Members have spoken very powerfully about PIP, and I share their concern.

I want to speak very briefly about the implications for carers, to whom the Minister referred. He prayed in aid Carers UK’s approval at an earlier stage of the process. I think he would probably accept that if it had known then what it knows now, it would have been

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less approving. It issued a press release saying that it finds shocking the figures in the impact assessment, which appeared only days ago—we have been trying to get it for a long time. I think that it withdrew its approval at that point.

The Minister talked about only 5,000 fewer carers being eligible. It is not “only” for each of those 5,000 people. Each of them will be worse off. That 5,000 is nearly 7%, which is a minority but still a significant number. It is based on a static analysis. The Minister is always telling us that we should do dynamic analysis. Well, Carers UK has done what I would consider to be a more dynamic analysis of the figures in the impact assessment, and it suggests that by 2015 10,000 fewer carers will be eligible for carer’s allowance. Will the Minister comment on those figures? Will he also tell your Lordships’ House whether the Government will offer any transitional protection to carers losing carer’s allowance as a result of the introduction of PIP? Also in the spirit of the dynamic analysis, by 2015 I think that we are only about one-third of the way through the introduction of PIP. Do the Government anticipate further proportionate losses to those eligible for carer’s allowance as the process continues after that?

Lord Alton of Liverpool: My Lords, I think we all recognise that taking regulations of this nature in the course of a debate on eight sets of regulations is perhaps not the best way to do business. Given the speeches that we have already heard, especially about the effect on mobility and the allowances that people with disabilities cling to in order to ensure their freedom of movement, these regulations are so crucial that I am surprised that they have not been uncoupled from the others so that we could consider not just the regulations as they stand but the amendment that the Minister referred to earlier, which he intends to lay in due course anyway. It might have been better if they had been uncoupled from the other regulations before us today so that we could have had a separate debate on that question.

All of us will have been moved by my noble friend Lady Grey-Thompson’s powerful speech. Having had the chance to speak to her briefly yesterday, and to my noble friend Lady Campbell of Surbiton, none of us should underestimate the strength of feeling. My noble friend’s remarks about contemplating tabling a fatal amendment to the regulations underlines that, despite the changes that have been made, welcome though they are—as the noble Baroness, Lady Thomas of Winchester, said, the Minister has listened and made some changes—there are deep concerns in many organisations throughout the country. Some of those concerns have been mentioned already, but I shall refer to others.

During a debate on 17 January initiated by the noble Baroness, Lady Hollis of Heigham, I signalled my concern about the impact that the changes to the personal independence payment would have on the mobility of sick and disabled people. During that debate, and again on 24 January when I asked an Oral Question, I drew attention to those two things. The first was the omission of the words,

“reliably, safely, repeatedly and in a timely manner”,

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from the text of the regulations setting out the qualifying criteria for the payment and the impact of altering the criteria for the enhanced mobility rate from 50 metres to 20 metres.

During the debate on 17 January, I asked the Minister to,

“confirm the Government's own prediction, made earlier this month, that 27% fewer working-age people will be eligible for the Motability scheme once PIP is fully rolled out? Disability organisations say that the new proposal means that 42% fewer disabled people of working age will be eligible—an average of 200 people in every constituency”,—[

Official Report

, 17/1/13; col. 817.]

a figure my noble friend referred to a moment ago. I received no answer in the Minister’s reply that day.

When I returned to the question on 24 January, I pressed him once more and asked whether he accepted that,

“with one-third of disabled people living in poverty and an estimated 42% fewer being eligible for mobility support-many fearing that they will become prisoners in their own homes-his admission that under the new regime some disabled people will have their specially adapted vehicles taken away from them or offered to them to buy has caused widespread disbelief and considerable distress?”.—[

Official Report

, 24/1/13; col. 1180.]

