Welfare Reform Bill

Public Bill Committee, 17 October 2006.

Standing Committee A

Sir David Amess (Conservative, Southend West)

I remind the Committee that there is a money resolution and a Ways and Means resolution connected to the Bill. Copies are available in the room. I have been advised that I must remind hon. Members that, as a general rule, adequate notice should be given of amendments. My co-Chairman, Mr. Jimmy Hood, and I do not intend to call starred amendments. As ever, would all hon. Members also ensure that mobile phones, pagers and whatever other kinds of technology they are using are turned off or are in silent mode during Committee proceedings?

We now come to the programme motion. Debate on the motion may continue for up to half an hour.

Jim Murphy (Labour, East Renfrewshire)

I beg to move,

That—

(1) during proceedings on the Welfare Reform Bill the Standing Committee shall (in addition to its first meeting at 10.30 a.m. on Tuesday 17th October) meet—

(a) at 4.00 p.m. on Tuesday 17th October;

(b) at 9.10 a.m. and 1.30 p.m. on Thursday 19th October;

(c) at 10.30 a.m. and 4.00 p.m. on Tuesday 24th October;

(d) at 9.10 a.m. and 1.30 p.m. Thursday 26th October;

(e) at 10.30 a.m. and 4.00 p.m. on Tuesday 31st October;

(f) at 9.10 a.m. and 1.30 p.m. on Thursday 2nd November;

(g) at 10.30 a.m. and 4.00 p.m. on Tuesday 28th November;

(h) at 9.10 a.m. and 1.30 p.m. on Thursday 30th November;

(2) the proceedings shall be taken in the following order: Clause 1; Schedule 1; Clauses 2 to 20; Schedule 2; Clauses 21 to 25; Schedule 3; Clause 26; Schedule 4; new Clauses and new Schedules relating to Part 1; Clauses 27 to 37; Schedule 5; new Clauses and new Schedules relating to Part 2; Clauses 38 to 46; new Clauses and new Schedules relating to Part 3; Clauses 47 to 55; Schedule 6; Clauses 56 to 59; Schedule 7; new Clauses and new Schedules relating to Part 4; Clauses 60 to 63; Schedule 8; Clauses 64 to 67; remaining new Clauses and new Schedules; remaining proceedings on the Bill;

(3) the proceedings shall (so far as not previously concluded) be brought to a conclusion at 4.30 p.m. on Thursday 30th November.

Thank you, Mr. Amess. I am sure that I speak on behalf of everyone when I say that we are delighted to see you in your place for the first sitting of this important Committee. Your duties will be shared by Mr. Jimmy Hood, whom I also know to be an experienced Chairman of such proceedings.

It is generally accepted that the Bill is a very important and necessary piece of legislation. We have built into its proposals the support and consensus reflected on Second Reading and contained in the welfare reform Green Paper. The consultation on the Green Paper and the Government’s response to it will be reflected in our conversation and debate during the 16 sittings.

The basis of the Bill is that too many people have simply been written off as having no worthwhile contribution to make in our society, despite the fact that nine out of 10 people on incapacity benefits say that they wish for the opportunity to work. The Bill seeks to give effect to that overwhelming aspiration of those on incapacity benefit.

I am pleased to be joined by the Minister with responsibility for disabled people, the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Stirling (Mrs. McGuire). She has a great deal of experience on the issues that the Committee will seek to address.

Thus far—it may continue, but I do not wish to tempt fate—there has been a sense of co-operation both inside and outside the House about the principles and specifics of the Bill’s proposals. That spirit extended itself to the Programming Sub-Committee’s resolution.

David Ruffley (Conservative, Bury St Edmunds)

Can I have a name check?

Jim Murphy (Labour, East Renfrewshire)

We will leave that till the end of our proceedings.

Through the wise counsel and advice of the Whip, the Vice-Chamberlain of Her Majesty’s Household, my hon. Friend the Member for Nottingham, East (Mr. Heppell), the Programming Sub-Committee has agreed to 16 sittings without knives or guillotines, on the basis that the Committee will find its own way through our proceedings. If we do not make the necessary progress, he reserves the right to recall the Programming Sub-Committee to introduce knives and guillotines, which all of us would rather do without, judging from the way that we have progressed thus far.

David Ruffley (Conservative, Bury St Edmunds)

I welcome you, Mr. Amess, to the Committee. I look forward to speaking before Mr. Hood later. I hope that you do not mind that I have adopted the traditional modern Conservative garb of no jacket.

Jim Murphy (Labour, East Renfrewshire)

No policies.

David Ruffley (Conservative, Bury St Edmunds)

The Minister playfully suggests that we have no policies. He will soon discover that we do.

I thank the Minister and the Labour Whip for the amount of time that they have proposed for discussion of the Bill. We are happy to accept it. In the current climate, 16 sittings seems a generous allocation. It reflects the seriousness with which Ministers and the Government take the subject.

It is a big Bill in two senses: it is long, and it is a big issue. We all agree on that. The Green Paper, to which we shall refer in our proceedings, gave a magisterial analysis of the scale of the problem. All politicians, everyone with limited capabilities and those who support them, such as lobby groups, agree on some important facts: currently, some 2.7 million people are on incapacity benefit, 1.5 million of whom have been on it for more than five years. Statistics outlined by Ministers, and which I also use, show that if a person has been on incapacity benefit for more than two years, they have a better chance of dying or retiring than of getting another job.

The Bill is designed to hit the target of reducing by 1 million the 2.7 million incapacity benefit recipients by 2016. There is a lot of work before us, which the clauses in the Bill aim to do. Many of us have had extensive briefings on many issues from outside groups. I am not going to list them all, but Ministers as well as my hon. Friends have been in deep discussion with them. I pay tribute to them for the volume and quality of their briefings, not just on the Bill but on the consultation findings published by the Government in early summer on the back of the Green Paper and for their representations before the Green Paper.

A cornucopia of issues needs to be teased out. We have 16 sittings in Committee. Some people have suggested that we might not need all those sittings, but let me explain why I think that we will need them. The nature of the incapacities people now experience is changing. According to a remarkable statistic—both sides find this worrying—again in the Green Paper, 40 per cent. of those on incapacity benefit are on it because they have a mental or behavioural disorder. In 1995, that figure was 22 per cent. Many think that most people claim incapacity benefit because of bad-back syndrome—the classic, and rather lazy, identification—and muscular skeletal problems. That used to be true, but this year only 19 per cent. claimed it for that reason.

The nature of incapacity or disability is changing, which raises questions about how we treat not only those with predominantly mental and behavioural difficulties, but those with physical disabilities, with a fluctuating condition. That is a massively important issue on all our radars, and we want a good debate on it.

We need to remind ourselves that the Bill has a great deal of good in it, which I shall be making clear. However, a lot of outside groups as well as the Opposition question whether the successes in the well resourced pathways to work programmes will be continued. We know that we need to tease out that issue, no doubt in a clause stand part debate so that we are in order, and to ask how quickly existing claimants will be migrated on to the new employment and support allowance, which is the subject of the Bill.

I do not mean to be confrontational—Ministers themselves have flagged up frankly this issue—but what is the ability of those on the support component in the Bill to volunteer for work-related activity and how quickly will they be able to do so? It is neither the Government’s nor the Opposition’s intention to force those in the support component to participate in work-related activities, but if they wish to volunteer, they must be properly resourced.

There are issues around the quality of the training of the personal advisers delivering the allowance and, indeed, the regime that precedes it. Do they have enough understanding of mental health issues? There are further issues around the other two targets set out in the Green Paper, which the Bill is designed to meet. They are noble aims that we support—returning to the work force 1 million older people and one third of a million lone parents. We all agree on those things. The Bill addresses those policy imperatives—they are policy imperatives for us all.

In summary, for the record, I agree with what the Minister just said. He said that the Bill had built-in consensus and support for its central planks. That is true. He knows our good intent because we had the option of not voting for the Bill on Second Reading in July. We did not take that option. We were in favour of the Bill, and I hope that that spirit of consensus will continue for these 16 sittings.

A “but” is coming, however, which the Minister will respect. The spirit of consensus does not mean that we can agree with everything in the Bill; that is not how parliamentary scrutiny works. We want a good airing of the issues. In that respect I should like to draw attention to the fact that quite a few clauses are enabling clauses. They refer to regulations that are to be published where the fine grain, granular detail will be exposed.

The Minister has done his level best and the civil servants have done a good job in producing much draft regulation material for the Committee, but two of the three draft regulations relating to the assessments under clauses 8 to 10 are not available. That is not the Minister’s fault. We have had a very grown-up discussion about why they cannot be published. Ministers would be greatly criticised if they rushed out draft regulations when everyone knows that they and their officials have been deep in consultation on the design of the limited capability for work test, the work-related health assessments and the work-related activity assessments.

If we are to have a sensible debate about those very important clauses, we will need some latitude to kick around the issues. The outside world, disabled people and those with incapacity, the advocates and the groups who support and advise them will want to know that we are teasing out the issues at this stage, and are not waiting for the regulations to appear at some time in the future. It would not go down terribly well with any of us if we did not have the opportunity to have an extended debate, notwithstanding that the clause does not include much detail and the draft regulations are not available for completely understandable reasons.

With those minor caveats, I am happy to begin this Committee in a spirit of great consensus. I would just say parenthetically, as a former Opposition Whip, that this is probably the first time, certainly in my experience in the last two years, that the Opposition have not voted down a programme motion. We agreed the programme motion in the Programming Sub-Committee and are very grateful to the Government for affording such time.

Danny Alexander (Liberal Democrat, Inverness, Nairn, Badenoch and Strathspey)

It is also a pleasure for me to be serving on this Committee under your chairmanship, Mr. Amess. I look forward to our discussions and the guidance that you and Mr. Jimmy Hood will give. It is a particular pleasure for me as a relatively new Member, because it is the first time that I have served on a Standing Committee. I look forward to any guidance or instructions that you might be able to give me.

As the Minister and the Conservative spokesman both said, there is a great deal of consensus around the principles and objectives of the Bill. As I said on Second Reading, the Liberal Democrats certainly share in that. There is a strong need and, indeed, a moral imperative to tackle the problem of the 2.7 million people who are on incapacity benefit. Many of them wish to work; they would like to have the opportunity to work but, for a variety of reasons, it is denied them. Those principles are the driving impetus behind the Bill, and the Liberal Democrats would like to enter into the debate on them in a consensual manner.

A huge number of people are affected, so the Bill is important for that reason; it is also important because there is such interest in the wider community in the Committee’s deliberations and the results of its discussions. An enormous number of outside bodies—lobby groups, representative organisations, and so on—take a great interest in this Bill. I am grateful for the support and briefing that they have provided me with and I am sure that other Committee members are, too.

As the Conservative spokesman, the hon. Member for Bury St. Edmunds (Mr. Ruffley) said, broader issues relate directly to whether the provisions contained in the Bill can be successful, and I hope that we have a chance to discuss those. In particular, many of the changes made under the Bill depend for their success on the success of the pathways to work programme that has been piloted in several areas and has been proven to be successful for at least some of the groups for which it provides help. However, I am concerned that, under the Government’s proposals for rolling out that programme across the whole country, those people for whom we are talking about changing the benefit arrangements and increasing the amount of conditionality that applies will then rely on pathways to work to provide the positive side of the equation.

David Ruffley (Conservative, Bury St Edmunds)

I do not wish to interrupt the hon. Gentleman’s flow, but again in a spirit of consensus, would he agree that there are issues about sanctioning, for instance, about which outside bodies and disability groups are concerned? I am sure that the Minister will want to debate that in a spirit of co-operation.

Danny Alexander (Liberal Democrat, Inverness, Nairn, Badenoch and Strathspey)

I think that we could take this spirit of co-operation and consensus thing too far. However, I agree with the hon. Gentleman and I hope that the Minister will, too, because there are important issues involved, including whether the people who will have sanctions and conditions placed on them will have genuine access to the support and help that they need.

This has rightly been described by the Government as a something-for-something arrangement. We support that approach, but we have to ensure that the something that is on offer to support people back into work—the pathways to work programme—is rolled out properly. I hope that the Minister will be able to offer some assurances about the level of funding that will be available for that package. I am concerned that there is a big shortfall in the funding that will offer people outside the pilot areas a “pathways to work lite programme”, which will mean that the responsibilities that they are being asked to take on under the Bill are not balanced by the opportunities and support that is on offer. That is my first caveat.

The hon. Member for Bury St. Edmunds made the important point that, over the years, we have seen an increasing proportion of incapacity benefit claimants claiming for reasons of mental health. One Government evaluation of the pathways to work programme has suggested that incapacity benefit was not as effective for people whose first reason for claiming benefit was mental health. We need to return to that issue, particularly when we are discussing the personal capability assessment. We will need to ensure that there are protections and assurances for the people involved. Likewise, there are important questions to be asked about how quickly existing claimants will be migrated on to the new benefit and to what extent both the conditions and benefits of pathways to work will be available to them.

An important issue regarding the amendments that we want to discuss is the extent to which the Government’s approach offers any sense of support to, or engagement with, employers. This is not just a supply-side issue about getting people ready for work; it is also about ensuring that employers are encouraged to keep their side of the bargain.

I am happy to support the programme motion. The approach that has been suggested—not having knives, but allowing the Committee to find its own way—should command support from all Committee members. I hope that we have a mature and sensible discussion, and I am sure that that will be so. I dare say that we will find consensus on some issues, but also that there will be disagreements and I am sure that they will be discussed on both sides in the constructive spirit that has governed the Bill’s proceedings so far.

