Welfare Reform Bill

My Lords, we support each of the amendments tabled in the name of the noble Lord, Lord Patel. As we have heard, the first would amend the Bill’s 365-day limit on the contributory employment and support allowance and proposes to replace that with an order-making power for setting a limit, but with the proviso that it should be not less than two years. The proposal that any limit should be set by order opens up the opportunity, sadly missed in the Government’s formulation, for any time limit to be evidence based. The 365-day limit currently in the Bill is supported by scant evidence, apart from some references to ““international practice””, which did not bear scrutiny in Committee. What the Government are proposing is fundamentally unfair. The unfairness is compounded by issues to which we will come later; for example, the inclusion of the assessment phase in the time and the counting-in of contributory benefits already received when the legislation enters into force. As the noble Lord, Lord Patel, said, to be entitled to employment and support allowance, an individual must be assessed as having limited capability for work and/or limited capability for work-related activity; that is, they are not fit for work. Contributory ESA is a non-means-tested benefit and is earned by having a national insurance contribution record, some of which requires payment and some of which is credited in. It demonstrates a recent attachment to the labour market, but the long-standing principle underlying it is that people pay contributions on the basis that, if they fall out of work through ill health or disability, they have a degree of financial protection. Some may pay in throughout their working lives and may never have to draw on it; some may pay in for just a few years and need recourse to the benefit for an extensive period. That is what social insurance is all about. But we should be clear: being in receipt of a contributory benefit does not amount to having a life on benefits. The benefit is payable only for so long as somebody is unfit for work. We have accepted with some reluctance that a time limit could be imposed on contributory ESA, but it would have reasonably to reflect a time period sufficient to enable people to overcome their illness or disability and to access employment. A minimum of two years is to an extent still arbitrary, but there is no doubt that it is a more realistic timeframe within which to expect a return to work. However, an evidence-based process rather than an arbitrary figure should be locked into primary legislation. Why will the Government not at least agree to remove the 365-day limit from the primary legislation? They have prayed in aid international comparisons for the one-year restriction, but even cursory probing in Committee, particularly by my noble friend Lady Hollis, demonstrated this to be a trifle flimsy. Our Library was unable to access any meaningful international analysis. Comparisons are made with the JSA regime and the fact that contributory JSA lasts only for six months, but JSA is a regime applicable to those deemed fit for work—that is, work ready. Let us be clear: to be eligible for ESA, a person must be assessed as having limited capability for work. That is defined in the Welfare Reform Act 2007 as being where a person’s, "““capability for work is limited by his physical or mental condition, and … the limitation is such that it is not reasonable to require him to work””." Of course, it is expected that people who are able should take every opportunity to move closer to the labour market, but any suggestion that the one-year time limit will act as a spur to force people towards work by making them poorer seems particularly pernicious. We and the Government know full well that many people in the WRAG will not be able to access work within a year. The Government propose to do this irrespective of the particular health circumstances of an individual and in the knowledge that the prognosis for many people is that they will not be fit for work within 12 months. Indeed, they know full well that the data indicate the contrary. As we have heard, some 94 per cent of contributory ESA claimants have a claim which will last longer than one year. An analysis of the Pathways programme showed that, for 2008-09, only some 13 per cent of those who started the programme found work within one year. Perhaps the Minister would let us know the expected job conversion rates in the Work Programme for those entering from the WRAG. The Government seem almost to be seeking to undermine the WCA and WRAG designations by bringing further policy levers to bear to push people back to work. There is the implication that it is somehow easy to be assessed as eligible for the WRAG. Pretty much all the evidence, as we know and have debated often, points in the other direction. Despite some improvements on Harrington, the volume of successful appeals against exclusion from the WRAG remains high. The Government offer in mitigation the availability of income-related employment and support allowance without time limits, which will certainly help some, but the thresholds, as we have heard, are low—household income of £7,500 or capital of £16,000—and will preclude many from benefiting. We have heard about the numbers affected—100,000 people losing their benefit overnight and, overall, some 700,000 people. Income losses will amount on average to £36 per week. We are told that time limiting ESA will save some £1.3 billion a year by 2016 and that our amendments are unaffordable, but we should challenge this. If we are to be denied the opportunity to amend anything which the Government have cut, what purpose do we serve here? Of course the Government have to tackle the deficit and of course this is not easy, but it is for the Government to justify why this particular burden should be borne in this particular way. On their own impact assessment, of those who lose out from these proposals, more than half fall within the bottom three income deciles. Those in the lowest income decile lose on average £35 a week. What definition of fairness allows this to happen? Amendment 38A, which I hope is more palatable to the noble Baroness, Lady Thomas, because of its cost implications, is more narrowly focused. It would remove time limiting in its entirety from those undergoing treatment for cancer or those who are in the WRAG as a consequence of being diagnosed with cancer. We heard in Committee and again today powerful testament about the range of barriers faced by people with cancer and its impact on their ability to return to work. They are not the only ones in this position, but we should take this opportunity today to secure greater justice where we can, even if this cannot be delivered for all. Supporting these amendments would not deny the Government a contribution to the government deficit; supporting these amendments would not give people a life on benefits; but it would give them a better chance to overcome the barriers which prevent them doing what they overwhelmingly want to do; that is, access the labour market with all the benefits that this can bring.