Let us be clear: some existing claimants will face losing as much as £150 a month if they fail to meet the newly tightened criteria. That amounts to an annual loss of £1,800. As the Disability Benefits Consortium, representing over 50 disability rights groups, says, that loss will have calamitous effects, as Motability vehicles, which include adapted cars, powered wheelchairs and scooters, are withdrawn. In its words, Motability vehicles are,

“their means of independence and participation, the lifeline that enables them to get to work, to GP appointments, to the shops, to take their kids to school”.

During the briefing session which the Minister kindly arranged two weeks ago, I returned to the same line of questioning, simply trying to obtain from the Government their estimate of how many people will be affected by the regulations that we are being asked to approve today. Not to know the figures but simply to have guesstimates thrown around like confetti is not a sensible way to proceed when the House is being asked to agree something as important as the regulations.

In a Written Question on 4 February, I asked,

“how many people they estimate will be affected by changes to mobility support for people with disabilities; and how many vehicles are likely to be repatriated or offered for sale”.

The Minister’s reply was, to put it charitably, opaque. He said:

“We are continuing to work closely with Motability to understand what impact personal independence payment might have on its customer numbers and to ensure the smooth introduction of PIP as it relates to users of the Motability scheme”.—[Official Report, 4/2/13; col. WA26.]

That is information that Parliament needs to have before we can in all conscience approve the regulations. The Minister needs to tell us how many vehicles will then be sequestrated or repatriated. What are the best guesstimates that have been made by his officials? He must have had discussions with Motability. What figures has it given him? How many will be offered for sale to their users and at what average price? What assessment has been made of the ability of the current users of those vehicles the funds to buy them and then to fully maintain them?

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Like the noble Lord, Lord McKenzie, and others, I would also like the Minister to say something about companies that have been given responsibility for implementing PIP. Perhaps he can confirm that Atos Healthcare, also mentioned by the noble Lord, Lord Touhig, has been given responsibility for two of the three contracts for PIP. Only last week the Public Accounts Committee reported on the work capability assessment. The committee is damning of the whole process, and particularly stresses that ultimately the Department for Work and Pensions is responsible. One of its main findings was that:

“The Department lacks sufficient rigour in managing the contract with Atos Healthcare. It has adopted a light-touch approach to managing this contract and placed too much reliance upon information provided by the contractor. The Department seems reluctant to challenge Atos Healthcare. It has failed to withhold payment for poor performance and rarely checked that it is being correctly charged for work”.

If after three years of trying with the work capability assessment it has been unable to get that right, goodness knows how much further misery and cost will be incurred with PIP.

8.30 pm

The report also says:

“The Department cannot explain how the contractor's profits reflect the limited risk that it bears. Moreover, in a new contract for the Personal Independence Payment, Atos Healthcare is sub-contracting to the National Health Service for part of its work, suggesting it is transferring risk back to the public sector. The Department should explain how the profitability of the contract reflects the actual transfer of risk for both the Work Capability Assessment and the Personal Independence Payment medical assessment contracts”.

Perhaps today the Government would care to give an answer to the Public Accounts Committee. They should certainly not expect us to proceed with these regulations until those questions, and others to which I want to turn, are answered.

During the exchanges on 24 January, the Minister admitted that the consultation process had been inadequate. That was very straightforward and honest of him, and I thank him for the subsequent decision on removing the four trigger words. Their retention in the regulations at least gives people the opportunity to go to appeals and tribunals. However, he will know that despite his assurance that the change from 50 metres to 20 metres will have little or no impact on the number of people qualifying, disabled people have not unreasonably asked: “Why change it, then?”. The Minister promised to consult more widely before asking us to debate these regulations today. I wonder whether, following that further consultation, he can tell us which disabled people’s organisations support that change.

On my reading of the regulations, the reduction from 50 metres to 20 metres will still have an adverse effect. For instance, if a person can walk 20 metres “reliably”, et cetera, but starts to struggle at 30 metres, they will not qualify for the enhanced mobility component of PIP under the moving around activity, as they would be deemed able to walk more than 20 metres “reliably”, et cetera. The Government have admitted that:

“We do accept that we have not previously consulted on a 20 metres measure—and we did not receive suggestions that we include one. However, we have consulted extensively on the

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assessment proposals and received very strong feedback that the ‘Moving around’ activity was unclear. Our changes were made as a direct result of these concerns”.