Clause 1

David Ruffley (Conservative, Bury St Edmunds)

I beg to move amendment No. 52, in clause 1, page 1, line 15, leave out ‘limited’ and insert ‘restricted’.

Sir David Amess (Conservative, Southend West)

With this it will be convenient to discuss the following amendments: No. 183, in clause 1, page 1, line 15, leave out ‘limited capability for work’ and insert

‘labour market disadvantage related to physical or mental condition’.

No. 1, in clause 1, page 2, line 1, leave out ‘limited capability for work’ and insert ‘a labour market disadvantage’.

No. 205, in clause 1, page 2, line 1, leave out ‘limited’ and insert ‘restricted’.

No. 2, in clause 1, page 2, line 2, leave out paragraphs (a) and (b) and insert—

‘(a) the labour market disadvantage affecting such a person is related to his physical or mental condition, and

(b) the disadvantage is such that it is not reasonable to expect him to work.’.

No. 206, in clause 1, page 2, line 4, leave out ‘limitation’ and insert ‘restriction’.

No. 150, in clause 1, page 2, line 4, after second ‘to’, insert

‘be available for or actively seek work’.

No. 9, in clause 8, page 6, line 7, leave out from ‘whether’ to ‘him’ in line 9 and insert

‘the labour market disadvantage affecting a person, and related to his physical or mental condition, is such that it is not reasonable to expect.’.

No. 207, in clause 8, page 6, line 7, leave out ‘limited’ and insert ‘restricted’.

No. 208, in clause 8, page 6, line 8, leave out ‘limitation’ and insert ‘restriction’.

No. 14, in clause 8, page 6, line 24, leave out ‘limited capability for work’ and insert ‘a labour market disadvantage’.

No. 209, in clause 8, page 6, line 24, leave out ‘limited’ and insert ‘restricted’.

No. 15, in clause 8, page 6, line 25, after ‘examination’, insert ‘necessary to determine labour market disadvantage’.

No. 16, in clause 8, page 6, line 27, leave out ‘limited capability for work’, and insert ‘a labour market disadvantage’.

No. 210, in clause 8, page 6, line 27, leave out ‘limited’ and insert ‘restricted’.

No. 17, in clause 8, page 6, line 42, leave out ‘limited capability for work’, and insert ‘a labour market disadvantage’.

No. 211, in clause 8, page 6, line 42, leave out ‘limited’ and insert ‘restricted’.

No. 18, in clause 8, page 6, line 43, leave out ‘limited capability for work’, and insert ‘a labour market disadvantage’.

No. 212, in clause 8, page 6, line 43, leave out ‘limited’ and insert ‘restricted’.

No. 19, in clause 8, page 6, line 45, leave out ‘limited capability for work’, and insert ‘a labour market disadvantage’.

No. 213, in clause 8, page 6, line 45, leave out ‘limited’ and insert ‘restricted’.

No. 20, in clause 8, page 7, line 2, leave out ‘limited capability for work’, and insert ‘a labour market disadvantage’.

No. 214, in clause 8, page 7, line 2, leave out ‘limited’ and insert ‘restricted’.

No. 21, in clause 8, page 7, line 6, leave out ‘limited capability for work’, and insert ‘a labour market disadvantage’.

No. 215, in clause 8, page 7, line 6, leave out ‘limited’ and insert ‘restricted’.

No. 29, in clause 10, page 9, line 8, leave out ‘capability for work’ and insert ‘a labour market disadvantage’.

No. 30, in clause 10, page 9, line 9, leave out ‘capability for work’ and insert ‘a labour market disadvantage’.

No. 42, in clause 17, page 14, line 31, leave out ‘limited capability for work’ and insert ‘labour market disadvantage’.

No. 216, in clause 17, page 14, line 31, leave out ‘limited’ and insert ‘restricted’.

No. 43, in clause 17, page 14, line 32, leave out ‘limited capability for work’ and insert ‘labour market disadvantage’.

No. 217, in clause 17, page 14, line 32, leave out ‘limited’ and insert ‘restricted’.

No. 44, in clause 17, page 14, line 34, leave out ‘limited capability for work’ and insert ‘labour market disadvantage’.

No. 218, in clause 17, page 14, line 34, leave out ‘limited’ and insert ‘restricted’.

No. 46, in clause 21, page 16, leave out lines 38 and 39 and insert—

‘ “labour market disadvantage” shall be construed in accordance with section 2(5);’.

No. 219, in clause 21, page 16, line 38, leave out ‘limited’ and insert ‘restricted’.

No. 220, in clause 21, page 16, line 40, leave out ‘limited’ and insert ‘restricted’.

No. 47, in clause 21, page 16, line 42, leave out ‘limited capability for work’ and insert ‘labour market disadvantage’.

No. 221, in clause 21, page 16, line 42, leave out ‘limited’ and insert ‘restricted’.

David Ruffley (Conservative, Bury St Edmunds)

Thank you, Mr. Amess. That must be some kind of record.

The amendment relates to an important piece of language, on which the Government should be congratulated, as their approach is to get away from the notion of incapacity. In the 1990s, invalidity benefit was changed to incapacity benefit. In those days, which are not that long ago, it was seen as an advance; but to me, and to most of us in the 21st century, it seems a rather unfortunate phrase, which is not in tune with the times.

The question, however, is whether the phrase “limited capability for work”, which is an improvement, is necessarily the right one. In the spirit of probing, I wonder whether the word “restricted” might be better. I do not want to stray into semantics, nor do I want to take up the Committee’s time, but in the longer version of the Oxford English dictionary, “limited” is described as

“appointed; fixed; confined within definite limits”.

“Restricted” might therefore be an improvement, as it is described in the same volume as

“of a person; not allowed freedom of movement”.

There is a sense in which, if “restricted” is used, people are being limited, and not free to move. The reality is that if someone has a limited capability for work, they are not being written off, because the Bill makes it clear that if a person has a limited capability for work and draws the support element of the allowance, it is not the end of the story. It is explicit in the Bill and in what the Secretary of State said that there will be movement within the elements of the allowance.

We must be clear about the language: when I was considering amendments to the Bill, “limited capability” struck me as being not quite right. The concept is fine, and the emphasis on capability is tremendous; I am not talking about what people cannot do, but about what they can do.

I am drawn inevitably to the other amendments, but I shall not list all of them for fear of trying your patience, Mr. Amess. There are attractions in the amendments that relate to “labour market disadvantage”, which I believe the Government will reject, but we need to explore the issue because it is important. It is not just about mental and physical conditions, which are mentioned in the amendments, being a limiting factor, but about labour market disadvantage. In that respect, we need to reflect on the debate among the many groups outside the House that are watching this Bill carefully. One thing that my hon. Friends and I—and Ministers, too—have picked up on is the fact that there is a demand side in the labour market—which is what the amendment refers to—and also a supply side. On the supply side, individuals are getting support. As we have heard, at least 1 million—probably more—out of the 2.7 million want to work. With the appropriate support, they are getting better and work ready.

What about the demand side? If the employees are not up for—to put it colloquially—employing those with limited capability or even severe disability, it does not matter how well they make themselves, what training they get, rehabilitation they do or support they get from Jobcentre Plus or third sector bodies. Therefore, the words “labour market disadvantage” in the amendment lead me inexorably, and I hope validly, for the purposes of this clause, to explore employment attitudes. One can have a limited capability if the employer does not take on disabled people even though they are work ready.

The Bill has great aims and ambitions and we want to try and ensure that the clauses work to deliver those policy objectives. However, has enough attention been given in the clause and elsewhere to encouraging employers to employ people with disabilities in the workplace? I am not suggesting for one second that this is an issue that Ministers have not thought about. They have; I have spoken to them. I know that this is a big issue. However, there does not yet appear to be enough on that in the Bill. That is why the “labour market disadvantage” amendment that we are speaking to is important.

There are some interesting statistics that I would like to share with the Committee. In 2005, the Chartered Institute of Personnel and Development took a large sample of employers drawn from all sectors. One in three employers responded that they deliberately excluded people with a history of long-term sickness or incapacity when recruiting staff. On the face of it, we all know that that looks like straightforward unlawful discrimination that would be covered in other Acts of Parliament and that deservedly should be stamped on. However, when it comes to people who have been on incapacity benefit—and, should it go through, the logic would apply to the new employment and support allowance—the picture is more complicated. Rather than being concerned about prospective employees’ health per se, many employers are concerned about the possibility that long-term claimants may lack up-to-date skills. They may have been on incapacity benefit for five years or even longer and lost the habit of working in a socialised work environment. Those were the findings of the CIPD, and 43 per cent. of the employers surveyed thought that long-term IB claimants would be less productive at work.

Recruitment conveys risk for any employer. They have the bottom line to worry about and they say—we know what the employers’ arguments are—that if the wrong person is hired, it can be costly to the whole enterprise. However, when we are looking at labour market disadvantage, it is not good enough in this day and age to say that employers’ attitudes do not matter or that we will just try and exhort them generally. We know that employers prefer to play safe, but that is not good enough.

The Royal National Institute of the Blind has also done research on this subject which shows that nine out of 10 employers thought that a blind or partially sighted person was either difficult or impossible to employ. It has said that the

“DWP needs to address evidence highlighted in Report no. 202 ‘Employers’ and service providers’ responses to the Disability Discrimination Act in 2003 and preparation for 2004 changes’ highlighting that nine out of ten employers think blind and partially sighted people are ‘difficult’ or ‘impossible’ to employ.”

The Department for Work and Pensions research report No. 139 on employers’ attitudes said that 37 per cent. of employers would take on people with mental health conditions, whereas 62 per cent. would take on physically disabled people. A poll commissioned by the Disability Rights Commission indicated that 25 per cent. of non-disabled people would not tell their employer if they acquired a disability or long-term health problem, for fear of dismissal—partly because of such attitudes, which will restrict a proper labour market for those with limited capabilities.

I support those findings—one goes out there, so one knows that that kind of thing goes on. Nevertheless, the CBI produced a survey that showed that 84 per cent. of firms now offer rehabilitation schemes to assist staff to return to work. However, the CBI also acknowledged that 35 per cent. of employers feel that they need more support from employees’ GPs, and/or want assistance with costs.

John Robertson (Labour, Glasgow North West)

I have listened to the hon. Gentleman’s comments on rehabilitation. I tried to introduce a ten-minute Bill on that subject. Does he agree that the Government need to consider people who become disabled through their work, rather than just considering disabled people in general, and that they have to legislate for that?

David Ruffley (Conservative, Bury St Edmunds)

The hon. Gentleman makes an important point. He and I have been speaking to the same outside groups, and briefings that I have received from them indicate that they are waiting with great anticipation for his contribution. I shall not pre-empt the argument for fear of being out of order and detaining the Committee on this clause, but we should debate the point.

If I may speak parenthetically, one of the issues that was flagged up in the Green Paper was on that point—reform of statutory sick pay and the issue of early intervention. Intervention at the early stage of a claim is absolutely right, but quite often the first two or three months of incapacity is not the first two or three months on incapacity benefit. Instead, it is the half year that a man or woman may have been on statutory sick pay—not in the benefits system, not having made a claim, but at home, ill, still being an employee of the company at which he or she may have suffered an accident, or having fallen out of regular work. With the greatest respect to the Government, the Bill does not say enough about what should happen at that stage of rehabilitation and of early intervention, before the benefits system kicks in. The Opposition are looking at it and the current debate will enlighten both our thinking and everyone’s. I am glad that the hon. Gentleman made the point and I look forward to his later amendments.

I have heard the CBI case. However—this may interest the Committee or it may not, but I am interested in it—

John Penrose (Conservative, Weston-Super-Mare)

Tell us.

David Ruffley (Conservative, Bury St Edmunds)

I hear my hon. Friend say, “Tell us” from a sedentary position.

Anne McGuire (Labour, Stirling)

He’ll do it anyway.

David Ruffley (Conservative, Bury St Edmunds)

The hon. Lady is entirely right—I shall. There was a time when Her Majesty’s Conservative Opposition would have been seen to give 100 per cent. support to those representing capitalism without any ifs or buts. That is not true now. I tabled amendments which sadly were not called as part of your selection, Mr. Chairman, but which would have been in this group had they been selected. They were on the need to take employers’ attitudes into account over and above mental and physical health conditions. A communication was sent to me which said that the amendments that I had tabled along with my hon. Friends the Members for South-West Surrey (Mr. Hunt) and for Daventry (Mr. Boswell) were unhelpful, because we were saying that employers’ attitudes and the labour market disadvantage point need to be taken into account when judging what is limited capability. That the CBI has described me as unhelpful is a badge of honour that I wear with pride. Those were the words it used. It said that Her Majesty’s loyal Opposition spokesman on the Bill had put down an unhelpful amendment.

If I am unhelpful, I am glad to say that I am in good company because amendments in the names of other Committee members could also be described as unhelpful, and no doubt many outside bodies which contributed to the amendments might also be seen as unhelpful. To coin a phrase, we are all in this together. We need to discuss labour market disadvantage because the demand side of the equation is tremendously important. That is jargon for, “Will employers change their attitudes? Will exhortation work? Must we do more than merely exhort?

