§ Order for Second Reading read.4.24 pm
§ The Secretary of State for Social Security (Mr. Peter Lilley)
I beg to move, That the Bill be now read a Second time.
A year ago, I announced a long-term review of the social security system. The aims of the review are to improve the system, to safeguard the position of the most vulnerable and to ensure that the system does not outstrip the nation's ability to pay. I subsequently published my analysis of the growth of social security over the rest of this decade. That document showed that one of the three areas accounting for most of the likely growth in spending was invalidity and related benefits, so that has been the first sector that I have chosen to tackle.
The Bill, together with the Statutory Sick Pay Bill, introduces a comprehensive reform of the system of benefits for those too unwell to work. The Bill has three objectives: first, to ensure that the huge and rising sums devoted to sickness benefits are properly focused on those who are genuinely too unwell to work; secondly, to ensure that the cost is affordable; and thirdly, to provide a more rational structure of benefits.
The Bill replaces sickness and invalidity benefits with a new benefit called incapacity benefit. It introduces a new and more objective test of incapacity for work, and abolishes the lower rate of statutory sick pay.
Before going into the detail of the Bill, let me knock one accusation firmly on the head. The Bill is not an attack on the sick and disabled; it is the very reverse. It is designed to protect their benefit against those who abuse it. As a result, it will make their benefits sustainable despite the other pressures on the social security system. That is a worthy objective, and one which the whole House should share.
Invalidity benefit is the fastest growing contributory benefit, and it is already second in cost only to the basic pension. Spending on invalidity benefit has doubled in real terms in the past 10 years, from £2.7 billion to £6.1 billion last year. If we left it unchanged, it would grow by a further 50 per cent. or more in real terms by the end of the decade.
It is working people who have to pay for it through their national insurance contributions. Already, on average, the cost for everyone who contributes is £275 a year, and the cost is rising because the number of claimants is growing. Over the past 10 years, the number of people on invalidity benefit has doubled. It has trebled over the past 15.
§ Mr. D. N. Campbell-Savours (Workington)
The right hon. Gentleman may know that several thousand people in west Cumbria draw invalidity benefit. In his calculations, does he assume that, in the event that invalidity benefit is stopped and restrictions are introduced which mean that fewer people can draw incapacity benefit, many people will move on to the unemployment register? Does he believe that that will be the impact of the changes?
§ Mr. Lilley
Clearly, many people who draw this benefit at present and who do not have jobs would initially draw 36 unemployment benefit or other benefits for the unemployed. I want those who are fit enough to work to be helped back to work by the benefits appropriate to them. It is wrong to give people who are able to work benefits which can eventually lead to their becoming unable to work because of unfamiliarity, lack of motivation and the staleness of skills caused by their being on benefits for some time.
§ Mr. Lilley
I would rather make some progress. I answered the hon. Gentleman's question perfectly well.
§ Mr. Deputy Speaker (Mr. Michael Morris)
Order. The hon. Gentleman cannot ask questions when someone else has the Floor.
§ Mr. Lilley
I am sure that that issue will arise in due course.
I pointed out that the number of people drawing this benefit has more than doubled in the past 10 years. Can it really be that Britain's health is getting so much worse? [Interruption.]
§ Mr. Deputy Speaker
I am sure that it is very important, and if the hon. Gentleman catches my eye he can put it with even more conviction, but not from a sedentary position. Mr. Secretary Lilley.
§ Mr. Lilley
I believe that, from those questions, the question arises whether we are becoming less healthy as a nation. Is there really an epidemic of incapacity? Of course there is not. The nation's health has been improving. Let me give a number of indicators of that.
§ Mr. Lilley
In a moment.
There has been a dramatic reduction in incapacity caused by peptic ulcers. There has been a marked reduction in the number of strokes, roughly halving the number of people aged under 65 who have died from them since 1970. With developments of modern surgical techniques, long-standing painful and disabling conditions, such as osteoarthritis of the hip joint, can now be successfully cured. Moreover, the general household survey has shown that there was no increase in disability in the general population between 1976 and 1988. Therefore, we have to re-examine the way in which the benefit works.
According to the statute, sickness and invalidity benefits were originally intended for those people who,by reason of some specific disease or bodily or mental disablement",were unable to undertake work. However, successive commissioner rulings and court case law have resulted in non-medical factors being taken into account. As a result, the rules have been progressively widened and complicated.
General practitioners have the job of assessing whether their patients are medically too unfit to work and are therefore entitled to the benefit. That has always put GPs in an invidious position. [HON. MEMBERS: "Hear, hear."] 37 On the one hand, they have an obligation to their patient; on the other, they have to act as gatekeeper for the social security system. That job has become harder as the definition of incapacity has become fuzzier.
Our research has shown that GPs are far from sure about what the legal position is or whether their decisions conform with it. An independent study conducted by Weekly Monitor found that two thirds of the GPs surveyed had issued medical certificates to people who were either not sick at all or not sick enough to be incapable of work.
We should not blame doctors for that situation. It is up to Parliament to resolve their conflict of interest and to clarify law. Until we do so, access to the benefit will remain haphazard, controls will be lax and the system will be open to abuse.
The public at large resent that abuse. People who work for a modest wage resent seeing neighbours, apparently as fit as themselves, living on invalidity benefit. Too many people regard invalidity benefit as a readily available supplement to their occupational pensions when they take early retirement.
Some employers are as much to blame as employees. It is not unknown for personnel departments to advise perfectly fit staff whom they are making redundant how they can claim invalidity benefit. There are well publicised cases of people on invalidity benefit earning money by cleaning windows at the very same office where they were claiming that benefit, enjoying cycling holidays and winning javelin contests.
§ Mr. Matthew Banks (Southport)
My right hon. Friend rightly draws attention to some of the abuses. He is aware that I had a very pleasant day close to my constituency last year, when I attended the grand national. Is my right hon. Friend aware that the man who waved the flag at the grand national was on invalidity benefit? [Interruption.]
§ Mr. Lilley
Obviously, I cannot comment on individual cases, but I have to say that in that case there was come evidence of capacity to perform that task.
§ Mr. Paul Flynn (Newport, West)
Before the Secretary of State plunges the entire nation into the chaos that the grand national suffered last year, will he take a tiny bit of blame himself and confess, before he scapegoats the sick in the way he is doing, that £8 billion was taken from the national insurance scheme by his predecessor's decision to withdraw the Treasury supplement from the national insurance scheme? That was left out for those three years, and that is the main reason for any shortfall in the national insurance scheme, not the problems of the sick.
§ Mr. Lilley
I do not think that that is a telling point. We have agreed to top up the fund from taxpayers' money, and we are doing that significantly at present. In other words, the recipients of contributory benefits are receiving benefits of which the total value exceeds the current value of contributions going into that fund.
Surely that is one reason why we should look closely at those benefits and ensure that they are going to people who are genuinely sick and disabled—people who are intended to receive them and on whose behalf those contributions have been paid. The hon. Gentleman thinks that is targeting the sick and disabled. It is targeting the benefit on the sick and disabled, which is what we want to achieve.
§ Mr. Simon Hughes (Bermondsey)
The Secretary of State knows that my hon. Friend the Member for Roxburgh and Berwickshire (Mr. Kirkwood) is ill and that otherwise he would be speaking on the matter in my place.
Does the right hon. Gentleman not agree with the general view, before he is selective in targeting, that the best way of reducing the number of those who honestly or dishonestly may seek to claim benefit is by maximising the opportunity for people to do a hard day's work and therefore minimising unemployment?
There will never be a system in the world which somebody will not get round. It is important that the system, although tough, deals with individual circumstances and the individual applicant in every event. A strict medical test that does not take account of age or of history of medical illness or of environment or of work will never be able to take account of everybody's circumstances, all of which are different.
§ Mr. Lilley
I strongly agree with both points. We want to help people back to work: that must be the most constructive thing for people who can work. A test must be sensitive enough to take into account the vast array of different conditions from which people suffer, and I shall be coming to the test and the way in which we are trying to ensure that it achieves that, while being objective and effective.
We obviously need to restore the original policy intention of providing help only to those who cannot work because of their medical condition. I want to clear away the clutter of conditions and focus the benefit on fitness to work. That is why I am proposing a new test of incapacity for work. The test will be more objective, simpler to understand and easier to apply.
Throughout the year, we have had extensive discussions with experts on disability and occupational medicine. As a result, we have developed a test based, first, on identifying the key faculties whose impairment can make people unable to work. The essential physical faculties include bending, lifting, walking, vision, hearing, reaching and so on. Following consultation, we have included climbing stairs and tinnitus as well. In addition, there are a number of measures on how mental health problems affect the ability to handle different situations.
The second step is to calibrate the extent to which loss of any of those faculties impairs ability to work. A number of people have tried to mock that approach and the basic test, which we have spelt out in the consultation document. I regret to say that even the hon. Member for Glasgow, Gaescadden (Mr. Dewar) has, rather uncharacteristically, joined in the mockery. That mockery is not appreciated by disabled people. The approach underlying the test is highly respected by disabled people and their representatives. It has the same basis as that used in the definitive study measuring the extent and severity of disability in Britian.
Our new test has already been welcomed. Today I received a letter from the National Back Pain Association, welcoming a more objective test. If the hon. Member for Garscadden says that we should listen to the views of disability organisations, let me read him the NBPA's conclusion:For some time now the Back Pain Association has been concerned with the issue of benefits of those disabled by back pain. The nature of the condition, with its invisibility, its many causes and often difficult diagnosis, has led both to some abuse by claimants and also to unfair views of the back pain sufferer as 39 a malingerer. A move towards a more 'objective' test would thus be welcomed. The NBPA is pleased to note that the added emphasis on self-assessment in the proposed process.The association adds:However, this organisation feels that the ability to sit must be added to the list of functions assessed.We have duly added that function. [Interruption.] No, that is the only function that the association mentioned in its conclusions.
§ Mr. Donald Dewar (Glasgow, Garscadden)
Let me just correct the record. I think that I am right in saying that the National Back Pain Association has also made it clear that it is deeply concerned about the present test, especially as it affects remission. Someone may be able to do the physical test satisfactorily on day A, but may pay a heavy price for it on subsequent days. The association has made strong representations and, as I understand it, remains unsatisfied on that point.
§ Mr. Lilley
A number of organisations have stressed the important point that the test must not be merely a snapshot taken at one point in time. We have taken that on board—indeed, we had done so before we issued the consultation document. The test must take account of the fact that conditions come and go. That fact will be taken into account in the assessment; that is right and proper. I shall deal shortly with the consultation and evaluation procedures. We want to take such comments on board, and the National Back Pain Association's letter shows that we are doing so.
The third step in developing our test is to establish how partial loss of two or more faculties may combine to make someone unable to work. The fourth step, which we have introduced as a direct result of our discussion with the expert panel, is to cross-check how the loss of faculty would influence ability to undertake the 100 most common occupations in this country. Together, those occupations account for three quarters of all people in work, so it will be a fairly comprehensive check.
The fifth step is to establish a threshold of incapacity beyond which people will qualify for the benefit. Clearly, that is a crucial decision. The threshold must be set at a reasonable level and must not exclude the people whom we want to help—the genuinely unfit. I want to draw upon the widest possible expertise in setting it. That is why I have set in train a wide-ranging process of consultation and evaluation before bringing forward regulations to implement the test.
I have published a consultation paper setting out our proposals in detail. I have sent more than 4,000 copies to individuals and organisations who expressed an interest in them. I have also formed a panel of some 80 experts, including disabled people, doctors, academics and representatives of disability organisations. I have asked those experts to help define the threshold of incapacity and to refine ways of measuring it. Their involvement will help to ensure that the threshold is set at a fair and reasonable level.
In the spring, I will be carrying out a full trial to evaluate the new procedures. We will examine how the test would work if applied to a large number of specific individuals. We will check that the test gives results that are consistent with those from a direct medical examination of each individual. I hope that that will reveal any pressure points, 40 unforeseen problems and exceptional cases. Following that process, we can refine the test and the adjudication procedures.
I intend to publish the results of both the consultation and the evaluation process before introducing forward secondary legislation to implement the test. Parliament will therefore be able to make an informed judgment on the effectiveness of the new test before considering the regulations.
§ Mr. Dafydd Wigley (Caernarfon)
The Secretary of State is trying to establish a definitive set of conditions —a level above which someone may be entitled to benefit and below which he or she will not be entitled to it. Does the right hon. Gentleman accept that disability varies enormously from individual to individual—that it is not a homogeneous condition? It may be well-nigh impossible for people to operate such clinical rules unless there is a considerable degree of latitude. Is the right hon. Gentleman prepared to give that latitude?
§ Mr. Lilley
I have a great deal of respect for the expertise of the hon. Member for Caernarfon (Mr. Wigley), who has specialised in these matters, and I take to heart the point that he has made. I said earlier that we are trying to ensure that the test is sensitive and that it absorbs and incorporates the expertise of a whole range of different experts and groups.
We want to get it right. We have an interest in doing so, because we want to get the benefit to those who are entitled to it and who have the underlying requirement for it. We seek only to exclude those who are not entitled to it—those who are fit enough to work and who ought to be helped back to work through the back-to-work benefits.
We recognise that the test should not be a single snapshot of a particular point of time; that we must take into account the nature of the ailment or incapacity from which a person suffers; and that we must ensure that the test achieves that. That is why we are going through the evaluation and consultation process. I hope that the publication of the findings will enable Parliament to be sure when it comes to consider the detailed regulations that we have done precisely that.
Clearly, however, any benefit must have a criterion attached to it and that criterion must be applied. Ultimately, the choice is between an objective criterion and a subjective one, and a subjective criterion relying on the simple opinion of an individual and his luck and good fortune in having a sympathetic local doctor can be much more unfair and unjust than an objective one. I hope that the procedure will result in something fair, reasonable and sensible that meets the complexities to which the hon. Member for Caernarfon referred.
§ Mr. Geoffrey Dickens (Littleborough and Saddleworth)
Does my right hon. Friend agree that we have perhaps been hoist with our own petard? In our compassion, we tried to give a very generous benefit to those suffering from invalidity. We are now replacing that with something that is more fair because it is targeted on those who are genuine invalids. Will my right hon. Friend tell the House the difference between the rewards that someone enjoys who can get on to invalidity benefit—even if he or she is not really entitled to that benefit—and what he or she will get in future?
§ Mr. Lilley
My hon. Friend makes a good point. Invalidity benefit is a more attractive benefit than the back-to-work benefits. [Interruption.] I am talking about the present, and at present invalidity benefit is more attractive than the back-to-work benefits and does not have the conditions attached to it that the benefits intended to encourage people back to work carry. There have therefore been attempts to get on to invalidity benefit when it is not the best or most suitable benefit.
§ Mr. Campbell-Savours
Can the Secretary of State give me the figure that really interests me? How many tens of thousands—in the view of the hon. Member for Littleborough and Saddleworth (Mr. Dickens), perhaps hundreds of thousands—of new people will be seeking work and want to register unemployed?
§ Mr. Lilley
We estimate that it will be some 95,000 in the first year, rising in the second year to 190,000. That is working on the most pessimistic assumptions.
Let me explain how the new test will be applied in practice. For the first 28 weeks of sickness, claimants will be entitled to statutory sick pay or the lower rate of incapacity benefit which replaces sickness benefit. During that first 28 weeks, the criterion for entitlement—normally inability through sickness to undertake one's current occupation—will be unchanged. So will the current reliance on a general practitioner's certificate. After 28 weeks, however, claimants will automatically move on to incapacity benefit at the middle rate.
Those who could not be expected to handle a questionnaire on their fitness—because of severe mental illness or terminal illness—who will be identified from their records during the first 28 weeks, will be handled directly by the Benefits Agency medical service and their doctor. But most people will then be sent a copy of the incapacity benefit questionnaire to assess long-term incapacity for work. That will ask claimants to give details of how their sickness or disability affects each of the key faculties. The process will be similar to that required of people claiming disability living allowance.
Their GP will then simply be asked to give his diagnosis of their illness and the principal disabling conditions to which it gives rise. He will not be asked to confirm the patient's self-assessment. Nor will the GP any longer be required to express a view of his patient's ability to undertake any kind of work.
The Benefits Agency medical service will then examine the claim form. In straightforward cases—for example where the diagnosis is of an invariably serious disabling condition—the adjudication officer will accept the claim without medical advice. But we would expect the adjudication officer to seek advice from the Benefits Agency medical service in about 85 per cent. of cases.
BAMS would then assess whether the questionnaire and diagnosis leave room for doubt. If so, it may seek further clarification from the GP and, if appropriate, invite the claimant for examination. We estimate that it will want to examine two thirds of cases referred to it. That means that just over half of all claimants may be called for examination.
§ Mr. Alan Howarth (Stratford-on-Avon)
I understand that the arrangements for passporting, for the purposes of the new incapacity benefit, people who are currently in receipt of invalidity benefit will mean, for example, that those on the higher-rate care component of disability living allowance will not be required to undergo a further medical test. Can my right hon. Friend say whether new claimants going straight on to incapacity benefit will be exempted similarly? That would be helpful to them. Such an assurance would be encouraging to the House and to people outside.
§ Mr. Lilley
I can give my hon. Friend that assurance. The move has been widely welcomed. It is obviously sensible, in that it removes the need of those people to undergo an unnecessary second test, and it will save the time of Benefits Agency medical staff.
As I have said, we expect that roughly half of all cases will involve an examination. The agency doctors will provide an assessment for the adjudication officer. Although the measure of incapacity given by the test will provide the main basis for the adjudication officer's decision, he will not be obliged to follow it mechanically if other evidence suggests a different conclusion.
Claimants will, of course, have a right of appeal against decisions. As at present, appeals will be heard by the Social Security Appeals Tribunal, but the Bill provides for a medical assessor to be present at any appeal where the degree of incapacity is in question.
Under the present, admittedly inadequate, system, existing recipients of invalidity benefit are subject to periodic review by Benefits Agency doctors. This may involve no more than review of the claimant's case notes. If the notes indicate a condition that is not likely to have changed, no further action may be taken; if not, the claimant may be called in for examination.
Each year, under the present system, about 900,000 people have their cases reviewed, and more than 300,000 cases involve an examination by Benefits Agency doctors. As a result of this review action, invalidity benefit was withdrawn in about 100,000 cases each year. Last year, 5,350 appeals against refusal or withdrawal of invalidity benefit were heard, and 2,856—a little over half—were upheld.
The hon. Member for Garscadden has claimed that the results of appeals show that few people are on this benefit who should not be. The fact that, even in the absence of a rigorous and objective test, 100,000 people have benefit withdrawn and that, of these, less than 3 per cent. are reinstated on appeal disproves the hon. Gentleman's point.
Naturally, when the new test is introduced, it will be used in the review of existing cases. To do otherwise would be inequitable. No existing recipient of invalidity benefit who is genuinely incapable of work need have any worry. The test is designed precisely to ensure that such people continue to receive this benefit. Indeed, we want to reduce as far as possible the number of claimants—particularly severely disabled claimants—who will even have to complete the test questionnaire. I do not want to waste their time, any more than I want to waste the time of Benefits Agency officials.
So we have tried to identify the groups who we can tell a priori are clearly unable to work. None of these will undergo any review process at all in future. As I have just mentioned, they comprise: people who are receiving the highest-rate care component of disability living allowance; 43 people who are terminally ill; and people who are suffering from any of a number of specified severe and chronic conditions.
I can give the House an up-to-date list of conditions that we propose to exempt from any review at all in future. The proposed list of serious chronic, degenerative conditions is as follows: tetraplegia, paraplegia, persistent vegetative state, registererd blindness, severe learning difficulties, severe and progressive neurological or muscle-wasting diseases or disorders—[Interruption.] Hon. Members find this humorous[Interruption.] Of course they should be exempt. I am saying that they are exempt. I imagined that Opposition Members would want to reassure their constituents that people in these categories will not have to go through even a review procedure.
Examples of the severe and progressive neurological or muscle-wasting diseases or disorders that I have mentioned are the later stages of multiple sclerosis, Huntington's disease, Parkinson's disease and motor neurone disease. Then there are active and progressive forms of inflammatory polyarthritis, impairment of the cardiorespiratory function—for example, as a result of a severe heart attack—dementia, dense paralysis of the upper limb, trunk and lower limb on one side of the body, such as occurs as the result of a severe stroke, and multiple effects of impairment of function of the brain and/or nervous system, such as a brain tumour. We are consulting leading disability organisations with a view to seeing whether the list can be extended.
In addition, people who are 58 or older at the time of the change and have been continuously receiving invalidity benefit since I announced these proposals on 1 December will not have to go through the new test. In total, some 850,000 people will not be bothered by a review. I hope that Opposition Members are thus reassured that I am not talking about just one or two cases.
This approach has been welcomed by the Disablement Income Group, which was particularly concerned that people on the higher rate of disability living allowance might have to undergo a second test. I believe that our approach demonstrates our determination to reassure severely ill and disabled people that they have nothing to fear from the sensible new procedures we are introducing. They certainly will not lose their benefit, and we want to cause them as little distress and bother as possible.
§ Mr. Frank Field (Birkenhead)
The Secretary of State is telling us that this measure will save the Exchequer a considerable amount of money. The saving will result from the fact that fewer people will be able to claim benefit. Will the right hon. Gentleman set for the Benefits Agency a target number of people who, although they qualified for benefit hitherto, will now have to be refused?
§ Mr. Lilley
Certainly not. If I were to do so, adjudication officers would, under the law, ignore my attempts. Adjudication officers are not allowed to work on that basis. They have to consider each person as an individual. That is what Parliament has rightly set down, and I would not try to interfere with it.
§ Mr. Lilley
That is quite correct. We have no savings target, but it is our intention to ensure that benefit goes only to those who are entitled to it. We cannot be absolutely sure how many people will be excluded. Following a dry run to see how things might work out, we have made an estimate by means of a case study of people who have applied for the benefit. If the actual figure turns out to be lower than the estimate, we shall certainly not change the severity of the test, which will have an objective rather than a financial basis.
§ Mr. Field
So the Secretary of State has a target. Benefit will be targeted on those who are eligible, and those who are not eligible will have benefit withdrawn. The people working in the Benefits Agency know that there is a Chinese wall between what the Secretary of State says in the House about the potential savings and the actual delivery of those savings.
§ Mr. Lilley
I can give the hon. Gentleman that assurance. This is why we in the United Kingdom do not have cash-limited benefits and why, from time to time, I have to come to the House for supplementary provision for the amount by which demand has exceeded provision. We are of the opinion that benefit should be geared to the needs of the individual, and not cash-limited across the whole spectrum. It certainly will not be so cash-limited in this case.
§ Mr. Ted Rowlands (Merthyr Tydfil and Rhymney)
We have been provided with an explanatory memorandum giving a very strong indication of the savings that are expected. Can the right hon. Gentleman assure us that, if such savings are not achieved, he will not seek even further tightening of the capacity tests?
§ Mr. Lilley
Of course, one is required to give the best possible estimate of the financial implications of the Bill. This we have done. However, estimates and forecasts are often out, one way or the other. None the less, I repeat that we are not in the business of basing the severity of tests on financial targets. The threshold will be set after we have involved experts to ensure that it will really measure whether people are able to work. If they are able to work, clearly they should not be receiving that benefit. If they are not able to work, clearly they should receive it. In that case, we want them to receive it. That is what it is for.
§ Mr. Frank Field
The heads of benefits agencies had their pay related to performance. Will the Secretary of State assure the House that the performance-related pay of the head of the Benefits Agency is not linked to delivering the savings announced in the Bill?
§ Mr. Lilley
That is quite correct. [Interruption.]There is no question of there being any flexibility in applying or disapplying the benefit. It relates only to the efficiency of providing and completing forms.
§ Mr. Lilley.
No, I want to make progress, as I have already given way at least half a dozen times.
I want now to spell out the new benefits structure. The present invalidity benefit is not well focused on need. It is not means-tested or taxed. It continues five years after pension age, and it is earnings-related. We do not propose to means-test it, because that would reduce the incentive 45 for employees and employers to provide additional provision for long-term sickness, and penalise those who do so.
However, it has always been our stated intention to bring invalidity benefit into tax, in the same way as all other benefits which replace earnings. My right hon. and learned Friend the Chancellor of the Exchequer stated in his Budget that new recipients will be liable to tax from April 1995 if they have sufficient other income to exceed their tax allowances.
The new incapacity benefit will also cease for those who reach state pension age after April. There will no longer be an earnings-related additional pension element for those who come on to incapacity benefit from its inception in April 1995. That additional pension is somewhat of an anomaly. It is the last remaining earnings-related element in pre-pension benefits. By removing it, we are going back to Beveridge, who believed in a system of flat rate benefits.
The additional pension is very poorly targeted, since it is highest for those who earned most and worked longest, yet they are the most likely to have private occupational sickness or early retirement schemes. Indeed, about half those who receive additional pension, which can amount to an extra £70 per week, also have some other income.
Strangest of all, even though it is calculated on the basis of notional entitlement to the state earnings-related pension scheme, it goes to those who have opted out of SERPS. That can mean that some people who have opted out of SERPS can benefit three times over: they receive additional pension paid with invalidity benefit; they pay lower national insurance contributions; and they may also have an occupational pension as a result of opting out.
It is wrong to continue paying such high amounts without any regard to need. The financial burden that this was storing up for the future was not anticipated at the time; nor was the growth in occupational pensions which has happily occurred. Additional pension alone would cost about £2 billion a year by the end of the decade, even after restrictions introduced in 1992. I shall listen with interest to hear whether Opposition Front-Bench spokesmen mount a rearguard action in defence of that somewhat anomalous element in the benefit structure.
Of course, existing recipients of additional pension will continue to receive it, but, unlike the rest of their benefit, it will no longer be uprated for inflation. By contrast, there is a far better case for the age-related invalidity addition. That is the extra amount given to those who become incapacitated early in their careers, and therefore have less time to build up invalidity pension rights or savings.
I propose to simplify and bring forward the dates of entitlement to that element. Those incapacitated before the age of 35 will receive an extra £12.15 a week on top of the basic benefit as long as they remain on incapacity benefit. Those incapacitated between the ages of 35 and 44 will receive a supplement of £6.10.
The only other important change I propose in the structure of the long-term benefit is to restrict the allowance for dependent adults to those who are looking after children and therefore getting the child increment as well and to dependents over 60.
The new benefit will be payable at three rates—the longer the period of sickness, the higher the benefit. I am also simplifying statutory sick pay, replacing the two existing rates with a single rate set at the present higher rate. That is implemented by the Bill. That will be worth an extra —3.70 a week for the lowest paid employees.
46 Most people receive statutory sick pay for the first 28 weeks of incapacity. For those who do not, incapacity benefit will be payable at the same rate as sickness benefit now. After 28 weeks, the middle rate of incapacity benefit will be payable at the same rate as statutory sick pay. At that point, the new benefit will be taxable.
After a year of incapacity, the benefit will increase once again to the same rate as basic invalidity benefit. That restructuring will provide a basic income to those who cannot work. It will continue for as long as they remain incapable of work and can be supplemented by private provision and, if necessary, with income-related benefits. Existing recipients will be protected. There will be no cash losers when the scheme is introduced.
Many people who receive incapacity benefits would prefer to work. I have four proposals to provide tangible help for them to go back to work. They can already receive a wide range of help and advice from the Employment Service in finding employment or appropriate training. People with particular needs, including those with disabilities and the long-term unemployed, are rightly given priority.
First, my right hon. Friend the Secretary of State for Employment will be reviewing the measures necessary to help people who become unemployed after being disallowed incapacity benefit to get back to work. Secondly, I propose a change which has been sought and will be welcomed by many voluntary and charitable organisations. That is the proposal to allow people on incapacity benefit to carry out up to 16 hours voluntary work a week without losing their benefit.