Having asked disability rights groups, they remain vexed that: first, there was no consultation on 20 metres; secondly, consultation on PIP assessment criteria did not clearly indicate the intention to use a distance of less than 50 metres, which was only implied in the case studies and insufficiently clearly to demonstrate proper consultation on a lower distance; thirdly, 20 metres is a massive reduction from the 50-metre distance established through DLA case law as proxy for being virtually unable to walk; fourthly, none of those responding to the consultation suggested 20 metres and only one mentioned a limit of lower than 50 metres, which has been referred to; fifthly, there is no research or evidence basis for 20 metres; and, sixthly, the 50-metre distance is embedded in guidance that was referred to earlier by the noble Lord, Lord McKenzie, in the Department for Transport’s inclusive mobility guidelines.

I have also seen a barrister’s opinion, which says that,

“it is arguable that the secretary of state has acted unlawfully by adopting eligibility criteria which are fundamentally different from the proposed criteria set out in the consultation process”.

Only today, I received an anxious e-mail about the possibility that the 20-metre distance will be seen by assessors as relating only to indoor mobility. I hope that the Minister will at least be able to lay that one to rest this evening.

Let me also refer to some case studies that were used by the department in its consultation and to the response that they received from Jane Young of We Are Spartacus. At a meeting with an official in April 2012, Ms Young challenged him on the apparent discrepancy between the descriptors and the case studies and was told that the case studies were provided “to make people think”. She responded that they merely served to frighten people and she now adds,

“it’s now clear our fears were entirely justified. They never actually meant 50 metres … and used the phrase ‘up to’ to ensure they could implement their intention to use a shorter distance in practice”.

I find it surprising that the Government can say with great confidence that their analysis is that the number of individuals who receive a score of 12 points or more from activity 12 to be broadly the same, regardless of this change, while saying simultaneously that they are unable to say how many people will be affected by the changes overall.

In conclusion, the financial consequences are very clear and the social consequences will not be far behind. People with significant mobility difficulties will become socially isolated. That in turn will lead to poorer health and well-being, a point made by the noble Baroness, Lady Browning, in her excellent speech. There will therefore be greater demands on the National Health Service and other public services. Mobility is often the only antidote to toxic loneliness, which in many ways is the scourge of the 21st century.

I end by quoting the Joint Committee on Human Rights, which published a report following its inquiry into disabled people’s right to independent living. In paragraph 110, it expressed concern,

“that the UNCRPD, and Article 19 in particular, does not appear to have played a central role in the development of policy.

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Inadequate attention has been paid to the impact of relevant policy on the implementation of the UNCRPD, in contravention of Article 4(1) and 4(3)”.

It went on to make other conclusions in paragraphs 146 and 161, which I will not quote this evening.

Before passing these regulations, the Government should share with the House what legal advice they have been given on the susceptibility of this aspect of the regulations to judicial review. They should detail the staff and resources that will be involved in dealing with the many appeals that will be generated. They should also commission a cumulative impact assessment that would include the impact of welfare reform changes on other services, carers and Motability scheme users. Above all, they should not expect us to vote these regulations through without giving us clear answers about the numbers of people who will be affected and the manner in which Motability vehicles will be sequestrated and repatriated from the owners who are deemed no longer to qualify. I know that I am not alone in believing that these wholly underreported and ill-conceived proposals will come to define the Government’s approach to welfare reform, in a way that will undermine those changes that have commanded much more broad-based support.

Baroness Howe of Idlicote: My Lords, it is a great pleasure to follow the powerful speech of my noble friend Lord Alton. I share many of the concerns that have been raised in the amendment proposed by the noble Lord, Lord McKenzie.