John Penrose (Conservative, Weston-Super-Mare)

In the hope that I shall not prefigure anything that the Minister might be about to say, I reassure him that when I asked the Secretary of State in the Select Committee about the effect of employer attitudes, he became very eloquent—

Sir David Amess (Conservative, Southend West)

Order. I think that I have been fairly generous. We have had a programme motion in which was discussed Second Reading, and we are now beginning to discuss amendments that have not been selected. I ask the Committee to return to the amendments that I have selected.

David Ruffley (Conservative, Bury St Edmunds)

I am most grateful, Mr. Amess.

On the attitude of employers, to which the group of amendments relates, implicitly if not expressly, Rethink and the Revolving Doors Agency have stressed that employers need more information, advice and training on best practice when employing people, particularly those with mental illnesses, which, as we have said, is one of the growing causes of incapacity, and “limited capability”—the phrase that we want to change.

A poll of small and medium-sized businesses published in October 2006, commissioned by the Disability Rights Commission, found that two thirds of those surveyed had no procedures in place for managing or assisting staff with mental health problems. I say parenthetically that both the Government and the Opposition always benefit from the work of the DRC—its findings are interesting and its surveys stimulating.

The survey indicated also that managers are more reluctant to provide workplace adjustments for new staff with a mental health condition than for existing employees with a physical one. When commenting on those findings, the chairman of the DRC said:

“We need to recognise that mental ill health is now operating as a badge of exclusion from the labour market in the same way that race and gender once did.”

“Market” is the important word there. The amendments make it clear that the labour market and the employer’s side of the deal are important. He continued:

“If the Government's welfare reform programme is to succeed it needs to tackle this lack of confidence among employers about recruiting staff who have a mental health condition.”

Having mentioned the CBI already, and pointed out that it called me unhelpful, I shall make a positive reference to some of the perfectly reasonable points that it made. Its director of human resources policy said that,

“many firms, particularly the smaller ones, need more guidance and advice on how they can help staff”.

The point is of course—we have to be fair—that many small and medium-sized employers simply do not have the resources required. They might have the good intention to be disability-facing and sensitive and to apply best practice to their businesses. However, because of their size and staff numbers, small businesses quite often do not have anyone to do human resources work. We must acknowledge that small employers have resources issues. That does not mean that we can let them ignore the need and the moral imperative to look more closely at recruiting those with disabilities, but we understand why it perhaps does not happen as much as it should in the small business sector.

Some of the concerns expressed at the time of the Green Paper made the point that I have made: there is a stigma that employers do not always acknowledge attached to people of limited capability. I quote Rethink’s response to the Green Paper:

“This is a clear market failure which needs to be addressed pro-actively by Government.”

Perhaps the Minister could respond to that at the end of the debate.

Rethink went on to say:

“Successful anti-stigma campaigns are running in Scotland and New Zealand, with significantly higher budgets than...work in England.

I am sure the Minister has seen this representation.

“The Scottish campaign has a budget nine times higher per head of the population than its English equivalent; the New Zealand campaign budget is 25 times higher...We believe that challenging employment discrimination forms an important part of work towards Objective IV of the DWP’s Public Service Agreement target, namely to further improve the rights of disabled people and remove barriers to their participation in society”

as well as in the labour market. The Government’s strategy unit

“recommended in 2005 that employers should lead a campaign on the business benefits of employing disabled people with input from DWP and DTI”.

That is a new point in the argument. It is not just that employers should consider recruiting and doing more to retain those with limited capabilities; I have made that point, as have the outside bodies. What about the business case—the positive, proactive reasons for taking on those with limited capability?

The strategy unit discussed the recommendations and the employer engagement project. Rethink said to me that it has not heard enough concrete Government plans on the matter. It said:

“There are specific initiatives that need to be undertaken in relation to employers.”

It gave some examples that we hope will help that labour market disadvantage to disappear or to be reduced:

“Application forms for employment now often ask whether a person has been detained under the Mental Health Act. Employers must be discouraged from asking this question of applicants...Aside from enabling employer-side discrimination, this practice also deters people with mental illness”

from applying for such jobs in the first place.

Rethink found:

“People with mental health problems have the highest ‘want to work rate’ but the lowest ‘in work rate’ of any disability group”

and cited 2003 Office for National Statistics figures to support that conclusion.

“It is conceivable that people will face continued rejection because of their health condition”

unless we all pay more attention to the labour market disadvantage.

The Sainsbury Centre for Mental Health has suggested Shift, a five-year initiative to tackle stigma and discrimination against people with mental health problems, as an example of a programme into which more investment might be channelled. Before the Minister, who is a decent and clever fellow, stands up to ask whether that is a Conservative party spending commitment, I shall say that it is not. It is just a question whether that project is properly resourced, and whether part of his budget might be vired across to support it. I do not know. That is one for Ministers, but I should like to hear more about it.

Dr. Peter Kenway, director of the New Policy Institute, pointed out that the Green Paper did not appear to consider the difficulties employers, especially small employers, would face in employing those with fluctuating conditions. I have already referred to the difficulties that small employers will have. The CBI pointed that out, too. I will not dwell on the subject of fluctuating conditions now because it will recur, not necessarily in clause after clause, but it will be a leitmotif for all of us throughout the Bill.

Dr. Kenway said that

“if one wants to get employers to take people on then one has got to look at who is risking what and whether there is a role for the state in mitigating those risks. That is particularly acute in the fluctuating health conditions.”

He pointed out that the Government and we as a country need to think more closely about that. I know that that work is being carried out inside the DWP.

We could touch on the issue of wage subsidies for employers, although I currently do not favour them. It is interesting to consider whether the Government should use public expenditure to develop a kind of in-work benefit, or financial in-work support to encourage those employers I have described who are not as keen on employing those with disability as they should be—

Sir David Amess (Conservative, Southend West)

Order. The hon. Gentleman is engaging and entertaining the Committee but he is now stretching my patience just a little. He is going rather wide of the amendments I have selected.

David Ruffley (Conservative, Bury St Edmunds)

I accept your stricture, Mr. Amess. You said that I entertain. I hope that I also inform. That will be for others to judge. I had, coincidentally, come to the end of my remarks. I was merely suggesting that, in relation to labour market demand-side issues, I would not address subsidies from the Government to employers to encourage them to take on those with limited capabilities. It might be an issue for others. However, I would not want my remarks on labour market disadvantage and the nature of limited capability to pass without flagging up that there is a debate about Government intervention with wage subsidies. It does not attract me at present. I am not aware that it attracts the Minister. Nevertheless, it should be flagged up for the record. That said, I am happy not to go any wider. I commend amendment No. 52 to the Committee.

Danny Alexander (Liberal Democrat, Inverness, Nairn, Badenoch and Strathspey)

I would particularly like to speak to amendments Nos. 183, 1 and 150. I agree with many of the comments of the hon. Member for Bury St. Edmunds, although I found it instructive that he seemed to spend more time on the amendments that my hon. Friend and I tabled on the question of labour market disadvantage than on his amendment No. 52 which would insert the word “restricted”.

David Ruffley (Conservative, Bury St Edmunds)

That is somewhat churlish as I explained earlier that a similar amendment was on the amendment paper. I know the hon. Gentleman looks at these things. I am not saying that he is an anorak, but he certainly goes through clauses and amendments carefully. He will see that my hon. Friends and I tabled an amendment referring to employers’ attitudes which, for whatever reason, in the infinite wisdom of the Chair, was not selected. As the record shows, we tabled amendments on exactly the point that I was making.

Danny Alexander (Liberal Democrat, Inverness, Nairn, Badenoch and Strathspey)

I am grateful for that intervention, which perhaps came a moment too soon, as I was about to say how grateful I was for the hon. Gentleman’s supportive remarks, especially about the concept of labour market disadvantage.

The amendment that would insert the term “labour market disadvantage” is fundamentally about the conceptual basis of the Bill. It would ensure that its approach is based on the social model of disability.

I shall put this important group of amendments in context. The social model of disability provides a valuable understanding from which to approach policy making, particularly as it relates to disabled people. A social model focuses attention on the barriers that policies must address in order that disabled people have the same life chances as non-disabled people. Of course, definitions are necessary. One reason for tabling the amendments was to stimulate a debate on the issues. We need to ensure that we have in the Bill a social model of disability that allows for clear decision making. The amendments, which introduce the concept of labour market disadvantage, would allow us to do that. By using different language from the words in the Bill, they would allow the barriers that people face to be considered from a different perspective.

As the hon. Member for Bury St. Edmunds said, the idea of limited capability for work is a step on from previous notions of incapacity or, if one goes back further, invalidity. The Government perhaps had that at the back of their minds in framing the new language in the Bill, but it does not go far enough. I would like the Minister when he responds to explain the term “limited capability for work” and to say why he believes that it is an improvement on the existing language relating to the incapacity benefit system.

Amendment No. 52 and the other amendments in the group proposed the word “restricted” rather than “limited”. The hon. Member for Bury St. Edmunds explained the thinking behind that, and it is a small step forward, but the amendments and the concept of limited capability for work still locate the problem with the individual and their impairment or condition rather than with the broader question of the barriers to entering the labour market that people face perhaps as a consequence of their impairment or condition. The issue is the conceptual basis of the Bill.

The hon. Gentleman also made the point that the barriers on individuals are frequently the result of employer attitudes, the principal reason why someone with a disability or conditional impairment is kept out of the labour market. I am seeking to introduce the concept of labour market disadvantage to ensure that the Bill focuses more on the barriers that people face as a result of the interaction between the individual and their environment. This is not just about individuals and their impairment or condition; it is about the barriers that they face as a result of how society is structured, and the attitudes of other people, particularly employers.

Tim Boswell (Conservative, Daventry)

I am glad to join the Committee, albeit somewhat belatedly, having risen from my sickbed. I do not wish in any way to gainsay the hon. Gentleman’s contribution, or that of my hon. Friend the Member for Bury St. Edmunds because I think we are marching along the same lines. However, would the hon. Gentleman not agree that, while I know what he was driving at, the concept of labour market disadvantage is a slippery one because, at any one time, that disadvantage may increase or be diminished beyond the ability to pick it up? For example, labour market conditions might change. The disadvantage may be more or less disadvantaging to the individual at any one time. That is a conceptual difficulty with his argument.

Danny Alexander (Liberal Democrat, Inverness, Nairn, Badenoch and Strathspey)

I am grateful for that intervention. I am glad to see that the hon. Gentleman has recovered from his sickbed and welcome him here. The problem with the Bill’s framework is that—the hon. Member for Bury St. Edmunds was making this point—it seems to be a supply-side approach that is about providing support for individuals to get ready for work.

It is at least theoretically possible that, if the pathways to work programme is a success and the intentions of this Bill are carried through, but nothing is done to tackle employers’ attitudes, the 2.6 million people currently on incapacity benefit—or a large number of them—who might be ready to enter work will still face barriers to entering the labour market as great as the ones they are facing today. It is important that the definition and concepts that we use in the Bill should not enable that to happen.

The concept of limited capability for work also runs the risk of limiting people’s expectations and diverting attention from the barriers that keep people out of work. A conflicting requirement will be created. They will need to demonstrate a limited capability to work through their capacity assessment, which will no doubt be debated later in the Committee’s proceedings, but also to enter into discussions—hopefully more positive ones—about their ability to undertake work-related activity.

The labour market disadvantage test allows a broader range of factors to be taken into account, through action planning and work-related activity. Therefore, putting the concept of labour market disadvantage at the heart of this Bill would ensure a positive and proactive approach to improving people’s employment chances. It would allow potential for identifying and addressing shared labour market disadvantages such as, for example, a lack of accessible transport or discrimination by employers in a particular locality. It would allow those broader strategic issues that are causing labour market disadvantage to people with disabilities, impairments or serious conditions in a particular locality to be identified and addressed during the process of action planning, which is part of the legislation of this Bill. In one part of the country, for example, there might be employers whose particularly negative attitudes to disabled people provide a serious labour market disadvantage to claimants seeking to return to work.

Introducing this concept into the Bill allows those issues to be identified and discussed and makes the employment and support allowance more consistent with the general direction of Government policy for disabled people. I am sure that the Under-Secretary of State for Work and Pensions, the hon. Member for Stirling, will not wish to contradict the point made, for example, by the Prime Minister in his foreword to the strategy unit’s report “Improving the life chances for disabled people”:

“Barriers - in attitudes, the design of buildings and policies for example - still have to be overcome by disabled people, reducing their opportunities and preventing them from fulfilling their potential. Too many services are organised to suit providers rather than being personalised around the needs of disabled people.”

I am attempting to capture that concept in the amendments in order to promote the concept of labour market disadvantage. I heard the Under-Secretary of State make the point from a sedentary position that this language would make the Bill more consistent with the Disability Discrimination Act 1995 and that—she may wish to intervene to correct me—those matters relate directly to that Act. The amendments would partly help to make this Bill more consistent with the Disability Discrimination Act’s approach, focusing on impairments not to limit expectations but to identify reasonable adjustments that stop an impairment being disabling. That is what the Disability Discrimination Act does. The concept of labour market disadvantage would introduce the same approach into the Bill, which is why the point is such an important one.

It would also make the Bill more consistent with the legislation on working tax credit, particularly the disability element of working tax credit, which is based specifically on the concept of disadvantage in getting a job—a very similar concept to that of labour market disadvantage. The concept is used as a test of whether someone is entitled to the disability element of working tax credit.