People will continue to be able to undertake therapeutic work, which is all they are allowed to do at present. That will also be subject to a limit of 16 hours. People who work for 16 hours or more can claim disability working allowance. In addition, I announced in my uprating statement that people who receive disability working allowance will automatically qualify for free prescriptions and free dental charges when incapacity benefit is introduced.
A further change sought by disability organisations is to allow people to undergo a period of employment training between their final payment of incapacity benefit and starting a job and still qualify for disability working allowance. We intend to introduce that.
The Bill brings in sensible and well thought out reforms to tackle undeniable problems in this area, while protecting the position of the sick and disabled. However, what have we heard from the Opposition on this subject? The hon. Member for Glasgow, Garscadden (Mr. Dewar) dismissed the proposals as "a petty change" to make "minor savings". By contrast, his right hon. and learned Friend the Leader of the Opposition described them ascontinued and vicious assault upon the welfare state"—[Official Report, 30 November 1993; Vol. 233, c. 941.]He also said that they were odious and deplorable. Far be it from me to stir up discord between them, but it cannot be both a petty measure, making minor savings, and the end of civilisation and the welfare state as we know it.
Both the hon. Member for Garscadden and his right hon. and learned Friend are wrong. The proposal is a major change, but it is a major improvement. It tackles with sensitivity a major problem. However, apart from those sniping and contradictory remarks, we have heard very little from the Opposition on the whole subject. They have come up with no coherent or penetrating criticisms of our 47 approach. They have offered no alternative of their own. Indeed, they seem to have given the subject no serious thought whatsoever. They just seem to have handed it to the Commission for Social Justice and dozed off.
An aggressive Opposition would oppose. A constructive Opposition would propose. However, this lethargic Opposition just repose. The test of commitment in this area is a willingness to give it serious constructive thought. Anyone who really believes in the welfare state must have the courage to take the decisions necessary to make it sustainable. Anyone who is really concerned about the sick and disabled must be prepared to tackle the abuse of benefits which were meant for them.
We believe in the welfare state. We are determined that it should survive and improve into the next century. We believe that everyone fortunate enough to be fit and able to work has a duty to help those who are incapable of working. That is why we have had the courage to undertake these reforms.
The Bill will ensure that those who are not able to work through sickness receive appropriate help through an affordable system; that those who are able to work are helped to do so, and that resources are not diverted to those who are able to work but do not seek to do so. I commend it to the House.
§ 5.9 pm
§ Mr. Donald Dewar (Glasgow, Garscadden)
The Secretary of State, at the end of his speech, tried to stir things a little. I am not sure whether his taunts were very effective, although I suspect that they worried some Conservative Members who will have to serve on the Committee, as they sounded like an invitation to lengthy and stern Committee proceedings.
Perhaps I should help the Secretary of State. I should at least admit my error in terms of the quotation that he gave from me. There is no doubt that, the more I have considered the measure, the more I have talked to people in the disability world, and the more I have considered the somewhat tardy trickle of information that has come from the Government, the less I like the measure. It has to be judged against the sweep of Government policy; it should not be seen in isolation. It is certainly not a measure by a Minister with a tidy mind putting his house in order, and, to be fair, I do not think that the Secretary of State saw it in that light.
Everyone is conscious of the public anger about a Government who owe their office to specific promises not to raise taxes and who won the previous election not even by discreet silence about embarrassing facts but by deliberate misrepresentation.
Undoubtedly, hypocrisy and cynicism are at large, and it is not difficult to see why. The Prime Minister has been arguing that "back to basics" has nothing to do with personal morality. I must say that we are fascinated to know that we owe it all to Barbara Cartland, according to today's papers. It certainly explains quite a lot. The Secretary of State, who has remained remarkably silent — I congratulate him on his good sense—during the "back to basics" argument, has missed that lady's splendid interviews, in which she explained that she cooked the whole thing up with the Prime Minister over a cup of tea, I think at Downing street.
48 In any event, if it is not personal morality, it is obviously public standards that the Prime Minister is stressing, and the public are entitled to ask what trust is to be put in an Administration whose own authority is built upon shaky and shabby foundations.
I am coming to the specifics of the Bill because it fits very well into the general picture. It is not just the tax hike and the size of the tax hike—the £24 billion over three years; the pay-now, pay-later, pay-more-and-more Government—it is also where the burden is distributed. Where the burden is distributed is worrying people in Britain as much as the size of the tax increases.
When we examine the measure as a whole—I include the taxation of incapacity benefit, the alteration in eligibility for the new benefit and the cuts in the new benefit as against invalidity benefit—we see a pretty vulnerable group by any standards—those who are struggling with the effects of long-term ill health and disability—being targeted with almost unerring accuracy by the Government. I do not think that it is a partisan point; there will be uncomfortable consciences among Conservative Members also. Very many people do not like what they are seeing.
The charge is straightforward, and it is damaging. Eligibility for incapacity benefit is being artificially restricted. Payments for those who get over the hurdles, pass obstacles and pass the test at the end of the day are being significantly attacked. It is fair to say that it is a mean-minded measure and that it will be resented. It is right to protest that the Government's overriding priority has not been protection for the long-term sick, as has been suggested, but protection for the Treasury.
The figures are impressive. I accept that they are estimates and not targets. The Secretary of State has given an assurance, and I will not challenge it, certainly at this stage. But, according to the best estimates, as he called them, in the financial memorandum, in 1995–96, the Government will save £550 million gross, and in 1996–97, they will save £1,450 million. That point might come out quite usefully in respect of the money resolution.
The offsetting figure is £265 million in the second year. I cannot remember what it was in the first year. Anyway, the offsetting figure for income support increases is very low. I am slightly puzzled by that, as I would expect there to be quite an impact in terms of a knock-on to income support as a result of the measures. However, the gross figures are formidable. The savings—it is an important point—will escalate very substantially subsequently.
We are talking about £1,450 million in the second year. However, as many people will still be on invalidity benefit and will be coming up for review—presumably they will then have to face the test for the new incapacity benefit —it is expected that a large number of them will fall out at that stage and, presumably, there will be additional savings to be added on to that. It will be interesting to see the projection continued from 1996–97 to 2000–01, as I suspect that the figure will be very much more substantial. I underline that point, because it emphasises the importance of what is being done and the number of people who are likely to be affected by it.
There is an interesting comparison to make. I recognise that the Secretary of State will not want to comment on it. However, the right hon. Gentleman will remember that a document came into the public domain in June last year, which revealed with remarkable accuracy the discussions that were going on between the Treasury, the Prime 49 Minister's office and the right hon. Gentleman's office. They had an objective test written in, they had cuts in benefit, and they also took into account the savings in taxing invalidity benefit. They came up with expected savings of £180 million in 1995–96, £495 million in 1996–97, and £1.3 billion by the end of the century.
I ask my hon. Friends to consider that escalation of cost and to start with the very much higher base that has been projected for this package of changes. They will see that, by the end of the century, it will be a very substantial sum indeed. I hope that we will have more information about that either in Committee or in the House when we debate the money resolution. I am concerned because those expected savings included an objective test, but one that seemed to us, when we read the papers which reached us, to be very tough indeed.
I do not need to remind the Minister of the well-known example of the 55-year-old builder with angina, who gets chest pains after excessive bending, heavy lifting and carrying. He is unable to walk on the flat for more than 200 yd before he has to stop because of chest pains, and he has to climb stairs slowly. That is an example of someone who, under that package, which would save a substantially smaller sum than the present package, would be excluded from invalidity benefit. That suggests to me that the Government anticipate that the impact will be very considerable. That is certainly a matter of concern.
I shall say a word or two about the so-called objective test. I do not want to have a long, convoluted argument with the Secretary of State about the view of the groups who represent people with disabilities. The other day, I had a meeting with about a dozen representative and well-known organisations, some of whom—I certainly do not want to particularise the reasons; I am sure that the Secretary of State will recognise why—are involved in the consultative process. Not one of them rested content. Not one of them was happy with the test. Everyone who spoke at length challenged the basis of the league table on which we are now building.
Those organisations responsibly took the view that they had a duty to their members, to the people whom they represent and to their colleagues at least to take part in the consultative process and to try to bring about improvements. It would be an abuse of that responsibility —I say this seriously to the Secretary of State—if the right hon. Gentleman represented to the public that, because they are taking part, they are happy with what they are consulting about.
My impression is that they would like to advise that the Secretary of State should go back to the drawing board and start again, but they know that that advice would not be heeded; therefore, they are reduced to arguments about important points—I do not belittle them—about whether a certain measure of disability should be worth three, five or seven points on the scale. I would be the last to mock that, but it would be interesting to hear from the Minister whether there are terms of reference within which working parties are operating.
I will draw an analogy—perhaps one that is slightly far away—and I will do so quickly. There has been the most extraordinarily full consultation process on paper over trust hospital status in my area of Scotland. The trouble was that when one wrote to say that one wanted to make a representation against the concept of trust hospitals, one 50 received a smart reply saying that that was not open to consultation and that it was a fait accompli. One could merely make representations about minor details.
I suspect that that is the situation that we face with the Bill. If I am wrong, I shall be glad to be reassured. If I am wrong and the Secretary of State says that he is prepared to listen to fundamental changes, I think that he will find that quite a few will be forthcoming.
§ Mr. Lilley
Will the hon. Gentleman reveal whether he is going to propose any fundamental changes or just sniping criticisms? If he has an alternative to the idea of an objective medical test, the Government would be interested to hear it. However, so far we have not.
§ Mr. Dewar
I was dealing specifically with the right hon. Gentleman's claim that there was widespread support for the test among disability groups. That is something which he must recognise is open at least—I put it charitably—to serious doubt. My view is that the approach is too mechanical, and that measuring the loss of capacity in a rather absolute sense does not tell the whole story.
I am sure that the Secretary of State will accept that there is no necessary correlation between disability and ability to work. There are many examples—we all have them in our personal circle of acquaintances—of people who would score a high total in the test, but who are able fortunately to hold down demanding and responsible jobs. There are real concerns that the cut-off will be too arbitrary and hard-nosed, and that many who need help will be left outside.
It is difficult to comment in detail on some of the matters that will be settled later by regulation. The Secretary of State will say that he wanted to leave the matter open, so there could be a wide expression of opinion. It is difficult for the House and it will be difficult for the Committee. We do not know how the threshold will work or what the final form of the test will be. The general feeling is that it under values pain, for example. There are general conditions that are debilitating but which are difficult to fit in the test even on a non-snapshot basis. These would be difficult to take account of even if there were one or two moving pictures over a period.
I pointed out in an intervention that representations have been made from people who are interested in back pain, and also from who are concerned with arthritis. In those cases, people are often in a position to perform tasks, perhaps because of remission or because they can do the task on a one-off basis but are unable to repeat it for a period. It will be difficult to take account of that in the general range of the test. The remission point has been made to us by those who are interested in multiple sclerosis, for example. They are entitled to be concerned about the ability of the system to take account of special cases and circumstances.
I remind the House of the June 1993 memorandum which referred to discussion about a continuous qualifying period for invalidity benefit. The memorandum said that that would have some disadvantage, particularly for thosewho suffer from progressive diseases eg multiple sclerosisThe rather unfortunate conclusion that was drawn was that the principle of continuous and long-term sickness seemed right, and therefore it was suggested that the measure go ahead. Such an approach shows a certain lack of sensitivity. There are concerns about the way in which the whole thing has been envisaged.
51 There are understandable worries about how one fits mental health into the pattern. From reading the section on mental health—apart from one rather startling misprint, for which I blame no one—I find it difficult to envisage how some of the cases of which I have some personal contact would get the help that they need. The problem is that objectivity for one man may result in rough justice for others, particularly if the priorities are out of sync. I hope that there is progress on the monitoring panel, and we await keenly to hear whether the Minister of State has anything further to say about that. However, he must not take that as an endorsement of principle.
I understand why that has been done. We know, because the Prime Minister told us, that the growth in the number of people on invalidity benefit beggars belief. It is well documented that the number has gone up substantially, from 600,000 to 1.5 million, since 1979. The Secretary of State is entitled to consider that fact, and to be concerned about it. He must not, of course, make a simplistic analysis. There is a great deal of evidence about the complexity of the reasons for that phenomenon, and there is no simple answer for it.
With all respect to the Secretary of State, there is a tendency to suggest that the increase is due to malingerers, lead-swingers and people on the make; there was a touch of that in the right hon. Gentleman's presentation. It is not like that. The right hon. Gentleman will be probably more familiar than I with the evidence if he has been as thoroughly briefed as normal by the Department.
I refer for example to the Policy Studies Institute report, of which the Secretary of State will certainly know. The report pointed out that 29 per cent. of the increase was accounted for by pensioners who were staying on invalidity benefit—presumably for the advantages of not being liable to tax. That 29 per cent. will not be an extra charge in terms of the public purse or in terms of the benefit paid by the Department, because those people will drop immediately to their retirement pension entitlement. In any event, that matter will come to an end as a result of the provisions of the Bill.
I hope that we will not be told that there has been a substantial fall in the number of people in receipt of incapacity benefit as a result of the new test. That reduction will relate to the fact that a substantial part of the "problem"—I use that term in inverted commas, as that is the way in which it is presented—comes from pensioners who have stayed on invalidity benefit.
The PSI suggests that 16 per cent. of the increase results from something that most of us would see as a hopeful phenomenon—the increase in the number of women in the labour market. Those women are now paying and running up a significant national insurance contribution record, and they are therefore entitled to invalidity benefit in a way in which they would not have been a few years ago. It may be embarrassing for the Secretary of State, but it seems to me that there is nothing to criticise there—that is something which we should broadly welcome.
§ Mr. Peter Thurnham (Bolton, North-East)
The hon. Gentleman has been speaking for about a quarter of an hour. I have been trying to make note of any positive proposals he has, but I have still not heard any. Does the hon. Gentleman agree that if an objective test were applied to the Opposition, all it would show would be an 52 instinctive knee-jerk reaction? That test would not show any positive mental processes at all. What are the Opposition's policies?
§ Mr. Dewar
The hon. Gentleman is showing advanced symptoms of knee-jerk reaction. I do not think that that was a particularly helpful intervention.
The research has not just come from the PSI. Much has been commissioned by the Department, and has been published over recent times. That research makes it clear that there are complex reasons for the rise in numbers, and it must not be assumed that it has the sinister complexion which is sometimes put on it.
I remember the evidence given by the permanent secretary at the Department of Social Security to the Public Accounts Committee in 1990. He distinctly linked the increase in numbers to demographic factors, and particularly to the rise in unemployment and the knock-on effect from the stress and anxiety of unemployment. The Secretary of State will, I have no doubt, have discussed the Department's position at that time with the permanent secretary.
The Disablement Income Group, the Disability Alliance, the National Association of Citizens Advice Bureaux and a range of organisations—I will not delay the House by quoting them in detail—have looked at the Department's research and the available evidence and have reached a different conclusion from that of the Secretary of State.
I rather deplored the Secretary of State's saying with a little coolness that he did not believe in commenting on individual cases. I suppose he meant naming names, but he went on to deal in a direct way with a rather odd collection of individual javelin throwers and window cleaners. I do not think that that is a sound basis on which to launch a defence of the measure. I was interested in what my hon. Friend the Member for Workington (Mr. Campbell-Savours) was challenging, and no doubt we will pursue that later.
If about 90,000 people, rising to 195,000 in the second year, will be put on the unemployment register and there is an inevitable swing from invalidity benefit to incapacity benefit, shedding more and more people over the next three, four, five or six years, it will be interesting to see the estimates for beyond the first two years. It will be interesting to see how many more than 195,000 we reach. That will also be a matter of considerable interest to the Department of Employment and worried Conservative Back Benchers.
I accept that invalidity or incapacity benefit should not be an alternative to unemployment benefit in the long term. There may be a need to tighten up the arrangements and build in safeguards. The Minister has been doing that in the past year or so with the improvement of, as he put it, the medical control arrangements. He expects to save £240 million in the next two years.
I do not quarrel with the assertion that a Department is entitled to examine safeguards. If there is genuine abuse at the edges, it should undoubtedly be stamped out. However, I hope that the Minister will persuade his colleagues to pursue the black economy—which is what he was talking about—as rigorously and enthusiastically in other areas.
I do not accept what the Minister of State said on the radio this morning. I heard a brief snatch as he talked to Scotland—an uncharacteristic role for him. He said: 53Invalidity benefit is not being used for the purpose it was intended for in the first place.That was an overstatement. It may lie at the heart of some of the difficulties. If one believes that statement, one may well feel that there is a case for the changes that are being proposed. However, the statement cannot be substantiated on the evidence.
The test should be not simply a test of disability but a test of capacity for work. That means that some other factors must be relevant. It is not the doctor who takes the final decision: it is the adjudication officer in the Department. With the proper training and framework, he should be in a position to hold the balance and ensure that the benefit is sensitive and helps those who most need and deserve help. I want to cut the £6 billion or so bill that is run up every year, but we should concentrate heavily not only on safeguards and eradicating abuse but on the positive action that is needed to give people a chance to get back to work. I welcome anything that the Government do in that direction.
We all know, and certainly the Minister of State knows, that barriers to employment still exist for people with a disability or an illness record. We note the remarkable and persistent failure of the Government to give fair wind to anti-discrimination legislation, which is badly wanted by those who deal with people with disabilities. The decision that employers should pay up 50 per cent. of the equipment and services required for disabled people in employment after six months is deeply resented not only by the disability groups but by the Confederation of British Industry, the Institute of Directors and employers in general. It is seen as a direct disincentive and it puts in some perspective what the Minister has said.
As the Minister knows, the switch in who bears the cost of statutory sick pay may be another disincentive to employers to hire those who have a disability or people who, because of their previous record, may be thought to be liable to ill health. I accept entirely the point that the Minister of State makes about the enthusiasm and commitment to work of people with disabilities, which may result in a good attendance record. However, I am talking about perception and there is no doubt about the widespread perception of disabled people and the barriers that I fear may be built in.
I commend to the Minister "An Evaluation Supported Employment Initiatives for Disabled People", which has been commissioned by the Department of Employment and was published in October 1993. The Minister may have studied the document. I must confess that I had not done so until recently. It says:Supported Employment is the process of enabling a person with a disability to secure and maintain a paid job in a regular work environment, by supplying all appropriate training support to them in the workplace".According to that substantial piece of research, the general outcome is thatAgency clients are finding real jobs with real wages … Job retention is excellent".That is an encouraging report, although it is important to note that the number of people involved is still small.
The conclusions of the report are:overall agency provision is:fragile in terms of the scale and scope of funding it receives …. a long way from meeting the extent of need in the community.If the Minister turned his attention to the lack of funding for such projects and the apparent progress that has been made on the limited and occasional scale that has been possible until now, he would encourage people to look 54 more hopefully to the future and to the provision of jobs. I hope that the Minister of State will say a few words about the projects that I have described, although I recognise that they are Department of Employment led.
Has any consideration been given to some form of partial incapacity benefit? I know that many people have argued strongly for an allowance not merely for 16 hours of voluntary work but for some sort of part-time work. Many people can manage perhaps one or two days a week. The trouble at present is that as soon as they do so, they sacrifice heavily on the benefits side.
There might be a case for introducing on a phased basis, obviously with a taper, a partial incapacity benefit to encourage people to take the first steps back to work. They could mirror in their employment pattern their gradually increasing capacity for work. That could perhaps be considered positively. I am not in a position to do the technical and financial assessments, but in principle it seems a sound concept and one which the Minister ought to consider. I should be interested to know whether it has been considered; if it has been considered and rejected, on what grounds was the decision made?
I noticed that, perhaps in unconscious humour or irony, the Secretary of State said that the changes were being made to protect the benefits of those who were entitled. An awful lot of recipients will think that that is an odd way of describing what is about to happen. We can argue about the objectivity of the test. I am sure that there will be subjective opinions about it. However, there is no doubt about the substantial cuts in benefit which will come with the transfer to incapacity benefit. I say that with some diffidence, because the arrangements are intensely complex. If the new benefit was intended to be a way of simplifying the position, it failed that test almost immediately.
Many of the provisions have still to be embodied in regulations, so it is difficult to follow them. I understand that details of the age allowance will be spelt out in regulations. I am not clear to what extent they will be an improvement or otherwise on the present provision in section 34 of the 1992 Act. We shall have to consider that.
I shall illustrate my fears with two examples. They are in the same area. Let us assume that a married man with two children has qualified for incapacity benefit and is within the 28-week and 52-week period. In other words, he is receiving the upper rate of the lower level—or is it the upper level of the lower rate? The Minister will follow what I mean.
That man will receive a basic incapacity benefit of £52.50 compared with £56.10, which he would have received under invalidity benefit. He loses £3.60 a week. The adult dependency allowance was £33.70. It will now be £26.40. So he loses £7.30. He received £10.95 for each of his two children under the invalidity benefit system. Between the 28th and 52nd week he will receive no children's allowance, so he loses £21.90 a week.[Interruption.]
Perhaps the hon. Member for Lancaster (Dame E. Kellett-Bowman) will pay some attention to my example. I know that she will have a warm and compassionate heart when it comes to the individual family. Leaving aside the additional pension, which normally averages about £13.40£I accept that that is a separate argument falling into a different category—that 55 family will be £32.80 poorer under the incapacity benefit system than it would have been under the invalidity benefit system between the 28th and 52nd week.
The Minister may say that that is equivalent to throwing people off benefit to protect those who are on benefit, but he has chosen an odd way of doing that. It is the hair-shirt approach and I am particularly unsympathetic to such an approach when it is enforced on other people.
The second example is that of a married man with no children. According to the same calculation, he will be £3.60 down on his basic benefit. He will lose his adult dependency allowance of £33.70, so he will be £37.30 worse off during those six months. Even after the 52 weeks, that man's adult dependency allowance will not be reinstated until his wife is 60. That is a long time to wait.
§ Mr. Dewar
My second example is a man without children. The right hon. Gentleman is correct that that allowance is reinstated after 52 weeks for a man with children. That difference is one of the complexities of the system.
It is clear that people will lose almost £40 during those six months. If we went through the small print, we would find other hidden examples of substantial cuts. They will go towards making the substantial savings that are mentioned in the financial memorandum.
The examples that I have cited are one reason why I am so certain that the Opposition are right to vote against the Bill tonight. I do not need to rely on the argument about additional pensions which are derived from SERPS. People have contributed over the years to that system, however, and they did so on the basis that they would receive a benefit. Now, that benefit will be taken from them. That raises a point of principle, although I accept that it is something of an anomaly when considered within the general pattern of benefit provision.
§ Mr. Lilley
The hon. Gentleman has still not told us what alternatives the Labour party has in mind.[Interruption.] He has referred repeatedly to cuts, but he knows that, even after the proposed changes, the real amount of expenditure on the benefit will not decline. If he proposed no changes to the system, there would be a substantial increase in that expenditure. If he has no alternatives to our proposals, the hon. Gentleman owes it to the House to tell us how much extra tax he would impose to finance that extra spending.
§ Mr. Dewar
The loyal baying behind the right hon. Gentleman sounded rather tired. He must realise that the old tax card, always a solid friend in a tight corner, is not quite as effective as it once was.
I have tried to outline some of the positive things that should be done to encourage people to go out to work and to remove the barriers to their doing so. I have made it clear that the test is not simply disability but incapacity for work. I concede that that means that the adjudication officer must take into account a wider gamut of circumstances than he is allowed to consider under this system.
If the Government are looking for savings and tax increases, they should not start with this group of people. That may be something which the Secretary of State finds hard to comprehend, but most people would understand it.
§ Mr. Julian Brazier (Canterbury)
The hon. Gentleman is the Opposition spokesman on social security and he has just said that he would not start from here. That is exactly what every other Labour spokesman says. Where would the hon. Gentleman start in the search for savings in public spending?
§ Mr. Dewar
I know that the hon. Gentleman would love, above almost anything else, not to be here as a representative of his Government, given the state of their fiscal and tax policy. We are therefore entitled to say that we would not make their daft mistakes.
I have sought to make a kind remark to the hon. Gentleman. I am not challenging the fact that, due to mismanagement of our affairs, we are faced with a problem with the public sector borrowing requirement. I accept that the Government feel that they must take steps to deal with that. I have suggested, however, that one would not start with a group of people who are vulnerable. I am sure that the hon. Gentleman would accept that. Those people receive invalidity benefit and I am sure that many of them will receive incapacity benefit, because there is no doubt about their entitlement to it. They are struggling with the impact of long-term ill health.
If the hon. Gentleman wanted to look around Britain for people who might shell out a little bit more to help the national effort, I should like to think that he would put that particular group rather low on his list. If I am wrong, I can only say that perhaps I am paying him a compliment that he does not deserve. I suspect, however, that he would agree with me.
Problems lie ahead with the interrelated issue of taxation of incapacity benefit. It is not right to tax that group of people at this stage. It will lead to perceived inequality. I trust that the Minister of State will say something about that when he replies to the debate. I accept that this is a Treasury matter, but the right hon. Gentleman mentioned it and it knitted into the argument about incapacity benefit.
My concern about the perceived inequality is that anomalies will arise for a considerable time. Perhaps two people in the same street, or certainly in the same district, who are in similar financial circumstances and who perhaps suffer from a similar disability or long-term ill health, will not be treated in the same way for tax purposes. Those on incapacity benefit will pay tax on it, while those who remain on invalidity benefit, although they will have passed the same test to retain that benefit, will not pay tax.
The other day, someone asked me whether that meant that the Labour party is in favour of taxing invalidity benefit as well. The answer is no and I made that clear. Unless I have misunderstood the Bill—it is all too easy to misunderstand its technicalities—such differences in tax treatment will last for some time. I welcome the fact that 850,000 people will not be subject to the review process and will remain on invalidity benefit. I therefore presume that they will not be taxed. People who join the system and who will receive incapacity benefit, however, will be taxed. That will involve many people, once the cycle is run through. The House should consider that.
On 21 June 1993, I asked a question about that matter. I was told that if one applied taxation to invalidity benefit, 900,000 people in receipt of it would pay, on average, another £500 a year in tax. Once the new system is operating, I presume that about that number of people, or slightly fewer, because fewer people will be on incapacity 57 benefit, will be taxed. Until the system has run its course, many people will be exempt, but an increasing number will be caught. Ministers have underestimated that figure.
Can the Minister of State tell me what will happen to those people who will be liable to pay tax, but who have no other income apart from incapacity benefit? I was told that there would be 200,000 such cases under invalidity benefit. It may be that the take-up of incapacity benefit will be so much lower than that of invalidity benefit that those people will disappear.
If the Government agree, that will be an expensive concession by them. If it is true, it is a clear illustration of how people will be prejudiced by the change. If that is not true, and a substantial number of people will still have to pay tax when they have no other income apart from incapacity benefit, how will that be managed under the pay-as-you-earn system? Who will be their employer? Will it be the Department of Social Security or will those people be considered to be outside the PAYE system, with all the complications that may ensue?
I hope that the Minister of State will respond to some of the points that I have raised. I make no apology for saying that I do not believe that the Government should have started from here. They should not target the long-term sick and disabled. Even if they believe that charges in eligibility are needed, it does not follow that those who qualify should be hit by reduced benefit and taxation, We must remember that many of those people are already fearful about the impact of VAT on domestic fuel and are already suffering as a result of the freeze on personal allowances, which hits those who are just marginally above the tax barriers.
The cumulative impact of the changes resulting from this Bill will be considerable. I have done rough and ready calculations—I am open to correction later—and it looks to me as though about 25 per cent. of the cost of invalidity benefit will rapidly disappear. [Interruption.] I can take the Minister through the figures if he wants. The figures that I have quoted already make my point about the substantial sums at stake.