I want to say a few words about the impact of PIP on deaf people. I gather that deaf people who are unable to understand verbal information without communication support will not be entitled to PIP. Support will be restricted to those who are unable to understand “basic” information. “Complex” information appears to be broadly defined as anything longer than a sentence. As this definition could apply to everyday conversation, I am aware that some people find the term “complex” in this context to be somewhat disingenuous. I hope that the Minister will set out exactly what this is likely to mean in practice.

Fears have been expressed to me that many deaf people who need communication support will find themselves without money to pay for it under these changes. If accurate, that does not seem to be consistent with promoting personal independence. We have heard much about how the Government wish to target resources, rightly, at those who face the greatest barriers. I feel sure that it is not the Minister’s view that deaf people are not among those facing the greatest barriers or that deaf people do not need or deserve support to be independent. This is another area where I hope he will reassure me, and others who apparently feel this, on this point.

I am particularly concerned about the impact of these changes on young deaf people who have just turned 16. Many of these young people will barely have begun their transition to adulthood. How will the department ensure that such young people are managed sensitively when they apply for PIP? How will they be supported if they are not eligible for this new benefit?

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I ask the Minister to outline what plans there are, if any, to reform the disability living allowance for children. I understand that this may well be reviewed in future. We know that some 600,000 disabled adults over 16 will see their DLA cut. There is considerable anxiety that a similar proportion of disabled children will also see cuts once the new review gets under way. The consequences of that would be severe.

I, too, have greatly admired the Minister’s dedication to his increasingly difficult and complex brief, not least in working out the details of these regulations. I much admire him for that and know him to be a fair-minded individual as well, with a great deal of knowledge in this area. I hope that I can look forward to a sympathetic, just and kind response.

Lord German: My Lords, I would like to raise the issue of sufferers of Crohn’s disease and colitis, who may not have been able to put their case as strongly as they might have in this whole arena of the development of PIP. There are around 240,000 people in the UK who are sufferers of Crohn’s disease or ulcerative colitis—collectively known, of course, as inflammatory bowel disease. They are lifelong conditions that most commonly present first in the teens or early 20s, and the intestines become swollen, ulcerated and inflamed.

The concern that these sufferers have is around Activity 5 in the descriptor list, which is about managing toilet needs or incontinence. The “continence” descriptor is limited. It fails to take into account the impact of the frequency and urgency experienced 24 hours a day by people living with conditions such as inflammatory bowel disease, as well as difficulties in reaching a toilet, both at home and outside the home, cleaning up after using the toilet or an episode of incontinence. The descriptor is phrased around the need for prompting or assistance to manage continence. Although this reflects the barriers imposed by people who have learning disabilities and musculoskeletal difficulties, it does not account for the severe difficulties faced by some people with inflammatory bowel disease in relation to controlling their bowels, who are otherwise physically well.

People with inflammatory bowel disease may experience additional costs associated with buying food and drink, which are currently ignored by the descriptor. These may include the need to buy expensive, nutrient-rich foods to address deficiencies, the need to modify their diet to avoid other foods or additives or the need for frequent and urgent access to a toilet, while the fatigue associated with IBD may require a taxi to and from the shops or the use of online shopping facilities. Consideration is not currently given to the additional cost of utilities for people who may be forced, because of this disability, to live more frequently within their home, and laundry or high utility costs are often incurred by people with IBD who have to wash or replace their clothes more frequently due to soiling or extreme fluctuations in weight. Can my noble friend the Minister explain how IBD sufferers are currently handled within DLA and whether the descriptor as it now stands can be looked at again to reflect the needs of sufferers of this not-well-understood disease?

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8.45 pm

Lord Hardie: In rising to speak in support of the amendment moved by the noble Lord, Lord McKenzie of Luton, I have to declare an interest as honorary president of Capability Scotland. Capability Scotland is a charity which provides services, education and accommodation for people with disabilities, both mental and physical, of varying degrees of complexity and severity. It provides services at more than 25 locations in Scotland for 1,000 people who are afflicted in one way or another. It is in that capacity that I became aware of these regulations and of the concerns of people who use the services of Capability Scotland. Those concerns have already been alluded to by the noble Lords, Lord McKenzie of Luton and Lord Alton of Liverpool, the noble Baroness, Lady Grey-Thompson, and other noble Lords in eloquent speeches highlighting the difficulties surrounding these regulations. I cannot improve upon the points they made. I simply look forward to the Minister’s response to the detailed questions posed by noble Lords who were seeking the justification for the reduction of the distance from 50 metres to 20 metres.