The idea of limited capability for work is still somewhat behind the position in other pieces of legislation, so I hope that the Minister for Employment and Welfare Reform will welcome the amendments in his response. The Bill must be able to last many years and to stand the test of time, but it will not be able to do so without a conceptual basis such as that proposed in the amendments, and in future years secondary legislation will be limited by the Bill’s outdated basis. The Prime Minister’s strategy report, “Improving the life chances of disabled people”, promoted thinking about the social model of disability, and there is no doubt that that is the direction in which policy thinking on disabled people is going. Sticking to the slightly improved but outdated concept of limited capability for work will limit the ability of future regulations and amendments to address issues as they should be addressed.

I assume from the Minister’s countenance that the Government will oppose the amendments, but I encourage him to give further consideration to the limitations of the concept of limited capability for work as the conceptual basis for the employment and support allowance, and to think further about the possibility of introducing Government amendments, either on Report or later in Committee.

The hon. Member for Daventry made the point—I think that this is what he was alluding to—that the concept of labour market disadvantage is a broader one, which could lead to benefit being widened or to broader issues being taken into account in a way that the Bill does not envisage. However, the concept would allow a more positive focus for decisions on the ESA, and would allow major factors to be taken into account. That would more accurately reflect the conditions and barriers that current incapacity benefit recipients face in returning to work. That is my case on amendments Nos. 183 and 1.

Amendment No. 150 would insert the phrase

“be available for or actively seek work”.

It is a probing amendment that is intended to ensure that the conditions for the ESA are consistent with those for receiving jobseekers’ allowance. Jobseekers’ allowance requires the claimant to be available for work and actively seeking work. Will the Minister clarify whether the same dividing line applies for the employment and support allowance? The Bill does not define “work”, so limited capability for work is not defined either. The amendment would make it clear that people eligible for the employment and support allowance would be judged unable to meet the test for jobseekers’ allowance. It would make clear the dividing line between the two. Will the Minister clarify the Government’s intentions? The new personal capability assessment should not be intended to confirm that requiring a person to work is unreasonable, but to qualify the circumstances in which it is reasonable to require them to return to work.

The amendments relating to labour market disadvantage are sufficiently important that, subject to the Minister’s response, I shall seek to divide the Committee.

John Robertson (Labour, Glasgow North West)

On a point of order, Mr. Amess, are you going to permit a stand part debate or do you wish points to be made as part of the discussion on this extensive group of amendments?

Sir David Amess (Conservative, Southend West)

That is a very good point of order and the answer is yes.

Kali Mountford (Labour, Colne Valley)

I do not want to labour any point so early in the proceedings, but I should like to mention something, since so much has been said about the labour market already and because there is a fundamental problem with at least one, if not all, the amendments—particularly amendment No. 183, which would replace the term “limited capability” with the concept of labour market disadvantage.

The idea of limited capability focuses our minds on the individual. It is intended that we work with individuals so we can look at the conditions that they inhabit and the ones that surround them. It is important to view “limited capability” as a holistic concept.

With regard to labour market disadvantage, I refer the Committee to a piece of work on older workers that I did when I worked in the then Department of Employment. The hon. Member for Daventry has already said that labour market conditions constantly change. I found that when unemployment was magnificently high a person could be considered old at 30 in Liverpool, for example, where employment conditions were dreadful, yet they were only considered old at 50 in Yorkshire and not old at least until 55 in other parts of the country. That shows the vast range of conditions that can pertain at any time.

The hon. Member for Inverness, Nairn, Badenoch and Strathspey (Danny Alexander) feels that such information upholds his argument, but I think that it does the reverse, because it does not recognise that an individual in any marketplace may wish, in spite of market conditions, to enter a realm of work in which they feel that they could be capable. That means that we have to concentrate on the individual’s capacity for work so we can help them, rather than consider only market conditions. The prevailing market conditions will affect more, or fewer, people at different times.

Tim Boswell (Conservative, Daventry)

The hon. Lady has been kind enough to mention what I have already said. May I also declare an interest? In just over 12 months, I shall reach state pension age, so I must fit in the old category for the labour market.

I think that the hon. Lady may have a point about looking at individuals, particularly in relation to comments made by my hon. Friend the Member for Bury St. Edmunds on mental health. It is difficult to persuade employers not to treat the class of people with a mental health condition as all being potentially dangerous or troublesome. If it is necessary, they may take proper risk-assessment advice on the individuals whom it may not be suitable to employ, but they should not stigmatise all of them as if there were something that ruled them all out.

Kali Mountford (Labour, Colne Valley)

I absolutely agree with the hon. Gentleman. I was about to make that point. I do not think that the amendment meets that requirement. It would be far better to do what is necessary through considering how the Disability Discrimination Act 1995 can be properly used and also to work with other parts of the sector, such as the small business unit, which in my area works closely with employers on how they can comply with current legislation.

There is work to be done with employers. I could cite many disappointments with people who have tried to get into work and felt that they were going to be supported, only to find that the employers—sometimes big ones, such as local authorities—failed to provide proper working conditions. Such things have to be dealt with, but I do not think that it would be right to use the mechanism suggested in the amendments. It is far better to use the wording in the Bill, which focuses the mind on the individual’s conditions, so that we can work with them and get people on the pathways to work programme and deal with the other end of the argument.

Let us consider the broader outlook. At a later stage, as a 60-year-old, or older, former Member of Parliament, I might present myself in the marketplace but not be the sort of the person that everybody would want to employ. I would then be able to argue that my capacity for work had been limited because of the marketplace—I would have a marketplace disadvantage—but I do not think that that should be the aim of the Bill. People such as myself can stick up for themselves, but others cannot always find a way into work and would not be able to cite my particular difficulty as theirs. I just think that the amendment is wrongly worded and does not focus our minds on the right issue.

Jeremy Hunt (Conservative, South West Surrey)

As this is the first time that I have spoken to the Committee, I am delighted to welcome you to the Chair, Mr. Amess. I have the honour of sharing a floor with you, and very often a lift, and I assure you that the jovial banter that we often share in the lift will not be repeated in this Committee where all due deference will be shown to you in your position.

We have had a good discussion this morning and, as so often, the debate over specific wording reflects a wider concern that all Opposition Committee members want to address—the question of the extent to which the Bill deals with employers’ prejudices in order to achieve its objectives of helping many more people to engage in the world of work who are currently unable to do so because of a disability.

The hon. Member for Inverness, Nairn, Badenoch and Strathspey said correctly that there is a disappointing focus on what is called in the disability world the “medical model” of disability that tries to identify a problem as a medical condition. I do not want to patronise the Government because I know that they are aware of this, but most disabled people do not want to be defined by their disability. Therefore, tackling employer prejudice is central to the success of the Bill.

I listened carefully to the hon. Member for Colne Valley (Kali Mountford) and I think that there would be a problem with simply relying on the DDA to deal with that issue, although I accept that it has the primary role. It would be difficult to rely entirely on it though because the kind of prejudice that we are talking about is difficult to trace. Prejudice in the recruitment of employees is often impossible to prove. An employer’s recruitment policy might say that they do not practise any kind of discrimination against disabled people, but in practice those hidden barriers exist in people’s minds. It is difficult to deal with that.

The Bill is an opportunity to address that situation. When speaking to organisations such as Remploy, which places people in work, it becomes clear that contact between employers and personal advisers can break down barriers. That will be rolled out and greatly increased by the scheme. It is important, therefore, that the Bill understands that an important role of advisers in the roll-out of pathways is to break down those barriers. That range of individual contacts is important.

It is important that we address another question: let us compare the phrase “limited capability for work” in subsection (3)(a) with the words “labour market disadvantage” in the Liberal Democrat spokesman’s amendment. The question is which is likely to have more claimants. I put it to the Committee that in practise, under either wording, the number of claimants is likely to be the same. We are not talking about a different group or number of eligible people.

Danny Alexander (Liberal Democrat, Inverness, Nairn, Badenoch and Strathspey)

I am grateful to the hon. Gentleman for drawing attention to clause 1, line 15 on page 1 of the Bill which reads:

“The basic conditions are that the claimant—

(a) has limited capability for work”.

Amendment No. 183 would amend that to refer to

“labour market disadvantage related to physical or mental condition”.

Therefore, the point that the hon. Gentleman just made about the number of people affected was correct. The earlier point about the potential for ex-MPs to be captured by the definition was somewhat beside the point.

Jeremy Hunt (Conservative, South West Surrey)

I am grateful for that response, but I want to say to the Government that the purpose of the amendments is to make sure that, as a result of the Bill, the Government give due focus on dealing with employer attitudes and prejudices. Whether we use a labour market disadvantage definition, or a restricted capability to work definition, let us hope that we make so much progress in eradicating discrimination that the person with a facial disfigurement will have no labour market disadvantage whatever in 20 years’ time. That is our aim. By going for the labour market disadvantage in due course, it is possible that fewer people would need the support of the package, because the Government, when implementing the Bill, would have made sufficient efforts to deal with employer prejudices.

Yesterday, I was at Capability Scotland. It has just carried out a survey showing that half the unemployed disabled people in Scotland say that they are unemployed because of discrimination by employers. It is interesting that the other half say that it is because they are worried about losing their benefit packages, a matter to which we shall return in later discussions. We are discussing a huge problem in connection with employer prejudices. We support the Bill because we regard it not simply as dealing with the problems of incapacity benefit, but as a huge opportunity to make the next step forward in inclusion for disabled people.

Proper involvement in the world of work is vital for progress on the independent living agenda. On that basis, we must think not only about helping people into the world of work who should work, but helping people into that world who could work. It is important to deal with the other side of the coin, which is employers’ prejudices and prejudices of fellow employees. If the Government reject the amendments, will the Minister please spell out how they propose to deal with the broader package of ways in which society and attitudes need to change, as well as the specific issue of how to give individual help to disabled people who need the package of support offered by the new employment and support allowance?

Wayne David (Labour, Caerphilly)

I have welcomed very much the tone of our discussion this morning. It has been positive and some good points have come to the fore. However, I was slightly worried about the fact that the hon. Member for Bury St. Edmunds had been described by the CBI as unhelpful. I was even more worried when he questioned the efficacy of capitalism.

David Ruffley (Conservative, Bury St Edmunds)

I was not doing that.

Wayne David (Labour, Caerphilly)

I note the length of the time that the hon. Gentleman took to deliver that riposte. The way in which things are going is clear. He tried to retrieve the situation a little by saying that the CBI agreed with some of his points. Movement has been far, but the question is how far?

Amendments Nos. 183 and 1 are important, but I have taken note of the argument of my hon. Friend the Member for Colne Valley. The Bill is focused on specifics and, although valid points might have been made, there is a danger of extending it too far. Many good issues have been raised about the attitudes of employers and the undoubted prejudice that exists among them, but I honestly do not believe that the Bill is the tool by which to address such issues. I have no doubt that the Government are dealing with those matters, so will the Minister explain some of the ways in which they are dealing with them? I suggest, too, that we must confront a broader cultural issue. We must not only focus on the Bill, but take on the perspective to which members of the Committee have referred. A number of pieces of legislation are being introduced.

My second point is about amendment No. 52, which would omit “limited” and insert “restricted”. I brought my Oxford dictionary with me this morning—

David Ruffley (Conservative, Bury St Edmunds)

It is not the long version.

Wayne David (Labour, Caerphilly)

Admittedly, it is only the concise version, but it is the new colour edition. The definition of “restrict” is given as “confined to certain limits”. Under “limit” it says “restrict or confine”. In other words, there is very little difference between the two. I suggest that in the rest of our discussions we focus on taking the argument forward and fleshing out some of the good ideas that have already been mentioned, rather than focusing on the semantic points made in the debate on the first amendment.

Jim Murphy (Labour, East Renfrewshire)

Thank you for the way in which you have conducted our proceedings this morning, Mr. Amess. You have allowed a breadth of arguments to be advanced on some relatively tightly drawn amendments. I congratulate you on allowing the debate to range on these matters.

After hearing at the start of the debate that we were seeking consensus, I was surprised to see that there were no less than 38 amendments to the first clause. The hon. Member for Bury St. Edmunds said that he has been damned by the CBI as being unhelpful. The Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Stirling, said from a sedentary position, “Leave him to assess what he said when he was a special adviser at the Treasury,” when unemployment was at 3 million and all sorts of other things were happening in the 1990s.

David Ruffley (Conservative, Bury St Edmunds)

As far as my time as special adviser to my right hon. and learned friend the Member for Rushcliffe (Mr. Clarke) is concerned, we gave the hon. Gentleman’s Government a golden economic legacy of single-digit inflation and interest rates, the lowest unemployment rates in Europe and record inward investment and I am hugely proud of that record.

Jim Murphy (Labour, East Renfrewshire)

I know not to respond in too much detail to the hon. Gentleman’s points. He missed the fact that incapacity benefit levels had trebled, that one in three kids lived in poverty—

Sir David Amess (Conservative, Southend West)

Order. I was too weak; I should have intervened immediately. The Minister knows that he has to respond to the amendment.

Jim Murphy (Labour, East Renfrewshire)

Mr. Amess, you would be right to chastise me if I said that one in five kids grew up in a household with no one in work, so I will not make that point.

I shall reply to the points that have been made, in quite a constructive way, on the amendments. At present, the incapacity benefit legislation uses the concept of incapacity for work as a key condition of entitlement to the benefit. Incapacity for work focuses on what people are unable to do; it is a central weakness of our current culture of benefit, which creates a negative impression or perception among those who are on the benefit.

