HC Deb 18 November 2002 vol 394 cc365-80 3.31 pm
The Secretary of State for Work and Pensions (Mr. Andrew Smith)

With permission, Mr Speaker, I should like to make a statement on the next stage of our welfare-to-work strategy for people with health problems or disabilities and to report to the House the annual uprating of benefits.

On the benefits uprating, I can confirm that most national insurance benefits will rise by the retail prices index—that is, by 1.7 per cent. For the third year running, retirement pension will be uprated by more than the RPI, with an increase of £100 a year from next April for single pensioners and £160 a year for couples. The minimum income guarantee will rise by more than £200 a year, in line with the Government's aim of targeting extra help on the poorest pensioners. There will also be above-inflation rises in maternity allowance and statutory maternity pay, which will be uprated from £75 a week to £100. Most income-related benefits will rise by the Rossi index—1.3 per cent.—in the normal way. I shall place details of the uprating in the Vote Office and arrange for figures to be published in the Official Report

Ensuring that as many people of working age as possible are in employment is central to the Government's strategy to tackle poverty and social exclusion. We inherited a major problem of worklessness, not just among those traditionally seen as unemployed, but for millions of other people who were offered little or no help to find work. Between the 1970s and the mid-1990s, the number of lone parents on benefit and the number of people claiming sickness and disability benefits both trebled. As industrial restructuring took place, one in three men aged between 50 and state pension age were out of work and reliant on benefits, and one in five men between 50 and state retirement age were receiving an incapacity benefit. At a time when many people should have been given the help they needed to find other work, they were effectively written off.

Over the past five years, we have started to tackle that legacy through economic stability and our active labour market policies, providing people with individually tailored help to move into work. As a result, employment is at record levels, with well over a million more people in work than in 1997. Long-term unemployment has been massively reduced and the number of lone parents in work continues to grow. But there is still more to do; almost 4 million people of working age are out of the labour market and on benefits. Of those, 2.7 million are receiving an incapacity benefit—nearly three times the number on jobseeker's allowance. However, as is clear from surveys, many people with health problems and disabilities want to work. Indeed, more than three quarters of a million people on incapacity benefits tell us that they want a job-just because people are on IB, it does not follow that they cannot work. Indeed, nine out of 10 people who start a claim for incapacity benefit expect to get back to work. It is right that we provide the proper support to help them to do just that.

We must continue to reform the tax and benefit system from one based on what people cannot do to one based on what they can do. For people who are off Work—through illness or disability—it is often a lack of confidence or knowledge about the support and advice available which stops them getting back to work. Today, I want to announce the first steps in a new approach to remove those barriers and help people realise their potential.

Our proposals are set out in the consultation paper, "Pathways to work: Helping people into employment", which sets out a new framework of help for those who through illness or disability have applied for incapacity benefit. It combines better and more intensive advice with mandatory work-focused interviews, new opportunities for rehabilitation and new financial incentives to encourage people to move into jobs. We propose phased pilot schemes of the new approach in six areas around Great Britain from next autumn.

Let me make it very clear that this is not about forcing sick or disabled people into work. It is about encouraging people to look at their options and helping those who want to work to achieve their goal of getting a job. I should like to reassure the House that those with the most severe conditions will not be required to attend the ongoing intensive interviews. We all understand how important it is that the development of the initiative does not threaten their security and the vital support that incapacity benefit provides for them.

Our new approach has a number of aspects. First, we need to provide the right support from the outset of a claim. We will build on the framework offered through Jobcentre Plus, and ensure that new claimants get early and frequent support once their claim has been sorted out. We will train a new team of specialist personal advisers to help claimants to stay focused on their capabilities—building on their expectation that they will return to work. We want as many as possible of those moving on to incapacity benefit to be seen as people with a working future, not as people at the end of their working lives.

Secondly, some people with disabilities and health problems of course need specialist help to get back to work. In the past, that has not been available. So, we will introduce groundbreaking rehabilitation programmes, working with the national health service, general practitioners and occupational health specialists, to combine work-focused support with health-focused rehabilitation for conditions such as back pain and depression. The programmes will be tailored to people's individual needs—helping people to understand the effects of their condition and working to increase their confidence to move back into work.

Making the move from welfare to work is a big step; it creates uncertainty and, often, financial worry. There is already a range of extra help available. The disabled persons tax credit guarantees a weekly income of £167 for a single person working 30 hours. That will increase to £189 a week from April next year when new tax credits are introduced. Today I can announce that we will build on that support by piloting a return to work credit for people leaving incapacity benefit for work. It will be paid at £40 a week for 52 weeks where personal income is less than £15,000 a year. For someone returning to work for 30 hours on the national minimum wage and the new working tax credit, that will guarantee an income of at least £229 a week for the first year in work, compared with £167 under the current system, and just under £80 a week on incapacity benefit.