A Question on the personal independence payment was asked in the House on 24 January. In reply to an intervention by the noble Baroness, Lady Grey-Thompson, about the 20-metre point, the Minister referred, at col. 1181 of the Official Report, to the various groups mentioned by the noble Lord, Lord McKenzie. I was surprised to see them mentioned because the implication I took from it, wrongly, was that they had suggested that the distance of 20 metres was appropriate.

The other thing I noted from the Minister’s reply was that there is no effective change in the number of people receiving higher rate mobility allowance because of this change. I challenge that statement. I am sure that the Minister did not intentionally mislead the House in making it, but I shall cite an example from Capability Scotland’s experience. A 41-year-old lady who suffers from cerebral palsy is in employment in the National Health Service and currently receives higher rate DLA at £54.05 per week. She uses that to cover the cost of her Motability vehicle, which is essential for her to get from home to work. She can walk with a frame a distance slightly in excess of 20 metres, but she cannot walk 50 metres, and that is why she gets her current benefit. If this regulation passes with the 20-metre limit, she will receive the basic mobility award, not the enhanced mobility award. The effect of that is that she will get £21 a week, losing £33.05 a week, or £132.20 a month. She will not have enough money to replace her car or to take taxis to work, and she will be unable to remain in employment. How is that compatible with the Government’s policy of encouraging people back to work and encouraging people with disabilities into work? This lady has done that, and yet because of this regulation, she will lose that independence.

I do not share the optimism of the noble Baroness, Lady Thomas of Winchester, about the flexibility of the regulations. Regulation 6 sets out the structure and one then has to look at the schedule for the assessment. When one does so, one has the various activities:

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“Planning and following journeys”, and then “Moving around”. There is then the detail of what is required of “Moving around”. If you:

“Can stand and then move more than 200 metres, either aided or unaided”,

you get no points. If you:

“Can stand and then move more than 50 metres but no more than 200 metres, either aided or unaided”,

you get four points, and so on. These points are maximums. It would not be possible for an assessor to give any more than the points in the table. Therefore, in the case that I have cited, the lady in question will qualify for 10 points. She needs 12, but unless she can get points from “Planning and following journeys”, she will never get 12 points. She is perfectly capable of planning and managing her journeys. I am confident that she is not the only person in this category. Lots of people will lose out because of this change. They deserve an answer to the question: why has this change been introduced? Why has it been reduced to 20 metres? Who suggested it? What is the scientific basis for it? What consultation was there? Did any disability organisation go along with 20 metres? I think not, but I look forward to the Minister’s response.

Another concern I have is that the regulations do not make provision for people who need occasional supervision to prevent them being a danger to themselves. I again cite as an example someone who gets support from the organisation of which I am proud to be honorary president. A 36 year-old man has had schizophrenia for nine years. He receives a low-rate care component of DLA because he has been assessed as requiring occasional supervision to prevent him being a danger to himself. He uses his payment of £20.55 a week for his sister-in-law’s bus fares to and from his home on a daily basis. Seven days a week, she travels by bus there and back to check on him. To give him some structure in his life, she checks that he is up in the morning, and that everything is all right. She knows instinctively if he is not well, and then alerts the mental health team. Take that allowance away, and she will not be able to visit as regularly as she does and the tell-tale signs of his increasing illness will be missed. He may then be a danger to himself and to others.

I am very concerned about these regulations. I hope that the Minister will give me some reassurance about the two matters that I have raised.