The saddest thing of all is that the Bill is creating, and will create, an enormous amount of anxiety, distress, frustration and fear among those who are on invalidity benefit. Evidence of that comes in from every side—the people we meet, the people who approach us, the people who write to hon. Members on the subject. Ministers are responsible and they should think again and not push through a Bill that is misconceived in principle and which will prejudice many people who have more problems than anyone in this House is ever likely to face.
§ Mr. Alan Howarth (Stratford-on-Avon)
I have always been proud of the fact that it was a Conservative Government who, in 1971, introduced invalidity benefit. I have often heard Ministers drawing attention, as grounds for satisfaction, to the large increase in spending on the long-term sick and disabled during the period of Conservative Government.
However, it is right to review the operation of any benefit—certainly of one for which claimants and expenditure have increased so rapidly. As my right hon. Friend the Prime Minister has said, no responsible Government could ignore the increase in expenditure on invalidity benefit from £1.5 billion 10 years ago to more 58 than £6 billion this year. It is right to ensure value for money, to see that the administrative means are appropriate to the purpose of the benefit, to see that the benefit is reaching the people for whom we intend it, to see that there is no abuse, and if there is, that it is suitably and sensibly dealt with, and to ensure that the benefit fulfils sensible purposes in terms of personal and social need and of the economy.
Why has the number of recipients of invalidity benefit increased so much? Has there been, as my right hon. Friend the Secretary of State suggested, an epidemic of invalidity in a nation that is getting healthier, or is that formulation perhaps based on some misconception of the issues?
The hon. Member for Glasgow, Garscadden (Mr. Dewar) drew attention to the study by the Institute for Policy Studies, which found that 29 per cent. of the increases had come from the increase in the number of people over pensionable age choosing to draw the benefit. Another 16 per cent. of the increase derived from the number of women in the labour market paying national insurance contributions and thus qualifying for invalidity benefit. A further 13 per cent. of the increase arose for a demographic reason, the increase in the number of disabled people in the relevant age groups. I do not think that we can complain about any of those features of the growth in numbers.
Another 42 per cent. of the increase arose from the growth in numbers of disabled people claiming invalidity benefit. Why should that have been so? It does not appear to be on account of any increase in the number of new awards being made. The Department's research, carried out for it by Bob Erens and Deborah Ghate, found that new awards to men declined during the 1980s and new awards to women increased only slightly. That background factor was mentioned in the introductory section of the study. We need to look more closely to see who those people were and what were their characteristics.
Erens and Ghate found that the great majority of all invalidity benefit recipients were over 50. They were poor. The vast majority of them earned, in the last job that they had had in 1991 or 1992, between £2 and £5 an hour. As the researchers say, they were much more likely than the working population in general to have worked in manual jobs.
No evidence that I have seen suggests that their invalidity was not genuine. The most common causes of health problems were found by the survey to be accidents at work at 12 per cent., followed by industrial diseases and other work-related causes at another 12 per cent. So unless one supposes that doctors are signing bogus certificates wholesale, it is impossible to contend that there is large-scale abuse. In any case, in most of the cases referred to the Benefits Agency medical service, the claimants were still found to be incapable of work. A parliamentary answer on 13 July 1992 told us that in about eight out of 10 references, and six out of 10 of those actually examined, the claimants were found to be incapable of work. Moreover, over half of appeals in respect of invalidity benefit are decided in the claimant's favour.
Other evidence also strongly suggests that claimants are most unlikely to be swinging the lead. The relationship of benefits to earnings, past and future, points to that judgment. As Erens and Ghate tell us, calculation of the backward-looking benefits-earnings ratio shows that the amount received in benefit replaced less than half of earnings for half of all respondents. Only 13 per cent. were 59 receiving more than 80 per cent. of their earnings in benefits. So there is no perverse structure of incentives there.
Likewise, the forward-looking benefits-earning ratio shows that, of those returning to work, two in five earned twice as much in their jobs after returning to work as they had received in benefit, and 15 per cent. were earning less than a fifth more then they received on benefit, but they clearly wanted to be back in work.
Interestingly, Erens and Ghate go on to observe that it is precisely those groups that are most likely to exhibit a higher ratio—women and the young—who are the most likely to return to work and to be attached to the labour market. A high proportion of people on invalidity benefit had a stable employment history before they went on to the benefit—half of them had been in their last job for 10 years or more. The vast majority of recipients under 50, including those most severely affected by health problems, were attached to the labour market—they wanted to return to work if they could.
However, it is vastly more difficult for people over 50 to return to work. The age of 50, the research shows, is the real watershed. By their second round of interviews, Erens and Ghate found that, up to the age of 40, about two fifths of people had left invalidity benefit. That proportion decreased to about one quarter for 40 to 49-year-olds, and to one in seven for 50 to 64-year-olds.
That diminished likelihood of getting off the benefit, which is what very many people over 50 want to do, is explained in part by motivational factors. We can easily understand the demoralisation and pessimism that can set in. It is also partly explained by the nearness of retirement age. But it is mainly explained by labour market conditions.
It is hard for many people on invalidity benefit to get back into work. They tend to have poor educational qualifications. Only 17 per cent. of those surveyed by Erens and Ghate had remained in full-time education after 16, and 48 per cent. of them had no formal educational qualifications at all. Only 5 per cent. had A-levels and only 9 per cent. had higher educational qualifications below degree level. A further 14 per cent., only, had a recognised trade apprenticeship or had gained some commercial qualifications. So it is reasonable to suppose that those people lacked the skills and confidence necessary to re-enter work, and that employers did not see them as desirable recruits.
By far their best hope has been to go back to their previous employer, and 64 per cent. of those returning to work did so. It is often not easy or possible for people to go back to their last employer, who may no longer be in business—the recession has eliminated the possibility of return in all too many cases. More broadly speaking, the decline of manual jobs in the economy has made it more difficult for a significant proportion of those on benefit to get back into work.
Men over 50 with poor, or no, qualifications, are in deep difficulties in the labour market. Another problem that Erens and Ghate identified was the fact that employers were disappointingly inflexible in their attitude to the employment of people with sickness and disability problems. Three out of four respondents on benefit said 60 that their previous employers had not provided them with any assistance to help them carry on working, despite their ill health.
Of those who returned to work, 81 per cent. went back to work hours similar to those of the last job. Half of those who were not able to stay in their return-to-work job said that their employers knew about their health condition but in only one case in five in which the employers knew did they provide any sort of assistance to help their employees to continue working.
Another disappointing finding of the research was that only two in three respondents on IVB were aware of Government schemes designed to help them, and only 10 per cent. of respondents had direct experience of them.
From all that, I conclude that the main reason for the growth in the number of people on invalidity benefit is the difficulty of returning to work.
What will happen if my right hon. Friend's proposals are implemented? An unknown but considerable number of people who previously received IVB will not receive incapacity benefit. Some will go on to unemployment benefit. There is no precise estimate of the number, although there are some speculative estimates in circulation. The Secretary of State made it clear that he does not have any forecast of the number of people who will not receive incapacity benefit. However, he has advised us in the Bill that he estimates that savings of £1,450 million will be achieved by 1996–97.
People, I am sorry to say, will become poorer as a result of the measure. They will be those who have a history of sickness and disability, who have been low earners when in work, who are poorly educated and skilled and who must be among the least fortunate and confident of our fellow citizens. It is estimated that those who fail the test and will no longer receive the benefit may be some £80 to £90—perhaps as much as £160—a week worse off. I do not think that that is what the Government want and it is not what I have understood the Conservative party to be about. Disraeli in his Crystal Palace speech in 1872, as you will recall, Madam Deputy Speaker—I mean from your deep knowledge of Conservative party history—said that one of the great objects of the Tory party was to improve the condition of the people, and he had a particular concern for those suffering from ill health.
The Secretary of State has assured us that he is committed to the welfare state. In his Budget speech, my right hon. and learned Friend the Chancellor similarly reassured us, and my right hon. Friend the Prime Minister has done so on many occasions. However, the freezing of the additional pension for existing claimants, and the decision that there should be no additional pension for new claimants, the reduction of the age allowance for women claimants aged between 45 and 55 and for men between 45 and 60, the lower level of benefit between the 28th and the 52nd week of benefit entitlement and the reduction in the dependant's allowance for people under 60 without children will mean that those who are among the least fortunate in our society are likely to experience still lower incomes. Low-paid workers are to contribute more through increased employees' national insurance contributions, only to receive less for their benefit.
The income of those who go on to unemployment benefit followed by the job seeker's allowance is likely to fall. There will be tighter eligibility tests for the job seeker's allowance and it will be received later than would previously have been the case. I am concerned about the 61 danger that some people will be found too fit for incapacity benefit and not fit enough for the job seeker's allowance. Those who fail the new medical test for incapacity benefit will be disqualified from disability premiums for means-tested benefits—income support, housing benefit and council tax benefit. We cannot assume that they will fall back from invalidity or incapacity benefit on to means-tested benefits, because invalidity and incapacity benefits are contributory, whereas entitlement to means-tested benefits is based on an assessment of family income.
What conclusions might the Government draw from that analysis and an observation of those facts? They should conclude what my right hon. Friend says that he has concluded, that the strategy should be to do everything possible to get people who are on invalidity benefit and, in due course, those on incapacity benefit, into work. That means a macro-economic strategy to secure growth and a panoply of policies to ensure that jobs are generated.
We need to look again at a number of relevant policies. If we want people to be in work and not on benefit, is it sensible to ask employers to bear a larger part of the costs of statutory sick pay? The Secretary of State argued that it will encourage them to promote the health of their work force. I fear that it may at least equally encourage them not to employ people with health problems.
Will the Government look again at the proposed new access to work measures? Is it sensible to ask employers to pay 50 per cent. of the cost of equipment that enables disabled people to work? That has been raised with me with some emphasis by the Council for Disabled People, based at the Royal Midland Counties hospital in south Warwickshire.
Will the Government consider the effect of taking people off incapacity benefit or making it harder for them to be on it, given that it is a passport to disability working allowance? I may have misunderstood that, in which case I shall be glad to be corrected. Disability working allowance has proved somewhat fragile and it has been difficult to ensure an extensive take-up. While I welcome the reforms and improvements that the Secretary of State was able to announce in the uprating statement at the end of last year, it would be unfortunate if other changes made it harder for people to move to disability working allowance.
I hope that the Government will look positively at the case for anti-discrimination legislation to make it illegal for employers to discriminate against disabled people. That is the proper and decent thing to do: it is right in itself. The disabled have a great deal to contribute, much more than all too many employers recognise, and we should do all that we can, on humanitarian and economic grounds, to get them into the productive economy.
I hope that the Government will draw from the analysis of DSS research the moral that we have to continue to make every effort to improve education and training. That includes an intensified emphasis on distance learning, credit accumulation and transfer and support for part-time students. We also need to do more to create awareness of Government schemes and their opportunities.
We must be careful not to penalise disabled people who undertake education and training. The Royal Association for Disability and Rehabilitation has expressed concern that disabled people undertaking a formal course of study at an educational establishment may lose benefit. I was 62 pleased to note my right hon. Friend's assurance that the Government intend to be positive about transitional training.
We must ensure the continuing improvement of health and safety at work. As I said, 24 per cent. of people in the survey were on invalidity benefit following an experience at work that had damaged their health. I know that the Government do not intend in the new deregulation legislation to do anything to undermine genuine health and safety, but it is important to be careful.
We must encourage employers to be flexible about the hours and conditions of work that they are prepared to offer disabled employees, just as they should be in helping single mothers to get back into work. The Government need to make a renewed effort, working with representatives of industry, to ensure that more and more employers are sensible in their own interests as well as in the interests of those who are on the margins of work, who want to work and are finding it difficult to find employment.
I hope that the Government will look at the possibility of a more differentiated policy on incapacity benefit which will take account, sensitively and constructively, of the varying circumstances of claimants. We have found that the big divide among those who are on the benefit is between those who are under 50 and those who are over it. The Government should look at the case for more generous rules for people over 50.
The research also shows that, naturally enough, there are problems for claimants in relation to travel to work. Erens and Ghate found that two thirds of their respondents said that it was important to find a job close to home. Can we examine the possibility of more flexible and generous rules for claimants in remote areas, where, with the best will in the world, there are few jobs to be found?
More importantly, should we not look at more relaxed and generous rules in unemployment black spots, those unfortunate areas where we have endemic unemployment rates of 20, 30 and even 40 per cent.? Is it appropriate to apply the same stringency to the long-term sick and disabled when we know that, realistically, in areas where it is desperately hard for anybody, it is hardest of all for them to find work?
I hope that, as has been argued, we shall think carefully about the principle of an objective medical test. When he announced this change in the uprating statement, my right hon. Friend said that it was his intention to have a "more objective" test. I hope that that means that he will be willing to recognise that a mechanistic set of scores related to bodily or mental capacities will tell adjudication officers very little that is useful to know about the capacity of an individual to work, relative to his or her education or skills, work experience, history of disability and so forth, and relative to the jobs that may be available. My right hon. Friend risks giving a new and unfortunate meaning to the Benthamite calculus of pain. I shall say nothing about pleasure, because I do not think that there is any pleasure involved in this set of calculations.
I hope that the yellow consultation document—"A consultation on the medical assessment for Incapacity Benefit"—is not a tablet of stone and that discussions will lead to modifications. I appreciate my right hon. Friend's assurance that he wants to be flexible and is looking to ensure that the methodology really works. I fear that, as a matter of essential principle, it will not and cannot work.
63 We should recognise the impossibility of a medical officer who does not know the individual concerned making a worthwhile assessment not only of the whole variety of disabilities that disabled people have but of the fluctuating conditions that an individual disabled person may experience, such as varying degrees of pain and the varying impact of mental ill health.
I feel that doctors should accept responsibility in that respect. I am sorry that some of the doctors consulted by the Department felt that it was not a proper part of their responsibility. The DSS sample was of only 40 doctors and they were not unanimous. For example, one is reported as saying:Somebody's got to decide whether people are fit to work or not … who else could know, who else could do it … Because the GP knows more about the medical history of the patient than anybody else and he knows the patient well. He is the only medical person that knows the patient well.That is a sensible and important observation.
The citizens advice bureau in Stratford-on-Avon, in my constituency, takes the view—I endorse its opinion—that local doctors feel that it is an appropriate part of their responsibility to make those assessments. We should look carefully at what self-assessment might mean. I may be wrong—perhaps this is not what is envisaged—but if it is the intention to ask people with learning difficulties to score their own cognitive impairments, that would not seem to me to be a sensible or proper policy.
I welcome the provision that the Government are introducing to make it permissible for people to do 16 hours of voluntary work without forfeiting their benefit. However, let us again be careful in the practical administration of the system. I hope that, if people do do voluntary work for up to 16 hours, it will not be held on that account that they are fit for other work. I know that that is not my right hon. Friend's intention, but it is extremely important that we should be careful about that. That point has been put to me strongly by the council for disabled people at the Royal Midland Counties hospital in Warwickshire.
I should like to make an allied point about therapeutic earnings, an issue that we should treat with great sensitivity. Often, the agreement that a claimant can have therapeutic earnings is an important halfway house, easing a person back to work and helping to build their confidence, particularly perhaps in relation to a new and unfamiliar job. That is a point about which the Warwickshire welfare rights service is particularly concerned.
I ask my right hon. Friends to be willing to make rather less savings than is envisaged in their present policy. Of course I understand the need for control of public expenditure and I respect that motive. Of course we must be satisfied that the money being spent is going on proper purposes. In politics at the moment we are having a bit of a discussion on tax. There are good reasons and bad reasons to tax. The good reasons include helping the poor and the sick to live in less poverty, more dignity and more hope. Are these the people who should bear the costs of our economic difficulties of recent years? The good reasons also include enabling benefits claimants to have a better chance to get back into work. That would be the positive way to limit expenditure on that aspect, as others, of social security.
§ Mr. Frank Field (Birkenhead)
It is a pleasure to follow the hon. Member for Stratford-on-Avon (Mr. Howarth). I hope to develop one or two of the themes on which he commented. I hope also that I shall be able to make my criticisms no less effectively, if more robustly, than he has done. If there is a financial crisis surrounding the payment of the benefit, it is one largely engendered by the Government. That is one of the themes on which I wish to speak. The way in which the Government are arbitrarily going to disengage themselves from this financial crisis, which is largely of their own making, will disadvantage thousands of our poorer constituents. That is the second theme to which I wish to address my comments.
The Secretary of State said that there was some puzzlement about why the numbers of people claiming invalidity benefit had increased. I suggest that there is no puzzle at all. There are two main reasons, one of which was touched on by my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar). It pays people who are on benefit, once they have passed retirement age, to continue to draw invalidity benefit. It is to their advantage, for the obvious reason that retirement pension is taxable and invalidity benefit is not.
The civilised way of dealing with that local difficulty would have been to bring invalidity benefit into tax, which the Bill does. I would claim that that is long overdue. Hon. Members should note that, although I am saying that it should be taxable, I am not necessarily saying that people should pay tax on it. People will pay tax depending where the tax threshold is. If I went down that path, I am sure that you, Madam Deputy Speaker, would say that I was out of order, so I will leave that to one side.
That is one reason why there has been an explosion in expenditure on invalidity benefit. People have not been taking their retirement pension; they have continued to draw invalidity benefit. There is another reason. If we look at the figures of claims, we see that they begin to rise steeply after 1986. We should devote some of our time this evening to the question why that happened after 1986.
Again, I suggest that there is one simple reason for that: the then Prime Minister, Mrs. Thatcher, thought that one could not win an election if unemployment totals were rising. One did not have to get it down to full employment to win; one had to get the total falling. Therefore, her Employment Minister, Lord Young, a Member of the other place, instructed his officials to persuade those people who were drawing unemployment benefit, or who were registered as unemployed and drawing the then means-tested support, wherever possible, to move over to invalidity benefit.
In our surgeries, those of us who were Members of Parliament at the time were puzzled at first why the Government appeared to be suggesting that people should make themselves better off by moving from a lower-paid benefit to a higher-paid benefit. Of course, it did not take us long to rumble what the reason was. It was part of the massaging of the unemployment figures. It was important in the run-up to the next general election to see the total fall.
Those are two of the main reasons for the escalation of expenditure on invalidity benefit. The Government have engaged in passive connivance with pensioners; they have also exercised passive discrimination, putting pressure on the unemployed to stop registering as unemployed and 65 start claiming invalidity benefit. Then they have the audacity to say that they have a financial crisis on their hands: they tell us that the number of people claiming benefit should be cut, and that the cost of putting the books in order should be borne by many of our constituents—people who are already disadvantaged, and are least able to fend for themselves in today's world.
We must not allow the debate to continue without relating these changes to fundamental changes in the job market that have occurred, are occurring and will continue to occur. If we are favourably disposed to the Government's job creation record, we will exclude the first two years of Mrs. Thatcher's stewardship, and the current recession or slump. If we do that, the Government can say that the number of new jobs has increased considerably; but who secured those new jobs? They were secured, to an overwhelming extent, by women workers.
Men have been increasingly disfranchised in regard to the job market, finding it more and more difficult to get and keep jobs. According to the most recent figures published in the Employment Gazette, twice as many men as women lost jobs in the latest batch of redundancies. This year—probably for the first time in our history—there will be more women than men in work.
It could, of course, be said, in relation to the claiming of this benefit, that the Government have been helpful and thoughtful: that they have been anxious to soften the blows inflicted by a fundamental change in the job market, and to cushion the impact of the costs that the transition has imposed on male workers. The Government have worked themselves up into a panic over their mismanagement of the economy. Because of that, it will be largely the male workers who are disfranchised from benefit.
Let me give some examples of the way in which low-paid households, with males claiming invalidity benefit, will be affected by the Bill. Again, my hon. Friend the Member for Garscadden teased its consequences, out of the Government. Many people who currently claim benefit will not be eligible for the new benefit; they will be unable to draw income support, because they will be unable to work. If another member of the household is working, that will disqualify them from claiming income support.
The financial savings, therefore, will be made at the cost of women workers who are managing to hold on to their jobs. They will not merely have to meet most of the bills, with their income supplemented by invalidity benefit; in future, they will have to meet the entire cost. That, too, will expose the vulnerability of males.
Already, under the present Government, one in five prime-age males is unemployed. Giving the Bill a Second Reading will add to that total, as well as depriving those males of any benefit. While making these savings, we should ask what people from whom we take benefit are to do. In a previous Parliament, the House confidently took benefit from 16 to 17-year-olds. We were told that their families would look after them—as families do, of course, if they can. But what do families do if they are on their uppers, and a benefit package is taken away when there is already not enough money to go round?
We do not have to be clever to answer that question. We are confronted with the answer every night when we leave the House after a Division to go back to our safe beds: we see people sleeping in doorways. That is one of the consequences of taking benefit away from people when there are no jobs.
66 What disturbs me so much about the Bill is the fact that the Government, sitting in their watertight compartment, have decided to ignore what is happening in the job market. More and more males are finding it increasingly difficult to obtain and hold down jobs. What will the Bill do to them and their families?
I shall not make easy points about the "back to basics" approach, because I am a heretic in regard to that issue —among others. I think that it involves an important theme: the way in which we can support families and enable them to do a good job, and how we can minimise the pressures on them at a time of massive economic changes not only in this country, but throughout the world.
Every hon. Member who holds surgeries knows of the near-violent tension in unemployed males who are desperate to receive invalidity benefit so that their wives can continue to work, or who face the prospect of losing it. The Bill will massively increase the pressure—violent pressure; breaking-up pressure—in many low-income families. For that reason, if for no other, I hope that the House will reject it.
This is a financial crisis of the Government's own making, but the way in which they are disengaging themselves places the burden not on the broader shoulders, but on some of the narrowest. They will completely disfranchise some male claimants from benefit. We have already seen the consequences of denying young people benefit when no jobs are available. If the Bill had contained provisions designed to return prime-age males to work, it would have been received sympathetically, However, because the Government have failed to link it with employment measures to protect the most vulnerable group, I hope that the House will throw it out.
§ Mr. Dudley Fishburn (Kensington)
Stumbling into the debate this afternoon, I felt that I was part of a particularly close-knit fraternity—a group of people who had pondered social security issues for many years. Such people—for instance, the hon. Member for Birkenhead (Mr. Field)—are able to make the kind of speech that can be made only with the confidence that results from having dealt with such issues of a long time. Another example is my hon. Friend the Member for Stratford-on-Avon (Mr. Howarth), who—on the other side of the House—has taken up a cause long espoused by my predecessor, Sir Brandon Rhys Williams: the cause of the poorest and most disadvantaged in the land. That demonstrated that it takes time to become expert on such matters, and that he is fast on his way to becoming so.
I am here partly to learn about some of the issues, and partly with a view to continuing in the same vein if I am selected to serve on the Standing Committee.
The Secretary of State should be congratulated on highlighting this issue. The reform of the welfare system will be as important and painful a task in the years to come as it was over the years in the 1950s and 1960s, when hon. Members on both sides of the House built it up with Beveridge as their guide. There is no doubt that the system will need reform, and that reform will be the leitmotiv of politics over the next decade.
Because it prompts so many emotions, the difficult issue of invalidity benefit is a good basis on which to consider how society is to retreat from a welfare system that we 67 know we shall not be able to afford in the years ahead as the population grows older and as those in work become fewer relative to that population.
I feel comfortable with the fact that the Bill is the first step in a reform of the welfare system because of the Government's extraordinarily good record in recent years in dealing with those who are invalids or who are incapacitated. Their record bears all the hallmarks of my right hon. Friend the Minister of State who, perhaps more than any Minister, has systematically introduced measures to protect those people.
For example, 2 million people now receive help for care and mobility, five times more than in 1979. Total spending on invalidity benefit and other benefits for invalids has increased by almost £10 billion in real terms since 1979. Care has become such an important element in the new understanding of how we can help invalids and, as a result, the invalid care allowance has gone from nothing a few years ago to about £360 million. In other less dry and less statistical terms, the Government have a good, sensitive and decent record in helping the very people for whom we are this evening once again, although in slightly different terms, trying to redress the balance by helping those most in need and pulling away from those who are less so.
Members of the Government Front Bench have heard criticisms of the Bill from Conservative Members and, most tellingly, from the hon. Member for Birkenhead, but I hope that they will take succour from the Government's impeccable record in dealing with those who are incapacitated.
Why have we, as a party, and why have the Government, made such an effort? First, the Government have recognised that it is the Government's duty to help those who are unable to work, a duty that Beveridge and the movement that followed him recognised later than some other reforms. Secondly, the Government have recognised the extra costs, needs and standards of care which have encouraged the caring industry that has come to the forefront in the past few years.
Finally, and most important, we have recognised that in a society in which there is ever more free enterprise and in which, as the hon. Member for Birkenhead said, there is an ever freer labour force, more women workers and more part-timers, we have a greater responsibility to those who are left out and who cannot take advantage of the opportunities which, as the hon. Gentleman said with great force, put great strains on the family because they make it less easy for the man to find work while making it more possible for the woman to do so. The greatest strains are on those unable to find work at all because they are incapacitated.
The Bill contains much that is to be welcomed. Attention has already been drawn to the 16 hours of work that people can do for voluntary organisations without losing invalidity benefit. Clauses 6 and 7 go a long way to making the system of payments more efficient and targeted more on those whom we seek to assist. We have heard how 850,000 people will not have to undergo tests and they are, of course, the very people who most need reassurance. I was therefore pleased to hear a categoric reassurance. It is also good news—I think that all hon. Members will 68 recognise it as such—that invalidity benefit will be brought into the tax net. All other benefits have gone the same way and invalidity benefit was an outsider in that respect.
For the past 15 years, I have been a trustee of the Open university, which has done a great deal—perhaps more than any other institution of learning—to help people left at home either because they are permanently incapacitated or because they are ill for a short time and want to use that period of adversity to upgrade their skills, so that, when they re-enter the labour market, they can do so at a higher level and find a better job. I was pleased to hear the reassurance that those who embark on higher and further education will not have their benefits cut and will therefore not be discouraged in any way.
In the years ahead, as all parties come to grips with what we need to do to reform the welfare state so that we are able to help those most in difficulty, we shall return time and again to the central fact that we shall need less welfare if we can educate people more. Higher standards of education will mean that more people can find and create jobs and the burden on the state will be less so that we can redirect welfare to those who need it most.
Today's debate is part of a larger debate that will continue as long as most of us are in Parliament. It is also taking place in every western European country. As we have all become aware, regardless of party, it is not possible for our welfare systems and public expenditure to continue unaltered. In most European countries, they now account for about 50 per cent. of gross national product. If that were to continue, the next generation would lynch us and refuse to pay the bill.
§ Mr. Paul Flynn (Newport, West)
We have tonight heard the Conservative party speaking with a voice similar to that of Disraeli, whom the hon. Member for Stratford-on-Avon (Mr. Howarth) mentioned. Even the Secretary of State spoke in rather gentler terms than we are used to hearing from him, especially in view of the Nuremberg-style rallies that the Conservatives hold every year and at which he produced his little list.
Perhaps the threat of crucifixion, real or imaginary, concentrates the mind, but the authentic voice of Toryism —the backroom, saloon-bar voice that we have frequently heard in the Chamber—is very much the inspiration behind the Bill. There is no doubt that the views of those who believe that we must crack down on scroungers and that the welfare state is being looted on a large scale were, in large measure, the inspiration for it.
