Welfare Reform Bill

My Lords, at this stage, I am not going to go into all the arguments about the time-limiting of ESA to one year. My noble friend Lord German will address the main issues in a short while. I shall speak to my Amendment 72A to my noble friend the Minister’s Amendment 72, the purpose of which is to question the whole business of the retrospective nature of this provision. Under this part of the new clause, the clock has already started ticking for existing claimants, regarding their entitlement to contribution-based ESA in the work-related activity group rather than in the support group, who have been receiving the benefit for 12 months or more. For them, their claim will stop as soon as the Bill becomes law, which is estimated to be April of next year. By starting the clock well before Parliament has made its decision on the Bill, the Government seem to be acting like a private insurance company that changes the rules of someone’s policy after they have made the claim. However, this does not seem to have been the plan in October last year. If one looks at the Spending Review 2010’s policy costings, published in October last year, on page 6—it is repeated in the Library briefing pack on the Bill—it is stated at the first bullet point that, "““for existing contributory ESA customers, the time limit will apply at the point they reach one year including the assessment phase. Those with a claim duration of one year or more when legislation comes into effect will have their benefit time-limited immediately and will have at least 12 months to prepare for the change””." Perhaps the Minister can throw some light on why and when the Government changed their minds and decided to make this provision retrospective—thus allowing hardly any time at all for some claimants to prepare for change. Just to be clear, someone whose claim started in April this year may find by the time the Bill becomes law in April next year that their claim will cease immediately. Parliament has always deplored retrospective legislation. In 2009, the Constitution Committee of your Lordships' House, in its report on the Banking Bill, drew attention to the need for there to be, "““a compelling reason in the public interest for a departure from the general principle that retrospective legislation is undesirable””." At least the letter to claimants that was sent out recently by the DWP is headed: "““Possible changes to your ESA””," and states that the changes the Government want to make have not yet been approved by Parliament. The letter continues by providing the ramifications of the change. I gather that many claimants who have received such a letter are telling citizens advice bureaux up and down the country that they do not know what this letter means for them, and that they are very worried by it. They have good cause to be worried. Not only are the Government breaking the understanding that national insurance contributions—perhaps paid for years and years—protected a person against the loss of employment on health grounds, but many claimants, as we have heard, are likely to be left with only their partner’s extremely modest income, which may push them out of eligibility under the means-tested ESA. I turn back to the policy costings document of October 2010. Under the heading, ““Uncertainty””, we read that the migration from IB to ESA was the cause of particular uncertainty. We now know that a high proportion of IB claimants are being found to be fit for work as a result of the migration to ESA, in spite of appeals. I therefore ask my noble friend whether the Government can now start to quantify savings that might be made on the ESA bill, in spite of an increasing JSA bill—given high unemployment—and whether they will consider reverting to their original plan and drop the retrospective nature of this clause. We all know of the need for the Government to cut public spending by an eye-watering amount as soon as possible. The Government’s argument may be that JSA is time-limited, so why not ESA? However, in my view, a claimant’s health is a much more emotive subject for their employment—or lack of it—and being ill can be a very expensive business. Using retrospection in this way, when it directly affects someone’s income in an unforeseeable way, seems to be thoroughly bad practice. Is it really good governance to cut massive corners by bringing in this policy in such haste?