Lord Freud: Once again, I thank noble Lords very much for their thoughtful and moving contributions to this debate. Clearly, as PIP is being introduced as a new benefit, it is right that it is subject to a very high level of scrutiny. I shall try to address as many questions as I can. The noble Lord, Lord McKenzie, asked about case loads and the steady state, which we estimate will be around 2018. Our current estimate is that the percentage getting the top rate of both elements will rise from 16% in DLA to 23% in PIP. As I have said, the actual number goes up as well, although not by a lot, from 354,000 to 357,000. But the number of people who will get the top rate of the daily living component will go up to 674,000 compared to the 539,000 who currently receive DLA.

My noble friend Lady Thomas wanted me to clarify the meaning of “repeatedly”. Currently, it means as often as the activity being assessed is reasonably required

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to be completed, which makes the point that it will not be on a daily basis necessarily but will depend on the type of activity that we are talking about. The noble Baroness, Lady Grey-Thompson, referred to what might happen to the 20-metre mobility criterion in the future. Clearly, I am absolutely conscious of the strength of feeling around that criterion and I assure the House that we will keep it under very close review both within and outside the independent review process. In the mean time, we have no plans to make any further changes to this criterion.

My noble friend Lady Browning was concerned, as am I, about groups with autistic spectrum disorder. We have worked to ensure that the PIP assessment will take full and fair account of the complex needs that people with autism face. The noble Lord, Lord Touhig, was concerned about the 30-day time period. We believe that that is sufficient time for providers to conclude the process, including gathering evidence where it is needed. Clearly, this is another area that deserves close monitoring.

My noble friend Lady Thomas was interested in how the Government would monitor Atos and Capita. We have set strict recruitment and training criteria for both providers. We will approve only practitioners who reach high standards. We will have random, independently assured quality checks, which we will undertake on a regular basis. Those assessors will be well versed in our case studies and guidance as part of their training.

As regards the carers’ case load and the steady state figure, the noble Baroness, Lady Lister, was concerned that we were using an interim figure for 2015, going to the steady state in 2018. The figure is a reduction of 9,000 claims out of the total number of claims in payment to carers, which is running at around 600,000. I make that 1.5%. The noble Baroness used a rather larger percentage that I did not recognise. Her figures may be on a different basis but we can talk about that privately.

The noble Lord, Lord McKenzie, was concerned about whether there was the right number of people to conduct these assessments. To one extent, by pushing out the timetable, we have taken away some of the potential overlap with the WCA reassessment bulge, but we are not using any of the same health professionals to carry out the PIP assessments, because PIP is being delivered through sub-contractors.

9 pm

I will write to the noble Lord and provide some of the numbers on the different lots. I do not have them to hand, but it is hundreds in the different lots and we expect that the face-to-face consultations will take about an hour. As the noble Lord knows, DLA recipients are exempted from the benefits cap and this will also apply to PIP. We do not have an analysis on who might be affected by not getting any benefit at all. The noble Lord asked why, given the concerns, we do not just revert to the 50 metres. We are stuck with the fact that the previous criteria did not work well. They were unclear and would have led to inconsistent outcomes. Twenty metres is not an absolute distance because of the words “repeatedly, safely, and in a timely manner”. Some individuals capable of distances over 20 metres will therefore qualify for the enhanced rate.

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The noble Lord, Lord McKenzie, and the noble and learned Lord, Lord Hardie, raised the issue of people not able to go to work any more. This is a point that has certainly resonated with me. We looked at the analysis of this and have not actually seen a negative impact on employment as a result of introducing PIP. We are actively exploring what extra support we can give to disabled people to ensure that they can still get to work. We are looking at whether we can use access to work as that particular vehicle. We want to ensure that mobility support remains in place during any transition between the Motability scheme and access to work. Our aim would be to ensure that individuals retain the use of their Motability vehicle until their access to work application had been processed. Active work is under way. I am grateful, as always, to the noble Baroness, Lady Hollis, who was quickly on to this point.