There are 2.7 million people on incapacity benefit, which is a reduction in recent years. If the trend through the 1980s and the first part of the 1990s had continued, the challenge today would have been to give 4 million people, not 2.7 million, the chance to get back to work. Make no mistake, that was the trajectory that we inherited and it shows the scale of what has been achieved thus far. I frankly acknowledge that not enough has yet been done and that we need to do more to support people among that 2.7 million, and to get a net reduction of 1 million people off incapacity benefit over a decade.

David Ruffley (Conservative, Bury St Edmunds)

I was not going to raise this issue as I did not want to spoil the general tone of consensus, but on a technical point, the Minister made the point that the trends at the end of the 1990s were not very creditable.

Jim Murphy (Labour, East Renfrewshire)

Disgraceful.

David Ruffley (Conservative, Bury St Edmunds)

The Minister says, “Disgraceful”, but he is talking about trends. For the record, even if the Bill does not perform as well as we all hope it will, by 2016—the end of the target period for reducing the 2.7 million by 1 million—the figure will be 2.36 million anyway. That is according to a parliamentary answer that the Under-Secretary of State for Work and Pensions gave me.

The Secretary of State told the Select Committee at the beginning of March that his aim was to get the figure down from 2.7 million to 1.7 million. Without any policy change in the Bill, the Government have already made great progress towards the target of 1.7 million. It will be 2.36 million anyway, on the estimates that the hon. Lady published for on-flow and off-flow. We hope that the 1 million target is hit. We are all behind it, but let us also recognise that 340,000 of it will be hit anyway by natural on-flows and off-flows. Those are the Government’s figures and there is a natural downward trend. I end my intervention on the point that the Minister raises about trends.

Jim Murphy (Labour, East Renfrewshire)

There is an awful lot in what the hon. Gentleman said. He said that we are seeking over a decade to reduce the number of people on incapacity benefit by 1 million. Some say that target is not achievable. I simply offer the observation that if the previous Government could increase it by 1 million over a decade, we can decrease it over the same period.

Of course, there has been remarkable recent improvement, but not far enough. Part of it is because of the labour market interventions and part of it is through the new deal and pathways. What if we settle simply for what has been achieved thus far? As the hon. Gentleman mentioned in his reasonable introductory remarks, the growing trend in fluctuating mental health conditions is a major contributory factor for people now coming on to incapacity benefit. If we do not intervene and offer support to those folk, these figures will grow again, because of the 40 per cent. coming on with a fluctuating mental health condition and the change in the gender profile of people coming on to incapacity benefit. Previously, we understood it to be part of an industrial legacy from some of the traditional heavy industrial areas of the United Kingdom. But that pattern has changed over time.

To return to the point raised specifically in the amendment, with employment and support allowance we want to move away from the creation of a negative perception of incapacity. We want to move away from labelling anyone as incapable. We want to move towards looking at what people can do, as well as what they cannot do, given their illness or disability. We also want to assess entitlement to the benefit in a neutral way, avoiding writing people off because they have demonstrated that there are things they cannot do.

Demonstrating “limited capability for work” is a fundamental condition of entitlement to the new employment and support allowance. By using “limited capability for work”, we are making it clear that we accept that customers, citizens and clients have identifiable and measurable limitations on their ability to carry out various activities. Having identified the extent of those limitations, we acknowledge that at a certain level of limitation, it is unreasonable to require these people to work, or to undertake work-related activity, depending on the outcome of the reformed personal capability allowance.

Turning to the comments of the hon. Member for Inverness, Badenoch and Strathspey—[Hon. Members: “ And Nairn.”] Of course, having been to Nairn I know what an important omission that would be. I can confirm that this is not jobseeker’s allowance by another name. No one will be sanctioned, encouraged or told to find work. It is about supporting people to have the opportunity to build their confidence, regain their skills and undertake work-related activity if that is appropriate. The benefit for people who need to be actively seeking employment is jobseeker’s allowance and will remain so.

The process of demonstrating limited capability for work recognises an entitlement to the support provided by the ESA but avoids labelling people as incapable or writing off their ability to work if future help and support are provided to get them closer to the labour market.

When identifying the most appropriate way of expressing the concept behind entitlement to ESA, we considered the various principles that we needed to incorporate in order to find the right way to distil the concept into wording. The words “limited capability for work” reflect that extensive consideration and discussion. We are satisfied that the word “limited” reflects most accurately the principles we want to capture for employment and support allowance. In particular, we observe that “limited” is a neutral phrase and simply states that on a spectrum of ability to carry out an activity, there is an identifiable point at which a person finds it more difficult to carry out that activity. It does not label someone as incapable of carrying out that activity, nor does it imply that the difficulty is permanent.

Jeremy Hunt (Conservative, South West Surrey)

Does the Minister not accept that one of the things that can limit people’s capability to work is the attitude of other people, particularly employers?

Jim Murphy (Labour, East Renfrewshire)

The hon. Gentleman is right. It is not just the attitude of employers but of fellow employees, people on the bus on the way to work, the person they buy a newspaper from in the newsagent’s on the way, neighbours and people who walk by in the street. Of course society’s attitudes impact the rehabilitation and confidence of people with a disability, particularly those with a fluctuating mental health condition, as well as their self-perception and ability to enter the labour market and play a wider role in society. I shall make a few comments about that. The hon. Member for Bury St. Edmunds asked about employer engagement.

Danny Alexander (Liberal Democrat, Inverness, Nairn, Badenoch and Strathspey)

The Minister makes a point about decision making through the PCA. Does he not accept that the concept in amendment No. 183—labour market disadvantage related to physical or mental condition—captures that broader point but would still allow decision making to take place through the PCA as envisaged?

Jim Murphy (Labour, East Renfrewshire)

I shall come to that in a moment, once I deal with the point raised by the hon. Member for Bury St. Edmunds. He made a quite well-informed speech and raised a number of important issues.

David Ruffley (Conservative, Bury St Edmunds)

Don’t sound so surprised.

Jim Murphy (Labour, East Renfrewshire)

Well, I am not sure I will become used to it. The hon. Gentleman made an informed speech and raised a number of genuinely important points relating to employers’ attitudes. However, what he did—it is a trend among Opposition Front-Bench spokespeople at the moment—was to raise a concern and offer no prognosis: “I share this concern; here is something that needs to be addressed”, full stop.

Jeremy Hunt (Conservative, South West Surrey)

Is not tabling amendments a practical way of showing a prognosis or making suggestions to deal with the issues?

Jim Murphy (Labour, East Renfrewshire)

The hon. Member for Bury St. Edmunds mentioned rehabilitation leave and said, “Let’s have a debate about that,” without offering a view on whether the Conservatives support it.

David Ruffley (Conservative, Bury St Edmunds)

I said that I hoped that we would have a debate, that the Conservatives would be expressing our views on that and all the resource implications and that we must have a grown-up debate about it later in Committee. I do not want the Minister to leave people with the impression that we will not make our position clear when the clauses relating to rehabilitation leave are debated.

Jim Murphy (Labour, East Renfrewshire)

That is very helpful, but the hon. Gentleman also made observations about statutory sick pay, anti-stigma campaigns and a series of other issues without offering a specific prognosis.

Jeremy Hunt (Conservative, South West Surrey)

I wonder whether the Minister would agree that although he may say that it is a trend for Opposition politicians to talk about a problem without offering a prognosis, it has also become a trend for Ministers to spend most of their speeches talking about Conservative policies rather than addressing their own, which people are interested to hear.

Jim Murphy (Labour, East Renfrewshire)

Conservative spokespeople do not talk about Conservative policies, on the basis that there are very few that I have identified.

Mr. Ruffleyrose—

Jim Murphy (Labour, East Renfrewshire)

I wish to make some progress. To be fair, the hon. Gentleman opposed one policy, but it was the one policy that we were in favour of. That policy is about supporting people financially to make the transition into work more effective and extending the return-to-work credits for a full year. Of course, that measure will be means-tested for those going into the lowest-paid work, but it will encourage the transition into work and genuinely make work pay for people who have been out of work for prolonged periods on incapacity benefit or on employment and support allowance. We are committed to the concept and the specifics of committing public funds to support the alleviation of in-work poverty for those coming off incapacity benefit and the employment and support allowance.

Engagement with employers is essential, because in the main the Government do not create jobs. Most jobs are created in the private sector. That is the underpinning philosophy that we have to consider in our approach to the Bill. Additionally, we also have to acknowledge the important fact that the public sector—government, the health service, and other public agencies—is also an employer. It would be wrong, looking towards 2008, if we seek to compel private sector businesses to do something that we do not already do ourselves. That is an important challenge for public sector employers.

Tim Boswell (Conservative, Daventry)

I just could not believe my ears when the Minister of State asserted that the Government were committed to increasing jobs in the private sector, which I concede is so, but appeared not to be interested in promoting jobs in the public sector. The number of people directly employed by the public sector has increased by some 300,000 since 1997. Is he repudiating those past moves or is he now saying that the Government have learned from them and will not repeat them?

Jim Murphy (Labour, East Renfrewshire)

The figures show that there are almost 29 million people in employment in this country, which is a record under any Government, and is 2.5 million more than in 1997. Of course, there has been an increase in the public sector, but that is dwarfed by the increase in the number of people now in employment outside the public sector. I know the hon. Gentleman to be a fair man, and I think that he would acknowledge that.

Danny Alexander (Liberal Democrat, Inverness, Nairn, Badenoch and Strathspey)

The Minister makes an important point about the need for Departments and public sector bodies to play a role fairly in employing people currently on incapacity benefit and disabled people. Does he acknowledge that the Government have a great deal more to do in this area? I draw his attention to a written answer to me from the Under-Secretary of State for Work and Pensions, the hon. Member for Stirling, which shows that the proportion of staff in the Department for Work and Pensions who are defined as disabled has fallen from 5.99 per cent. to 5.26 per cent. over a six-year period. Is that not an indication of how far the Government have to go to ensure that their own house is in order?

Jim Murphy (Labour, East Renfrewshire)

The hon. Gentleman makes an important point, which I had already made, which is that the public sector, including government, public agencies, non-departmental and other public bodies—all sorts of public sector organisations—also have to see what more they can do to support the Government’s agenda and the wider agenda in respect of supporting people to come off employment and support allowance and into active employment by 2008. The Government should not encourage others to do what we are not willing to do ourselves by 2008.

The details of our relationship and conversation with employers, and what more we can do, are set out in our health, work and well-being strategy, which has been published. We should be supporting people while they get into work. As we know and as hon. Members have already said, people journey from being active in the labour market, through a period of depression, illness, intermittent or long-term absence, to statutory sick pay and everything else that goes with that. We have to be a lot more proactive with employers. Many employers are comfortable with and proactive on this agenda, but the last point of intervention in the welfare system and working with employers should be when someone reports for benefit. Currently, that is the first point of intervention.

There is a huge amount of work to do with employers. We are discussing with employers in great detail the most effective way to improve support at work, including occupational therapies and removing stigma in the workplace among employers and employees.

We have options for encouraging a change in attitude, although there have been changes already—we all acknowledge that there have been improvements over recent years. There has been a 10 per cent. improvement in the employment rate of those with declared disabilities, but that is not enough; it is an improvement, but we must go further.

The best people to encourage employers are not the Government, but other employers with positive experiences of employing someone with a disability and of those people’s sheer determination. That is a more effective way in which to achieve success on that agenda, and we are discussing with major employers the most effective way in which to do that. We want an employer-led publicity campaign on best practice based on their own experiences. Some employers said that to be frank they felt they had taken a slight risk—their words, not mine—but that they were glad that they had. Allowing them to share that experience with others is a more effective approach than leaving the Government to do it by themselves.

Jeremy Hunt (Conservative, South West Surrey)

Does the Minister share my concern that some of the employers who have shown best practice in that area, such as BT, Asda and Royal Mail, are quite open in saying that what drove them to develop a more progressive policy towards employing disabled people were labour market shortages and that their inability to fill places in their own work force with non-disabled people led them to look at the pool of disabled people? When they did that, they found that disabled people are often more loyal employees, and more profitable to employ. In particular, BT found that it saved a huge amount in recruitment costs.

In a labour market where unemployment is rising and with the prospect of many more people coming to the UK from the EU accession countries, is the Minister concerned that that engine for promoting the employment of disabled people might no longer exist?

Jim Murphy (Labour, East Renfrewshire)

Various employers across the country have employed people from all sorts of backgrounds and with fluctuating mental and physical health for reasons important to their local labour market, values, market strategies and the way in which they run their businesses. The hon. Gentleman mentioned a few, but there are many others. There is a good number of them—I shall not name check any of them now because it would be unfair not to name check them all. However, at a later date, if time allows—I know that we have only 16 sittings—perhaps the Committee will allow me to go through all those that we engage with on a regular basis.

Of course, there are pressures, such as the skills base. I am not talking just about the skills gap in constituencies in south Wales, central Scotland, the north-east and north-west—it is significant in some of those places—where people, predominantly men, are out of work for prolonged periods because of the decline in traditional industries. In the world of information technology, the pace of change is so quick that if some one is out of work for three, six or nine months, or a year, their skills become stale and their confidence is knocked. The skills base and the individual skills of everyone on incapacity benefit and the employment and support allowance are important factors in employability. That is why Sandy Leach’s skills review is important.

I shall make briefly another point about wider engagement. The work of general practitioners and other health professionals is important. As we know, for too long, in many cases, GPs have prescribed pills, tablets and medication when condition management and part-time or voluntary work might have been more appropriate. That default position—time off work being considered the best solution in such circumstances—is becoming increasingly a thing of the past. However, we need to go further to ensure that GPs are engaged in that issue.