We realise, too, that the first step into work is a big one. Finding money for the first month's bus pass or for work clothes can too often be barriers to work. That is why I also announce today that we will extend access to the advisers discretion fund, enabling advisers to make awards of up to £300 to spend on anything that will help their clients move into work.

Better support for people with health problems will not stop at incapacity benefit. We will also increase support for people with less severe health problems who move from incapacity benefit to JSA, but who might none the less face significant barriers to work, by ensuring that they automatically see a specialist adviser when they first claim JSA. I can also announce that we will refer those people to tailored support through the relevant JSA new deal, without the usual waiting period of 18 months. We will further reform the system so that people awaiting an appeal are not moved on to reduced rate income support, but receive JSA and work-focused support.

People with health problems or disabilities get support from a number of sources. Today I have outlined the role that the state will play, but others have an important role, too. We want to encourage an environment where as many employers as possible are managing health at work actively and positively. That makes good business sense. In an era of full employment and a tight labour market, people with health problems or disabilities are an untapped resource that employers and the country cannot afford to ignore.

We also want to support doctors, who can sometimes face pressures to sign off people from work. There is now clear evidence of the medical, psychological and therapeutic benefits that work can have, so we will work with doctors to raise awareness of the importance of work retention or resumption in improving the health of their patients.

To conclude, this package of reforms is about providing support to help people with health problems or disabilities to move back into work. It is about them fulfilling their desire to work and realising their own ambition. It is about changing attitudes, both their own and those of others. Those claiming IB will, I believe, respond to a focus on what they can do, rather than on what they cannot do. We are not abandoning them and denying them opportunity, as in the past, but supporting them with help towards a better future.

Mr. David Willetts (Havant)

I thank the Secretary of State for his statement, and welcome the uprating of benefits. Despite his devoting only seven sentences of his statement to the uprating of all social security benefits, it is important for the House to ask about the right hon. Gentleman's overall strategy for benefits, before turning to what he said specifically about incapacity benefit.

Next year, £19 billion of benefits for families, including child benefit, will have been handed over to the Treasury to satisfy the Chancellor's strange obsession with tax credits. Will the Secretary of State assure the House that they will be covered in any future uprating statements? More importantly, will the Secretary of State pledge that the different tax credits for families which will replace benefits will all be uprated annually, at least by inflation?

The benefit system is to go through enormous change over the next 18 months, with more means tests and more tax credits. I regret that in his short remarks about the uprating, the Secretary of State did not describe the measures that he was taking to deliver those changes. There is widespread concern about their practicability. The pension credit has already been delayed from April 2003 to October 2003—and the computers will not be ready even then, so the complicated new formula is supposed to run on the old computers for at least two years. Is the Secretary of State confident that he can deliver that?

With child support, the position is the other way around: the new computers are available, but they are supposed to be operating on the old formula, and we still do not know when that will start. The child support changes have already been delayed from October 2001 to April 2002. Then, a few days before that deadline, they were delayed a second time, so millions of families still have no idea when the new rules for child support will take effect. Is it this year, next year, some time or never? The uprating statement is an opportunity for the House to be informed about that.

As if the pension credit and child support changes were not enough, there are all the changes to family benefits as well. Millions of families were told that they would receive the Chancellor's new tax credits in 2003, but that plan has been abandoned. Instead, the move to the new system is supposed to take place in three stages—in April 2003, October 2003 and April 2004. Can the Secretary of State assure us that that programme for the former family benefits, for which he is still responsible, is on track?

In April 2003, the Government will start the process of paying benefits into bank accounts. Hon. Members in all parts of the House will know that that has caused great concern, especially to pensioners in our constituencies. However, we still do not have reliable information about the post office card account, and none was offered today. Will the account indeed be available, ready and operational in all post offices for April 2003? We need to know from the Secretary of State whether it will be ready on time.

We would not mind all those changes to just about every main area of benefit if they were going to give us a better system, but the reason why the Government are having such difficulty in implementing them is that they are so complicated. That is because there is so much means testing. That is what we have got—more means testing for more families, and people simply do not like such tests. Does the Secretary of State accept that that is the reason why take-up of his benefits is falling? Is that why he has not even dared to publish his figures for the take-up of benefits even for the year ending April 2001, despite the fact that they are long overdue? When will he report to the House on the take-up of benefits?

