My Lords, I have been sitting here listening in amazement as the Minister has been shelling out goodies right, left and centre. It is a quite unfamiliar experience. I just hope that his bag is not now empty; I hope that he has not completely run out of goodies to dole out.
Amendment 41 would leave out Clause 13. It is tabled in my name and those of the noble Baronesses, Lady Meacher and Lady Manzoor, and the noble Lord, Lord McKenzie of Luton. I shall speak also to Amendment 44, which would leave out Clause 14, which is tabled in my name and those of the noble Baronesses, Lady Sherlock, Lady Meacher and Lady Manzoor.
Clause 13 would abolish the work-related activity group component of employment and support allowance —which I shall call ESA from now on—for new claimants from April 2017. Clause 14 abolishes the equivalent component in the new universal credit, which will replace ESA and a number of other benefits. If Clauses 13 and 14 were to remain in the Bill, the effect would be to reduce income for those in the work-related activity group, which from now on I shall start calling “the WRAG”. It would reduce income for those in the WRAG from £102.15 to £73.10 a week—the same level as jobseeker’s allowance—which would be a reduction of £29.05 a week. Existing claimants would be protected but would be affected if they moved into work and then returned to claiming ESA in the WRAG. Furthermore, as the noble Lord, Lord Patel, showed in Committee, anyone initially placed in the support group, but who subsequently moved into the WRAG, would drop from £109 to £73.10, a reduction of £35.90 a week.
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We debated the impact of these cuts that the Government are proposing in depth and at great length in Committee for more than two hours. In addition, like the noble Baronesses, Lady Meacher and Lady Grey-Thompson, I carried out a review of the potential impact of the cuts, which was made widely available to noble Lords at the time of the Committee. We were supported in our review by a number of disability charities: Leonard Cheshire Disability, Mind, the Multiple Sclerosis Society, the National Autistic Society, RNIB, the Royal Mencap Society and Scope. As a vice-president of RNIB, I declare my interest here, but, as someone who did not personally write a word of the review, I can perhaps say what an excellent report it was and commend it to noble Lords for their attention.
Of course, I extend a huge thanks to the charities concerned, led by Rob Holland of Mencap, who managed to complete the review in six weeks flat from start to finish—an astonishing feat. Some 30 organisations responded to our call for evidence, as well as 200 disabled people who gave us often very personal and moving accounts of their lives and aspirations and the hardships that they faced. I am also very grateful to the Minister for finding time to discuss the review with us before Committee at very short notice.
We have also had the benefit of briefings for this debate from the Equality and Human Rights Commission and the Disability Benefits Consortium. The DBC’s briefing actually contains a good summary of our review, so noble Lords have not run short of information to support this debate. In these circumstances, I do not propose to detain the House too long by going through the arguments in detail, but will simply do my best to summarise them as briefly as I can. I hope it will not be necessary to press these amendments to a vote, but if it is, I propose to treat them as consequential in the interest of saving the House’s time, as they relate to the same principle. I hope that the Minister would be agreeable to that approach.
Essentially I want to make five points. The first relates to the hardship that these changes would cause to substantial numbers of disabled people. A drop of £1,500 a year in their benefit income from £5,300 to
£3,800 would be catastrophic for many disabled people. It would exacerbate poverty among the disabled; a third of working-age disabled adults live in poverty already, compared with only a fifth of those who are not disabled. The Government’s proposals would push many further towards, or actually into, poverty. The EHRC expressed concern that the proposals would cause unnecessary hardship and anxiety to people who have been independently assessed as unfit for work and that the measures were likely to have a disproportionately adverse impact on disabled people.
ESA is the main benefit for people who are unable to work because of illness or disability. In November 2014, nearly half of the 490,000 ESA claimants placed in the WRAG were suffering from mental and behavioural conditions; a further 529,000 ESA claimants were in the assessment phase. The number of ESA claimants in the WRAG is expected to increase to 537,000 by 2019-20. Considerable numbers of disabled people will be adversely affected by these changes if they go through.
For all these reasons, the cut to ESA and the limited capability for work component of universal credit are the aspects of the Bill which are most feared by disabled people and the organisations which represent them. A 38 Degrees petition against the cuts was started about a week ago and at the last count had already attracted nearly 100,000 signatures. Some 36 disability organisations have written an open letter to Iain Duncan Smith calling for the cut to be halted.
The mitigation set out in the Government’s impact assessment is that someone moving into work could, by working around four or five hours a week at the national living wage, recoup the notional loss of the work-related activity component or limited capability for work element or universal credit. However, as the EHRC points out, this is not an option for those unable to work because of disability. As Parkinson’s UK says,
“This is not a realistic possibility for anyone with a progressive condition who has already been acknowledged as too unwell to work”.
Secondly, the Government say that the ESA WRAG premium acts as a disincentive for people to look for work. Our review found no evidence to support this assertion. The 2005 study on which the Government rely deals only with general unemployment, not unemployment among disabled people, which is very different, as evidenced by the so-called disability employment gap and its persistence. Only half of disabled people are currently employed, compared with nearly 80% of non-disabled adults. This has proved intractable over many years to the point where it is almost a structural feature of the labour force. When challenged on the OECD study, officials managed to come up with an article in the Journal of Epidemiology and Community Health from 2010, which said that,
“there was some evidence indicating that benefit level was negatively associated with employment”.
We had some discussion of this with the Minister in Committee but I think even he would agree that the only conclusion to be drawn is that the evidence is rather weak. The authors comment:
“Policy and researchers need to address the lack of a robust empirical basis for assessing the employment impact of”,
recent welfare reforms.
Thirdly, the claim that disabled people are more likely to get a job if their benefit is cut just does not stand up. In fact, our review found that the precise opposite is the case. The barrier to employment for disabled people is not any financial disincentive created by the ESA premium. What stops disabled people getting jobs are things such as employer attitudes, their health condition, illness or impairment, difficulty with transport, and lack of qualifications, experience, confidence and job opportunities.
Fourthly, the Government aim to halve the disability employment gap, which is very welcome, but our review found that the proposed cut would hinder people’s ability to look for work. They would struggle to pay for well-being activities that help recovery and enable them to feel more confident about considering paid work. The thought of such a drastic reduction in income makes people more worried and stressed—would your Lordships not feel the same?—and this impacts on their mental health and has an impact on work-related activity, such as travelling to appointments, volunteering or obtaining smart clothes for interviews. One thing that particularly struck me was people’s ability to maintain internet and phone connections, which are so important for identifying job opportunities and submitting applications. It would also be harder to attend training courses and work-focused interviews if people were already struggling to meet the basic needs.
Fifthly, it was clear from those who gave evidence to our review that they encountered a wide variety of barriers to work that could not simply be removed by providing generic support. The overwhelming message was that personalised support tailored to the individual’s particular needs is the key.
Our review contained 11 recommendations, chief of which were to reverse the cut of the ESA WRAG component and the equivalent payment under universal credit, and to conduct a thorough impact assessment of the proposed changes to ESA WRAG, plus a raft of other measures to promote the employment of disabled people. This cut is estimated to save £640 million a year by 2020-21 but, as we have seen, this is at the cost of considerable further hardship for disabled people who are already poor and, by definition, unable to work. Furthermore, no assessment has been made of the additional costs to the NHS and social care services as a result of these changes, as well as other DWP benefits. Clauses 13 and 14 are all about making savings for the Treasury and have nothing to do with the interests of disabled people. They should be resisted. I beg to move.