In a revealing intervention of which I made a note, the hon. Member for Southport (Mr. Banks) asked:Is my right hon. Friend aware that the man who waved the flag at the grand national was on invalidity benefit?It is worth underlining the fact that last year's grand national was not our greatest or most successful sporting occasion. Was the hon. Gentleman saying that the man who started the race should be fully employed, should start all the races or should quietly stay at home with a towel wrapped around his head and exist on invalidity benefit? I am baffled and do not understand the hon. Gentleman's point.
My hon. Friend the Member for Birkenhead (Mr. Field) correctly identified the two main reasons for the increase in the number of claims for invalidity benefit. The first that he mentioned was the Government's desire to ensure that people were taken off the unemployment register in the 69 pre-election period. The second was the advantage that people see in staying on invalidity benefit rather than drawing a retirement pension. There is, however, another reason.
If people question those reasons, as they well might, and if they do not believe that Government policy is skewed in a pre-election period, they need only consider what happened with the disability living allowance and the disability working allowance before the previous election. They were both ludicrously over-advertised, to the extent that 90 per cent. of the claimants of one of them had to be turned down because they were misled by the Government into believing that the claim applied to them.
That advertising was done a matter of weeks before the last general election, as a feel-good campaign by the Conservative Government, to give the impression that they would care for the disabled. It was a massive, expensive deception, the bill for which should have been paid by Conservative central office.
Invalidity benefit claims have increased especially sharply in Wales. One of the reasons—as the hon. Member for Caernarfon (Mr. Wigley) recognises, because it is an area in which he has been much engaged throughout his parliamentary career—is that the people who claim invalidity benefit now are people in the 50 to 60 age group who, during the bulk of their working lives, worked in industry that was very much deregulated. We are returning to it now. It is another fashionable crusade on which the Government are embarking but which has its dangers.
At the time when industry was so deregulated, many people who worked in the quarrying industry in north Wales or the mining industries of south Wales were exposed to dust and suffered from silicosis and pneumoconiosis, and also had their bodies exposed to risks that we would all find intolerable now. In the steel industries, men worked in front of baths of boiling sulphuric acid while the steel was being pickled, without wearing any type of mask. People were deafened by the noise of machinery. There is a famous poem by Gwenallt, who spoke in the Welsh language, about his father coughing up his life-blood into a bucket in the kitchen—a graphic account of what happened to that generation of people who worked until literally they dropped.
That generation, especially in south Wales, is responsible for that increase in claims for invalidity benefit. Those people, now in their fifties and sixties, of which there is a greater concentration throughout Wales and in the industrial area of Wales than probably anywhere else working in those unhealthy industries, leave their work prematurely. The old compassionate practice was for them to go on to a light job; to continue in their occupations but to do something in which there was not much demand for physical effort, where they could carry on semi-invalided. In these hard days, that is no longer possible. They go on to sickness benefit and eventually on to invalidity benefit, which is absolutely just and light.
The explanation which was given by my hon. Friend the Member for Birkenhead (Mr. Field), and that which I have just given, show why the increase has taken place. There has been no analysis by the Government that suggests that there is any other reason for it. It is nonsense that we can contemplate such a major piece of legislation without possessing firm evidence. The Government are motivated by anecdotal evidence only.
There is one aspect about which I have attempted to question the Government, as has my hon. Friend the 70 Member for Glasgow, Garscadden (Mr. Dewar). We asked the Government to name the 80 experts who will convene to consider the detail of the proposed medical test for incapacity benefit. It is crucial that all the organisations that wish to contribute to the discussion—we have been told that the Government's mind has not been entirely made up—know who those people are so that we, as Members of Parliament or outside organisations, can make a contribution.
Today the Secretary of State mentioned one organisation that I do not think many of us had heard of. He quoted selectively from a letter. We know, however, that the mass of organisations for people with disabilities very much oppose the Bill and are highly critical of it.
Instead of giving us the names of the panel members, the Government have said that the members have asked them to respect confidentiality until the exercise is completed. They intend to publish a report containing the names of the members of the panel, the summary of its work and findings and the results of the exercise, after the event. Why on earth should that be, and why should they reject the two parliamentary questions that have been tabled on that basis? It is crucial that the information is communicated to those people.
The only possible reason that I can think of why the membership of the panel should be treated as confidential is that members are ashamed of what they are doing and do not want to be named. Perhaps the Minister can tell us at the end of the debate why that star chamber is meeting in secret to make those decisions and we will not know who the "guilty people" are until they have made their decisions. It seems an extraordinary situation.
The Secretary of State looked a little puzzled at the amusement on the Opposition Benches when he mentioned certain categories of people who will be exempt. One of the categories that he mentioned was that of people in a permanent vegetative state. It is not much of a concession to say that someone who is in that state will not be asked to take a job down the nearest coal pit. That is our brave new world.
Are the Government really saying that Opposition Members should receive that news with great gratitude —that the nation will be told that people who are permanently, hopelessly incapacitated should not be pressurised into doing an extra job?
The Bill fails because the test that the Government are applying is not a test of incapacity for work—that would be the sensible course for them to take—but one of disability. It should be a test of incapacity. If the test is adopted, the result will inevitably be that many people who are incapable of work will be refused benefit because they are not disabled enough and presumably others who are capable of work will receive incapacity benefit because they pass the disability test.
It is an irrational basis for a major piece of legislation, but we all know what it is about. It is about the Government again saying—the hon. Member for Kensington (Mr. Fishburn) seems to have swallowed the myth entirely—that we cannot afford our welfare state, which we have afforded for many, many years. We afforded it in the 1940s and the 1950s when we were a very poor nation relative to our wealth now and relative to many other countries in the world. At that time we could afford a welfare state that was regarded generally as adequate. The Government are also saying that in 40 years' time 71 —when we shall be infinitely richer, by all forecasts, than we are now—we shall not be able to afford an adequate welfare state.
The hon. Member for Havant (Mr. Willetts), who never takes part in these debates but writes well about them, would disagree with that analysis. The Government have exaggerated the demographic trends because it suits their case and they have also exaggerated the burden that the welfare state is and is likely to be.
The Bill, as so much of the Government's legislation at the moment, is designed to shift spending from the people who are in greatest need. They will make a case for it. Virtually every organisation representing people with disabilities has objected to the measure. It will mean a massive cut in the incomes of those people whose income is already very low. My hon. Friend the Member for Birkenhead has said that many of the people who now receive the present invalidity benefit will not qualify, and we have had the figure—95,000 in the first year, 195,000 in the next year. We know that virtually none of those people will qualify for the current unemployment benefit. We know that very few of them will qualify for income support if someone in their family works, so there will be a massive cut in the income of the great army of people who are already on low incomes.
I will finish with a final argument. My hon. Friend the Member for Birkenhead spoke about the people we see on our streets now. The fastest growing industry in Britain is drug trafficking. We know that the great attraction for young people, young or old, is not to take a job on dirt pay that they may get in McDonald's Hamburgers Ltd. or to take some other low-paid job where they work for pennies above the level of income support, but to recruit themselves into Britain's fastest growing industry where they can make huge moneys in the area of criminality: the business of trafficking drugs.
The financial inducement of that industry will recieve its greatest boost from the Government's attempt to drive people into deeper poverty. The entire message of the Bill is an attempt by the Government to soak the sick.
§ Dr. Charles Goodson-Wickes (Wimbledon)
In the health debate in the past week, we heard how sensitive Opposition Members are to any proposals to reform the welfare state. Today, to adopt the phrase used by my right hon. Friend the Secretary of State for Social Security, "there is evidence that the Opposition are in repose". I have not the slightest doubt that, in due course, he shall have to endure ritual protest alleging that he has betrayed the memory and the ethos of Beveridge.
What did Beveridge actually say? In establishing the concept of a safety net, he made it clear that the role of the state should be limited. He said:The state, in organising security, should not stifle incentive, opportunity and responsibility. In establishing a national minimum, it should leave room and encouragement for voluntary action by each individual to provide more than a minimum for himself and his family … The danger of providing benefits, which are both adequate in amount and indefinite in duration, is that men, as creations who adapt to circumstances, may settle down to them".In other words, the risk of people becoming dependent on welfare and flouting the original and worthy intentions of the legislation was recognised. The result would be, first, 72 a disincentive to work and secondly, his outlook on life would be damaging to the individual, his family and, also importantly, expensive to the taxpayer. It is precisely that problem which has arisen in relation to sickness benefits in the social security system.
§ Mr. Malcolm Wicks (Croydon, North-West)
I am grateful to the hon. Gentleman, who has clearly re-read the Beveridge report recently. Would he remind the House what Beveridge said about the giant idleness, by which he meant unemployment, and what Beveridge said about the need for Government to maintain full employment?
§ Dr. Goodson-Wickes
I welcome that intervention from my near namesake. We can all quote selectively from Beveridge and I am trying not to do so. Even the hon. Gentleman will recognise that the concept of full employment is a worthy objective, which parties on both sides of the House, whenever in government, have failed to fulfil, yet I believe that it is still a worthy aim.
I congratulate my right hon. Friend the Secretary of State on his courage in tackling what is bound to be an emotive issue. It cannot be right that the number of people who receive invalidity benefit has trebled over the past 15 years, which implies that almost 1.5 million people are unable to work when the health of the nation has been improving steadily. On the other hand, as the prosperity of the country improves, provision for those truly in need should be all the better, which partially covers the intervention of the hon. Member for Croydon, North-West.
The present system is bureaucractic, arbitrary and expensive. The transition from staututory sick pay and sickness benefit to invalidity benefit is wholly unsatisfactory. Problems occur because while statutory sick pay is taxed, invalidity benefit is free of tax. More importantly, while invalidity benefit is free of tax, unemployment benefit is taxed. It is these distortions which are clearly the major factors causing invalidity benefit to rise from £2 billion a year in 1979 to over £6 billion a year today. Some estimates are as high as £8 billion.
The so-called gatekeeper to invalidity benefit is the general practitioner who is asked to issue a certificate. All hon. Members have heard representations about the invidious position in which the GP has found himself. Any doctor, acting on the best motives and knowing something of the personal, domestic and financial circumstances of his patient would find it difficult to deny him or her access to a higher system of benefits. Thus, the number of people on invalidity benefit has risen inexorably.
That unsatisfactory state of affairs is compounded by other anomalies. For example, invalidity benefit, which is more generous than the state pension, may be received for five years after pension age. What an extraordinary state of affairs. Also, periods of receipt may be linked to include periods of unemployment during which claimants were not incapacitated. Perhaps most telling of all is the fact that, once people are on invalidity benefit, an infinitesimal number come off it. It has become a one-way track. That system flies in the face of common sense and the whole operation must be re-examined to ensure that only those who are genuinely disabled and those who are chronically ill qualify.
Speaking as a physician myself, I have the greatest sympathy for GPs who are put in a near impossible situation.
§ Mr. Campbell-Savours
I misunderstood the Minister. I thought that he said that 100,000 people a year came off invalidity benefit. Perhaps he would wish to confirm that.
§ The Minister for Social Security and Disabled People (Mr. Nicholas Scott)
§ Mr. Campbell-Savours
The Minister nodded, so when the hon. Gentleman said that it was one-way traffic, clearly, he did not get the record right. The Minister disagreed with him.
§ Dr. Goodson-Wickes
I accept that intervention. I did not have the exact statistics to hand. I accept that there is now a three-way communication and look forward to my right hon. Friend the Minister's elucidation. I correct myself on saying that it had become a one-way track. It has become a tendency.
I have the greatest sympathy for GPs performing the difficult task which the regulations have imposed or, them. How can they dispute a claim for invalidity benefit without impairing the doctor-patient relationship? Why should they confront their patients over a dubious claim, when they often have neither the time nor the training to assess people's fitness for work? For example, a large proportion of claims are based on musculo-skeletal disorders, two thirds of which are associated with back pain, which is notoriously difficult to assess.
It was thus with great interest that I heard from my right hon. Friend that the National Back Pain Association has made representations, which I am sure will be taken extremely seriously. The British Medical Association—here I part company with my hon. Friend the Member for Stratford-on-Avon (Mr. Howarth)—says that GPs do not want to be cast in the role of policemen, making judgments which may be based as much on social factors as on medical factors.
I welcome the proposed incapacity benefit, which while consolidating and simplifying the system, also introduces the medical incapacity test; an objective, medical yardstick. It involves the claimant, the claimant's GP and the Benefits Agency medical services. A simple questionnaire will be sent out before the end of 28 weeks, at least I hope that it will be simple.
The general practitioner merely has to confirm the diagnosis and, after scrutiny by an adjudication officer on purely medical grounds, I understand that about 85 per cent. of cases will be referred to the Benefits Agency medical services, which has discretion over which claimants shall be examined. It is just as important that the case must be reviewed at intervals thereafter, to check that there has been no change in the medical condition.
Let me give an example. We heard today about a patient suffering from angina. I do not know the circumstances of that particular case, although they sounded rather doubtful and perhaps worthy of re-examination. Clearly, a patient suffering from angina who subsequently has surgical treatment—a coronary artery by-pass—may well be fit to resume a normal way of life.[Interruption.] I hear a bit of jocular comment from the Opposition Front Bench. I happen to be a practising physician who deals with such problems daily. I have numerous patients who have gone back to an entirely normal way of life after the appropriate surgery.
§ Mr. Dewar
There is no dispute about the efficacy of by-pass surgery. If someone has surgery and his or her 74 physical condition changes, that should clearly be taken into account at a review. My objection is that the Government were contemplating with satisfaction a state of affairs in which the person, before by-pass surgery—with all the disadvantages of constricted arteries and the pain that the condition brought—should not be on invalidity benefit.
§ Dr. Goodson-Wickes
I have already said that I should like to know more about the case. The hon. Gentleman has missed my point, which was that, before the introduction of the proposals, the patient who had had surgery did not automatically come back to be reassessed and could have stayed on invalidity benefit indefinitely and with no form of monitoring. The Bill is in part designed to remedy that situation.
I am sure that those on the Opposition Front Bench will welcome the exemptions that my right hon. Friend the Secretary of State has granted. Those near pensionable age, those with terminal illnesses and those in receipt of disability living allowance will be exempt from the tests proposed. Above all, those genuinely unable to work need have no fear about reassessment under the new scheme because hon. Members on both sides of the House will be monitoring their effectiveness in practice.
§ Mr. Campbell-Savours
The hon. Gentleman said that, in the case to which he referred, the claimant would not be subject to review. Did he not hear the Minister refer in his opening speech to the fact that 300,000 cases annually were being reviewed, including cases of that nature?
§ Dr. Goodson-Wickes
The hon. Gentleman exhibits the phenomenon of the perfect being the enemy of the good. The ethos behind the Bill is to make absolutely certain that a mechanism exists and can be stringently applied to ensure that the system works properly.
I welcome the concession enabling those on benefit to continue to do voluntary such work. Many hon. Members have espoused the concept of active citizenship. We have not heard much about that recently and I hope that the Government will again pick up that theme. The concession is certainly an example of their encouragement of voluntary work. I welcome, too, the undertaking that groups representing the disabled will be involved in advising on the setting of medical standards.
The principle is undoubtedly right. The exact mechanism should be examined in Committee. We must be wary of having too many tiers of decision making and excessive bureaucracy. If 85 per cent. of cases examined by the adjudication officer are, indeed, to go to the Benefits Agency medical service, there will be a large element of double handling.
I ask my right hon. Friend to consider whether the Benefits Agency medical service should not itself be the decision maker. Could we not cut out the role of the adjudication officer entirely? That may be a radical suggestion, but I invite my right hon. Friend to address it none the less. Whatever system we end up with must be backed up by an appropriate appeals procedure to protect aggrieved claimants.
On a more positive note, I believe that nothing but good can come out of market-testing the Benefits Agency. Does my right hon. Friend see any scope for the independent sector to become active in this area? I assume that there 75 would have to be an appropriate governing body to ensure the maintenance of comparable standards and some uniformity across the country.
When all the emotion is swept aside, we are left with a proper and overdue examination of the system, applied in a practical and humane way. Sadly, the abuses predicted by Beveridge have come about. They cause resentment to the beleaguered taxpayer and further deprive the most vulnerable in society. The balance must be restored. I am confident that my right hon. Friend will tackle the unfairness, protect those needing benefits and show a fair and feasible way forward.
§ 7.4 pm
§ Mr. Dafydd Wigley (caernarfon)
I must say that I should have more confidence in the Bill if it did not come from this stable and at this time. We have heard so many attacks on scroungers and so much about the need to roll back the state in recent months that attempts to dress the Bill up as legislation designed to allow us more effectively to target disabled people leave me highly sceptical.
I listened with interest to the hon. Member for Wimbledon (Dr. Goodson-Wickes). He said that only genuinely disabled and chronically sick people should be entitled to invalidity benefit. I put it to him that there are many grey areas—that many people who would not be defined as chronically sick according to the definition in the Chronically Sick and Disabled Persons Act 1970 should, none the less, certainly be entitled to invalidity benefit and would qualify even under the new definitions that are to be applied.
§ Dr. Goodson-Wickes
I do not dispute that for a moment. I am sure that the hon. Gentleman would accept, however, that the necessary flexibility has been built into the Bill to cover those in categories that he describes as grey areas and to ensure that those who need benefits are given them.
§ Mr. Wigley
I shall be coming to that point. I do not believe that there is adequate flexibility, as I said in an intervention in the speech of the Secretary of State. The hon. Member for Wimbledon has experience as a doctor. I can well understand the difficulty facing general practitioners, especially given that they must maintain their relationship with their patients. But if a GP is not in a position—either directly or through his or her access to specialists—to make a judgment on the validity or otherwise of an application, who on earth is?
The danger is that the necessary flexibility will not be there and that we shall be unable to look at the needs of the individual in the light of all his or her circumstances—circumstances that are often not known to those on faceless boards and panels who make decisions.
Hon. Members have sought to imply that it is a redeeming factor of the Bill that terminally ill people will not be subject to review. I do not suppose that they will; that is part of the tragedy. If such cases have to be invoked as a justification for the rationale behind a Bill, that Bill needs to be looked at very carefully indeed.
I oppose what I believe to be a dishonest Bill. I do not believe that it is a Bill intended to target the existing cash resources of £6.1billion on those who need it. I might have some sympathy with the Bill if, rather than clawing back 76 money for the Treasury or other Departments, it retained that same sum within the broad ambit of the needs of disabled people who have been claiming invalidity benefit—either giving more money to the limited number of beneficiaries or replacing wrongful beneficiaries, as the Government see it, with the numerous people who should undoubtedly be receiving benefit but are missing out for a variety of reasons, including ignorance and lack of advice. In reality, however, the Bill is aimed at cutting expenditure by £1.5 billion, not at re-targeting that cash among the group from which it is being taken away.
I do not accept the logic of taxing invalidity benefit— certainly not in its entirety. Part of the benefit has been regarded as intended to cover needs over and above the basic necessities of a person or a family; it has gone to meet exceptional requirements arising out of the circumstances of a person's invalidity. That part of the benefit should most certainly not be taxed any more than should specific disability provisions—which, indeed, they are not.
The Bill acknowledges—and the Secretary of State acknowledged—that 195,000 people who fail to get work after losing their invalidity benefit will depend on income support or unemployment benefit if they are entitled to it. The cost will be £265 million—about £30 per person per week. That is an indication of what those people will lose.
In fact, a Government document that was issued to the press last June indicated that the estimated average cost of failing the incapacity test was £87 a week and that, in some circumstances, the loss could be as high as £160 a week. The people concerned will at the very least have found themselves in circumstances which justified the payment and which, it could be argued, justify its continuation.
There will be real difficulties. Many people will not qualify for income support. For example, a disabled man whose wife does some cleaning or cooking in the local school and makes a pittance in an effort to sustain her family will no doubt lose entitlement to full income support. Modest savings, too, will debar people.
Is this what the Government mean when they talk about targeting resources towards those in need? It strikes me that we have here a pretty venomous piece of legislation whose intention is to take money from one of the many groups of have-nots of society—people who are in no position to do much to help themselves.
The Secretary of State has laid great emphasis on people whose condition may render them fit for work and who should therefore be seeking work. The right hon. Gentleman defined medical and disablement conditions that would make a person unfit and would automatically entitle him to the new incapacity benefit. I think he said that the number of people in this category was 850,000.
One is glad that those people are provided with a safeguard, so far as it goes, but 700,000 are left out. Although existing benefits may be safeguarded to some extent, such people will fail to receive help, and about 750,000 will be open to being tested and will run the risk of not succeeding. It remains to be seen how the figures will work out in practice.
When the Secretary of State talked about people being fit for work; he did not define "work". The guidelines that the Government have given to benefit offices in recent months suggest that there is already a move towards tightening the interpretation of invalidity. The National 77 Association of Citizens Advice Bureaux has drawn our attention to reports from its local offices. Let me mention some of the examples that it has given.
Disabled people have been told that, if they are fit to sit as artists' models, they are fit to work. Are we really going down that ludicrous road? It may be technically true that a person who is acting as an artist's model should be paid. If that is the definition, and if people are to be refused benefit on such a basis, as is already beginning to happen under the existing system—the danger is that the regulations will be even tighter under the new system, since the whole objective is to cut back—the Government must be taken to task.
It is totally demeaning for disabled people to be addressed in this way. In addition, there simply are not enough jobs as artists' models. It may be that a person could sit in a chair for a couple of hours, but if no job is available he should not lose benefit on that ground.
NACAB reports that pressure has been put on Benefits Agency doctors. I quote from a recent document:Recent CAB advice indicates that, despite the test for invalidity benefit remaining unchanged, regional medical officers are taking a much tougher line on capacity to work, and invalidity benefit is being inappropriately withdrawn from some people who are disabled and incapable of work. Many CABs have reported their concern that Benefits Agency doctors appear to be responding to administrative pressures and declaring more people fit for work.That is based on the experience of a cross-section of CAB offices the length and breadth of these islands.
§ Mr. Michael Stephen (Shoreham)
Surely the hon. Gentleman is not suggesting that the "artist's model" test is being applied generally. I imagine that if it were, there would be no one at all drawing invalidity benefit.
§ Mr. Wigley
In the context in which I am bringing these reports to the attention of the House, the question is whether modelling for an artist, as well as other occupations to which I shall come in a moment, is a job that the benefit assessors are being told to regard as suitable for disabled people. There is evidence from more than one CAB that this is what has been suggested. The hint is that such guidelines have gone out.
If that is the road that we are taking under the existing rules, and given that the whole intention is to tighten up with regard to the definition of disability, I have some misgivings, as no doubt does the hon. Member for Shoreham (Mr. Stephen). I am sure that if this is the Government's intention the hon. Gentleman will be unhappy. Indeed, he indicates assent.
I should like to refer to several more CAB examples. A bureau in Wiltshire reports on a client who has been off work for three years as a result of chronic back problems and has been claiming invalidity benefit. That person has been told by the Benefits Agency that he should be a van loader.
§ Mr. Wigley
Well, he could not do it. However, his refusal would be deemed to be unwarranted. This underlines the crisis that will be faced by some of the most vulnerable people in society.
A citizens advice bureau in Humberside reports on a client appealing against disallowance of invalidity benefit. The client's GP wrote:Any interference leading the client to accept any form of occupation may even lead to his death.78 If that is the degree of sensitivity among those addressing this question, people deemed to be unfit for work will be forced to take jobs and could die as a consequence. As they go down the path that they are starting to tread, the Government will have to face up to this problem.
A CAB in Yorkshire, reporting on a client who suffers from severe depression and has had two nervous breakdowns, says:His doctor maintains he cannot work and he is covered by a medical certificate until next January. The DSS has decided he is capable of doing some form of work and has stopped his benefit accordingly.In other words, Big Brother knows best. It is the disabled person who suffers.
A CAB in Wales reports on two cases in which general practitioners admitted that they felt that they had little alternative to signing clients off the sick, despite their own opinions, in the light of the decisions of the regional medical officer.
All these cases highlight the problems that are being faced at present. If such situations are arising now, what on earth will happen when the new legislation is enacted?
We have seen in recent months the emergence of a consistent pattern in the jobs being suggested for the recipients of invalidity benefit. I was about to refer to some others when the hon. Member for Shoreham intervened a few moments ago.
§ Mr. Campbell-Savours
The cases to which the hon. Member for Caernarfon (Mr. Wigley) refers ought to be commented on specifically in the Minister's winding-up speech. I am not suggesting that individuals should be named, but if modelling for an artist is regarded as an acceptable occupation in this context, the Minister ought to address the matter at the Dispatch Box. We are entitled to hear his view on the proposition. All the cases to which the hon. Member for Caernarfon has referred are of great interest. I should like to hear what the Minister has to say about them.
§ Mr. Wigley
I am grateful for the hon. Gentleman's intervention. We need such a response. We need to know whether the Department has issued guidance with regard to cases such as those that I have mentioned.
Let me refer to the other occupations that have been reported to more than one citizens advice bureau. We are seeing the emergence of a pattern which suggests that local authorities have been provided with guidance generally.
It has been suggested that a disabled person could become an embalmer. If a disabled person could find a job as an embalmer, he would be considered fit for work. Other suggested jobs include swimming pool attendant, petrol pump attendant, van loader, radio telephone operator, repetitive assembler, checker and packer. Those suggested jobs appear to be part of a pattern of guidance issued by the Department under current legislation.
As the hon. Member for Workington (Mr. Campbell-Savours) said, the Government should come clean and tell us whether guidance has been issued along those lines, describing the jobs to which I have referred. If that is the case, how on earth can the Government justify their position? If that is the basis on which they are building the background for the new legislation, my goodness, disabled and sick people have a lot to fear.
§ Mr. Dewar
I am listening with great interest to, and have much sympathy with, what the hon. Gentleman is 79 saying. I do not mean to belittle what he has said, but perhaps he would like to address a more mainstream difficulty.
What happens to someone who has no special skill or training, who has been a manual worker all his life and who is told that he must come off invalidity benefit—and presumably may not qualify for incapacity benefit—because, theoretically, that person could get an office job which, at the age of 52, he has absolutely no chance of obtaining? That is where the really damaging moral dilemma arises and where the danger signals fly in respect of the Government's proposals.
§ Mr. Wigley
It seems that the hon. Members for Workington and for Glasgow, Garscadden (Mr. Dewar) have read my mind. The hon. Member for Garscadden has referred to the category that I was just about to raise.
What happens if a labourer who has broken his back is deemed to be fit to work as a computer programmer although he does not have the skills to perform that job and cannot reasonably be expected to have those skills? What happens if a teacher has had a nervous breakdown and cannot face a class of children? What happens if a person is told that he is fit to be a labourer, even if he is 50 years old and may never have worked as a labourer? Are those the questions that we will have to face as a result of the redefinition in the Bill?
We have often heard of people being told by tribunals that they are fit for light work and, in that respect, I refer to a point raised by the hon. Member for Newport, West (Mr. Flynn). A former slate quarryman in my constituency has a chest infection as a result of dust diseases—but, as we hear on so many occasions, "only a little dust, not amounting to pneumoconiosis". However, he is incapacitated in the same way that coal miners are incapacitated. Such people may be told that they are fit for light work, but what if there is no light work available? Are they expected to perform heavier work which may endanger their health?
A CAB in Berkshire stated:Many clients we see suffer from fatigue or exhaustion on the slightest effort and although they may be physically able to carry out the tests would suffer a severe deterioration in their health as a result.Is it to be an acceptable definition of "fit for work" that someone can actually do the work, although the consequences may not be acceptable?
To what extent is the question of the type of work available in an area relevant? That is not a medical consideration and, given the way that we are going, it will not be taken into account. There may be no work available, but a disabled person may be capable of undertaking work which might possibly be available in a handful of instances somewhere scattered around these islands. If he or she does not try for that work, that person is deemed not to be seriously going after work. Is that the road that we are going down?