Mr. Brazier


Mr. Willetts

Quite right. What we want from the Secretary of State, with the minimal information about the benefits system in his uprating statement, is some answers. We need to know how many people he thinks will take up his new benefits. Will he confirm that buried in his Department's own forecast is the expectation that only two thirds of pensioners eligible for the pension credit will receive it? How many families eligible for his family credit will receive it? In the Chancellor's fantasy world, he tackles child poverty—an admirable objective to which we know he is personally committed—but he does so by assuming 100 per cent. take-up of his benefits. In the real world, there is nothing like 100 per cent. take-up, which is a very serious problem.

The Secretary of State devoted most of his statement not to the uprating of benefits, but to his particular proposals on incapacity benefit, about which I should now like to ask some questions. Will he confirm that the number of people on incapacity benefit has now been growing for two and a half years? That has happened despite the Government already having introduced some means testing of incapacity benefit claimants and years of briefing about crackdowns on disabled people who are not working, including the notorious spin last summer about the MOT tests for disabled people. Despite his glossing over the issue, the number of workless households is now rising again.

We very much hope that after years in which Ministers have talked a lot but delivered very little on disability benefits, things might be starting to change. However, in order to improve the system and genuinely to reform it, they will have to be much more honest about the problems that they have already encountered. The Secretary of State spoke as though a new deal for disabled people had not already been introduced, as well as the ONE programme and work-focused interviews for disabled people.

May I remind the Secretary of State of the evidence from his own attempts at piloting the very sort of schemes that he has once again announced today? I sometimes think that I am the only person in the country who ever reads his Department's research reports. Maybe I should have better things to do with my time. None the less, let me remind him of what his own research reports show. He talks as though there had never been a new deal for disabled people, but it has been in place for four years. I should like to quote from an evaluation of the letters sent to invite incapacity benefit claimants to interviews. His research states that, of the disabled people on incapacity benefit who received letters asking them to work-focused interviews, 3 per cent. had responded to the invitation letter directly". He had only a 3 per cent. success rate in even getting people to the interviews under the new deal for disabled people.

Why will the new interviews be any more successful than those that the Secretary of State has already piloted, launched and, indeed, already evaluated? If people turn up for the interviews, what will happen then? Again, an evaluation has been produced by his own Department. Let me remind him what it found when it compared the pilot areas—[Interruption.] I am asking him whether he is learning the lessons from his own evaluations of his own pilots. That is the question. I shall quote. In the pilot areas respondents in the sick or disabled group who had not participated in these interviews were more likely to be in work than were participants. The research continues: This finding is not easy to explain. In other words, the right hon. Gentleman's compulsory interviews were not effective. Why does he think that things will be any different this time round? We have had announcements, crackdowns, evaluations and pilots before. We hope that it will be different next time round, but given the Government's record I doubt very much it.

We need to know from the Secretary of State how many people he expects to participate in his pilots. How many people does he expect to find work as a result of the new schemes that he has announced? We hope that he will make a success of things. We hope also that he will learn from the many charities that work with disabled people. We hope that he will learn from the commercial sector that is involved in commercial disability insurance, such as Unum. Above all, we hope that the right hon. Gentleman will finally break free from a cycle of overspin, overhype, failed pilots and failed initiatives. If he can break free, we will support him.

Mr. Smith

I glimpsed one or two questions in the hon. Gentleman's speech. He might have started by welcoming the fact that this is the third year that the state pension has been increased by more than the retail prices index. The Conservative Government conspicuously failed to do that during every year that they were in office, except the year that they were taking money off pensioners with value added tax on fuel. Since 1997, the basic state pension has increased by £275 a year above the rate of inflation. The hon. Gentleman should welcome that.

As I have said, I glimpsed some questions. Pension credit has not been delayed. It is on course to be delivered next October, as was promised. The hon. Gentleman asked whether the stages for phasing in the introduction of the credits were on course. The answer is yes. If he does not understand why it does not make sense with such a great change to phase in the introduction, it is clear that he learned nothing from the Conservative Government's administrative failings.

The hon. Gentleman asked about post office card accounts and whether they would be ready. As I have reported to the House previously, we concluded contracts with the Post Office on the universal bank. The Post Office has assured us that the card is on course for delivery.

The hon. Gentleman referred to complications. Surely he should have learned from the lessons of the Child Support Agency. There was support on both sides of the Chamber for the original, over-complicated approach. We have had to simplify it and bring forward child support reforms.

The hon. Gentleman asked about the publication of benefits statistics. As he knows, take-up is a matter for the Office for National Statistics. I am as anxious to see the figures as he is. I hope that before the end of the month I shall be able to tell him when they will be available.