I turn to the points on labour market disadvantage made by the hon. Member for Inverness, Nairn, Badenoch and Strathspey. He is right: we do not intend to accept his amendments, and I shall explain why. There is a superficial attraction to them, and the hon. Gentleman put the case for them thoughtfully. However, they would undermine two key principles behind the employment and support allowance: first that it is based objectively on functional limitations assessed through the PCA, and secondly that it is defined nationally and consistently. As the hon. Gentleman said, and as interventions made by my hon. Friend the Member for Colne Valley and others have shown, people are disadvantaged in the labour market by a wide range of factors. In introducing the new benefit we are aiming for national consistency based on an objective assessment of functional limitations.

Skills have an impact on labour market disadvantage, as do personal experience, transport and national employment rates. To have different entitlements based on different transport conditions in different towns, or even within the same town or the same street, or based on labour markets in different nations or cities of the United Kingdom or within cities, would lead to enormous inconsistency and uncertainty. Even if such observation and measurement were desirable—I do not agree with the assessment that it is—it would be hopelessly complicated and unworkable.

Labour market disadvantage is caused by a myriad ever-changing circumstances, such as local redundancies or a change to a local bus route. There can be so many such circumstances that to set in statute provisions based on that continually fluctuating labour market would remove the consistency that many on employment support allowance would value. It would also create a design challenge that would be undeliverable: a benefit entitlement changing from year to year, month to month, week to week or even day to day, based on happenings in a person’s locality. It would undermine the principles of the ESA.

Kali Mountford (Labour, Colne Valley)

I am listening carefully to my hon. Friend. Does he agree that we need to guard against a counsel of despair and the idea that there is nothing that an individual can do to change their circumstances, because market conditions are such that they can never enter work? Instead of looking at what they can do, such a person might always think, because of market disadvantage, “There is no hope for me.” Such a counsel of despair is a situation that I do not want.

Jim Murphy (Labour, East Renfrewshire)

My hon. Friend is typically accurate. We are moving away from negative labelling, and we have discussed whether we are going far enough in emphasising the positive nature of what people can contribute. Either as constituency Members of Parliament or in preparation for the Bill, we have all met people and listened to their work aspirations. To reintroduce a test of disadvantage based on negativity, on top of everything else in the Bill, would be entirely wrong even if it were practically achievable.

Jeremy Hunt (Conservative, South West Surrey)

Is not the Minister contradicting himself? Earlier, in response to my intervention, he agreed that limited capability for work could include limitations by factors such as employers’ attitudes. Those factors vary between areas of the country and types of employment, so there are inevitably variations in capability for work. If the phrase “limited capability for work” can include the attitudes of others, as the Minister said to me earlier, is that not the same variable that the Liberal Democrat amendment covers?

Jim Murphy (Labour, East Renfrewshire)

Not at all, and I would be interested to hear from any Opposition Member who believes that the suggestion is workable, even if it is desirable. Limited capability for work will be determined through the renewed and modernised PCA and the work-focused health-related assessment. We want that to be the neutral and objective process for gaining entitlement to ESA in future.

We know that there are wider circumstances that affect people’s ability to enter the labour market. However, for the legislation to say that that labour market disadvantage—with all the different factors that feed into it—should accompany the PCA as a way of assessing benefit entitlement would be unworkable and would reintroduce negativity. The hon. Member for Inverness, Nairn, Badenoch and Strathspey did not even attempt to explain how it would work in practice. I hope that he will not press his amendments, but if he is minded to do so, I shall encourage my hon. Friends to oppose them on the basis that they are unnecessary and entirely unworkable in practice, and that they would constitute a return to negativity.

David Ruffley (Conservative, Bury St Edmunds)

We have had an interesting debate, Mr. Chairman, and you have been very generous in allowing Opposition Members to range widely, so I shall not take up more time. However, the Opposition may wish to press the amendments in my name—amendment No. 52 and the related amendments Nos. 205 and 206—to a vote. I understand the arguments that the Minister has evinced on why he does not wish to accept them. Nevertheless, we may wish to press the amendments to improve the definitions in the Bill.

John Robertson (Labour, Glasgow North West)

I welcome you to the Chair, Mr. Amess. I have been in several Committees that you have chaired and I know that you are always more than fair to those of us who sit on the Back Benches.

I am looking for clarification from the Minister on clause 1(3)(e), which is associated with paragraph 5 of schedule 3 and concerns the effect of income-related allowances on the disability premium. I seek clarification as to how claimants of the ESA who qualify for the disability premium of income support by other routes will be able to receive the premium during the assessment phase. I also seek clarification on how sick or disabled claimants who claim benefit on the basis of a status other than being incapable of work—for example, lone parents or carers—will continue to be able to receive the disability premium in income support without having to claim ESA.

The terms of clause 1(3)(e) and paragraph 5 of schedule 3 would seem to set up a strict demarcation between those entitled to income support and those entitled to the ESA. If that is right, it suggests that the person will no longer be able to qualify for the disability premium in her or his income support on account of their having a limited capability for work, as it would seem that the determination of that issue lies exclusively within the ESA, and so the determination of whether a person has such a limited capability to work will arise only if she or he makes a claim for ESA.

However, a significant number of people qualify for income support by a route other than their capability for work, such as carers and lone parents. They are also incapable of work—or, in the ESA language, will have limited capability for work—and so qualify for the disability premium in their income support. Under clause 1(3)(e) and paragraph 5 of schedule 3, it is unclear how such a person will access the disability premium. If the answer is that the person can access the disability premium only by claiming the ESA and being found to have a limited capability for work, those lone parents and carers would have to make themselves subject to the conditionality regime under the ESA, which I understand is not the intention.

On the other hand, if it is intended that lone parents or carers who also have a limited capability for work will be able to qualify for the disability premium in their income support, we are unclear as to how clause 1(3)(e) will enable that to be achieved. The disability premium is an important contribution towards meeting the cost of disability. The proposal in the Green Paper is to incorporate it into the main phase of the ESA, but it is unclear where that leaves the claimants referred to above. The high levels of poverty among disabled persons indicate that benefit levels are inadequate at present. Any restriction on the availability of the disability premium can only worsen that situation.

Tim Boswell (Conservative, Daventry)

On my first formal excursion into the Bill, may I welcome you to the Chair, Mr. Amess? It is already clear that we will enjoy the process of discussing a Bill that enjoys a high degree of consensus in all parts of the Room, but which also contains areas of detail that need exploration.

Somewhere in the back of my mind is a reference to a work called “Seven Kinds of Ambiguity” and, for the avoidance of doubt—as the lawyers, of which I am not one, would say—I should point out that I am on the Front Bench for the purposes of anything that I say, although I am on the Back Bench geographically, which is a matter of convenience and might also have something to do with the temporary avoidance of contagion.

I want to add some remarks to the admirable points that my colleagues have made. The first is to emphasise the cardinal importance of employer engagement. Indeed, the Minister has spoken about that issue, and there is no real contention between us. However, we all need to remember that the proposals will not work substantially unless somebody is prepared to employ the people concerned. If we believe, as many of us do passionately, that there is a strong business case for the involvement of disabled people—they are beneficial to business, being a profit centre, not a cost centre, if I may put it that way—it is important to persuade employers of that case.

One of the main ways in which the Government can do that directly is through their own activities in the public sector. It is fair to say that those have been patchy, and as the hon. Member for Inverness, Nairn, Badenoch and Strathspey, who speaks for the Liberal Democrats, reminded us, there are some rather disturbing figures. Indeed, I tabled a question some years ago asking which Departments were members of the admirable Employers Forum on Disability. We found that a number, including the Minister’s own Department, were, that others were not, and that one or two clearly did not know whether they were or not. I make the serious point, however, that the public sector can properly give a lead on this issue, although I would not like it to be seen as detracting from the importance of involving small and medium-sized enterprises as well. Special considerations could conceivably apply, particularly in relation to mental ill health, and they must be discussed in a sensible and balanced way. I therefore want to hammer home the importance of employer engagement at all points in this Bill and to make the point that engagement is good for employers, claimants and the national interest.

Those who broadly support the Bill should sometimes stand back from it, and my second point relates to the great importance of communication. On revisiting the clause, it occurred to me that the average claimant is unlikely to find this benefit particularly easy to understand. I make no cheap trick about that, because the clause is drafted in legal form, as it must be; indeed, it is rather better drafted than many of the bits of legislation that the Government serve up to Committees, so I have no problem in that regard. However, this is a multiple benefit, with an income-related element and a contributory element. It will be paid at different rates in the holding period, and there will also be the issue of whether there is an employment allowance or a support allowance, so matters will be extremely complicated. In some cases—I will speak to them when we reach a later clause on advance payments—people might receive an award under a set of conditions that does not apply until they reach a qualifying date, so there might be further scope for confusion there.

All that I am saying to the Minister, in all seriousness, is that if we need algorithms and diagrams to explain more or less what is going on—and I am pleased to see them, because I always like explanatory clauses—how much more will the average claimant need? I do not say for a moment that the Department and its officers are not committed to this process, but I would very much welcome it if the Minister spent a moment or two at least giving the Committee the assurance that the issue will be actively handled and that every effort will be made to improve the way in which matters are communicated to people—perhaps using colour-coding or whatever other variants and modern techniques there are. We need to remember—we will need to return to this throughout the Committee—that many of the people we are talking about are vulnerable and possibly demotivated and that they have not seen what they could do. We are trying to emphasise their potential, and we need to make a positive case at all stages for encouraging them to achieve what they are capable of. Frankly—I know that this is a throwaway, and we all do this ourselves—we do not want to add the need to grumble about a load of paperwork to the other problems that people face when trying to obtain entry to employment.

I saw the Minister nodding through that, but I thought that somebody needed to say it. I feel very strongly that that approach should inform everything that we do in this Committee and that it should inform not only what the rules are, but how they are explained to people in a way that is helpful to them and which in no way diminishes their enthusiasm for returning to the labour market.

Jeremy Hunt (Conservative, South West Surrey)

I want to point to three areas in which there is a lack of clarity and I should be grateful if the Minister would address them.

First, we had a good discussion about the importance of involving employers in the process. The Minister’s view was that the best people to persuade employers are other employers, but like other Opposition Members, I was thinking of something broader than just a marketing campaign by one group of employers to another. We are really talking about a fundamental change in employers’ attitudes. I suggest to the Minister that the best way to get that is to recognise that the Government are the largest single employer. Given that 1.3 million people are employed in the national health service alone, there is a huge opportunity to transform attitudes to employing disabled people by improving the practice of Government. I do not just want Government to say that they do not want to impose on the private sector and employers what they are not prepared to do themselves. They should say that they want the Government sector to blaze a trail with its far-sighted attitudes to the employment of disabled people.

Tim Boswell (Conservative, Daventry)

I strongly endorse my hon. Friend’s remarks. Does he not agree that it would be helpful to involve Members of Parliament from all parties in local activities in this area, as Government sometimes do? I am going to see a pathways to work project in Derby on Friday, and there is a wonderful opportunity to show engagement by using people on the projects and by being seen as a beacon for other employers in that regard.

Jeremy Hunt (Conservative, South West Surrey)

My hon. Friend makes an excellent point. I am sure that the Minister has had similar feedback, but advisers often say to us that, in respect of employment, it is harder to place people in the public sector than in the private sector. That is not meant as a swipe at the Government in any way. The reality is that the public sector often has the best policies on paper for the recruitment of disabled people, but in practice their implementation can be bureaucratic, whereas the private sector’s policies are often not as good on paper, but managers are willing to be flexible when faced with a situation of employing a particular disabled person. The Government could do much by leading by example, and I would welcome the Minister saying that he sees the Government playing a positive role by transforming their policies on the employment of disabled people.

There is confusion about whether the Government accept the validity of the social model as opposed to the medical model. The Minister said that he accepted that people’s capability for work can be limited by the attitudes of others but, at another point in the debate, he said that he wanted the test to be purely objective and that he therefore would not want it to take into account the attitudes or prejudices of others. We need more clarity.

Will the Minister inform me about something else? I do not understand subsection (3)(e), which says that the basic conditions include that the claimant

“is not entitled to income support”.

I understand that one is entitled to it if one is: a lone parent; registered sick or disabled; a student and either a lone parent or disabled; or one is caring for someone who is sick and elderly and one does not have a certain threshold of savings. Some disabled groups have told me that, on the face of it, the provision would seem to exclude many disabled people from being eligible for ESA because they fall into the categories of being lone parents or carers who have income below the thresholds that are required. I would be grateful if the Minister would clarify that point. I am sure that he does not intend to exclude large numbers of people by the wording, but it would seem to do that.

Danny Alexander (Liberal Democrat, Inverness, Nairn, Badenoch and Strathspey)

I associate myself with the remarks made by the hon. Member for Glasgow, North-West (John Robertson). He made points about probing the potentially complex interactions between ESA and other benefits, particularly as they relate to lone parents, carers and so on. That is an important issue, and I look forward to the Minister’s clarification of the intentions.

Some broader issues about the complexity of this benefit need to be drawn out a little. In the Green Paper, the Government made it clear that they thought that there was a possibility of further simplification of this aspect of the benefits system in future, in particular by an idea that I think well worthy of a further debate in relation to where we go next after this: moving to some sort of single working age benefit to create a much greater degree of simplicity in the benefits system. The Green Paper suggested that that idea might be considered. I should be grateful if the Minister could enlighten us whether the Government wish to look at that. I hate to prejudge matters, but if the Bill were passed, is that a direction in which he believes that policy could go next?