§ Mr. Campbell-Savours
Is not the critical issue the fact that, once that decision has been taken, within months that person will be drawing social security benefit and, therefore, his assets will be taken into account? That might lead to the depletion of someone's assets when that person is deemed fit for work, although he could not work anyway.
§ Mr. Wigley
Inevitably, if such a person had assets over and above the threshold for income support, they would be eroded until they came down to that threshold. Many people have worked hard in difficult industries and, by their fifties, have saved a certain amount of money. People are proud and want to look after themselves in their old age. They will lose their money in the way that the hon. Member for Workington has described.
To what extent are the general capabilities of an applicant before he or she became sick or disabled to be considered relevant? In other words, what consideration will be given to an applicant's ability to work as a computer programmer or labourer if that person's background is completely different?
If such factors are not taken into account, we will have a right pig's ear of a situation and there will be many cases infinitely more harrowing than those I have quoted from citizens advice bureaux. There are also problems in rural areas involving difficulties in travelling great distances to work and the costs involved. There are also problems in areas of high unemployment, such as the old industrial areas and the valleys of south Wales and other coal-mining areas. In those areas, there are high levels of unemployment and also a high level of invalidity benefit claimants.
In the context of the definitions about which I was asking a moment ago, it is worth considering the way in which case law has developed over the years. In order to deliver some kind of justice, case law has found it necessary to ensure that there is a more flexible definition of incapacity for work. In 1951, a tribunal of commissioners explained:a person is incapable of work within the meaning of the National Insurance Act 1946 … if, having regard to his age, education, experience, state of health and other personal factors, there is no type of work which he can reasonably be expected to do.That kind of definition is broad enough to assuage our worries. It is the kind of definition that is being cut out as a result of the Bill. That is an extremely worrying development.
Another difficulty facing a disabled or sick person when trying to obtain a job arises from the danger of the possibility of recurring sickness being in the employer's mind when considering whether to employ that sick or disabled person. Such an employer might steer clear of someone who has a history of sickness, because of the danger of absenteeism. We are all aware of the prejudice that often exists against a person who has suffered disability.
The Bill underlines even more the need for anti-discrimination legislation for disabled people. When the private Member's Bill is introduced in March, I hope that the Government will give it their wholehearted support, because many disabled people will need the provisions of that Bill when they have to face up to the implications of this Bill.
The Government's assessment of the potential for work for disabled people has been shown to be woefully inadequate by the experience of the disability working allowance. In 1990, the Government thought that 50,000 people might be entitled to claim DWA. Just before Christmas, it was revealed that the number of people claiming that benefit was 3,178. I fear that the Government's assessment in relation to the Bill will be just as misleading and erroneous.
81 In conclusion, I can do no better than to draw to the attention of the House the words of Ann Robinson, the chief executive of the Spastics Society:The Government claims to be scrapping Invalidity Benefit on the basis that many people who can work are claiming it, but we've yet to see any evidence of this. This legislation is about reducing public expenditure, not ensuring the right benefits reach the right people. Once again, disabled people seem to be getting a rough deal as a result of Government cost-cutting. This new benefit will not meet the needs of disabled people who cannot work.
§ Dr. Liam Fox (Woodspring)
The Bill is extremely important and we must abide by two guiding principles. First, we must have a realistic appraisal of the level of invalidity. It is inconceivable that, with the improvement in the health of the nation over the past 15 years and before, we have seen such an increase in the number of people qualifying for invalidity benefit.
There have been massive health improvements. Many hon. Members have referred to angina. When I think of the improvements over recent years in coronary artery bypass grafts, in angioplasty, in the introduction of long-acting nitrates and in the benefits that they have had in terms of reduced morbidity, if not improved life expectancy, for patients, I find it inconceivable that a large number of such people should be entering the invalidity category. That is simply not credible.
Likewise, the improved control and management of diabetics at hospital and general practice levels over recent years must have contributed to the much greater ability of diabetics to be able to continue working during their normal working lives.
Again, I find it rather difficult to accept that, as the Opposition would have it, the figures show that the population are becoming less healthy. An increased number of patients have been treated in hospital in recent years, and there has been increased productivity among GPs, especially in health promotion. All that has contributed to increased health of the nation, yet, paradoxically, more people are on invalidity benefit.
The second principle is that we must target benefits on those who need them. Opposition Members have said that that will mean that some people will not receive the benefits that they are receiving at present. That might be the case, but there is a strong case for honesty in our public policy. If that means that more people are seen to be on the unemployment register, for example, I will not flinch from that, but I do not want people to be given invalidity benefit, with all that that entails and implies, when they are not invalids. Giving somebody invalidity benefit undermines their sense of self-worth in many respects. Hon. Members have not taken account of that point.
As somebody who practised as a general practitioner before coming to the House in 1992, I know that GPs do not like the current system of invalidity certification. GPs and other doctors should not act as unpaid agents of the Department and Social Security. That is not what they were trained to do, and it is not a suitable role for people who have been trained to have a neutral and objective relationship with their patients.
Far from providing flexibility in dealing with certification, as the hon. Member for Caernarfon (Mr. Wigley) mentioned, doctors are not qualified to deal with many of those matters, as I shall show later, and their relationship with their patients has been undermined by a 82 system which asks them to be judge and jury on state benefit. That is not what medical practitioners are trained to do, nor what they take their medical oaths for.
All GPs find difficulty with the complexity of the system. I am sure that all hon. Members would accept that. We have self-certification for a week, then we have F Med 3, which is issued after that, with the diagnosis causing incapacity for work, and a time limit put on that. For the first six months, doctors must decide whether the patient can do his normal job, after which they must decide whether the patient can do any sort of work.
That is an important practical point. We must consider what is actually involved in this job, that job and the other job. If one has spent one's life at university, at medical school, in hospital or in general practice, one has precious little knowledge of what many specific jobs require. It is much easier in the first six months to determine what the patient might require for his own job, because one can ask the patient what is involved, but it is difficult to determine whether the patient would be fit for work in one type of industry or another when one has no experience of it. As a GP, I found that decision difficult, if not impossible.
Off the case goes to the adjudication officer, who will decide whether one of the Benefits Agency doctors should see the patient. If it goes to the Benefits Agency doctor, he will decide whether the original doctor should give a statement. In fact, he may require the original doctor to give a statement about why the patient was put on benefit. That, plus other information, will decide whether the patient should be examined by the Benefits Agency medical service doctor at home or at the medical centre. When all that is done, the case goes back to the adjudication officer to decide whether the patient should be put on invalidity benefit.
That is a cumbersome process, which puts patients who are suffering from genuine invalidity under great pressure. It is an unsatisfactory system from the point of view of patients and general practitioners.
However, for a new system to work, several points must be fulfilled. There has to be a proper scientific assessment procedure. That must be very detailed and exact, and its field trials have to be very thorough before we can introduce it into the system. It must deal not with the nature but with the effect of pathology. There is a grave danger that we will introduce categories of illness and categorise patients by the nature of their illness rather than the effect that their illness has upon them. That can be deeply undermining for some patients.
For example, I refer to certain types of physical disability or blindness. Patients might be willing and able to carry out many types of work, but, if we introduced categories for those patients automatically to receive invalidity benefit, there would be a danger of reducing the self-worth that those patients feel. I hope that my hon. Friend the Minister will take note of that point.
§ Mr. Andrew Hargreaves (Birmingham, Hall Green)
As a person who learned to walk in plaster and was considered disabled for much of his childhood, I certainly take great issue with some Opposition Members who implied that, because a person is deemed disabled for one type of work, it does not mean that he is perfectly able to perform service to the community or service to his own family by taking a totally different job. The medical assessment should be only on the basis of his condition as 83 it affects him at the time. That should not become a way of saying that such and such a disability or disease precludes him from work, full stop.
§ Dr. Fox
I am grateful for my hon. Friend's intervention. Although I readily agree, as with most things in life, there is a balance to be struck. We must not expect people to do more categories of work than they are able to do. That is why the specificity and sensitivity of the test will become extremely important.
Patients who suffer from diabetes can have a wide range of capability for work. For example, early-onset diabetics may be perfectly controlled, and late-onset diabetics increasingly have a longer life expectancy nowadays and will therefore have more complications, especially renal complications, which now cause the second largest bed occupancy in the national health service. We must be very sensitive with the tests and make sure that we do not exclude groups who should be on invalidity benefit; but, likewise, we should not go too far in the other direction.
When we bring in the tests, we must consider not only mechanical function—many Opposition Members tend to be obsessed with mechanical function—but cognitive function, which is extremely important. Although it is right to consider many categories, such as walking, standing, rising from sitting, manual dexterity and so on, it is extremely important to recognise the importance of cognitive function—learning difficulty, for example—and especially psychiatric morbidity.
It will be extremely difficult for my right hon. and hon. Friends to make sure that psychiatric morbidity is dealt with in a deeply sensitive way. It is always very difficult to assess, because of its fluctuating nature. Full credit to the Government for making sure that, at the very outset, that is one of the main categories that will be considered. In many debates on the subject, mental health issues have not been adequately addressed.
The test, however, must score not only individual specific limitations but combinations of limitations. Perhaps that is where the greatest difficulty of all will arise. Previous studies in other subjects have shown how difficult that will be. For example, the Oregon study was flawed because of the difficulty of taking comorbidity into account when dealing with health rationing. That will be a matter of some difficulty. We will require secondary regulations. I wish my right hon. and hon. Friends well in that matter.
Again I plead with my right hon. and hon. Friends to shy away a little from including specific disease entities as categories. We all know what our mailbags would be like. The more specific pathology groups that we include in such a Bill, the more we will encourage specific interest groups to try to have their particular pathology or disease entity included in legislation for automatic eligibility for benefit at a later stage. That is not a healthy attitude. As I have said, we must look at the effects of a disease upon patients and not at diseases themselves.
With all due respect to them, for far too long hospital doctors have regarded patients as pathology with a name. We must now regard patients as individuals. Of course, we GPs have regarded patients as such for a long time. [HON. MEMBERS: "Hear, hear."] I hear my hon. Friends who have had the same experience. My files will be available to the Whips Office for a six-figure sum after the debate.
84 Under the new system, GPs will still issue certificates for the first 28 weeks. The hon. Member for Caernarfon mentioned that matter. It is right that GPs should continue to do that. First, in that 28-week period, the conditions are usually relatively minor, or ones of which the GPs have had full experience, or the patient is recuperating from surgery or so on. The GP is the best person. The GP will have more information than a hospital about how an illness is affecting the patient.
There is also the issue which I mentioned earlier—that of a patient's own job. Incapacity should mean physical or mental impairment, causing a medical incapacity for all, or almost all, work. I thank the Secretary of State for recognising that some groups will not require to be reassessed. That is an important principle.
The Opposition were, as ever, relatively small-minded in pointing out one or two cases to which my right hon. Friend referred during his speech. My right hon. Friend went through a large number of conditions which will not require to be reassessed. That is important if we are not to frighten patients about the change.
If there is one charge of which the Opposition are certainly guilty, it is that of frightening patients. The groups who will not be required to be reassessed include those who are near to pension age, those who are aged 58 and over on the day the new scheme is introduced, those who were receiving invalidity benefit on 1 December 1993 and those suffering from certain serious, specified, long-term or terminal conditions. Also included, as my right hon. Friend mentioned, are those receiving the highest rate care component of disabled living allowance.
It is right that we should remove the element of fear from the debate, and get back to the basic issues involved. It is right that others who are not included in those groups should be reassessed if the system is to be fair and just, not only to all those involved in the benefit system, but importantly to those who are contributing to keep the welfare system afloat—all this country's taxpayers.
I was a little confused by the opening speech from the Opposition today. The hon. Member for Glasgow, Garscadden (Mr. Dewar)—I am sorry that he is not in his place—said that he rejected the charge that the benefit was not being used to help those for whom it was intended. Does that mean that the hon. Gentleman believes that the trebling of the numbers receiving benefit does not include some people who could be working?
Were it not for the oath of confidentiality, I could give the hon. Gentleman a good number of cases of people who are receiving invalidity benefit but who could certainly be out working. Those people are getting through the system in a way which was not intended. There are a number of people on invalidity benefit who are quite clearly capable of a wide range of work. I am sure that all hon. Members know of such cases, and for the Opposition to pretend that it does not happen is quite ludicrous. Well might the hon. Member for Caernarfon (Mr. Wigley) smile—I know that he must know of a couple of such cases, too.
The Opposition have been small-minded and confusing. We heard that we would be driving youngsters into drug dealing, rather than taking jobs in McDonald's, because of the wicked legislation which we are bringing in. The Opposition have been cynical because, as with many pieces of recent legislation, they have tried to frighten those currently in the system.
The current system provides excess work for GPs. Colleagues whom I phoned this morning to see what was 85 happening in their surgeries today say that up to 30 per cent. of patients had come for certification, and certification only. That not only demoralises GPs and provides unnecessary paperwork. It means that they have less time to spend with patients who are genuinely ill and who need to see them. We must welcome the deregulation for GPs, and were I still working, I would find it an extremely pleasant change that that was one burden that would be taken away.
§ Mr. Wigley
The hon. Gentleman expressed concern at a high level of certification applications which were taking up the time of GPs. Does he accept that, if hundreds of thousands of people who are in receipt of invalidity benefit come off that benefit, a large proportion will go to their GPs more often to get certification for the illness, as they will not be covered under invalidity benefit?
§ Dr. Fox
The objection of GPs is not simply to the amount of work that they have to do. They object to being the gatekeeper for the Department of Social Security and to carrying out duties for which they are not trained. A great burden will be removed from them, because their real problem is their difficulty in maintaining relationships with their patients.
There are huge pressures, and even threats, from patients who are demanding to be kept on in validity benefit. Those pressures come not only from patients, but from patients' families and relatives, all of whom can put an intolerable burden on the GP. The GP feels that he must give in, although he knows that it is not the right thing to do because of its adverse effect, not only on the patient directly, but on other patients in his care. Surely that cannot be right, and we have to change the system for that reason.
GPs will tell us of a patient in his late forties who has a bit of back pain and who may be facing redundancy. The GP knows all the social pressures which exist, but it is not the place of the GP to determine what effect that will have on the DSS. A doctor's job is to make sure that the patient is getting the correct treatment and that, if the patient is eligible for genuine invalidity benefit, he gets it. The problem of the current system is that GPs are under duress to get a settlement for a patient which is financial and not medical.
The Bill at long last brings something to the House which will better target benefits, and will reduce the abuse which is relatively widespread in the system. There will be a diminished burden on doctors, which will give them more time to spend with patients who genuinely need their time. The Bill will remove from GPs the odious job of being gatekeeper for the DSS, and will give better value for money for the taxpayers. For all those reasons, I urge my hon. Friends to support the Bill.
§ Mr. Terry Rooney (Bradford, North)
The background to the Bill has been well trailed over probably three years now. We have heard tonight many of the comments and clichés which we have heard many times from the Dispatch Box. For example, there is the talk of the trebling of the numbers receiving invalidity benefit at a time when the health of the nation is increasing. That, of course, has much to do with the use of preventive, rather than curative, medicine.
There is also a contradiction in the words of the Minister of State, who has said that we recently celebrated reaching 86 a total of 1 million people who are receiving disabled living allowance, which presumably gives some evidence of incapacity. It is rather strange that self-certification is deemed to be a good thing for a benefit as significant as DLA in terms of providing a passport to other benefits, and yet this is not the case in terms of invalidity and sickness benefit.
The aim of the Bill is to reduce the invalidity benefit bill by whatever means possible. We have heard it said many times—usually at the time of a Budget—that it has always been the Government's intention to bring invalidity benefit into the tax net. There is something of an anomaly in the fact that statutory sick pay, which is payable at a much lower rate, is taxable but invalidity benefit is not. However, surely that is a separate issue from whether people qualify or not. It is significant that statutory sick pay is subject to national insurance, and we have not heard whether invalidity benefit will be subject to a national insurance charge also.
Against that backcloth, the Bill brings forward a principle. However, as usual with social security, the regulations are to follow. Too often the principle turns out to be far worse when the regulations are up and running and in effect. If people need reminding, they should read the debates on the Child Support Agency, which bore no relation to what came into being by way of the regulations.
There is a wide continuum between full and able capacity to work and total incapacity to work. Some Government Members recognised that by way of referring to the definition of grey areas. Within them, the Bill makes a tacit attempt to address that issue by talking about a period when one is unable to follow a normal occupation, and a period when one is unable to follow any occupation, but even that has its drawbacks and flaws.
Where, for instance, does one categorise somebody with a mental illness which is not severe enough to be classed as permanent? The illness may be such that, at different times of the day or week, the person can be absolutely incapable of work, whereas an hour later the situation may be different. Where does one place myalgic encephalomyelitis, an illness which is slowly getting recognition, although not at Richmond house? People suffering from ME can be severely incapacitated in the morning, feel better in the afternoon and be almost bedridden by the early evening.
Such cases cannot be dealt with adequately by the principle of a Bill such as this. I am afraid that, when we see the regulations, we will find that such circumstances will not have received full recognition or been given sufficient weight. In the not-too-distant future, Conservative Members will be protesting about how their individual constituents have been mistreated by the Bill that they seem to welcome so much.
In the continuum of work, there is a point at which people can be declared fit for some work. Let us examine the type of work that is suggested. I shall not repeat stories of officers who suggested work as an artist's model. That was a stupid one-off and I hope that the person has been suitably and permanently disciplined. Often people are told that two types of work are suitable for them. One is work as a swimming pool attendant and the other is work as a car park attendant. In the great and glorious private sector, National Car Parks may have attendants, but I know of no local authority car park that has attendants; such car parks 87 are mechanised. The system is called pay and display. So that is one type of job that is not available, certainly in the public sector.
It is ludicrous to suggest that someone who has been disabled or sick for a considerable time should find work as a swimming pool attendant. Such work is a form of emergency service. Certain degrees of fitness and capability are required. Life-saving abilities are needed. Nevertheless, adjudication officers recommend such employment as suitable work.
§ Mr. Bob Cryer (Bradford, South)
My hon. Friend is right in everything he says. Indeed, in Bradford at one stage the alternative job offered to people in this circumstance was work as a lift attendant. Such work was recommended for several years as an alternative job to justify not paying a person invalidity benefit, until it was pointed out that there was only one lift in the whole of Bradford in which an attendant was employed and that, as there was only one job and it was occupied, it was unlikely to be available.
§ Mr. Rooney
The days are long gone when we could wander into a lift and be escorted to the floor that we wanted.
The role of GPs has been championed a great deal tonight. Most illness and sickness lasts less than four weeks and certainly less than 28 weeks. Up to 28 weeks, it seems that it is all right for the GP to judge a person unfit for work. Suddenly, at 28 weeks, it becomes a major problem—a crisis of conscience, almost.
§ Dr. Liam Fox
The hon. Gentleman may have overlooked the fact that there is a significant difference in the position before and after the 28-week watershed. Before then, the doctor is asked to say whether the patient is fit for his own job. After 28 weeks he is asked to say whether the patient is fit for any work. That is much more difficult for a doctor to determine.
§ Mr. Rooney
I accept that the hon. Gentleman is a former GP, but he glosses over the point. I am not aware of any point at which GPs are informed that 28 weeks are up and from then on they must specify whether the person is unfit for any work.
It is a proper role for an adjudication officer to adjudicate on the capacity of the person to do work. That is what they are there to do. The GP will continue to fulfil that role—it has been called the role of the gatekeeper. They will still be expected to issue medical certificates stating the health of the individual concerned. The only difference will be the people will be subject much earlier and more often to medical examination by the Benefits Agency.
The Bill may be a wonderful job-creation wheeze. Certainly the regional medical officer service could not cope with the numbers who currently receive invalidity benefit. The Bill is a fundamental breach of the contributory insurance principle. It is not the first that we have seen, especially in recent weeks. According to that principle, the benefit is not targeted, but one pays a contributory insurance premium in return for specified and given benefits. Targeting means nothing less than means 88 testing. If that is what the Government want, they should abolish national insurance, full stop. That was never the intention of the contributory insurance system.
There has been much maligning of the words of intent of Beveridge. It is a tragedy that, in this 50th anniversary year of Beveridge, his memory has been so polluted by the statements of Conservative Members. The issue is not the number of people who qualify for invalidity benefit each year; it is the method and the appropriateness of exit from the benefit.
Proper research, debate and discussion might find an avenue to deal with the issue. We have not had that proper research, debate or discussion. The Bill is a finance-led measure and a Treasury-driven initiative. The real damage will come later in the regulations. That is when Conservative Members will, as usual, start screaming and squealing about the implications. The Bill should be rejected tonight.
§ Mr. Michael Stephen (Shoreham)
In Britain today we give more help to the sick and disabled than we have at any time in our history. That is fully consistent with the traditions of the Conservative party established by Disraeli and even before. In Britain we spend no less than £6.1 billion on invalidity benefit. Let me tell Opposition Members that in the constituency that I represent, £6.1 billion is a very large sum of money.
The health of the nation is undoubtedly improving. Any of us who look at it—as I am sure we all do when we go to our hospitals and talk to our GPs—realise that. Spending on the national health service is up by almost 50 per cent. since the Conservatives came to office. More people are being treated and receiving better treatment than ever before. More money and more effort is being put into preventive medicine, particularly child vaccination. Yet the number of people claiming invalidity benefit is rising inexorably—by a factor of three, we are told. Clearly, there is something wrong.
Opposition Members have sought to explain the increase by suggesting that it is something to do with the fact that it is difficult to find work at present or that the people are really retired. Yet those who are fit for work and cannot find it should be on unemployment benefit. Those who are retired should receive their pension. Neither of those two categories of person should receive a benefit intended for a person who suffers from invalidity, if they do not have an invalidity.
Opposition Members tend to forget, not only in this context but in almost everything else that we discuss in this place, that benefits are paid by working people—by our working constituents—many of whom live on modest incomes and some who support a sick or elderly relative themselves. I suggest to the socialist parties—both of them, or perhaps I should say all three of them—that they should care a little more about those people.
The socialist parties frequently tell us that this or that item is Treasury-driven, and that all that the Government are trying to do is save money for the Treasury. I should hope that the Government are trying to save money for the Treasury. As I said a moment ago, it is our constituents who fund the Treasury. Opposition Members seem to think that there is a crop of gold out of which all state schemes can be financed. I shall let them into a secret: there is not.
89 The hon. Member for Glasgow, Garscadden (Mr. Dewar) referred to a matter which was not relevant to a debate on this subject, but as he did so, let me say a few words about it. At present we are paying rather more tax than any of my hon. Friends or I would like. The difference is that the Conservatives tax because they have to, but the socialists tax because they want to. Everyone knows that socialists believe that our constituents cannot be trusted to spend their own money. Socialists wish to take money from them and spend it themselves. That is the difference between the socialists and us.
§ Mr. George Foulkes (Carrick, Cumnock and Doon Valley)
Will the hon. Gentleman confirm that he said that Conservative Governments tax because they have to—because they get the economy into such awful difficulties —but Labour Governments tax because they want to—in order to provide decent services for the people that we represent?
§ Mr. Stephen
Labour Governments tax because they do not believe that people can be trusted to spend their own money. Liberal Democrat Governments would to the same if they were ever in a position to do so. Conservative Members have voted for higher taxation than we would have wished because of something called the world recession, which has been obvious to us, but seems to have escaped the notice of Opposition Members. It is the worst recession in the western world since 1929. I know it is inconvenient for Opposition Members to recognise that; they would much prefer it if the present recession were the fault of the Conservative Government. But the world recession is much more likely to have been made in Washington and Tokyo than in London.
§ Mr. Stephen
The world recession has been obvious to me for quite a long time. It has not, apparently, been noticed by Opposition Members. It is remarkable that, during the worst recession since 1929, the Conservative Government have been able to maintain spending on the national health service, on social security and generally on our welfare state.
§ Dame Elaine Kellett-Bowman (Lancaster)
Does my hon. Friend agree that, at the last election, it was not obvious to any Member, Conservative or Opposition, that the recession would continue as long as it did? No one could have forecast the length of the recession, and that made an enormous difference.
§ Mr. Stephen
My hon. Friend is right. As Groucho Marx said, it is dangerous to make predictions, especially about the future.
One reason why the Conservative Government have been able to maintain spending on the health service and on the Department of Social Security is that, during the good 90 times of the 1980s, we repaid so much of our national debt that we were able to borrow to tide us over the difficult times.
Notwithstanding that we pay more tax than any Conservative Member would like, living standards have increased dramatically since 1979, and the great majority of people have a much greater disposable income than ever before. Our constituents often say that they have paid into the system, so they should have the money. However, when I considered the figures, I discovered that the amount of money collected in national insurance contributions was just about enough to pay the old-age pensions, and precious little was left to pay for all the other benefits. Essentially, all those other benefits are paid for out of general taxation.
The Bill seeks to resolve another difficulty. If benefit goes to the wrong people—as it does in some cases—there is less money for the right people. Opposition Members should think more about the right people, who are not getting as much money as they should.
§ Mr. Stephen
No, I have given way already to the hon. Gentleman.
There is some debate on whether we should tax incapacity benefit. We should consider the matter from the view of somebody who is a low earner, but pays some tax. Is it fair that another person, who receives the same amount of money and has the same amount of disposable income, but receives money through invalidity benefit, should not pay tax? I do not think that many constituents would think that fair.
The issue of the general practitioner's role as gatekeeper has been raised. I was grateful for the contributions by my hon. Friends the Members for Wimbledon (Dr. Goodson-Wickes) and for Woodspring (Dr. Fox), both of whom are doctors and know what they are talking about. It occurred to me as a layman that a doctor with a long-standing relationship with a patient and his family might find it embarrassing to refuse a sick note. I appreciate my hon. Friends' confirmation that that is a source of embarrassment for doctors. They also mentioned something that should be obvious to all of us: doctors have enough administration to do without acting as unpaid officials for the DSS.
Clearly, we need a proper objective medical test. Now is not the time or the place to debate that test. I hope that my hon. Friends who are doctors will be involved when my right hon. Friend the Secretary of State devises the test and the regulations that the House will be called upon to consider later.
§ Mr. Nigel Evans (Ribble Valley)
Does not my hon. Friend find it embarrassing that Opposition Members, who know that the amount of money for incapacity benefit has risen to £6.1 billion and is expected to rise to £8 billion in 1994–95, are not prepared to confront that issue? All they say is that we should carry on with the current system. There is something wrong with the Labour party, which is prepared for his constituents and mine to continue to pay such money.
§ Mr. Stephen
My hon. Friend is right. As I have said, the Labour party does not care about the people who have 91 to pay for those benefits. It does not care about the people who are not receiving as much as they should because the money is going to the wrong people.
Opposition Members have had their fun commenting on categories such as the terminally ill and people who are human vegetables who will not be required to submit to the test. Of course, we would expect the Minister to say that those people would not be required to submit to a test and he has done so. It is ridiculous to suggest, as Opposition Members seem to do, that it is a concession given by a Government who really think that human vegetables should earn a living. That shows the standard of debate of which Opposition Members are constantly showing themselves to be capable.
While at the Bar, I was for some time a personal injuries practitioner and I know that if there is a financial incentive, people sometimes tend to be economical with the truth when it comes to their physical and mental condition. There are malingerers—I was amazed when my right hon. Friend the Secretary of State told us that a man who had been claiming invalidity benefit had won a cycle race. That is quite remarkable.
There is nothing dishonourable or demeaning about being an artist's model, or a swimming pool or petrol pump attendant. Opposition Members should think of the reaction of a swimming pool attendant. How would they like to ask him, "You are earning your money and paying taxes?"? The attendant will answer, "Yes and why should I pay tax to support someone who is capable of doing my job but prefers to sit at home and draw invalidity benefit?"