Eventually, the hon. Gentleman got round to the announcement that I have made on help for those with illness and disability.

Mr. Brazier (Canterbury)


Mr. Smith

Surely it was sensible to pilot a groundbreaking initiative. That should be welcomed by the Opposition as it will be welcomed by many disabled people and their representative organisations throughout the country. More sensitive help and new rehabilitation are being brought forward, with new partnerships working with occupational health specialists and the national health service. New financial incentives are involved. I would have thought that £40 a week for a year for someone moving off incapacity benefit into work would be welcomed by Opposition Members.

The hon. Member for Havant (Mr. Willetts) referred to the existing new deals. We learned from them and from those who have been successfully providing the new deal for disabled people, as well as from the experience of where it has been less successful. We are considering how we can incorporate the lessons of the best practice and the good providers. The hon. Gentleman asks how many people would be affected. Depending on the pilot areas that are selected, I anticipate that it will be about 8 per cent. of the flow on to incapacity benefit in the first instance.

As I said, the benefits uprating statement is good, and includes a good proposal to help deal with the longstanding increase in those who move on to incapacity benefit by encouraging them to consider their options, and offering them new hope and help into jobs.

Mr. Frank Field (Birkenhead)

I welcome the Secretary of State's uprating statement and the initiative to help those who are unemployed back to work through buying a bus pass. However, does my right hon. Friend accept that for that to be effective, there must be a bus on which they can travel? Does he know that in Birkenhead, where there are 15 per cent. unemployed, 38 per cent. of job vacancies were withdrawn at the jobcentre 20 miles down the road because no one could travel to the area to take up the jobs?

I make a plea to my right hon. Friend that when he develops his welfare-to-work strategy, which Labour Members greatly welcome, he bears it in mind that his next initiative may need to link the unemployed to where the jobs are. According to the latest data, more than 200 constituencies have fewer people in work now than when we were elected in 1997, although there are 1.5 million extra jobs in the economy. One of the reasons for high unemployment in some areas is not that people do not want to work, but that they cannot travel to where the jobs are located.

Mr. Smith

I thank my right hon. Friend for his welcome for the statement and recognition of the contribution that the bus pass can make, and the other help that access to the £300 discretionary fund can provide.

My right hon. Friend made important points. They are precisely the matters on which our action teams for jobs, based in the most disadvantaged areas where unemployment is highest, can work. I urge employers, Jobcentre Plus and the Employment Service in his constituency and elsewhere to work with the action teams for jobs to realise our provisions.

In the experience of the action teams for jobs, more than 10 per cent. of those who volunteered to take advantage of their help are incapacity benefit recipients. Moreover, that applies to more than 10 per cent. of those whom the teams got into jobs.

Mr. Steve Webb (Northavon)

I thank the Secretary of State for his statement and welcome some of the measures that he has proposed to make it easier for disabled people to move into paid work.

I want to ask three questions on the aspect of the statement that the right hon. Gentleman glossed over: benefits uprating. A section of the statement is headed "Better support for people on JSA". Without mentioning sordid matters such as cash, will he explain what 1.3 per cent. means for someone on jobseeker's allowance? Will he confirm my calculation that it means 70p or 75p? Does he believe that that is a fair reflection of the increase in the cost of living that unemployed people face in the next 12 months?

Secondly, will the right hon. Gentleman confirm that the pension uprating obeys what I would call Webb's law of benefits uprating: the increase in the state pension declines with distance from the last general election? Does he confirm that the pension increased by £5 when the election was being held, by £3 the following year because a promise had to be made, but by only £2 this year?

Thirdly, will he launch an immediate and urgent internal investigation into the Department? Earlier this month, it gave a straight answer to a written question. When the Department was asked for the real value of the retirement pension in today's prices in 50 years time, it replied that it would be 75p higher than now. Will he confirm that he is again asking pensioners to accept 75p, but that this time they have to make it last for 50 years?

What sense does it make for the pension, which is supposed to be the foundation of income in old age, to increase by only 75p above inflation over half a century, when the economy will double in size?

Mr. Smith

I thank the hon. Gentleman for his welcome, if such it was, for the statement. He referred to the section on extra help for recipients of JSA. Extra help is being provided for those whose application for incapacity benefit has been turned down, and who will go on to JSA. They will be able to access early the help that the new deals provide. I hope that he will endorse that. The hon. Gentleman referred to the level of the increase. It is the inflation increase, fair and square. He also referred to the levels of increase in pensions, but, as I told the hon. Member for Havant, the cumulative impact of our pension increases, over and above inflation, is very substantial—as, indeed, it is for the poorest pensioners in receipt of the minimum income guarantee. We are making real inroads into pensioner poverty, which is something that the hon. Member for Northavon (Mr. Webb) ought to welcome.