The noble Baroness, Lady Lister, asked about carer’s allowance protection. There will be protection for one month if a DLA recipient does not qualify for PIP. The noble Lord, Lord McKenzie, asked whether people losing PIP will have additional costs as a result of their disability. A primary objective of PIP is to focus our support on those who need it most. It is hard to make direct comparisons. My noble friend Lady Thomas asked about the role of JCP decision-makers. They take the final decision and they use all the available evidence, including the report from Atos or Capita. We will undertake to lay further amending regulations if findings from the independent review indicate that we need them.

The noble Lord, Lord Alton, talked about the PAC’s issues with regard to Atos Healthcare. We take a robust approach to managing the contract with Atos and believe that the application of service credits has been handled appropriately. Where Atos has been responsible for underperformance, recovery plans have been put in place and redress has been sought in the form of these service contracts. We have a challenging target in this regard in that 95% must reach the top standards but we are looking at whether we should tighten this standard further. We are puzzled by the PAC’s point about whether profits reflect the risk that is borne. An analysis was not provided of how the profit levels related to the risk levels so we are baffled as to how anyone would have reached the conclusion that the PAC did.

My noble friend Lord German referred to people with Crohn’s disease and managing toilet needs. It is important to note that the managing toilet needs activity is not the only activity under which claimants with Crohn’s or colitis could receive points. If an individual who suffers from those illnesses suffers, for instance, fatigue to the extent that he or she requires assistance to get in or out of the bath or shower, he or she would be awarded appropriate points under the washing and bathing activity.

The noble Lord, Lord Alton, spoke of the level of consultation on 20 metres. As I said, we did not specifically consult on the change to include 20 metres. However, we have consulted extremely extensively on PIP and I hope that we have been absolutely clear about it today. Indeed, the Secondary Legislation Scrutiny

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Committee praised the DWP for its extensive consultation on PIP criteria. It is one of the most heavily consulted on provisions that I can recall, although others may have a better memory.

The noble Baroness, Lady Howe, asked about deafness. The assessment includes an activity on the ability to communicate verbally. That is a significant improvement on the DLA, which fails to take into account the barriers faced by the deaf and hearing impaired people. Individuals needing communications support to be able to understand basic verbal information will receive eight points, which in itself brings entitlement to the standard rate of the component. We currently have no plans for reform for the under-16s.

I turn to the final two points made by the noble Lord, Lord Alton. On legal advice, I clearly cannot refer to anything that lawyers tell me. However, we are aware of obligations under the UN convention and we believe that we comply with them. I assure him that, as regards the mobility criteria, we are looking specifically at outdoor movement—he was concerned that we were looking only at indoor movement—including how someone deals with uneven surfaces and steps, as that movement is clearly more difficult than indoor movement.

We have developed these reforms in a principled and considered fashion by seeking the views of disabled people and their organisations at every step. We have carried out four major consultations and have listened and acted on each of them. We also know that these regulations are not the end of the journey; they are the start. We will be monitoring and evaluating their operation to ensure that they are working as we intend, and to identify whether there are improvements that we need to make. Key to this are the independent reviews that noble Lords rightly insisted we build into our plans. Given all that, I urge noble Lords to support these important regulations.

Lord Alton of Liverpool: Before the Minister sits down, would he be kind enough to answer the question that my noble friend Lady Grey-Thompson and I put to him about the numbers of people who will be affected by these regulations? Before asking the House to agree them, it is surely not unreasonable for us again to put the question to him, not for the first time, of whether he disputes the figure of more than 40%—perhaps as many as 200 people in every parliamentary constituency in this country—standing to have their vehicles repatriated or sequestrated. Does the noble Lord agree with those figures? If he disputes them, what figure would he give the House?

Lord Freud: My Lords, we know how many people will get the higher mobility component, a figure that will clearly be fewer under PIP than under DLA. I have provided those figures but, just for the record, the figure of roughly 1 million people on the DLA component in a steady state will reduce to roughly 600,000. That is the decline. What we do not have, and therefore find it difficult to comment on, is a read-across from how many people are on the full mobility allowance to those who have a Motability contract, because that is a private matter. Motability runs its operation separately from us; it is a charitable operation. It is therefore

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impossible for us or anyone to calculate a read-across of the percentage of people on Motability contracts who will be affected.