The hon. Member for Birkenhead (Mr. Field) has said that a considerable number of people will lose benefit if the Bill is passed, as I hope it will be. The Labour party cannot have it both ways. It accuses us of massaging the employment figures. The Bill is a gift for it—we are going to do something to reveal those people who are unemployed. We will take off invalidity benefit, those who are not invalids and put them where they belong—on the employment register.
§ Mr. Eric Martlew (Carlisle)
Is the hon. Gentleman saying that the unemployment figures, which are issued by the Government, are deliberately lower than they should be because of people on invalidity benefit and that the real level of unemployment is above 3 million?
§ Mr. Stephen
I am not saying anything of the kind. I do not believe that the hon. Gentleman was present for the earlier part of the debate, but if he reads Hansard, he will see that that issue has been discussed.
The hon. Member for Birkenhead drew attention to the extremely worrying problem of male unemployment. All Conservative Members have male constituents who have been unemployed for a long time and we are extremely worried about them. Most hon. Members have factories in our constituencies. If we visit them, we see that the roaring factories are no longer roaring. That has not happened because the Conservative Government have decided to close down manufacturing industries. Anyone who visits a factory will see not hundreds of people scurrying round or engaged over the work bench, but row upon row of gleaming robots doing their meticulous tasks, with the 92 assistance of very few people. It is the inexorable march of technology that has caused so much male unemployment, and if they were honest, the Opposition would accept that.
To put the debate in an international context, the House may be interested to know that the Netherlands, a country renowned for the most generous welfare system in the world, now expects higher contributions from employees with a long sickness record. Employers are fined up to one year's salary for each employee discharged into the disability scheme. Legislation has been passed to reduce the level and duration of benefits for new disability claimants, and the regulations governing the examination of claimants have also been tightened. All people over the age of 65 must contribute to the social security general disability insurance scheme.
As I listened to the hon. Member for Garscadden, I was reminded of the farmer in a remote part of Ireland who was asked by a tourist the way to Ballymena. He thought for a moment and replied, "If I were going to Ballymena, I would not start from here." Anyone with any sense, and I would have thought that the hon. Member for Garscadden had a little bit of it, would realise that we must start from where we are, not from where we would like to be. If the hon. Gentleman is suggesting that, in attempting to reduce the burden upon our taxpaying constituents, we are starting with the people who are drawing invalidity benefit, he has obviously not listened to the debates in the House, because the whole range of public spending is being closely examined to cut waste and to reduce the tax burden.
What is the Labour party's policy? Opposition Members have been asked endless times by my hon. Friends to explain their policies, but all they can do is yell, "You're in the dock". Nobody here is in the dock. We are trying to work out what should be done in the best interests of our constituents. I would have expected, and the people expect, some kind of constructive opposition from the Labour party, but all we get is yah-boo politics.
The Labour party cannot cope with the burdens of opposition, and it is totally unfit to be trusted with the responsibility of office.
§ Mr. Malcolm Wicks (Croydon, North-West)
This debate is about an important aspect of social security policy but, not surprisingly, many hon. Members have returned to the theme of employment and employment policy. The interface between those policies is one of the most crucial issues to take into account when deciding whether to support the Bill.
We must decide what the prospects will be for those who are denied benefit in the future. How many of them will join the labour market and find jobs?
The Secretary of State said that he has evidence to suggest that malingerers are cleaning windows, apparently at their own offices. I am not sure whether he witnessed that act. When he mentioned cleaning windows, I wondered whether he was about to go through the George Formby song book. I thought that he was about to talk about witnessing a scrounger leaning on a lampost at the corner of the street, but he did not go that far.
The Secretary of State obviously believes that many in receipt of benefit are in employment. We must ask ourselves serious questions about the prospects of those who will lose benefit, at a time of mass unemployment, should the Bill survive the House. Will they find 93 employment? We all know that evidence suggests that many people with disabilities find it extremely difficult to secure employment.
One survey carried out in 1990 by Social and Community Planning Research, SCPR—I am bound to say that official data are sparse—found that, among those with disabilities who were actively seeking work, 22 per cent. were unemployed. Today, experts estimate that those with disabilities who are seeking work are two and a half times more unlikely to find jobs than those without disabilities. That survey is one indicator of the scale of the problem.
§ Mr. Nigel Evans
The hon. Gentleman has quoted from a survey. How does he react to the survey of GPs, in which two thirds of them admitted that they had signed people off for sickness benefit who were not sick and were able to work?
§ Mr. Wicks
I was talking about people with disabilities and unemployment. The hon. Gentleman is talking about another survey.
Another survey conducted by the Spastics Society—the hon. Member for Ribble Valley (Mr. Evans) is obviously interested in surveys—found that employers are six times more likely to turn down a person with disabilities for an interview, even if that person had the same qualifications and experience as a person without disabilities. That survey suggests that, if we believe that those who will be denied benefit as a result of the Bill will easily find work at a time of mass unemployment, we are being naive.
Public policy has long sought to enable those with disabilities to find work. Back in 1944, shortly after the publication of the Beveridge report, an Act of Parliament was passed that stated that employers with more than 20 workers had to have a 3 per cent. quota of employees with disabilities. That was a decent and vintage Act of Parliament. In practice, three quarters of employers have failed to meet that quota and, since 1944, only 10 prosecutions have been brought. That suggests that public policy is not working.
At a time when the Government are seeking to restrict the social security benefit entitlement of people with disabilities, another Department of State, the Department of Employment, recently introduced a programme—in June 1993—called access to work. That programme is a move backwards in terms of the ability of people with disabilities to find employment, because four schemes have been wound up as a result of it.
The adaptation of premises and equipment scheme, which provided grants of up to £6,000 to enable workplaces to be adapted to accommodate people with disabilities, has been wound up. Special aids to employment and a personal reader service, which enables sight-impaired people to find employment, have also gone, along with the fares to work scheme.
As a result, and not surprisingly, the Royal Association for Disability and Rehabilitation, RADAR, has commented:There is absolutely no evidence that employers will be prepared to pay extra money to retain disabled staff … on the contrary, there is extensive evidence that workers tend to lose their jobs when they are disabled.How can the policy that the Secretary of State has outlined square with that of another Department, which is actively discriminating against people with disabilities entering the 94 labour market by withdrawing such useful schemes? We need to examine the impact of two Departments on a particular scheme.
The difficulty is that Governments inevitably seek to cut public spending on social security at a time of mass unemployment. They indulge in rhetoric and pursue policies designed to push people into the labour market at the precise time in the economic cycle when jobs are not available. That is what they are seeking to do under the Bill.
It is therefore incumbent on Government to go back to basics of a kind and to try to pursue again policies of full employment, which are vital to many groups, not least those with disabilities. It is only when we begin radically to cut unemployment and provide people with decent jobs —not any old jobs—that people with disabilities and others who suffer from discrimination will have a fairer chance of getting good jobs. So far that has not happened.
A key theme for the future, illustrated by this Bill, will be the following choice: will more and more people become victims of the dependency culture, forced to go on benefits—if not decent invalidity benefits, then income support? That will drive up social security costs and encourage the Government to be mean-minded and introduce mean, and usually means-tested, benefits.
Or will there be another sort of future? Conservative Members have challenged the Opposition to discuss alternatives. The alternatives are clear: instead of a dependency culture we must encourage the active society. We must have public social and employment policies which enable people to be active, drawing more of them into the labour market by means of training schemes, schemes for the disabled, child care support and so on. That is the alternative, but it is not pursued by the Government, who merely encourage dependence on the state.
We need a vigorous employment policy that includes training and positive policies towards people with disabilities. That should replace the negativism that we have heard today—and recently from the Department of Employment. The Government have the cheek to introduce an incapacity for work Bill while showing themselves incapable of providing work for our people.
§ Mr. Peter Thurnham (Bolton, North-East)
I had some difficulty following the points made by the hon. Member for Croydon, North-West (Mr. Wicks), who appeared to be saying that the Government are cutting social security at a time when unemployment is rising. In fact, unemployment is falling; the whole point of the review is that social security spending is rising—the very opposite of what the hon. Gentleman said.
I apologise for having left the Chamber for part of the debate, but I took the opportunity to obtain a copy of the report on supported employment initiatives which the hon. Member for Glasgow, Garscadden (Mr. Dewar) kindly drew to the attention of the House. I was not aware of it before; it looks interesting; I have only had a chance to glance at the summary and conclusions.
The report refers to 1,600 supported employment places, and to the need for much more research into, and understanding of, what can be done. There is a great deal of common ground in this debate in this area—there are many unanswered questions about how we can best help 95 people with disabilities to find employment. There is indeed a need for more research and understanding, and for greater awareness by the public, and by public and private employers, of what can be done.
The hon. Member for Garscadden tried to say that he would not start from here with a review of social security spending, but it is to the credit of the Secretary of State that he has started from here. There are difficult issues that need dealing with, and my right hon. Friend has dealt with them sensitively.
The consultation paper on the new medical tests lists about 200 organisations that have been consulted, and doubtless more of them will respond before the consultation period expires early next month. I understand that the United Kingdom has one of the worst sickness records and absenteeism rates in the European Community. The number of invalidity beneficiaries has soared from 500,000 to 1,500,000 in the past 15 years, and the cost, which has risen to £6 billion, could rise to £8 billion in 1995ߝ96 if this reform is not put into effect.
The Secretary of State is right to bring the Bill to the House. He said that his primary aim is to help people back into work if they are fit for work, and that is what I should like to talk about this evening.
It is vital that businesses and organisations be helped to provide opportunities for people to work, both for people's own fulfilment and for the benefit of society. That is much better than leaving people to live on benefit. It is impossible to assess with a medical test alone whether someone will be able to get a job—Professor Hawking, on any test, would rate as severely disabled, yet he has proved perfectly capable of employing himself, to his own benefit and the benefit of the rest of society.
I have been struck by some of the points made about voluntary workers by the National Association of Citizens Advice Bureaux. It has pressed strongly for allowing the concession due to take effect in April 1995 to apply now. I do not know whether the Minister can tell me that there is a possibility of allowing the concession to apply now. The argument advanced by NACAB is that the concession would not incur any cost, and it would at least benefit some people. My local paper has reported that some disabled volunteers feel that they cannot volunteer for charitable work at the moment.
The Government are reviewing the disability working allowance at the moment. Before I became a member of it, the Social Security Select Committee reported on the need to look at aspects of the allowance that are not working well—for instance, the poverty trap problem, the disincentive to work, and the high failure rate of claims. It is disappointing that only 3,000 or so people have got jobs with the disability working allowance, given that the Government's own target was 50,000 and that more than that could, in my view, have benefited had its application been wider. After all, 300,000 people with disabilities are thought to be seeking work.
Many Opposition Members have pressed for antidiscrimination legislation, but the Government are wise to keep an open mind on that—indeed, to be sceptical about it. A recent report by the TUC—it is undated, but I believe that it came out last autumn—on the number of disabled people working in the public sector highlighted the remarkable fact that many organisations in the public 96 sector—30 health authorities and trusts and 12 local authorities in England, Wales and Scotland—employ no registered disabled people at all. The report considers the various sectors of public employment and shows that about 100,000 jobs could be provided for disabled people if the public sector approached the quota of 3 per cent.
I query the usefulness of anti-discrimination legislation for the private sector while the public sector—presumably it should set an example and can be given directions—falls so far short itself. Overall, the report shows that only 0.8 per cent. of workers in the public sector are registered disabled. Only the Department of Employment meets the 3 per cent. quota.
Even an organisation such as the BBC, which one might imagine could set a better example, employs only 0.3 per cent. The usual argument is that these organisations employ people who are disabled, but not registered disabled. Given that that probably applies generally, there is a great deal of scope for parts of the public sector to improve—without worrying about legislation for the private sector.
The hon. Member for Garscadden said that he has not yet had an opportunity to read all the conclusions of the report. He should certainly study it, and study it in connection with the excellent work done by the Shaw Trust, whose director general, Tim Papé, was in Central Lobby just now—which is why I had to slip out to see him for a prearranged appointment. I have with me the latest —last year's—annual report of the Shaw trust. The trust was set up 10 or 15 years ago and provides sheltered placement employment for 2,200 people. It provides training for about 1,000 a year and seeks 700 extra placement positions every year.
Despite current employment difficulties, the trust is to be commended for increasing its number of places last year. In the report, Mr. Papé states:Within the United Kingdom today, over 300,000 people of working age have some form of disability, and are unemployed. One in four families has someone with a permanent or temporary disability or knows a close friend in that position.Disability is widespread, yet it is a subject that is still surrounded by misunderstanding and fear.>This lack of understanding is based on a deep-rooted belief that disability means 'no ability' and that the only suitable response is sympathy and segregation.More often than not, this kind of well-meaning attitude is the single biggest impediment for people with disabilities.By focusing on what these people cannot do, to the exclusion of what they can do, society hopelessly overlooks their huge potential for education, training and for work.Shaw Trust performs a vital role for people with disabilities in the United Kingdom.Our commitment to them is a commitment to the varied and invaluable abilities which they have to offer.If a person can work and wants to work, the Trust is dedicated to finding them an opportunity to make the best use of their talents, whatever their disability.Shaw Trust prepares people for work and ensures that they have the skills and training that they need to realise their full potential.I should be glad to make a copy of that report available to any hon. Member who would like to know more about the trust. When I met Mr. Papeé, he gave me the outline of a discussion paper that he is preparing, on which I hope to work with him. It lists two and a half pages of questions, the answers to which will make evident the right way forward to develop employment opportunities for the disabled.
The striking fact about the sheltered placement scheme is that it costs less than £5,000 a year to help people to gain 97 jobs. Workshop provision through Remploy and workshops elsewhere costs double that—about £10,000 a year per job. If we could redirect the money that is currently devoted to sheltered workshops, we could provide twice as many employment opportunities for the amount that is available.
I support the Bill and I congratulate the Secretary of State and the Minister on tackling difficult issues in a constructive and positive way. I wish the Bill good progress through both Houses. If we have an opportunity to amend it and to provide for volunteers, I hope that amendments will be considered and that there will be a chance to review further the provision for increased sheltered placements and the improved working of the disability working allowance.
§ Mr. George Foulkes (Carrick, Cumnock and Doon Valley)
I am grateful for the opportunity to speak on Second Reading of another social security Bill, although the proliferation of such Bills is not at all welcome. They bring bad news and are followed by bad news. I spoke in the debate on the Statutory Sick Pay Bill when the Government rushed it through on an unwise, guillotine motion—one of the causes of the breakdown in co-operation between the Government and the Opposition. I am pleased to note that that Bill, which was rushed through with unseemly haste in a day, is now hurtling slowly through the House of Lords.
§ Mr. Stephen
The hon. Gentleman complains about Bills being guillotined. Is not he shedding crocodile tears because when he and his hon. Friends had time to debate the issues about which they said they were concerned, they wasted it on procedural wrangles?
§ Mr. Foulkes
That argument does not stand. I am glad that I am not in court being defended by the hon. Gentleman, because if I were, I would feel very vulnerable.
We should prefer much more time to discuss all these measures because, given the opportunity, we could examine them in detail and show where they are wanting. That was evident in the excellent speech by my hon. Friend the Member for Glasgow, Garscadden (Mr Dewar). I used to sit through debates on the Scottish rate support grant and was constantly amazed by the way in which my hon. Friend mastered the intricate detail in a most fantastic way. He has been suddenly transformed to our Front Bench as the Opposition spokesman on social security, a subject that is even more complicated, if anything can be, than the Scottish rate support grant, and he has mastered it with equal facility. I look forward to the day when he and all other Opposition Members are on the other side of the Chamber and he is dealing with the matter substantively rather than as the shadow spokesman.
I think that the proposal was first leaked in June 1993 in a memorandum from the Secretary of State for Social Security to the Prime Minister. There were all sorts of denials at the time, but, of course, there always are. We were told, "Don't get worried, don't fear, the Government would never think of that kind of thing." But, inevitably, it materialised and here we are again.
There is genuine fear and alarm in my constituency. It is one of our most beautiful constituencies, but it has one of the highest levels of unemployment. Some 5,000 people who were in mining have lost their jobs and are desperately 98 looking for alternative work, and it is a calumny, an insult, to suggest that they are not. They are, and many of them are severely handicapped.
It is strange that, again and again, Conservative Members, and especially Ministers, speak about a world recession causing everything. Exactly the same people used to tell us that Thatcherism was so successful that it was being exported all over the world. Perhaps that is why there is a world recession. Everybody has adopted Thatcherism and countries are following Britain down the stank. That is a good Scots word. The English version is down the drain, in purely economic terms.
It ill behoves the hon. Member for Shoreham (Mr. Stephen) and other Conservative Members to talk about world recession as if it did not have its roots here in the Conservative Government. The hon. Member for Shoreham also spoke about saving money by preventing it from going to the wrong people and giving it to the right people. I note that he said, "right people". I cannot see any provision in the Bill for redistributing the money to anybody.
§ Mr. Gordon McMaster (Paisley, South)
We have heard much rhetoric from the Government about re-targeting resources, but on page 2 of the Bill under the heading "Financial effects of the Bill", it is made absolutely clear that the Bill will produce estimated gross savings of £550 million in 1995ߝ96 and £1,450 million in 1996ߝ97. The Bill has nothing to do with targeting.
§ Mr. Foulkes
My hon. Friend is absolutely right, but, to be fair, it also says that those will be offset byadditional expenditure on income support and unemployment benefit of around £135 million in 1995ߝ96 and £265 million in 1996ߝ97.That tells us two things. First, there has been a cover-up on the level of unemployment: there is no doubt about that. Part of this is a consequence of the massaging of the unemployment figures by the Government. We heard from the hon. Member for Wimbledon (Dr. Goodson-Wickes), a retired general practitioner, about the experience of GPs. GPs in my constituency have told me that people have been sent from the Benefits Agency to their doctors to get off unemployment and on to invalidity benefit, to keep the unemployment statistics down. Now they are facing the consequences of their actions.
§ Mr. Jim Cunningham (Coventry, South-East)
Does my Friend not agree that, as a result of Government measures, many people who possibly are in ill health may be made redundant? That will mean another general shake-out of industry as a result of the Bill, because employers will not foot the total bill for sick payment.
§ Mr. Foulkes
My hon. Friend is absolutely right, and the point that he makes was made in a speech in an earlier debate.
My hon. Friend the Member for Paisley, South (Mr. McMaster) made a point in relation to the money saved. More than £1 billion is to be saved off people who are currently on invalidity benefit. That means that they will be more than £1 billion less well off, or £1 billion poorer. That means that there will be greater poverty. That money will be no longer available for those people. They are not getting money from anywhere else. The theory is that they will be forced into some suitable kind of employment. Could Conservative Members tell me where in Cumnock, 99 Auchinleck, Muirkirk, Dalemellington and Rankinston are they going to find that kind of employment? What kind of jobs? There is no McDonald's.
§ Mr. Stephen
The answer to the hon. Gentleman's question is, if a person is fit for work and cannot find it, the proper place for him to be is on the unemployment register, not drawing invalidity benefit.
§ Mr. Foulkes
We have already taken account of that. We are talking about encouraging people who are invalids and are trying to get some work, who are interested in working. There are people who are interested in working, but where are they? Where can they find work? There is no possibility of employment whatever.
§ Mr. Foulkes
No. The hon Lady is the last person I would want to give way to.
I shall quote, because I need to look at exactly why the number of claims has gone up. A very good study carried out by the Policy Studies Institute says:29 per cent of the extra cases have been people over pensionable age, drawing IVB rather than their pension for tax reasons. This increase hardly matters for public expenditure, because they would instantly become pensioners if they lost their IVB.16 per cent of the extra cases have been due to the increasing number of women in the labour market, paying national insurance contributions, who qualify for IVB if they have to give up work.That is a sensible reason; new people properly qualify because of a demographic change or a qualitative change in the employment arrangements.
It continues:13 per cent of the extra cases may have been due to a gradual increase over the years in the number of disabled people in the relevant age-groups.That is a fact. There is a real increase in the number of disabled people in the relevant age groups. Are they going to be denied? Surely even Conservative Members would not suggest that.42 per cent. of the extra cases arise from genuine growth in the rate of claiming invalidity benefit among a stable population of disabled people.In other words, they have become more aware of the invalidity benefit and have taken advantage of that. I do not think that any of those people can be described as undeserving. I do not think that any of them deserves to be squeezed out by the actions of the Government and by the consequences of the Bill.
Invalidity benefit was introduced by a Tory Government in 1971, in the days when Tory Governments were a little more understanding, a little more realistic, a little less harsh, a little less bitter than the present Tory Government. It was brought in to provide income for people who were unable to continue working as a result of long-term sickness or disability. That is an entirely sensible and understandable purpose. We are now getting a new incapacity test that is wrong in principle and unworkable in practice. The principle of it is completely wrong. It does not relate to the reality of the situation and it will be unworkable.
There will be a cut-off point. My hon. Friends have seen cut-off points work in other areas and know the problems that arise when people come just below the level. The 100 proposal is unrealistic and unworkable. It is being introduced for disabled people at a time when they are being hammered again and again by the Government.
I know that the Minister, for whom personally I have great respect, sometimes finds it embarrassing to be the Minister for the Disabled. He is forced by the Treasury to save £1 billion here and £1 billion there. It is being imposed at a time when vehicle excise duty exemption is being abolished for disabled passengers, we are getting VAT on fuel, or perhaps we are not. Perhaps tomorrow the eight Members of Parliament who have said that they oppose VAT, the four Members of Parliament—
§ Mr. Foulkes
I look forward to it tomorrow. If we get the rebels that we are promised, we will not have VAT on fuel. Let us see whether they have the courage of their convictions.
When one is making the test in relation to whether people are capable of work, other factors must enter into it, such as age, work history, educational ability and personal skills. After all, it is not a homogeneous group of people, but a varied group, as I know from my constituency, which has miners with chronic bronchitis and emphysema. All those disabilities come in a mining area, but not necessarily in other areas.
I think that I have made most of my points. I know that some of my hon. Friends want to get in. I find the Bill detestable. I hope that the House will reject it.
§ Mr. McMaster
Before my hon. Friend concludes, I congratulate him on his splendid speech. I shall be rushing back to the Whips Office to put a gold star on his jotter for it. Can he shed any light on why, in the preparation of the Bill, the Government have made particular provision to deal with councillors' allowances? Why have they singled out councillors? Is it, as we all suspect, another part of the attack on local democracy?
§ Mr. Foulkes
My hon. Friend is, of course, the Scottish Whip, so I have a particular respect for him. He is also an officer of the all-party disabled group and does an extremely good job, and I am grateful to him. He has made a good point. Like me, he used to be a councillor. Both of us are getting sick and fed up with the attacks on locally elected representatives. My hon. Friend the Member for Newport, West (Mr. Flynn) has raised, on a number of occasions, the issue of the growth of quangos as opposed to elected representatives. He has pointed to yet another way in which they are being disadvantaged.
§ Mr. Nigel Evans
Can the hon. Gentleman say why, over the past 15 years, the health of the nation has improved, yet the number of people claiming invalidity benefit has trebled?
§ Mr. Foulkes
I do not think that there is evidence that the health of the nation is improving. We have a much older population. I used to work for Age Concern Scotland. I know for a fact that there is a large increase in the number of old people, particularly the very old. There are many more disabled people. I do not think that the health of the population has improved substantially. If more people stopped smoking regularly, we might see a substantial increase.
§ Mr. Jimmy Hood (Clydesdale)
I am sure that I do not need to remind my hon. Friend, but it was the policy of the Government to take people off the unemployment register and put them on invalidity benefit when they were fibbing the figures on unemployment. It is a little bit rich coming from them that they are now seeking to take from the poor, to punish the poor, the elderly and disabled.
§ Mr. Foulkes
I hope that at some time in this debate, in the debate on the money resolution, or on some other occasion, my hon. Friend catches your eye, Mr. Deputy Speaker. He is a particular expert on Ways and Means resolutions. 'Those of us who were in on the Local Government etc. (Scotland) Bill will know that he made an excellent contribution to the Ways and Means resolution. I know that he is good on that as well as on money resolutions.
I am fed up with the way in which the Government treat sick and disabled people like embarrassing statistics. It is about time that they were treated individually, as people; it is about time that the Government dealt with them properly and sympathetically. The Bill does the opposite.
Only the other day, the Secretary of State for Employment said that Members of Parliament ought to be subject to market testing. I agree. The best kind of market testing, in this instance, is a general election. Let us have a general election now: we shall see how many Conservative Members are returned. I can guarantee that Conservative Members will be found wanting.
§ Mr. David Congdon (Croydon, North-East)
The debate began on a thoughtful note, and I am sorry that the speech of the hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) deviated from that path. If he cannot even face the fact that the health of the nation has improved dramatically over the past 14 years, there is not much point in his debating this important issue.
Since the general election, there has been a good deal of debate about social security—about the need for reform and the growth in expenditure. I was interested in the failure of the hon. Member for Glasgow, Garscadden (Mr. Dewar) to mention the Social Justice Commission, which his party set up but which seems to have been buried. That suggests that Labour recognised the need for a reform of the social security system; but, although the patty may recognise the need in principle, in practice it will fight every sensible step towards reform of what has become a complex and costly arrangement.
I congratulate my right hon. Friend the Secretary of State on launching a review of the system, and on introducing the Bill. It did not come as a surprise; it was well trailed. One thing, however, did come as a surprise. When I listened to the Chancellor's autumn statement—his second Budget speech—I thought that we were finally tackling the enormous growth in social security spending, but when I turned to the Red Book I found that, despite the Bill and the other measures outlined in the Budget, the increase in spending would go on inexorably. I stress that I am not taking into account the cyclical side of social security.
In 1988ߝ89, in real terms—excluding cyclical expenditure—social security accounted for £54.6 billion of public spending. Last year, the figure was £61.8 billion; in the current year, it will rise to £65.2 billion, and by 102 1996–97, when the measures in the Bill will have been implemented, it will be £66.7 billion. Those figures in themselves demonstrate the need for change.
I was surprised to hear Opposition Members complain that the Bill would save £1.5 billion. Would they prefer that money to be spent, with taxes becoming ever higher? No; I suspect that they want spending to increase, while pretending that taxes need not be raised to pay for that increased spending.
§ Mr. Dewar
I take the hon. Gentleman's point seriously. I accept that the figures require some study, and that the long-term trends must be taken into account. However, it is not a case of our objecting to the saving of £1.5 billion. Most of that money must come out of the pockets of those receiving incapacity benefit; these changes will almost inevitably result in a cut in those people's income. Does the hon. Gentleman approve of that? How would he feel if he were asked to accept a cut in his very low, almost subsistence wages, to save money for someone else?
§ Mr. Congdon
The hon. Gentleman should ask himself whether some of the people currently receiving invalidity benefit are strictly entitled to it.
§ Mr. Congdon
Yes, it is. What this means is that some people who have played the game fairly, and are unemployed, are receiving unemployment benefit, while others have manipulated the system to ensure that they receive a higher benefit. I can understand that, but I am not prepared to condone it. Labour Members know, from their surgeries and from letters that they have received, that some people have manipulated the system in the way that I have described.
§ Mr. Dewar
I made it clear that, if the system was being abused, that abuse should be tackled. I also made it clear that I did not think that invalidity benefit, or incapacity benefit, should become a substitute for unemployment benefit. That, however, is a different point from the one that I raised just now.
There is a second string to the Minister's bow: he is deliberately cutting the income of people who are not malingering—people who fully and genuinely pass the incapacity benefit test. They will receive at least £30 or £40 a week less than they would have received under the old system. Does the hon. Gentleman defend that?