Mrs. Joan Humble (Blackpool, North and Fleetwood)

Will my right hon. Friend, in expanding the work of his Department in jobcentres, take into account the excellent work done in the community by organisations such as Progress Recruitment in Blackpool, a newly incorporated company that was previously an arm of local government? It is successfully getting people—often those with profound disabilities—into work, because it listens to what they have to say. It also listens to what employers have to say, and allays the fears of both. It matches people with appropriate jobs and offers them support so that their jobs are successful not only in the short term but in the long term. Will my right hon. Friend look at enhancing the work of such organisations?

Mr. Smith

Yes, indeed. My hon. Friend makes a good point, and I join her in congratulating groups such as Progress Recruitment on their work. There are important lessons to be learned from how the new deal for disabled people is working successfully, and from other initiatives being undertaken by voluntary organisations in the community. They will have a central role to play in the collaborative working that we envisage as a crucial part of the new pilot.

Mr. Archy Kirkwood (Roxburgh and Berwickshire)

Will the Secretary of State confirm that there will, as usual, be a full debate on the uprating element of his statement? The contributions from the two Front-Bench spokesmen show that much needs to be discussed, and it would be beneficial if that could be organised before Christmas. As Chairman of the Work and Pensions Committee, I welcome the welfare-to-work aspects of his statement. The Committee is about to undertake an inquiry into that very important subject, on which I would like to ask the right hon. Gentleman two questions.

First, the Department's own research on moving from sickness into work, published in 2001, showed that it was time to examine the conceptual basis of incapacity benefit, and the way in which it is assessed. Will the consultation that the Secretary of State has launched include measures that consider the essence of how incapacity benefit is measured currently?

Secondly, the Secretary of State mentioned encouraging employers to manage health at work more actively. Does he agree that we need to use stronger language than that? If we are to create new vacancies for people who are not in good health, or who are disabled, it will take real encouragement and some pretty hard persuasion by the Government, using all their means, to establish vacancies for which disabled people can apply.

Mr. Smith

On the hon. Gentleman's first question, I expect the debate on the order to take place in the normal way. On his subsequent questions, I said in my statement that we needed to shift further the philosophy of the tax and benefit system from one based on what people cannot do to one based on what they can do. I take it that that is the sort of conceptual shift to which he referred. In the pilot areas, we shall build on the experience of the personal capability reports that will provide essential information to feed into the assessment, through which clients, jointly with Jobcentre Plus, medical advisers and those organising their rehabilitation will need to craft the right sort of programme to help them to move into jobs. There will, of course, be lessons to be learned from that process.

Of course, we need to do more to encourage employers. As I said in my statement, there is a good business case here as well. We should not miss any opportunity to put across the message that it is in a firm's own interests to have an enlightened recruitment policy, as many that have successfully recruited disabled people, or people who have suffered illness, will attest. In addition, as part of the approach that I have outlined today, the Health and Safety Executive is working with Middlesex university on a good practice guide to help employers to make the most of this kind of opportunity.

Mr. Terry Rooney (Bradford, North)

I welcome the thrust of the statement, but one of the biggest barriers preventing those with disabilities, especially mental disabilities or illnesses such as epilepsy, from getting work is the attitude of employers. What work will my right hon. Friend do with his colleagues in the Department of Trade and Industry to challenge those prejudices, which, sadly, apply to all too many employers?

Mr. Smith

I am glad that my hon. Friend welcomes our proposals. We shall continue to work closely with employers through, for example, the Disability Rights Commission, to promote the responsibilities imposed by the Disability Discrimination Act 1995, including those that will apply to small as well as large firms from 2004. We shall also work through the National Employment Panel to encourage and support employers who recruit more disabled people.

Mr. Nick Gibb (Bognor Regis and Littlehampton)

As the Secretary of State knows, when it comes to the quite proper allocation of further resources to the uprating of benefits and new resources to welfare-to-work schemes, his Department's accounts have been qualified owing to the huge amount of social security fraud; yet only 5 per cent. of fraudsters are prosecuted. Has he any plans to change the policy?

Mr. Smith

We take every opportunity to bear down on fraud, and to minimise the amount of fraud. As for the qualification of the accounts, we are working closely with the National Audit Office to end the present situation.