Short-term issues are also involved in the complexity of the system that remains under the Bill, as the hon. Member for Daventry said when he referred to graphs, charts and the explanatory notes. Explaining to current benefit recipients how the new benefit will work and how it will differ from the existing benefit will be complicated, not least because it is now the Government’s intention, when the new system is in place, to migrate all existing claimants to the new benefit. Will the Minister provide a little more enlightenment about how the Government intend to go about migrating all existing claimants to the new benefit? What does he regard as the timetable for such a process? What process of education and information does he envisage being undertaken?

David Ruffley (Conservative, Bury St Edmunds)

I do not wish to assume the post of the Minister for Employment and Welfare Reform. [Hon. Members: “Not yet.”] I heard what my hon. Friends said from a sedentary position, but I shall not be tempted down that route. I say to the hon. Gentleman that we know the answer. My understanding is that, because the new ESA is resource intensive compared with incapacity benefit, any existing claimant on incapacity benefit who was to be migrated to ESA would, to put it bluntly in Treasury terms, cost a lot of money to resource. The Secretary of State has made it clear that it is “as resources allow”, which is Treasury speak for “Gordon Brown has not told us what we have got for next year’s Budget”.

Danny Alexander (Liberal Democrat, Inverness, Nairn, Badenoch and Strathspey)

I am sure that the Minister will not necessarily wish to prejudge the result of the comprehensive spending review, although any commitments that he can make not only in that area, but in relation to my earlier point about the long-term funding for the pathways to work programme will be welcome. It is essential in making the process work.

Tim Boswell (Conservative, Daventry)

Just for the record, will the hon. Gentleman concede that the Department for Work and Pensions has anticipated and, indeed, reached an agreement with the Treasury on its forward programme of spending ahead of major announcements next year? Frankly, the prospects for pushing the boat out for such a benefit—admirable as it may be—do not look good from those figures.

Danny Alexander (Liberal Democrat, Inverness, Nairn, Badenoch and Strathspey)

The hon. Gentleman has made my point. One of my biggest worries remains the fact that, as far as I know, £360 million has been allocated to the roll-out of pathways to work and other changes under the Bill. That is grossly insufficient to meet the needs of incapacity benefit claimants to have the chance to access the support and help that might be needed to assist them to overcome their labour market disadvantage. I shall continue to use that term, despite the result of the Division earlier. Perhaps the Minister can enlighten the Committee on those points.

Employer attitudes relate to our debate. I commend to the Minister the work of the Employers Forum on Disability to promote a disability audit within employers. I hope that he will support and encourage it. It highlights employers in the public and private sector who can be role models and explains to other employers the substantial benefits of employing disabled people.

Jeremy Hunt (Conservative, South West Surrey)

On that note, no doubt the hon. Gentleman will have heard yesterday’s announcement that the Conservative party has asked Scope to undertake an audit of the party’s employment procedures in respect of disability. Scope is also in discussions with the Liberal Democrats about carrying out a similar audit for that party. However, it has not yet heard back from the Labour party about whether it will be willing to have an audit undertaken of its practices. Perhaps the hon. Member for Inverness, Nairn, Badenoch and Strathspey will ask the Minister to use his good offices to ensure that the Labour party could set an example.

Danny Alexander (Liberal Democrat, Inverness, Nairn, Badenoch and Strathspey)

I do not wish to try your patience, Mr. Amess, too much on the issue, but I noted that announcement yesterday. The hon. Gentleman will be aware that I announced a month ago that the Liberal Democrats had reached a similar agreement with Scope to carry out an audit of our candidate selection procedures. I was pleased to see the Conservative party follow suit, and I hope that the Minister will use his good offices to ensure that the Labour party does likewise. Encouraging the participation of disabled people in public life is as much a part of the philosophy behind the Bill as many of the other points that we debated earlier.

One change that could be made to promote the better engagement of employers with this issue is the introduction of rehabilitation leave, which the hon. Member for Glasgow, North-West has proposed in a Bill. The Liberal Democrats will be more than happy to support his proposal when it is debated in this Committee.

Jim Murphy (Labour, East Renfrewshire)

As is the case in Committee, some very talented officials have drafted an excellent speaking note. With your permission, however, Mr. Amess, I will answer some of the specific points rather than simply repeat the note. For the record, it explains the structure of clause 1. By reading the clause, hon. Members will read what is in my speaking note, anyway, but if they wish me to place a copy of it in the Library or to read it anyway, I will be happy to do so.

I have known my hon. Friend the Member for Glasgow, North-West for many years. I would like to thank him for giving me advance notice of his detailed question, but he did not, so I cannot. I reassure him that my answer will be shorter than his question, and I encourage him to look at the draft regulations and the supporting material, including page 4 on the new structure of the benefit, which the Department published earlier this month. It was sent to everyone on the day of their selection to the Committee.

Basically, we are restructuring the architecture of the benefits. There will be an assessment phase, and then a basic allowance on top of which there will be two separate levels. The first will be paid to those with work-related activity, expectations and conditionality; and any higher amount will be paid to more severely disabled people for whom there is no requirement to undertake any conditionality or work-focused interviews. Additionally, all the benefit levels that 2.7 million people currently enjoy will be protected during their transferral to the employment support allowance.

My hon. Friend asked specifically about lone parents. When the ESA is introduced, they can make their own choice. If they claim income support because they are a lone parent, they can stay on it and keep the disability premium. Alternatively, they can claim ESA because they are sick and disabled, and obtain the new structure and support. I hope that that clarifies the point for him.

Jeremy Hunt (Conservative, South West Surrey)

Will the Minister explain that point, because the Bill seems to say the precise opposite? Subsection (3) says:

“The basic conditions are that the claimant...

(e) is not entitled to income support”.

Does not that mean that the lone parent of whom he talks would not have that choice?

Jim Murphy (Labour, East Renfrewshire)

I am sorry if the hon. Gentleman misunderstood me. The provision is based on the principle that someone cannot access two contributory benefits at once. We would not pay it, and they would not be entitled to employment support allowance if in receipt of—

Jeremy Hunt (Conservative, South West Surrey)

The Bill does not say “in receipt of”; it says “entitled to”.

Jim Murphy (Labour, East Renfrewshire)

That person would not be entitled to ESA, based on the condition set out in subsection (3)(e), which is on entitlement to income support. The individual will choose, based on the explanation that I gave to my hon. Friend the Member for Glasgow, North-West.

Danny Alexander (Liberal Democrat, Inverness, Nairn, Badenoch and Strathspey)

For the sake of clarity, the clause says that the individual

“is not entitled to income support”.

The Minister has just described a circumstance in which the individual would be entitled to income support and ESA and would have the right to choose between them. The Bill would specifically prohibit that circumstance by making not having entitlement a condition. If the Minister is saying that subsection (3)(e) should read, “is not claiming income support”, that is quite different from what the Bill says.

Mr. Boswellrose—

Sir David Amess (Conservative, Southend West)

Order. We cannot have an intervention on an intervention.

Jim Murphy (Labour, East Renfrewshire)

I feel that it will be a similar point so I will give way.

Tim Boswell (Conservative, Daventry)

I am grateful to the Minister for giving way. As I understood it, he effectively said that there would be a no-detriment provision whereby if somebody chose—and Ministers are nodding at that—to maintain their existing patterns of benefit because they were more advantageous or they preferred to do so, they would be permitted to do so.

My concern relates to schedule 4. In paragraph 6, regulations make provision for converting existing awards into awards of ESA. Now if they can do that, will the Minister give the assurance that nobody will be required so to convert if it would be to their loss, even if the conversion period would be compulsory and that there would therefore have to be special provision under the new ESA?

Jim Murphy (Labour, East Renfrewshire)

To return to the point about clause 1(3)(e), entitlement specifically means receiving rather than someone having some type of underlying entitlement. I hope that that clarifies the point for the hon. Gentleman. In terms of additional points raised by the hon. Member for Daventry—

Mr. Huntrose—

Jim Murphy (Labour, East Renfrewshire)

I would like to make some progress on this point. In terms of ensuring that there is a greater understanding of the new benefit architecture and the means of entitlement to it particularly by those with different circumstances and fluctuating mental and other health conditions, the first work-focused interview, regardless of whether pathways to work is rolled out through the public or private and voluntary sectors—and as we have said publicly, our future roll-out would be based in the private and voluntary sectors—will be done through Jobcentre Plus. It is at that point that the explanation of the different benefit opportunities will take place.

In terms of the new benefit entitlements—whether it is ESA, JSA or another benefit that might be available to the individual—advice will be given on a face-to-face basis in the first work-focused interview with Jobcentre Plus staff, regardless of whether the pathway area is in the private, voluntary or public sector.

The hon. Member for Daventry also raised the point about engagement with pathways. For all types of reasons, it is important that there is local engagement between Members of Parliament and those who are providing pathways at a local level, even if it is to emphasise the cross-party nature of support for the roll-out of pathways. Although there was not cross-party support for the money that made pathways possible—with many people on this Committee voting against it—the cross-party consensus is that pathways is now the right way to go.

In the most recent roll-out of Jobcentre Plus-based pathways, I have asked Jobcentre Plus district and local managers to make contact with local Members of Parliament, regardless of which party, so that there can be conversation at a local level about the ways in which support can be provided to hon. Members’ constituents. I will ensure that that takes place because it is important that it does so.

On the additional points raised by the hon. Member for South-West Surrey, it is important—although he says that this is not the only piece of legislation—to emphasise the sheer change and nature of the Disability Discrimination Act 1995. There are 7 million employees and 1 million employers who can help drive change and as my hon. Friend the Under-Secretary has said, all public authorities have to undertake the disability equality duty review by December of this year. Although the review is not exclusively about employment, it will focus on it. It makes an important point regarding the local implementation of enlightened and progressive national policies in the public sector. We have to make sure that that is happening in as many interactions as possible in the public sector in terms of our worthy goals and progressive policies.

However, the hon. Gentleman was being unduly kind—perhaps in the good-cop bad-cop arrangement that he has with his hon. Friend the Member for Bury St. Edmunds—

David Ruffley (Conservative, Bury St Edmunds)

Which is which?

Jim Murphy (Labour, East Renfrewshire)

I am not going to be drawn on that.

Anne McGuire (Labour, Stirling)

It is the new Tories; they are both good cops.

Jim Murphy (Labour, East Renfrewshire)

My hon. Friend offers an honest assessment, but I will leave it there.

There has been pretty fair criticism of the public sector for what does not happen at the moment, and an implicit suggestion that the position is much stronger in the private sector. Last week, I met some major national companies to talk about our agenda, and they admitted to having structural weaknesses in how they implement the policies. I am not criticising them but making an observation which they themselves offered about their inability, on occasion, to have that face-to-face intervention at the point of sifting job applications, at job interviews, or in relation to supporting employees at work. They are looking for ways to ensure that their well intentioned and progressive national policies can be rooted in as many interactions in local branches and outlets across the United Kingdom. This issue presents challenges in both the public and private sectors.

I move to the points raised by the hon. Member for Inverness—I hope that he accepts that title for the rest of the Committee and does not take it as an insult to anywhere else. I am looking forward to an official visit to his constituency soon, and am glad that he invited me to visit, so I know that he will not take it as an insult if I refer to his constituency simply as “Inverness”.

We are still committed to a single working age benefit; that is one of our goals with simplification. The Bill simplifies matters in an important way, despite the reasonable point made by the hon. Member for Daventry about ensuring that there is no complication as agreed on understanding among customers and claimants about the new architecture. We are replacing incapacity benefit and income support that is allocated on the basis of disability with ESA. That is an important change to the way in which benefits are structured. I reiterate that we are committed in the long term to a single working age benefit.

Jeremy Hunt (Conservative, South West Surrey)

I apologise to the Minister for going back to his earlier comments, but I just looked at the clock and wanted to make some comments now. I welcome his comments about the single working age benefit, but we have not quite resolved the matter of subsection (3)(e) and the difference between people who are entitled to income support and people who are claiming income support. Will he undertake that his officials will reconsider the wording of that measure before the Bill makes further progress through the House, because disability groups are concerned that it seems to exclude a number of people from entitlement to ESA?

Jim Murphy (Labour, East Renfrewshire)

I will, of course, return to the point that the hon. Gentleman reasonably raises. I also want to deal with the issue of employer engagement, which has been raised again by hon. Members. We work in close co-operation with the Disability Employment Advisory Committee, which offers a fantastic, frank analysis of some of the emerging challenges with the agenda in a way that improves the quality of our work on disability and how we offer support to people entering the workplace.

The hon. Member for Inverness asked about migration, which is important as it concerns 2.7 million people, although if current trends continue that number will be marginally lower in 2008-09. He probed our better intentions about migration. Of course, this issue is partly affected by resources and their availability, but our genuine intention, which is based on the current analysis of IB, is that those who are most recent to the benefit should be those most likely to have the opportunity to get back to work. As the hon. Member for Bury St. Edmunds said, thus confirming what the Government suggested, someone who is on incapacity benefit for two years or longer is more likely to die, retire or never work again. We have used that analysis for a migration strategy and looked for ways in which to migrate the newest IB claimants on to the new ESA.

Standing Committee A

Clause 1

Jim Murphy (Labour, East Renfrewshire)

Thank you for calling me, Mr. Hood. I congratulate you on your appointment to the Chair—co-Chair, lead Chair or whatever—of our proceedings. The Clerks or Mr. Amess might have informed you that we had a relatively well-informed debate in good tone while trying to work our way through some important details of the Bill. At the start of our second of 16 sittings, I seek to continue that approach.