Baroness Hollis of Heigham: My Lords, perhaps I may pursue the Minister on that point about statistics. When we were discussing this elsewhere, he agreed that actually 200,000 people who currently get the lower rate because of problems of supervision, psychological issues associated with outside movement and so on would now get the enhanced rate. Therefore, the number of those who are losing the allowance on the grounds of physical disability only is not 400,000 but 600,000.

Lord Freud: Yes, my Lords, there is some churn. By the time we reach 2018, we will be out beyond the major review process that we will have. The figures are therefore quite tentative for that stage. I am providing them to your Lordships but they are indicative. Clearly, there will be some churn, but the point is that we are trying to direct PIP at the people who really need it.

In closing, it is simply not possible for me to confirm, deny or reach any figures in answer to the noble Lord’s question on how many cars will go.

9.15 pm

Lord McKenzie of Luton: My Lords, I thank all noble Lords who have contributed to this debate, and I thank the Minister for his responses. In relation to the question of the noble Lord, Lord Alton, I accept that the Minister cannot be very specific, but the answer must be that at least a significant number of people will miss out on their Motability arrangements as a result of these regulations.

Perhaps I may first address the process of holding this important debate at this hour, with little prospect of a vote. We probably bear some responsibility for not pressing hard enough through the usual channels to make sure that this debate was held on a separate day or was ordered in a different way. I should just say that further regulations will at least give us another chance for a debate around the issue. We would not want to defeat them because we would want them, but the House would be able to express its opinion, which I hope would be some comfort to all those people out there who are directly affected by the regulations.

We have heard some very powerful themes. On the importance of recognising the right of disabled people to live independently, we heard from the noble Baronesses, Lady Browning and Lady Grey-Thompson, the noble Lord, Lord Alton, and others. The noble Lords, Lord Touhig and Lord Alton, mentioned the risks around delivery. We understand that Atos will use subcontractors. I am not sure whether we should feel more comfortable; we will have to see. My noble friend raised an issue about a 30-day period and that was deemed to be enough. I am still struggling to see how long, on average, it is expected that a health professional will have to review every case. Some of the experience of the WCA and Atos is that the time spent is far too short and that is why we have problems.

We heard very directly from the noble and learned Lord, Lord Hardie, what it will mean to someone to lose their DLA and what it will mean in terms of their

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employment. I do not think we had an answer from the Minister to the question about the range of people likely to be affected by that. My noble friend Lady Lister asked about the number of carers. I think she posed a question about the assessment at 2018, when the reassessment process will be complete, and at 2015. The Minister is nodding that he did, in which case I apologise to him. We have had some specific questions about colons and colitis. We have also heard about the impact of all this on deaf people.

At the end of the day, there is no doubt that major concerns are articulated in relation to the 20-metre and 50-metre proposals. I remain confused. The noble Baroness, Lady Thomas, was comforted and thought that the 20-metre proposal was an extra; and that if you could not walk 20 metres you were assured of the enhanced rate and that did not preclude you from getting the enhanced rate if you could not walk 50 metres. I am struggling to see the difference. If the number of people affected by the 20-metre/50-metre proposals are going to be broadly the same under the existing arrangements, why is that? What is the purpose of the 20-metre rule? I am not just talking about the process by which that has come about, but why is it there and what difference does it make?

If the noble Lord is saying that the current 50-metre rule is creating an inconsistency because some people who are not able to manage 50 metres are getting the higher rate when perhaps they should not, we need to understand that a bit better. That seems to be the implication from what the noble Lord is saying. Unless there is clarity on that issue, a climate of fear will persist among many disabled people about the consequence of these regulations for them, their ability to work, and their ability to live independently.

Given the hour, I have no option but to withdraw the amendment. We need to return to this matter and have a fuller, more complete debate. The House needs a chance to express opinions on these regulations and what they mean for disabled people.

Amendment to the Motion withdrawn.

Motion agreed.