Ross Cranston (Dudley, North)

I welcome the changes in incapacity benefit administration. As an old industrial area, my constituency contains a significant number of men over 50 who will be helped by the new scheme. My obvious question is this: when will it be rolled out nationally so that Dudley can benefit?

Mr. Smith

The first three pilots will begin in October next year, and three more will follow in April 2004. We shall need to learn from that experience what works best and how cost-effective the programme is before deciding on when to roll it out, but the new approach promises a great deal, and I hope that we shall be able to extend it more generally.

Mr. Andrew Mitchell (Sutton Coldfield)

Today's statement ranged more widely than the traditional uprating statement that the House has come to expect at this time of year. Along with outside bodies that take an interest in these matters, we shall have to examine the Secretary of State's words carefully to ensure that what he has proposed will actually happen.

May I invite the right hon. Gentleman to answer the question posed by the shadow Secretary of State about the timing of the Child Support Agency reforms? May I also point out that his proposals for incapacity benefit are almost identical to those in the last Conservative party manifesto? Why does he not go the whole hog and introduce a proper integrated system?

Mr. Smith

Ours are consultative proposals, and we shall work closely with outside organisations. We shall listen to their comments, and make sure that what is implemented works well. As for the timing of the child support reforms, I wrote to all Members in September updating them on the progress of the testing of the new system. I cannot say more today, but I assure the House that, as soon as I can say when the new system will be operating, I shall seek to make a statement here.

I was not aware of a resemblance between our proposals and those of the last Conservative Government. If I had been, I might have expected a warmer welcome from Conservative Members today.

Mr. James Plaskitt (Warwick and Leamington)

I particularly welcome my right hon. Friend's emphasis on the importance of piloting reforms such as these. As he will know, the ONE reform was piloted very successfully in my constituency. One thing that emerged then was the advantage of targeting and tailoring services according to the needs of individuals. Will that approach be extended to my right hon. Friend's reform of incapacity benefit?

Mr. Smith

I thank my hon. Friend for his welcome and, like him, I think that there are important lessons to be learned from the ONE pilots. Indeed, I was pleased to visit the office in his constituency when the ONE pilot was being established there. The approach needs to be individually tailored, drawing on the personal capability report as well as medical advice and advice from other occupational health specialists to ensure that we meet the needs of the individual. The barriers that people face, whether of confidence, skills or health, are very individual and the programme needs to be individually tailored.

Mrs. Angela Browning (Tiverton and Honiton)

Will the Secretary of State take another look at how welfare to work impacts on the more able end of the spectrum of those with learning disability and those with ongoing mental health problems? He will understand that a rather different approach is required, because they are not necessarily people who have had something wrong with them or have fallen sick and recovered. They need time. In that context, will he re-examine his changes to the therapeutic earnings rule and how it affects those people? I seek for them not jobs that are just make-work schemes, but real, paid jobs. That extra time would make a difference to them.

Mr. Smith

The hon. Lady makes some good points, and we shall continue to develop our policies in ways sensitive to those whom she describes as being at the able end of the spectrum. That is very important indeed. In relation to the therapeutic earnings rule, it is important to understand that when an adviser or health support worker thinks that there is continuing health and personal development benefit from that work experience, it can extend beyond the initial 26 weeks and the second 26. We need also to consider those matters in line with what the hon. Lady says about the potential of those at the able end of the spectrum to see what we can do to enable them to move to self-sustaining employment. I would have thought that the right support and training for people who have been taking advantage of therapeutic earnings for up 16 hours would help them to move beyond that, extending opportunity rather than denying it. That is what the pilots are intended to provide.

Dr. Jack Cunningham (Copeland)

Should not everyone welcome the important benefit upratings that my right hon. Friend has announced today and the changes in procedures that his statement envisages? Will he be rigorous, however, in ensuring that the Government's intentions and our constituents are not let down by information technology system failures, on which Whitehall, sadly, does not have a good record? Is it not obvious that, with 2.7 million people receiving incapacity benefit, many tens of thousands of them would like to work if the opportunity were there for them? I therefore welcome his imaginative proposals to give those people help, professional guidance and encouragement to rejoin the labour market. But do not they also need a new deal from employment and recruitment agencies to ensure that outdated prejudices against people with disabilities are swept away once and for all?

Mr. Smith

Yes, indeed. I thank my right hon. Friend for his welcome and the points that he makes with characteristic eloquence. He is right about changing attitudes—that is one thing that we hope the initiative will do. It is perhaps not sufficiently realised that, every year, some 150,000 people move off incapacity benefit and into jobs. Reference has been made to the new deal for disabled people, which has already helped 14,000 people off incapacity benefit and into work, so with the extra support and the tailored advice, many more people, as he advocates, can progress to jobs. As to sorting out IT system failures, my Department is working night and day to get it right.