§ Mr. Congdon
I defend the Secretary of State's proposals in the Bill. I do not accept all the figures that the hon. Gentleman has given. I entirely agree that the new benefit should be taxed: other benefits are taxed, after all. The challenge is presented by the need to ensure that resources are better targeted—I know that that is a much-abused word—on those who really need them. One of the ironies of the social security system is the fact that, for every one of the cases reported in the newspapers involving people who receive excessive state benefits, there are several other cases in which not enough help has been provided.
It is a bit rich for hon. Members to attack the Bill as an assault on the disabled and those in need, when the Government are spending well over £80 billion on the welfare state. If what has been done over the past 14 years constitutes an assault on the welfare state, it has been a 103 pretty ineffective assault. Although I support the welfare state, I believe that it has become over-complicated and has begun to bring about a regrettable dependency culture. We need to attack that.
Let me deal specifically with invalidity benefit. I was very impressed by the speeches of my hon. Friend the Member for Stratford-on-Avon (Mr. Howarth) and the hon. Member for Birkenhead (Mr. Field): I listened to both carefully, and I appreciated what they said about the needs of the disabled. I urge my right hon. Friend the Secretary of State to tread carefully, especially on the proposals in the consultation document about medical assessment for incapacity benefit.
It is terribly easy to get something like that wrong, and I am sure that none of us wants to be wondering in a few years what regulations we had passed. Although I understand some of the concerns expressed, I do not accept that the Bill is an attack on the disabled, or that the Government would ever attack the disabled. Indeed, we have a very good record of providing extra support for the disabled—
§ Mr. McMaster
Clearly, I would argue the contrary on political grounds, but let us leave politics aside for a moment. Why have not the Government asked voluntary organisations and charities such as the Spastics Society, the Disability Alliance and RADAR—the Royal Association for Disability and Rehabilitation—which are adamant that the Government have cut benefits and taken no account of their wishes or of the need for a comprehensive strategy to deal with disability?
§ Mr. Congdon
I understand the hon. Gentleman's point, but I find it very hard to equate it with the fact that, over the past 15 years, benefits to the disabled have increased threefold in real terms to just under £15 billion. I accept that there is always room for improvement, but it would be a little more helpful if some of the lobby groups which genuinely try to represent the interests of the disabled would give credit where credit is due—to the Government. We should then be able to view some of their submissions with greater sympathy.
It is an inescapable fact that there has been an enormous growth in invalidity benefit over the past 14 or 15 years. We have heard that spending has more than doubled in real terms to £6.1 billion in the past 10 years, and that the number receiving it has trebled.
Great play has been made of the Library document which analyses a report by the Policy Studies Institute on the cause of the growth. I can accept the part of the report's explanation which refers to those who have reached pensionable age but who are still claiming invalidity benefit. With all due respect, I should have thought that that fact alone was evidence of the need for reform. It is nonsense that people can carry on claiming invalidity benefit once they have reached pensionable age.
I accept what has been said about more women being in the labour market and therefore being able to claim invalidity benefit, but the report states that 42 per cent. of the casesarise from genuine growth in the rate of claiming invalidity benefit among a stable population of disabled people.I stress the second part of that sentence, because I do not fully understand what it means. It appears to be saying that there has been a growth in the numbers claiming invalidity 104 benefit, but it does not provide a jusitification or a reason for that growth. Based on surgery cases and other evidence, I should have thought that there was at least a case to be made for saying that part of the growth must be due to people manipulating the system in the way I described earlier.
Some hon. Members have stressed the link with unemployment. I am not going to get into that argument, but Labour Members are surely not arguing that, because there might or might not have been a link in the past, it is wrong to break that link now and ensure that people get the appropriate benefit and do not receive invalidity benefit if unemployment benefit would be more appropriate. On those grounds alone, we should support the Bill. My hon. Friend the Member for Woodspring (Dr. Fox) spoke of his experience. I always bow to a doctor's experience, especially when I am ill. He outlined the issues raised by doctors across the country.
The Bill is long overdue, and my only caution is that we ensure that we do not hit the genuinely disabled—that is the last thing I would want. I am sure that we can avoid that problem as the Bill passes through its various stages.
It is a pity that the Opposition have not been prepared to face the problems. We all thought that they were going to do so when they established the Commission for Social Justice but it seems that they are prepared to funk the issue. That is a great pity, because we need a debate about social security support. The debate is not about long-term trends in terms of the working population but about the trends in the growth of social security and to what extent a modern economy can legitimately support an ever increasing public expenditure burden. The Bill is a modest step in the right direction, and I am pleased to support it.
§ 9.3 pm
§ Mr. Thomas Graham (Renfrew, West and Inverclyde)
I wish that we were discussing real measures to help people who receive invalidity benefit, people who have suffered for years under this miserable Government. The debate makes me think of tax avoidance and abuses in the City and the financial institutions, where people seem to get away with the prize.
The other evening, we discussed training. The Government are frightened to put money into creativity or something that could generate income for the country but, lo and behold, they have once again suggested proposals that attack people who can hardly defend themselves, people who live in the hope that they might just see out tomorrow.
Not that long ago, in the House I told Ministers about a man who was called by his doctor and so on to find out whether he was fit. The doctors came and met him. They said, "We now have to try to find out whether you are eligible to claim the money. We will do a wee test on you." The wee test consisted of his going outside his house and walking 100 yards. The man managed 100 yards. He was dead and buried within a month. His wife asks, "What type of inhuman society are we that we put our menfolk through tests such as that?"
I have suffered my period in invalidity, and I have had the indignity of going through the test. It is not a pleasant thing when one is being accused of being a malingerer, of not being ill when one is ill, and one sits there with doctors, academics and people who have been through university. One just sits there as a Joe Bloggs—just an ordinary punter 105 —and one wants to tell the truth and will not dodge with the lies that they think we will all tell. What an indignity we are placing on mankind in this country!
I remember that the Prime Minister said that it "beggars belief' that the increase in numbers is due entirely to health-related reasons.
I live in Linwood, which is not a beautiful town. It is a hard-working town, where, years ago, thousands of men and women worked in the car plant and made a living. If one goes to that town now, one will find an incredible increase in the number of people living on invalidity benefit. If one checks the reasons why, it will come through that the serious depression that confronts them, with under-employment—the lack of job opportunities and so on—destroys the morale. It lowers one's resistance to illness and diseases. It plays a major part in the deterioration of people's health. If there is no hope and we do not give folk hope, their health will suffer.
§ Mr. Nigel Evans
I have listened carefully to the hon. Gentleman. Is he arguing that there ought to be no tests whatever?
§ Mr. Graham
I wish that we could have a good system. In answer to the hon. Gentleman, I wish that the Government could have listened to some of the organisations that have put forward many ideas for schemes. If the Government had taken on board some of the ideas for a comprehensive benefit system, we might not be in the mud hole that we are in.
§ Mr. Graham
In 1980, I was on Strathclyde regional council. I was a member of a group that was examining the problems of disabled people. The Parliamentary Under-Secretary of State for Health and Social Security at the time was Lady Chalker. We discussed with her the problems that people on low income suffered. The "low income" that we were talking about was the money that people received on sickness benefit and invalidity benefit.
Does the Minister honestly think that the folk are laughing all the way to the bank with the pittance that we give them to live on, with disability and invalidity benefit? Do the Government believe that they can drink a bottle of champagne a week? Do they think that those people are living on caviare and steak? There is no way that they are living on that.
§ Mr. Jim Cunningham
My hon. Friend has put his finger on the nub of the problem, which is that the Secretary of State, who conceived the Bill, has based it on an assumption that most people who are on invalidity benefit are malingerers. That has been half the problem, and that is the problem with the philosophy behind it. Did not the hon. Member for Ribble Valley (Mr. Evans) betray it when he asked the question about the tests?
The problem is that existing tests are pretty tough, as my hon. Friend has outlined, but the new test will be ten times tougher. Does that not point the finger at the Secretary of State? It is a malicious attempt to penalise people on benefit.
§ Mr. Graham
I am most grateful for that telling intervention. I do not have a lot of time, and I do not need notes. I can tell the Minister that I know of many doctors who issue sick lines in the sincere belief that their patient is ill and against their professional experience that they 106 know when folk are not fit for work. They issue those notes with the care and maintenance of patients in mind. They offer that sick line because they sincerely believe that their patients are ill. Are we therefore accusing every doctor of getting it wrong? Are we saying that the system is wrong?
I question the system, but I also question the Government. They have one of the worst records imaginable in trying to help the sick, the poor, the disabled and the unemployed. We have seen their income savaged and reduced to barely nothing because of the Government's constant and unbelievable mismanagement of our economy. We are struggling because the Government cannot see a way in which to create revenue-raising power.
As they once again bail out their friends in the City, they take £1.5 billion from the ill and the disabled. It makes me disgusted to be a Member of Parliament. We are speaking to a Government who are not prepared to listen, but are only prepared to keep trundling along and taking everybody, like lemmings, over the cliff. I do not think that the people of Britain will accept that and, at the general election, they will show the Government the door so that we can take heart, look after the future of disabled people and give them the quality of life to which they are entitled, not the poverty-driven chaos created by Government.
§ Mr. Nigel Evans (Ribble Valley)
I am grateful to be given an opportunity to participate in the debate.
I find it amazing that in the time that I have been in the Chamber, and while I believe that everyone in the Chamber would agree that it is an important debate, not one Liberal Democrat Member has been present. At such an important time, when we are approaching the climax of the debate, I find that amazing. There is no doubt that, as we come towards elections of any kind, the Liberal Democrats will say how dreadful the Government's social security policy is.
Having listened to hon. Members on both sides of the House, I believe that we desperately need to improve the current system. I agree with my hon. Friends that we desperately need to protect the most vulnerable in our society. At the same time, having heard the comments of Opposition Members about helping the disabled, it is rich that they have not been able to come up with anything concrete that they would put in place of what the Government are suggesting. We have all heard about the Opposition's current commission, but we are yet to hear anything concrete from the Opposition Members about social security.
We need a system which will operate, which will protect the vulnerable and which will be sustainable.
§ Mr. Evans
The hon. Gentleman may say "save money", but one should consider the present system and the way in which the number of claimants has trebled.
I disagree with the hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes), who said that the health of the nation has not improved. It has improved. At the same time, the number of people claiming benefit has trebled, so that the amount paid is £6.1 billion, which is projected to rise to more than £8 billion in the near future. Yet Opposition Members are not prepared to confront that fact. They criticise and chastise Conservative Members for 107 trying to save money. With this Bill, the Government are trying to ensure that the money that is spent in vast sums will go to those people who need it and that those who are not eligible for invalidity benefit do not sign up to it.
I referred earlier to a survey of general practitioners in which two thirds of those questioned indicated that they had signed sickness benefit notes for people who simply were not sick. We must address that problem. Opposition Members have said, "If anyone is claiming invalidity benefit who is not entitled to it, something should be done about it." But yet again they have failed to suggest any concrete policies that would correct that imbalance. We need to hear something concrete—
§ Mr. Flynn
We are all touched to hear the hon. Gentleman, in his deep-seated favour, explaining how people must not loot the public purse. Will he urge his hon. Friends the Members for Rutland and Melton (Mr. Duncan), for Billericay (Mrs. Gorman) and for City of Chester (Mr. Brandreth) to return to the public purse the money that they made out of buying council houses and the £200,000 that they had from the public purse—
§ Mr. Deputy Speaker
Order. The hon. Gentleman knows full well that he should not make criticisms of other hon. Members unless he has given them notice. I greatly deplore that practice.
§ Mr. Stephen
Does my hon. Friend accept that, in this country, we live under the rule of law by which everyone is innocent until proved guilty?
§ Mr. Evans
Conservative Members are more than happy to accept that. Clearly, however, Opposition Members do not share our view.
We must accept that the health of the nation has been improving over the past 15 years. Moreover, expenditure on invalidity benefit represents one of the largest and most rapidly growing areas of expenditure in the whole system. If money is going where it is not supposed to go, it must be checked. If that flow is not checked, and if money is not targeted on those who really need it, either taxes will have to go up and up to ensure that the bill is met or those in real need will be denied access to proper benefits—[HON. MEMBERS: "Taxes are going up."]
It is amazing to hear Opposition Members say that taxation is going up anyway. They decry the Government for seeking to tackle a problem by reducing the amount of money going to people who should not be getting it. They tell the public that the Government are wrong to raise taxes, but they are not prepared to back the Government when they seek to do something about the problem of benefits going to people who are not entitled to them.
Opposition Members would prefer to see taxes increased. My right hon. and learned Friend the Chancellor 108 told David Frost on Sunday that, if the Labour party were in government, taxes would be far higher than they are. Opposition Members have proved that point admirably.
§ Mr. Evans
I have only three minutes left. Opposition Members have had a fine opportunity to answer the questions that we have put to them but have refused to do so. I have the hon. Member for Newport, West an opportunity to come back with an answer; instead he made a cheap attack on my hon. Friends. Given that sort of attitude, I am not prepared to give way to Opposition Members again.
Those who are capable of work should not be encouraged to sign on for invalidity benefit; they should be encouraged to go into the world of work. At the moment, as the GP survey showed, too few people are being encouraged to do that. The onus on GPs is unfair. In many ways, the guidelines were too loose and allowed too many people to sign on for invalidity benefit. The criteria for eligibility for incapacity benefit will be far stricter. That will ensure that those who receive the benefit are those in need of it and that those who are able to work are helped to get back into work. Funds will be focused on those who need benefit because of incapacity—something that ought to be welcomed by every hon. Gentleman.
I have not heard any hon. Member refer to the voluntary work sector. People who are claiming incapacity benefit will be able to do 16 hours' voluntary work a week. This is excellent news to anyone who, like myself and, I am sure, most other hon. Members, is involved with several constituency charities.
My hon. Friend the Member for Croydon, North-East (Mr. Congdon) referred to the fact that the question of medical assessment is currently out to consultation. I hope that there will be widespread discussion with general practitioners, charities and anyone else who wants to make a contribution. We must get the system right, so we shall have to listen very carefully to comments about some of the possible pitfalls. In this regard, however, I am confident.
Having listened to Opposition Members, I am not sure that they agree with any type of testing whatsoever. I believe that we shall get the question of medical assessment right—that people who are incapable of working will be entitled to claim incapacity benefit and will receive it at the appropriate rates and that those who are able to work will be helped into employment.
This is the right system, and it is a great shame that Opposition Members are unable to support it. What I have heard today reveals the real Labour party—the tax-andspend party that my constituents, having listened to its case, will recognise as the one that lost the last four general elections and will lose the next one.
§ Mr. Keith Bradley (Manchester, Withington)
In general, this has been a very thoughtful and well-ordered debate. We have heard important contributions from several hon. Members—in particular, my hon. Friends the Members for Birkenhead (Mr. Field) and for Newport, West (Mr. Flynn), the hon. Member for Caernarfon (Mr. Wigley), and my hon. Friends the Members for Bradford, North (Mr. Rooney) and for Croydon North-West (Mr. Wicks), as well as several of my hon Friends from Scottish 109 constituencies. We have heard some interesting contributions from Conservative Members too. In particular, I welcome the remarks of the hon. Member for Stratford-on-Avon (Mr. Howarth). Conservative Members brought several specific points to the Minister's attention.
The debate was enhanced considerably by the speech of my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar), who clearly stated the Labour party's position on the Bill. It is very important that we should recognise the real purpose behind the measure, which constitutes a fundamental attack on the interests of disabled people. The Government are yet again looking for a way out of the economic mess caused by their mismanagement and their policies. Yet again, disabled people are being used as the scapegoat for Conservative incompetence. That is something of which we ought not to lose sight, however often we hear reference to Disraeli, the one-nation Tory. The country knows very well the current position of the Tory party. Bringing Disraeli back from the dead will not get the Government out of their mess.
The Minister of State shakes his head vigorously in denial of the claim that the disabled are being used as a scapegoat for economic incompetence. However, we have only to look at recent history to see how these people have been targeted. It gives me no pleasure to refer yet again to the question of the independent living fund. Exactly what we predicted during the passage of the legislation dealing with that fund has come to pass.
There has been a massive cut in the amount of money available for disabled people in the independent living fund. We said that very few people would benefit from the fund as a result of the way in which it was structured. It gives me no pleasure to see that in the 1993–94 budget of £4 million, to date only £500,000 has been allocatd and £3.5 million remains to be spent. Although there have been 700 applicants, only 104 payments have been received.
§ Mr. Scott
When we introduced community care, and when the new arrangements for the independent living fund came into being, it was inevitable that it would take time for the caseload to build up. The cases that the ILF has taken on and which have incurred the £500,000 expenditure represent between £5 million and £6 million of full-year expenditure.
§ Mr. Bradley
I listened with interest to the Minister's defence. Unfortunately, the evidence does not bear that out. There has been criticism from the local authorities. The authorities confirm what we claimed during the passage of the legislation. They believe that it is ridiculous to have limits of £200 and £500. They also believe that it is ridiculous that no one over 65 can receive benefit from the fund. It is also ridiculous that the terminally ill cannot receive anything from the fund and that the provision was limited to people on income support and those with savings of less than £8,000. Those limitations have seriously curtailed the ability of disabled people to benefit in the way that they so desperately need to.
Even before today's Bill, there has been evidence of the way in which the Government are targeting disabled people. We have heard much about the way in which invalidity benefit has been administered. However, it is clear that there is a range of ways in which the Government are focusing on invalidity benefit and also making real cuts in the amount of money that will be available in future to disabled people.
110 We have already heard that the Government intend to make savings of £550 million in 1995–96 and a staggering saving of £1,450 million in 1996–97. I must stress that those savings will arise not from the introduction of a new benefit to deal with people with disabilities, but from the replacement of benefits such as sickness benefit and invalidity benefit. Those cuts, or savings as the Government call them, will be achieved through a series of measures.
We must be clear where those savings will be made. Crucially, the Government are changing the rates for the new incapacity benefit. Two new rates will be introduced for the first 28 weeks. In current circumstances, someone would receive £42.70 and then a higher rate for 29 to 52 weeks. That person would then move on to £52.50, the same rate as statutory sick pay. Only after 52 weeks would that person move on to current invalidity benefit rate of £56.10. Between 28 weeks and 52 weeks, there will be a real cut in the rate paid to disabled people even if they get through the hoop of the new test.
The Government cannot claim that they are not making a real cut in the amount of income available to people with disabilities as a result of the introduction of this new benefit. Not only are they making a cut, they are also introducing a greater delay before people with the same disabilities achieve the same rate as those who currently receive invalidity benefit of £56.10. There will be a cut in the rate and a delay before one receives the current full rate of invalidity benefit.
The new proposals also make crucial structural changes to the new benefit. That also applies to some of the changes that are to be made in respect of people who continue to receive invalidity benefit. The most crucial point is that, after the introduction of the new rules in April 1995, there will be no additional pension.
Much has been made of the increased payments to people on invalidity benefit. It has been said that, when they reach retirement age, they should go back on to the basic state retirement pension. Most of them receive an additional amount only because they have contributed to an additional pension. Under the new rules, that allowance will not be permitted, and, for those currently in receipt of it, the amount will be frozen.
That flies in the face of what the Government announced previously. It gives me no pleasure to quote the Minister for Social Security and Disabled People. As many of my hon. Friends have said, we have great respect for the way in which he has championed the needs of disabled people. However, talking about the additional pension, he said:The clause does not affect existing rights to additional pension. All the rights built up in the years up to and including the 1990–91 tax year will be preserved, whenever the claim for invalidity pension is made, however far in the future that may be. Moreover, such additional pension will continue to be subject to revaluation uprating in exactly the same way as at present."—[Official Report, 3 April 1990; Vol. 170, c. 1115.]Under the new rules that he is introducing tonight, the Minister will renege on that promise. The additional pension will be frozen, it will not be uprated.
§ Mr. Bradley
The Minister shakes his head. If he wishes to refute what I am saying, I should be pleased to give way. He cannot refute the allegations.
In addition, there will be further cuts. There will be no age allowance for claimants between 45 and 55. There will 111 be a lower benefit between the 28th and 52nd week, as I have said. Also, there will be no dependants' allowance for people under 60 without children. All that means cuts in payments for disabled people. For the no additional pension category, there will be cuts of £20 million in 1995–96 and £130 million in 1996–97, £5 million in respect of the no allowance for claimants between 45 and 55 in 1995–96, and £15 million in 1996–97. In the case of the dependants' allowance, that is a saving of £110 million in 1995–96 and £150 million in 1996–97.
That is the issue—cuts in basic rights to benefit and income for disabled people. That is why we oppose the Bill so strongly.
We must also consider the way in which the new medical assessment will be undertaken. Several points must be reinforced. It surprised me greatly that, when we asked to be consulted on the new medical test, we were eventually told by written answer to my question that a group of 80 experts had been brought together to comment on the medical assessment. I asked the Minister exactly who were representing the interests of disabled people and making an assessment. In his first answer, he just gave me a list of the groups that would be represented, so I asked again, because I believed the Prime Minister's words and those of the Chancellor of the Duchy of Lancaster, and I thought that we had open government. When asked who the 80 experts were, the Minister said:We have asked that panel members respect confidentiality until the exercise is completed".Opposition Members believe in open government. If Conservative Members want to list the 80 names, we shall be happy to publish them so that we know who is representing our interests in that medical test.
Our next major concern is that we will not know the details of the test before the Bill is considered in Committee—in fact, we will not know the details even after the Bill has been considered in Committee. I shall be surprised if we know the details of the medical test when we come to Third Reading or beyond.
Yet again, the Government are using regulations to prop up the Bill. Instead of having a proper consultation process, coming to decisions and bringing them to the Floor of the House at the appropriate time, the Government are hiding behind regulations and trying to slip the new test in through the back door. We will vigorously be opposing their method in Committee, and I can assure the House that there will be a full-blown debate when the regulations come back, to ensure that the interests of disabled people are properly represented.
We have heard much tonight about the medical test. Our greatest concern has also been stated by some Conservative Members—I welcome their comments as well as those of my hon. Friends—in relation to the difficulty in setting up an objective test. A number of illnesses and disabilities have various elements that cannot be assessed by one snapshot. The Secretary of State said that he was not looking for a snapshot, and that there would be scope for variation. What is not clear, and why it is so difficult to debate the measures, is how much discretion will be brought into the system.
Clearly, the way in which the document has been drawn up means that there will be a storing of points which will come to a threshold. On one side of that threshold, the person concerned is okay—on the other side, he is not. We 112 have heard many cases of disabled people who would score heavily on the criteria as they are laid down who are holding down competent jobs. On those criteria, they would be eligible for incapacity benefit. Equally, people who would not score—
§ Mr. Bradley
That is not the point that we are making. We are asking how there can be an objective, one-off test where people on either side of the divide may score totally differently in different situations.
We have had many representations from disabled groups throughout the country. The Secretary of State mentioned merely one organisation, but we have heard from the Disability Alliance, the Disablement Income Group, citizens advice bureaux, the Spastics Society, the National Association for Mental Health, the Royal National Institute for the Blind, the Royal National Institute for the Deaf, the Multiple Sclerosis Society, Arthritis Care, and other organisations up and down the country. All of them say that they do not accept the criteria which have been laid down.
The problem with the Secretary of State saying that the criteria will be stretched to include moving targets is that those organisations have been asked to consult on the details. They have not had an opportunity—and, from what I understand, although I hope to be corrected, they will not have a new opportunity—to be re-consulted once the 80 experts have come up with a new assessment for medical conditions. There are conditions, such as arthritis and MS, which change over time and from day to day. Pain be managed on one day and people may be able to undertake tasks, but the mere fact that they have undertaken those tasks disables them again in the future.
For example, the MS Society has said that disability in general, and MS in particular, takes many different forms and levels of severity. Therefore, the society feels that it is impossible to set a cut-off point or a threshold between capacity and incapacity. That is supported by the fact that many people with relatively minor disabilities are unable to work, and yet some people can work even though they have a severe disability.
That sort of assessment and wide-ranging discretion are crucial when determining people's incapacity. They are also crucial in determining not only a person's incapacity for their occupation—we will return to that point on Committee—but a definition of all work. We have heard tonight that many people may be able to undertake work from their previous occupation, but certainly will not be able to take on any occupation that the Employment Service throws at them. Those jobs could include manual or clerical work, and administrative and technical tasks. That wide range of considerations, as well as the current economic and unemployment situation, must be taken into account when there is a proper assessment about people's incapacity.
The Government's sole motive is to save money. We have seen from the research, and the Government have said, that there are thousands of people on invalidity benefit now who should not be. Opposition Members do not defend people who illegitimately receive invalidity benefit. However, all the research that has been done, including research commissioned by the Department of Social Security such as "Why are there so many long-term sick in Britain?" by Disney and Webb's research in 1991 113 and "An analysis of the growth in invalidity benefit claims" by Holmos, Lynch and Molho in 1991 show that the cause of the extra claims is not limited to people who, in the Government's terms, are simply swinging the lead. There is a range of complicated factors which must be taken into consideration before draconian measures such as the Bill are introduced.
As we have heard, even the permanent secretary to the Department of Social Security, Sir Michael Partridge, said in evidence to the Public Accounts Committee:the theory of increased numbers due to fraud is not borne out by research.He said that the principal reasons were prolonged unemployment and the move to community care. That was the reason that the Department's own permanent secretary gave for the increase in invalidity benefit. The reason is not the other factors that Conservative Members have used so dubiously without attaching figures to their arguments
. The hon. Member for Ribble Valley (Mr. Evans) said that a survey of GPs had come up with a reason for opposing invalidity benefit. However, he could not tell us how many GPs were surveyed in that report. Would he like to give us that figure now? He cannot. We know that only 40 GPs were surveyed. They were probably all fundholding GPs too busy drawing up contracts to sign sickness certificates.
We are short of time and we must bring the debate to a conclusion. I assure the Secretary of State that, whatever he believes, the Labour party will oppose the Bill line by line vigorously in Parliament and throughout the country. We have the support of the people of Britain. They know that economic mismanagement has brought the measure before the House. They know and disability groups throughout the country know. The press knows. Today, we saw in The Times the headlines "Back-door benefit cuts for severely disabled" and "Benefits curb may create more jobless". We have heard tonight that that is the fact. There will be 200,000 extra people on the unemployment register as a result of the Bill alone.
I warn the Minister that an article in The Times today said that the measure was more controversial than the Criminal Justice and Public Order Bill or the Finance Bill. We shall ensure that that controversy goes from the House back into the country. We will oppose the Bill vigorously every step of the way.
§ The Minister for Social Security and Disabled People (Mr. Nicholas Scott)
In concluding the debate, shall endeavour to deal with some of the points raised by the hon. Member for Manchester, Withington (Mr. Bradley). I am sure that we shall have a few weeks of energetic activity in which we shall go into all the points in greater detail. I look forward with relish to that time.
I begin by reiterating the fundamental aims of the Bill. There has been a great deal of distortion and misrepresentation during our debate today. The Bill aims to ensure, and I believe that it will do so, that those who are not able to work through sickness or disability receive appropriate help through an affordable system, that those who are able to work are helped so to do and that resources are not squandered on those who are able to work but do not seek to work. I should have thought that few would challenge those principles. I am grateful to several of my hon. Friends who have expressed their strong support for those principles during the debate.
114 I dispute the assertion of the hon. Member for Withington that those principles do not have support in the country. As I have gone round the country discussing the Bill, I have found that few have challenged them. In essence, the Bill seeks to return the benefit presently called invalidity benefit, to be called incapacity benefit under the new system, to its original purpose.