Hywel Williams (Caernarfon)

I also welcome the moves to help people with disability back to work, representing as I do an area of low economic activity that contains a large number of people with disabilities.

May I ask the Secretary of State about areas of high unemployment and extreme rurality? The statement talks about an era of full employment and a tight labour market, but that certainly is not the case in parts of the UK, parts of Wales and parts of my constituency. How will the pilot schemes address such questions in areas of high unemployment? On areas of extreme rurality, he referred to bus passes. According to the 1991 census, in my area at least, about 2 per cent. of the working population travel to work by bus. People with a disability will find it difficult to travel to any jobs that might be appropriate. How will the scheme in the six areas address those questions?

Mr. Smith

I acknowledge the hon. Gentleman's point about the challenge not just on unemployment as conventionally recognised, but on labour market inactivity, especially in some parts of Wales. I very much hope that we will be able to operate one of the pilots in Wales precisely so that people trapped in inactivity can have a greater opportunity to get into jobs. The initiatives that we are already implementing through the action teams in the most disadvantaged areas have a lot to commend them, and I would certainly urge strong local collaboration between Jobcentre Plus and the health and occupational specialists, and with employers. There are vacancies even in areas of high unemployment, and it is crucial for people who have been trapped out of the labour market to be able to access them.

The discretionary support available for travel is not confined to bus passes. I gave that as an illustration. It can help with travel to work by other means.

Mr. George Foulkes (Carrick, Cumnock and Doon Valley)

May I urge the Secretary of State to ignore the Jonahs on the Opposition Front Benches, and instead commend the excellent work that is already being done to get disabled people into work by the skilled professional advisers in jobcentres? Will he expand on the work of the action teams for jobs, such as the one in East Ayrshire, which is successfully providing minibuses for groups to get to work, and helping people with driving lessons so that they can pass their test and drive to work? All those teams are doing extremely well. Will he consider rolling out the action teams on jobs initiative to other areas, such as Girvan—an area you know very well, Mr. Speaker? Will he also confirm that one of the new, excellent pilot schemes will be in Scotland?

Mr. Smith

Yes, I hope that one of the pilots will be in Scotland. I thank my right hon. Friend for his remarks about the staff in jobcentres and elsewhere who are doing such good work in helping disabled and other unemployed people into jobs. I shall listen to what he has to say as we carry forward this initiative on action teams for jobs. I shall consider carefully his recommendation for it to be extended.

Mr. Gary Streeter (South-West Devon)

If the proposals that the Secretary of State has announced have the intended impact, they deserve to be supported. However, he seemed to be establishing a new battery of special advisers, experts and others who will help disabled people to go from welfare into work. How many new advisers does he anticipate will be required for these extensive measures, and what will that cost?

Mr. Smith

As I just said, we shall draw on the expertise that is already available from disability employment advisers. We shall need to recruit and train more advisers in the pilot areas. That will have to be a collaborative effort in those areas as the initiative gets under way. The hon. Gentleman asked a sensible question about costs. It shows the scale of our commitment to this initiative that provision was secured through the spending review for extra resourcing. There will be £15 million next year and £41 million in each of the two succeeding years.

Mr. Tom Levitt (High Peak)

I have no doubt that the credit of up to £40 a week for people coming off incapacity benefit into work and the grant of up to £300 for the one-off costs of going into work will be a tremendous help to people who would otherwise find that transition difficult. Will the Secretary of State help me with regard to disabled people who could work but perhaps not full-time? I am thinking of severe asthmatics and people with arthritis or ME. My constituent Joe Bush is a severe asthmatic. He is a few years from retirement, and is allowed to earn up to £66 a week on top of his incapacity benefit, but only for 26 weeks, after which he must start from scratch. What is there in this package for people like Mr. Bush, who are capable of work, but not full-time, regular work?

Mr. Smith

The provisions for therapeutic earnings are not limited to the first 26 weeks. Where it is clearly to the benefit of the client, as judged by a medical professional or by their adviser, that period can be extended. Moreover, that is one of the reasons why, in the pilots that I have put forward today, the back-to-work credit—the extra £40 a week—would not depend on someone working full time and would be available to someone working more than 16 hours a week. That greatly increases the gains from working for someone with a disability moving into a job, even when they cannot work full-time.

Paul Holmes (Chesterfield)

I welcome some of the Secretary of State's comments about helping people who are on incapacity benefit back into work where that is appropriate, but the emphasis must be on "where appropriate". I should like to ask two questions in relation to that. First, he talks of compulsory interviews in the pilot areas for all but the most severe cases. What criteria will be used to determine those cases? This year, we have seen successful appeals against decisions to withdraw incapacity benefit increase from more than 40 per cent. to a massive 53 per cent. Obviously, people concerned do not want to be forced back into work when they are not ready or capable. Secondly, all the surveys undertaken by the Government and by disability organisations indicate that 40 per cent. of people with disabilities positively would welcome the chance to get back into work if they could overcome the obstacles. Many of the things that the Secretary of State said will help in that area, but why not, rather than beginning with blanket back-to-work interviews—

Mr. Speaker

Order. I have allowed the hon. Gentleman two questions. He is doing well.

Mr. Smith

I thank the hon. Gentleman for his supportive remarks. It is not a question of forcing anyone to undertake work. We will be using the existing provisions that can make work-focused interviews mandatory, and, in excepting the most severe cases, we will be guided by the personal capability report. That is precisely something on which we wish to consult as we develop the proposals, which is one of the reasons why these are Green proposals today. We want to learn from those in the field, the wider public and those who represent disabled people.

Mr. Chris Pond (Gravesham)

I welcome my right hon. Friend's determination not to write off people with disabilities, as occurred before 1997. In addition to the welcome measures to help disabled people into work, will he make sure that there is continuing support so that they can continue in work and do not find themselves back on benefits soon after getting into employment?

Mr. Smith

I thank my hon. Friend for his support. We shall examine how we can ensure that the support does not stop the minute someone starts work. That support must continue, so that they have that back-up, which is an essential part of the rehabilitation process.

Mr. John Bercow (Buckingham)

Why is the Secretary of State so timid and coy in failing to appreciate the significance of the problem highlighted by my hon. Friend the Member for Havant, namely that the complexity and intrusiveness of means-tested benefits are such that one third of pensioners do not claim them? Will he recognise that that is an urgent problem that needs to be urgently addressed?

Mr. Smith

I am not aware that I was being coy. As the hon. Gentleman recognises, there is a balance to be struck between simplicity on the one hand and ensuring that available resources are used most effectively to help the poorest on the other. We have been doing that; notably in respect of the huge inroads that are being made into pensioner poverty, precisely because we have brought in the minimum income guarantee and increased it in real terms by so much.

Mr. David Kidney (Stafford)

I welcome the benefit upratings, especially the above-inflation increases for the state retirement pension, the minimum income guarantee and statutory maternity pay. In the case of older people on benefit who want to return to work, does my right hon. Friend also recognise the problem of age discrimination by some employers? If sticks and carrots can be applied to those employers, will he consider bridging the gap between the current voluntary code of practice and the legislation that will not be with us until 2006?

Mr. Smith

One of the programmes that we have learnt from in devising the pilots is the new deal 50-plus, where the back-to-work credit was such a success in supporting so many people back into jobs. I am aware of the problem that my hon. Friend refers to. It is why we are running the age positive campaign. Since we launched that, the proportion of job advertisements in which an age limit is specified has more than halved. Moreover, the Government are committed to bringing forward measures to tackle age discrimination through legislation.

David Cairns (Greenock and Inverclyde)

A recent meeting of the all-party group on brain injury heard evidence that entirely substantiates my right hon. Friend's claim that many people with brain injuries want to work and are capable of working but lack the necessary advice and support. Can he reassure me that, among the specialisms of the new advisers that he has announced today, there will be expert knowledge on the many complex issues facing people with acquired brain injuries?

Mr. Smith

Yes. That is precisely the sort of expertise that we have drawn on in bringing forward the proposals. I referred in my statement to the medical evidence on these matters. There is the Acheson report and work by Waddell and Burton on occupational health guidelines for the management of back pain. Others have expertise in head injuries. Increasingly, the evidence shows that, in the right circumstances, the right progress back into work helps people in terms of health as well as of self-esteem. We shall draw on the expertise.

Huw Irranca-Davies (Ogmore)

Does my right hon. Friend recognise that the approach tailor-made to the individual is exactly the right approach but extremely resource-intensive? Can he build on the action team for jobs and avoid the aberration where one community in one ward benefits from it, yet one equally deprived next door cannot? It has released pent-up demand and is thoroughly to be welcomed. Can he try to avoid the aberration of the postcode lottery?

Mr. Smith

Yes, except that in bringing forward pilots there will have to be boundaries to the pilot areas. I am not sure that all boundary problems will be unavoidable. We will try to do this as sensitively as possible, recognising the needs of local communities.