It will ensure that those who are genuinely incapable of work due to long-term sickness or disability will be helped. Those who are unemployed or who are not working for other reasons will be able to turn to other benefits for support.
Given that the Government had witnessed the growth in the take-up of invalidity benefit over a number of years, it was right for us to consider the reasons behind that and to decide on the priorities that we should set for the future. I totally dispute the point made by the hon. Member for Withington about a gap between the approach of my right hon. Friend, myself and the permanent secretary to the Department of Social Security. The evidence that he gave before the Public Accounts Committee was exactly in accordance with the arguments that my right hon. Friend and I have put forward in support of the Bill.
The original purpose of the benefit has been altered, sometimes gradually and sometimes dramatically, by alterations over years in case law. Its purpose has been changed not by legislation passed by the House but by judgments in case law and commissioners' decisions. Those decisions have altered the background against which the benefit has existed and the way in which it has been administered.
§ Mr. Barry Sheerman (Huddersfield)
It is a question not of changing over the years, but of changing over the weeks. A new trend and fashion of "back to basics" has meant back to basics for the most vulnerable in our society. The right hon. Gentleman's remarks are a gloss on a crude and unacceptable philosophy.
§ Mr. Scott
I suppose that there is safety in numbers for the members of the Opposition Front Bench if they can intervene, seriatim, on such matters. I do not accept for a single moment what the hon. Gentleman said. Any responsible Government, having seen the growth in take-up of invalidity benefit, would want to look back to the origins of the legislation and ensure that it was still doing the job for which it was designed. That benefit is the second largest and fastest growing benefit in the social security system. It is absolutely right that we should take a fresh look at it.
§ Mr. John Marshall (Hendon, South)
Does my right hon. Friend agree that there is something strange about an Opposition who one day say that the taxation is too high and then the next day say that public expenditure is too low?
§ Mr. Scott
I agree totally with my hon. Friend.
A number of points were raised in the debate about the structure and shape of the benefit and whether the way in which it is targeted—or focused, as I would prefer to call it—is being properly undertaken.
The hon. Member for Croydon, North-West (Mr. Wicks) said that any change in the benefit should be subject to further debate. We have had such a debate today and I am certain that we will have further debates in Committee. The Labour party has been very active in 115 criticising the existing social security system, but it is silent about any alternative that it is prepared to put forward. If we were to take every item of the Opposition's criticism and imagined that they would translate that into legislative action once they got back into office, the shadow Chancellor might be in need of receipt of the benefit himself.
§ Mr. Wigley
The right hon. Gentleman referred to people being fit for work. Can he confirm that the Government or the Benefits Agency sent out guidelines during 1993 to local officers defining the sort of work that might be appropriate for people currently receiving invalidity benefit, including categories such as artist's model? Was that the Government's intention? Will they now withdraw those guidelines if they issued them?
§ Mr. Scott
The guidance was given to local officers about the administration of the benefit. It has been suggested that individuals were advised to try for particular jobs. If someone is found fit for work, he is given a list of jobs that he might consider. No one tells him to take a specific job.
The agency is doing its best, rightly, I believe, to give guidance to individuals who are found fit for work about the sort of employment that they might seek. I believe that that guidance is absolutely right and in accordance with the agency's commitment to help those who come to it for help.
The hon. Member for Glasgow, Garscadden (Mr. Dewar) spoke of a loss of benefit. Many people listening to our debate or reading about it in the newspapers may fear that current claimants will have their benefits undermined or altered. It is worth reiterating, therefore, that all existing invalidity benefit claimants will get the rate of pay that they are receiving at the time of the change.
The hon. Member for Worthington also referred to the additional pension. I have not identified the quotation that he read out, but since then I have made it explicitly clear that existing claimants would have their benefits uprated, except for the additional pension, which would be frozen at the rate applying when the change came.
We estimate that about 70 per cent. of claimants at the time of the changeover will not qualify in future for help from income support because they have other resources and help to which they will be able to turn.
§ Mr. Scott
No. I was given only 20 minutes to wind up —or rather less than that—and I have already given way twice. It is only fair that I should be allowed to press on.
The hon. Member for Garscadden also mentioned the taxation of incapacity benefit. It is common knowledge in this House that the Government's policy for a number of years has been that invalidity benefit should be brought into tax. The principle is simple; it was the practice that frustrated the Government's intention. A benefit paid as a replacement for earnings, as invalidity benefit manifestly is, should be subject to tax in the same way as earned income. This will bring the tax treatment of the new benefit into line with retirement pensions and unemployment benefit—the two other main contributory benefits.
As I have already said, existing invalidity benefit will not be taxed. The few beneficiaries who pay tax at the 116 moment will do so only because they have other taxable income, such as an occupational pension or permanent health insurance.
§ Mr. Howarth
I am therefore extremely grateful to my right hon. Friend. Although the principle of taxing invalidity benefit is likely to be right"—after all, it replaces earnings—does my right hon. Friend accept that it is also worth considering that the vast majority of the recipients of incapacity benefits will be people on relatively low incomes who face additional costs because of their incapacity? Will he therefore be willing to argue the case for a disability tax allowance analogous to the elderly person's tax allowance or the blind person's tax allowance —and I welcome the fact that the Government have increased the latter? Such an allowance would provide an acceptable basis for the introduction of taxation of the benefit.
§ Mr. Scott
My hon. Friend knows as well as I do that matters of taxation are for my right hon. and learned Friend the Chancellor—so are allowances. It will be perfectly possible to ensure that tax of the new benefit is properly collected.
The hon. Member for Garscadden said that it was inequitable that a tax should apply only to the new benefit, not to current benefits. Ever since I became a Minister in the Department it has been a principle that people receiving a benefit should not in general have their expectations changed when new arrangements are introduced. That is to say that people receiving invalidity benefit have adjusted to that income, and I do not believe that it would be right to change that by making them pay tax. Of course, over the years an increasing percentage of those who are on the new benefit will come within the tax system.
With his usual commitment and interest in this matter, the hon. Member for Caernarfon (Mr. Wigley) asked whether a claimant's general practitioner is the best placed person to decide whether a claimant is medically incapable of work. That issue was raised by other hon. Members, some of whom held the opposite view. It has been impressed on me that GPs have expressed increasing reluctance to act as gatekeepers for this benefit. They perceive it as inimical to the patient-doctor relationship. Expecting GPs to certify patients as sick, let alone to apply complex social security rules, has been a considerable and, many GPs believe, an unreasonable burden upon them.
My hon. Friend the Member for Stratford-on-Avon (Mr. Howarth) said that some general practitioners might be the better people to make these decisions, but there is a danger that GPs, who develop a close relationship with many of their patients, could be under pressures quite distinct from the independence of judgment that is required to decide whether somebody is entitled to the benefit.
My hon. Friend the Member for Woodspring (Dr. Fox) asked whether the test had enough personalised input from the GP who knows the patient. The GP will still be asked to provide the claimant's diagnosis and principal disabling conditions. In some cases, the GP may be asked to supply further information or an opinion, but he will not be asked for an opinion on the capacity for work. That relieves GPs from their gatekeeper role, and they greatly welcome that change.
117 I shall now deal with the medical test. I sometimes despair of Opposition arguments. If the Government had blithely presented a fixed medical test without any consultation or the involvement of outsiders or professionals, there would have been an outcry from the Opposition that we were not listening. Some 4,000 copies of the document have been circulated to organisations of and for disabled people, to experts of one sort or another and others who are properly interested in the matter. The Government should be given credit for that and not criticised.
The 80 experts on the committee were recruited not to sign up to the details of the test, but to give their expert opinion of the way in which the Government were tackling this matter.
§ Mr. Scott
Already it has been possible to react to a number of suggestions by the experts and we shall seriously consider any further suggestions.
Some Opposition Members have derided the Bill as a narrow, cost-cutting exercise. I utterly refute that charge. As a Social Security Minister since 1987, I recognise a widespread acceptance by all Governments in the developed world that, if expenditure on social protection programmes is not controlled, we shall end un..like the last Labour Government, unable to pay even a Christmas bonus or to uprate benefits as they promised. We have no intention of going down that road.
We must recognise the imperative of ensuring that our system focuses help on those who really need it, thus ensuring that social security costs are sustainable for future generations. We must plan for a modern, realistic system that is attuned to the concept of a society that cares for those who need help and can provide it in an affordable way. Such an approach needs nerve, vision and courage —qualities notably lacking on the Opposition Benches. But we are determined to carry this work forward. The Bill is an earnest of our intent to do just that. I commend it to the House.
§ Question put, That the Bill be now read a Second time:—
§ The House divided: Ayes, 313, Noes 272.121
|Division No. 87]||[9.59 pm|
|Ainsworth, Peter (East Surrey)||Banks, Matthew (Southport)|
|Aitken, Jonathan||Banks, Robert (Harrogate)|
|Alexander, Richard||Bates, Michael|
|Alison, Rt Hon Michael (Selby)||Batiste, Spencer|
|Allason, Rupert (Torbay)||Bellingham, Henry|
|Amess, David||Bendall, Vivian|
|Arbuthnot, James||Beresford, Sir Paul|
|Arnold, Jacques (Gravesham)||Biffen, Rt Hon John|
|Arnold, Sir Thomas (Hazel Grv)||Blackburn, Dr John G.|
|Ashby, David||Body, Sir Richard|
|Aspinwall, Jack||Bonsor, Sir Nicholas|
|Atkins, Robert||Booth, Hartley|
|Atkinson, Peter (Hexham)||Boswell, Tim|
|Baker, Nicholas (Dorset North)||Bottomley, Peter (Eltham)|
|Baldry, Tony||Bottomley, Rt Hon Virginia|
|Bowden, Andrew||Garnier, Edward|
|Bowis, John||Gill, Christopher|
|Boyson, Rt Hon Sir Rhodes||Gillan, Cheryl|
|Brandreth, Gyles||Goodlad, Rt Hon Alastair|
|Brazier, Julian||Goodson-Wickes, Dr Charles|
|Bright, Graham||Gorman, Mrs Teresa|
|Brooke, Rt Hon Peter||Gorst, John|
|Brown, M. (Brigg & Cl'thorpes)||Greenway, Harry (Ealing N)|
|Browning, Mrs. Angela||Greenway, John (Ryedale)|
|Bruce, Ian (S Dorset)||Griffiths, Peter (Portsmouth, N)|
|Budgen, Nicholas||Grylls, Sir Michael|
|Burns, Simon||Gummer, Rt Hon John Selwyn|
|Burt, Alistair||Hague, William|
|Butler, Peter||Hamilton, Rt Hon Sir Archie|
|Butterfill, John||Hamilton, Neil (Tatton)|
|Carlisle, John (Luton North)||Hampson, Dr Keith|
|Carlisle, Kenneth (Lincoln)||Hanley, Jeremy|
|Carrington, Matthew||Hannam, Sir John|
|Carttiss, Michael||Hargreaves, Andrew|
|Cash, William||Harris, David|
|Channon, Rt Hon Paul||Haselhurst, Alan|
|Churchill, Mr||Hawkins, Nick|
|Clappison, James||Hawksley, Warren|
|Clark, Dr Michael (Rochford)||Hayes, Jerry|
|Clarke, Rt Hon Kenneth (Ruclif)||Heald, Oliver|
|Clifton-Brown, Geoffrey||Heathcoat-Amory, David|
|Coe, Sebastian||Hendry, Charles|
|Colvin, Michael||Hicks, Robert|
|Congdon, David||Higgins, Rt Hon Sir Terence L.|
|Conway, Derek||Hill, James (Southampton Test)|
|Coombs, Anthony (Wyre For'st)||Hogg, Rt Hon Douglas (G'tham)|
|Coombs, Simon (Swindon)||Horam, John|
|Cope, Rt Hon Sir John||Hordern, Rt Hon Sir Peter|
|Cormack, Patrick||Howard, Rt Hon Michael|
|Couchman, James||Howell, Rt Hon David (G'dford)|
|Cran, James||Howell, Sir Ralph (N Norfolk)|
|Currie, Mrs Edwina (S D'by'ire)||Hughes Robert G. (Harrow W)|
|Curry, David (Skipton & Ripon)||Hunt, Rt Hon David (Wirral W)|
|Davies, Quentin (Stamford)||Hunt, Sir John (Ravensbourne)|
|Davis, David (Boothferry)||Hunter, Andrew|
|Day, Stephen||Hurd, Rt Hon Douglas|
|Deva, Nirj Joseph||Jack, Michael|
|Devlin, Tim||Jackson, Robert (Wantage)|
|Dickens, Geoffrey||Jenkin, Bernard|
|Dicks, Terry||Jessel, Toby|
|Dorrell, Stephen||Johnson Smith, Sir Geoffrey|
|Douglas-Hamilton, Lord James||Jones, Gwilym (Cardiff N)|
|Dover, Den||Jones, Robert B. W Hertfdshr)|
|Duncan, Alan||Jopling, Rt Hon Michael|
|Duncan-Smith, Iain||Kellett-Bowman, Dame Elaine|
|Dunn, Bob||Key, Robert|
|Durant, Sir Anthony||Kilfedder, Sir James|
|Dykes, Hugh||King, Rt Hon Tom|
|Eggar, Tim||Kirkhope, Timothy|
|Elletson, Harold||Knapman, Roger|
|Emery, Rt Hon Sir Peter||Knight, Mrs Angela (Erewash)|
|Evans, David (Welwyn Hatfield)||Knight, Greg (Derby N)|
|Evans, Jonathan (Brecon)||Knight, Dame Jill (Bir'm E'st'n)|
|Evans, Nigel (Ribble Valley)||Knox, Sir David|
|Evans, Roger (Monmouth)||Kynoch, George (Kincardine)|
|Evennett, David||Lait, Mrs Jacqui|
|Faber, David||Lamont, Rt Hon Norman|
|Fabricant, Michael||Lang, Rt Hon Ian|
|Fairbairn, Sir Nicholas||Lawrence, Sir Ivan|
|Fenner, Dame Peggy||Legg, Barry|
|Field, Barry (Isle of Wight)||Leigh, Edward|
|Fishburn, Dudley||Lennox-Boyd, Mark|
|Forman, Nigel||Lester, Jim (Broxtowe)|
|Forsyth, Michael (Stirling)||Lidington, David|
|Forth, Eric||Lilley, Rt Hon Peter|
|Fowler, Rt Hon Sir Norman||Lloyd, Rt Hon Peter (Fareham)|
|Fox, Dr Liam (Woodspring)||Luff, Peter|
|Fox, Sir Marcus (Shipley)||Lyell, Rt Hon Sir Nicholas|
|Freeman, Rt Hon Roger||MacGregor, Rt Hon John|
|French, Douglas||MacKay, Andrew|
|Fry, Sir Peter||Maclean, David|
|Gale, Roger||McLoughlin, Patrick|
|Gallie, Phil||McNair-Wilson, Sir Patrick|
|Gardiner, Sir George||Madel, Sir David|
|Garel-Jones, Rt Hon Tristan||Maitland, Lady Olga|
|Major, Rt Hon John||Soames, Nicholas|
|Malone, Gerald||Speed, Sir Keith|
|Mans, Keith||Spencer, Sir Derek|
|Marlow, Tony||Spicer, Sir James (W Dorset)|
|Marshall, John (Hendon S)||Spicer, Michael (S Worcs)|
|Marshall, Sir Michael (Arundel)||Spink, Dr Robert|
|Martin, David (Portsmouth S)||Spring, Richard|
|Mates, Michael||Sproat, Iain|
|Mawhinney, Rt Hon Dr Brian||Squire, Robin (Hornchurch)|
|Merchant, Piers||Stanley, Rt Hon Sir John|
|Milligan, Stephen||Steen, Anthony|
|Mills, Iain||Stephen, Michael|
|Mitchell, Andrew (Gedling)||Stern, Michael|
|Mitchell, Sir David (Hants NW)||Stewart, Allan|
|Moate, Sir Roger||Streeter, Gary|
|Monro, Sir Hector||Sumberg, David|
|Montgomery, Sir Fergus||Sweeney, Walter|
|Moss, Malcolm||Sykes, John|
|Nelson, Anthony||Tapsell, Sir Peter|
|Neubert, Sir Michael||Taylor, Ian (Esher)|
|Newton, Rt Hon Tony||Taylor, John M. (Solihull)|
|Nicholls, Patrick||Taylor, Sir Teddy (Southend, E)|
|Nicholson, David (Taunton)||Temple-Morris, Peter|
|Nicholson, Emma (Devon West)||Thomason, Roy|
|Norris, Steve||Thompson, Sir Donald (C'er V)|
|Onslow, Rt Hon Sir Cranley||Thompson, Patrick (Norwich N)|
|Oppenheim, Phillip||Thornton, Sir Malcolm|
|Ottaway, Richard||Thurnham, Peter|
|Page, Richard||Townend, John (Bridlington)|
|Paice, James||Townsend, Cyril D. (Bexl'yh'th)|
|Patnick, Irvine||Tracey, Richard|
|Patten, Rt Hon John||Tredinnick, David|
|Pattie, Rt Hon Sir Geoffrey||Trend, Michael|
|Pawsey, James||Trotter, Neville|
|Peacock, Mrs Elizabeth||Twinn, Dr Ian|
|Pickles, Eric||Vaughan, Sir Gerard|
|Porter, Barry (Wirral S)||Viggers, Peter|
|Porter, David (Waveney)||Waldegrave, Rt Hon William|
|Portillo, Rt Hon Michael||Walden, George|
|Powell, William (Corby)||Walker, Bill (N Tayside)|
|Redwood, Rt Hon John||Waller, Gary|
|Renton, Rt Hon Tim||Ward, John|
|Richards, Rod||Wardle, Charles (Bexhill)|
|Riddick, Graham||Waterson, Nigel|
|Rifkind, Rt Hon. Malcolm||Watts, John|
|Robathan, Andrew||Wells, Bowen|
|Roberts, Rt Hon Sir Wyn||Whitney, Ray|
|Robertson, Raymond (Ab'd'n S)||Whittingdale, John|
|Robinson, Mark (Somerton)||Widdecombe, Ann|
|Roe, Mrs Marion (Broxbourne)||Wiggin, Sir Jerry|
|Rowe, Andrew (Mid Kent)||Wilkinson, John|
|Rumbold, Rt Hon Dame Angela||Willetts, David|
|Ryder, Rt Hon Richard||Wilshire, David|
|Sackville, Tom||Winterton, Mrs Ann (Congleton)|
|Sainsbury, Rt Hon Tim||Winterton, Nicholas (Macc'f'ld)|
|Scott, Rt Hon Nicholas||Wolfson, Mark|
|Shaw, David (Dover)||Wood, Timothy|
|Shaw, Sir Giles (Pudsey)||Yeo, Tim|
|Shepherd, Richard (Aldridge)||Young, Rt Hon Sir George|
|Sims, Roger||Tellers for the Ayes:|
|Skeet, Sir Trevor||Mr. David Lightbown and Mr. Sydney Chapman.|
|Smith, Tim (Beaconsfield)|
|Abbott, Ms Diane||Bayley, Hugh|
|Adams, Mrs Irene||Beckett, Rt Hon Margaret|
|Ainger, Nick||Benn, Rt Hon Tony|
|Ainsworth, Robert (Cov'try NE)||Bennett, Andrew F.|
|Allen, Graham||Benton, Joe|
|Alton, David||Bermingham, Gerald|
|Anderson, Donald (Swansea E)||Berry, Dr. Roger|
|Anderson, Ms Janet (Ros'dale)||Betts, Clive|
|Armstrong, Hilary||Blair, Tony|
|Ashton, Joe||Blunkett, David|
|Austin-Walker, John||Boateng, Paul|
|Banks, Tony (Newham NW)||Boyes, Roland|
|Barnes, Harry||Bradley, Keith|
|Barron, Kevin||Bray, Dr Jeremy|
|Battle, John||Brown, Gordon (Dunfermline E)|
|Brown, N. (N'c'tle upon Tyne E)||Hain, Peter|
|Bruce, Malcolm (Gordon)||Hall, Mike|
|Burden, Richard||Hanson, David|
|Byers, Stephen||Harman, Ms Harriet|
|Caborn, Richard||Harvey, Nick|
|Callaghan, Jim||Hattersley, Rt Hon Roy|
|Campbell, Mrs Anne (C'bridge)||Henderson, Doug|
|Campbell, Menzies (Fife NE)||Heppell, John|
|Campbell, Ronnie (Blyth V)||Hill, Keith (Streatham)|
|Campbell-Savours, D. N.||Hinchliffe, David|
|Canavan, Dennis||Hoey, Kate|
|Cann, Jamie||Hogg, Norman (Cumbernauld)|
|Carlile, Alexander (Montgomry)||Home Robertson, John|
|Chisholm, Malcolm||Hood, Jimmy|
|Clapham, Michael||Hoon, Geoffrey|
|Clark, Dr David (South Shields)||Howarth, George (Knowsley N)|
|Clarke, Tom (Monklands W)||Howells, Dr. Kim (Pontypridd)|
|Clwyd, Mrs Ann||Hoyle, Doug|
|Coffey, Ann||Hughes, Kevin (Doncaster N)|
|Cohen, Harry||Hughes, Robert (Aberdeen N)|
|Connarty, Michael||Hughes, Roy (Newport E)|
|Cook, Frank (Stockton N)||Hutton, John|
|Corbett, Robin||Illsley, Eric|
|Corbyn, Jeremy||Ingram, Adam|
|Cousins, Jim||Jackson, Glenda (H'stead)|
|Cox, Tom||Jackson, Helen (Shef'ld, H)|
|Cryer, Bob||Jamieson, David|
|Cummings, John||Janner, Greville|
|Cunliffe, Lawrence||Jones, Barry (Alyn and D'side)|
|Cunningham, Jim (Covy SE)||Jones, leuan Wyn (Ynys Môn)|
|Cunningham, Rt Hon Dr John||Jones, Jon Owen (Cardiff C)|
|Dafis, Cynog||Jones, Lynne (B'ham S O)|
|Dalyell, Tam||Jones, Martyn (Clwyd, SW)|
|Darling, Alistair||Jones, Nigel (Cheltenham)|
|Davidson, Ian||Jowell, Tessa|
|Davies, Bryan (Oldham C'tral)||Kaufman, Rt Hon Gerald|
|Davies, Rt Hon Denzil (Llanelli)||Keen, Alan|
|Davies, Ron (Caerphilly)||Kennedy, Charles (Ross,C&S)|
|Davis, Terry (B'ham, H'dge H'l)||Kennedy, Jane (Lpool Brdgn)|
|Denham, John||Khabra, Piara S.|
|Dewar, Donald||Kinnock, Rt Hon Neil (Islwyn)|
|Dixon, Don||Leighton, Ron|
|Dobson, Frank||Lestor, Joan (Eccles)|
|Donohoe, Brian H.||Lewis, Terry|
|Dowd, Jim||Litherland, Robert|
|Dunnachie, Jimmy||Livingstone, Ken|
|Dunwoody, Mrs Gwyneth||Lloyd, Tony (Stretford)|
|Eagle, Ms Angela||Lynne, Ms Liz|
|Eastham, Ken||McAllion, John|
|Enright, Derek||McAvoy, Thomas|
|Etherington, Bill||McCartney, Ian|
|Evans, John (St Helens N)||Macdonald, Calum|
|Ewing, Mrs Margaret||McFall, John|
|Fatchett, Derek||McKelvey, William|
|Faulds, Andrew||Mackinlay, Andrew|
|Field, Frank (Birkenhead)||McLeish, Henry|
|Fisher, Mark||McMaster, Gordon|
|Flynn, Paul||McNamara, Kevin|
|Foster, Rt Hon Derek||McWilliam, John|
|Foster, Don (Bath)||Madden, Max|
|Foulkes, George||Maddock, Mrs Diana|
|Fraser, John||Mahon, Alice|
|Fyfe, Maria||Mandelson, Peter|
|Galloway, George||Marek, Dr John|
|Gapes, Mike||Marshall, David (Shettleston)|
|Garrett, John||Marshall, Jim (Leicester, S)|
|George, Bruce||Martin, Michael J. (Springburn)|
|Gerrard, Neil||Martlew, Eric|
|Gilbert, Rt Hon Dr John||Maxton, John|
|Godman, Dr Norman A.||Meacher, Michael|
|Godsiff, Roger||Meale, Alan|
|Golding, Mrs Llin||Michael, Alun|
|Gordon, Mildred||Michie, Bill (Sheffield Heeley)|
|Gould, Bryan||Michie, Mrs Ray (Argyll Bute)|
|Graham, Thomas||Milburn, Alan|
|Grant, Bernie (Tottenham)||Miller, Andrew|
|Griffiths, Nigel (Edinburgh S)||Mitchell, Austin (Gt Grimsby)|
|Griffiths, Win (Bridgend)||Moonie, Dr Lewis|
|Grocott, Bruce||Morgan, Rhodri|
|Gunnell, John||Morley, Elliot|
|Morris, Rt Hon A. (Wy'nshawe)||Sheldon, Rt Hon Robert|
|Morris, Estelle (B'ham Yardley)||Shore, Rt Hon Peter|
|Morris, Rt Hon J. (Aberavon)||Short, Clare|
|Mowlam, Marjorie||Simpson, Alan|
|Mudie, George||Skinner, Dennis|
|Mullin, Chris||Smith, Andrew (Oxford E)|
|Murphy, Paul||Smith, C. (Isl'ton S & F'sbury)|
|Oakes, Rt Hon Gordon||Smith, Rt Hon John (M'kl'ds E)|
|O'Brien, Michael (N W'kshire)||Smith, Llew (Blaenau Gwent)|
|O'Brien, William (Normanton)||Snape, Peter|
|O'Hara, Edward||Soley, Clive|
|Olner, William||Spearing, Nigel|
|O'Neill, Martin||Squire, Rachel (Dunfermline W)|
|Orme, Rt Hon Stanley||Steel, Rt Hon Sir David|
|Parry, Robert||Steinberg, Gerry|
|Patchett, Terry||Stevenson, George|
|Pendry, Tom||Stott, Roger|
|Pickthall, Colin||Strang, Dr. Gavin|
|Pike, Peter L.||Taylor, Mrs Ann (Dewsbury)|
|Pope, Greg||Thompson, Jack (Wansbeck)|
|Powell, Ray (Ogmore)||Tipping, Paddy|
|Prentice, Ms Bridget (Lew'm E)||Turner, Dennis|
|Prentice, Gordon (Pendle)||Walker, Rt Hon Sir Harold|
|Prescott, John||Walley, Joan|
|Primarolo, Dawn||Wardell, Gareth (Gower)|
|Purchase, Ken||Wareing, Robert N|
|Quin, Ms Joyce||Watson, Mike|
|Randall, Stuart||Welsh, Andrew|
|Raynsford, Nick||Wicks, Malcolm|
|Redmond, Martin||Wigley, Dafydd|
|Reid, Dr John||Williams, Rt Hon Alan (Sw'n W)|
|Rendel, David||Williams, Alan W (Carmarthen)|
|Richardson, Jo||Wilson, Brian|
|Robertson, George (Hamilton)||Winnick, David|
|Robinson, Geoffrey (Co'try NW)||Wise, Audrey|
|Roche, Mrs. Barbara||Worthington, Tony|
|Rogers, Allan||Wray, Jimmy|
|Rooker, Jeff||Wright, Dr Tony|
|Rooney, Terry||Young, David (Bolton SE)|
|Ross, Ernie (Dundee W)|
|Rowlands, Ted||Tellers for the Noes:|
|Ruddock, Joan||Mr. John Spellar and Mr. Peter Kilfoyfe.|
§ Question accordingly agreed to.
§ Bill read a Second time, and committed to a standing Committee, pursuant to standing Order No.61(Committal of Bills).