I was responding to a point about migration raised by the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Danny Alexander). I said that the migration strategy will be based on the premise that those who have been out of the labour market for the shortest time will be migrated first, simply because those people have a greater chance, based on objective analysis, of returning to the labour market.

Tim Boswell (Conservative, Daventry)

If somebody has been out of the labour market for a long time but is mad keen to get back—if they are strongly motivated and extenuating circumstances explain why they have not approached it—would the Minister consider at least in principle that they should be able on application to advance in the queue and to enter the new arrangements?

Jim Murphy (Labour, East Renfrewshire)

The hon. Gentleman anticipates one of three points that I wish to make about migration. One is proximity to the labour market based on time out of it; the second is child poverty. The No. 1 priority of the Department for Work and Pensions is to eradicate child poverty. By general acknowledgment, the Government have set the most ambitious child poverty reduction target of any Government on the globe: we aim to halve it by 2010 and to eradicate it by 2020. In terms of migration strategy, it is important that those with dependent children—

Adam Afriyie (Conservative, Windsor)

The Minister talks about eradicating child poverty. Which measurement of child poverty is he discussing in this context—relative or absolute?

Jim Murphy (Labour, East Renfrewshire)

We are committed to abolishing all measures of child poverty till there are no kids in poverty. It does not matter which measure is used, but the one that we are using for our target is relative poverty. By all acknowledgment, that is the most ambitious measurement of child poverty, because it is a measure of relative income across the economy.

Adam Afriyie (Conservative, Windsor)

On a point of clarity, if the Minister is referring to relative poverty, it would seem mathematically impossible to eradicate it. If he is talking about the lowest percentile of income for a family with children, that is a mathematical impossibility.

Jim Murphy (Labour, East Renfrewshire)

I am pleased to hear from the hon. Gentleman. He has involved himself in an important part of the conversation. However, we are committed to that target, and we are even more committed to developing policies to get us to that target by 2020. It is really a question that he should have addressed to his own Front-Bench Members. As he will know, they have apparently now committed themselves to that objective. As so often, his party wills the ends without identifying any of the means; nevertheless, it is a small move forward for the child poverty target.

On the migration strategy, we are looking for ways to maximise the income of those with dependent children and to eradicate child poverty. The general assessment is that this Bill and the measures in the Green Paper could remove about 100,000 kids from relative poverty. Those and other measures on child support reform play an important part.

On the point made by the hon. Member for Daventry (Mr. Boswell), we are considering ways of ensuring that volunteering happens. Someone out of the labour market for three, five or seven years may, because of a change in circumstances, have the determination to get on and get up. We are considering ways to make that a reality.

Finally, I turn to the point raised this morning by the hon. Member for South-West Surrey (Mr. Hunt) about clause 1(3)(e). I confirm that someone wishing to make a benefit application would contact Jobcentre Plus and discuss the available options. For some people, only one benefit—jobseeker’s allowance, for example—would be available. However, some would have the opportunity to choose.

This morning, I gave the example of a lone parent who also had a disability; they would be able to claim employment and support allowance or income support. The customer, in discussion with Jobcentre Plus, will make their own decision about what would be most appropriate for their circumstances; the key point is that they would make the decision. As we know, they would be entitled to only one income-related benefit at any one time.

The point raised by the hon. Member for South-West Surrey was not an issue of principle but of whether clause 1(3)(e) was fit for purpose. I looked into that point during the recess. I shall say something about the work entitlement, which the hon. Gentleman asked about. A person is entitled to a benefit only if they meet all the conditions and make a claim for it. Those are the two stages: entitlement to the conditions and making a claim. That is the legal, constitutional and legislative argument on entitlement.

Just before the end of this morning’s sitting, I was about to say—it was on the tip of my tongue—that, in common with other social security legislation, the Bill will achieve what I have set out by amending section 1 of the Social Security Administration Act 1992 through a consequential amendment, which can be found in paragraph 4(2) of schedule 3.

That may be a dry assurance, but I hope that it is what the hon. Gentleman sought at the end of this morning’s sitting. I have been advised that it has the correct and proper legal meaning and that it achieves the purpose that we wish to set out. I thank the hon. Gentleman for raising that issue and giving me the opportunity to clarify it.

Schedule 1

Jim Murphy (Labour, East Renfrewshire)

I beg to move amendment No. 78, in schedule 1, page 49, line 2, after ‘Act,’ insert—

‘( ) a contributory allowance,’.

I am slightly worried about saying it, but this should be a brief debate on the amendment, which involves a drafting omission. As Committee members will be aware, schedule 1 is duplicated from existing income support and incapacity benefit legislation, but we omitted to include the phrases contained in the amendment.

The amendment extends the definition of “benefit” given in paragraph 1(5) of schedule 1, which defines what is meant by “benefit” for the purposes of paragraph 1(4) of schedule 1. We use the current regulations to relax the first contribution condition so that it can be satisfied if sufficient contributions have been paid in any one tax year, not necessarily one of the previous three tax years. We want to be able to do the same in future for people who have been entitled to contribute to ESA and to do so we must ensure that to contribute to ESA is defined as a benefit in paragraph 1(5). I apologise for that drafting omission.

Danny Alexander (Liberal Democrat, Inverness, Nairn, Badenoch and Strathspey)

I beg to move amendment No. 164, in schedule 1, page 50, line 41, after ‘receiving’, insert ‘full time’.

Jimmy Hood (Labour, Lanark and Hamilton East)

With this it will be convenient to discuss amendment No. 170, in schedule 1, page 51, leave out line 28.

Danny Alexander (Liberal Democrat, Inverness, Nairn, Badenoch and Strathspey)

I join the Minister in welcoming you the Chair, Mr. Hood. I look forward to serving in this Committee under your chairmanship.

The amendments are designed to probe, in order to clarify the Government’s definition of education with respect to the qualifying criteria for the ESA. Paragraph 285 of the explanatory notes states that regulations will set out what is to be treated as education and when it may not apply, but we need to hear a bit more from the Government about what they mean by education and how they wish it to apply in this case.

For example, income support entitlement is usually allowed for part-time students and not full-time students, so amendment No. 164 would insert the words “full time” to make that clear. Indeed, exceptions in the case of income support that allow full-time education include, for example, students who are eligible for the disability premium and deaf people who receive the disabled students’ allowance.

The point that I wish to make is that the rules surrounding this benefit must not be a disincentive for people to learn. The Bill should allow more opportunities than at present to improve employment chances through education and training and it is particularly important that the terms of the Bill do not put up new barriers to people who might be suffering an impairment, condition or disability to access education and training while continuing to be able to claim their benefits.

I want to bring some relevant figures to the attention of the Committee, for which I am grateful to the Disability Rights Commission. Of those currently in receipt of incapacity benefit, 40 per cent. have no qualifications whatsoever and 15 per cent. have literacy and numeracy problems. It is worth noting, too, that having qualifications can increase the chances of a disabled person being in paid employment by 30 per cent. for men and 45 per cent. for women. In the context of the overall objectives of the Bill, encouraging education, training and gaining qualifications is vital.

As the disability premium for income support will be abolished under ESA, will the Minister clarify how students will be identified as qualifying for income-based ESA while studying full-time? People who receive income support can get reductions in their course fees and sometimes fee waivers. That does not apply to people who are on incapacity benefit, although some colleges individually allow fee waivers. Will the Minister explain how he thinks that people who receive income-based ESA will be supported in the high cost of post-16 education? Will a fee waiver apply to ESA recipients in the context of the Bill?

I look forward to the Minister’s response.

Jeremy Hunt (Conservative, South West Surrey)

I take this opportunity to welcome you to the Chair, Mr. Hood. I look forward to serving under your no doubt wise and erudite chairmanship.

I wish to speak in strong support of the amendments. We have reflected carefully on them and we support them because the role of education needs to be fleshed out if the Bill is to achieve the objectives that the Government have set out. In particular, part-time and even full-time education are often vital stepping-stones towards getting back into full employment. The Committee will be aware that one of the most iniquitous problems facing disabled people trying to lead an independent life and contribute fully to society is the education disadvantage that they suffer. Statistics such as the fact that a disabled person with a higher education qualification is more likely to be out of work than a non-disabled person with no qualification ought to give pause to anyone and make them think. In considering the drafting of the Bill we must be careful not to ignore inadvertently the fact that education is part of a solution, not part of the problem. Although we understand that for obvious cost reasons it is not possible to give the employment and support allowance automatically to everyone in full-time education, we would have much greater success in getting people into the labour market if we had a more positive attitude to the role of education.

I must declare an interest: before I was elected to Parliament last May, I ran my own publishing business. We published guides and websites to help people get on the right course and choose the right university or college. My hon. Friends might be relieved to know that it was a healthily capitalist occupation for me—at that time, of course, it was a different Conservative party. [Interruption.]

Jimmy Hood (Labour, Lanark and Hamilton East)

Order. I ask hon. Members not to be tempted to interrupt Members when they are on their feet.

Jeremy Hunt (Conservative, South West Surrey)

Thank you for rescuing me, Mr. Hood.

I declare that interest to show that I have some degree of knowledge of the business background and of how courses have become a vital way for people who are out of the labour market to re-engage in it. I used to have an image of adult education as being flower arranging, cake-making, Latin, Japanese, Shakespeare sonnets and other such wonderful and enjoyable pursuits. In fact, when visiting adult education colleges one finds that a huge number of the courses offered equip people with relevant skills.

Adam Afriyie (Conservative, Windsor)

Is my hon. Friend aware that in the technology industry, many people with learning difficulties and mental health challenges attend courses and are subsequently able to be placed with employers? There is definitely an opening for part-time and full-time courses to assist in meeting the Bill’s objectives.

Jeremy Hunt (Conservative, South West Surrey)

I am grateful to my hon. Friend for making that point, which brings me in a relevant way to my other points. Education is an important part of the solution, so the Bill needs flexibility. The amendments tabled by the hon. Member for INBS, as I think I shall call him from now on—the hon. Member for Inverness, Nairn, Badenoch and Strathspey—would at least make part-time education possible.

I hope that when we discuss education we will consider it also in relation to the support part of the new employment and support allowance. We shall come to that later, but if the Government are serious about wanting to allow people on the support package to volunteer for the pathways programme, they need to understand the role of education in making that possible. Education might not be a matter simply of job placement, although that is what it is most likely to be for people on the work-related part of the allowance package. I support the amendment.

Tim Boswell (Conservative, Daventry)

May I, too, welcome you to the Chair, Mr. Hood? You have probably picked up on the fact that the debate has been broadly consensual and good-natured, and I shall not subvert that. I wish to add only one or two comments.

First, one should always have regard to the control function as well as the relaxation function, so Ministers may need to reflect on the current definition of education. For many people education will be perceived as attending an institution in which education is delivered, but the internet and online learning may require Ministers to draw the definitions widely to embrace the appropriate restrictions. I am not anxious to encourage them to go further, but I put those views on the record.

On my second point, I should declare an interest as one of the parliamentary patrons of the National Institute of Adult Continuing Education. The Minister is looking at me wryly. As he will well remember, as a former Minister with responsibility for higher and further education, I am deeply committed to the cause of lifelong learning and I look only for allies on both sides of the Committee in relation to it. We all believe that it is important—whether in an employment-related or support-related context, or in a context unrelated to other matters. It is a good in itself, quite apart from the employment side of it, although I endorse the comments of my hon. Friend the Member for South-West Surrey on its relevance to employment for people who have been out of the labour market for some time and whose lack of prior attainment, though not ability, may disqualify them or hold them back from reaching the appropriate level in that market.

Finally, although the words have not been mentioned, I suspect that somewhere, stalking this debate, is the mythic figure of 16 hours concerning people’s availability for full-time work, or their potential availability for it were they able to go through the pathways and get access to work. The suggestion is that there should be a distinction. At the time of my ministerial experience of more than a decade ago there was a rigorous distinction between the student support package and the support that is available through the benefits system, and that has broadly been maintained, but the explanatory notes already indicate that there is some possibility of eroding or eliding it for disabled students. I do not think that Ministers will expect me to declare the end of the 16-hour rule as far as the Opposition are concerned. If they do, they will be disappointed; it is a debate for another occasion. However, and I speak in all seriousness, the role of education is important, and we should like to feel that the system works to facilitate it so as to encourage people back to work. We do not want it to be used unduly pedantically so as to exclude people from the labour market by making it, while theoretically possible, practically impossible for them to qualify for future employment.

Alison Seabeck (Labour, Plymouth, Devonport)

I apologise for being late for the start of the Committee, Mr. Hood.

Unlike a number of Committee members, I am not an expert in these matters. Paragraph 4(1)(a) of schedule 1 refers to “prescribed cases”. Will the Minister clarify what could be classified as such a case?

Jim Murphy (Labour, East Renfrewshire)

I shall endeavour to respond to the points mentioned. The hon. Member for Inverness, Nairn, Badenoch and Strathspey raised some genuinely important points about the role of education, and the importance of education in the skills and employment gaps, the income and wealth gaps, the opportunity gap, and in all the other differentials that we know have been endemic in our society for many decades. Education is the key part of that. When we examine social mobility, we see that the first factor to make a big impact is childhood and family poverty, which we have already considered in response to the comments made by the hon. Member for Windsor, and which we may have a further opportunity to discuss. The second is the role of the family, social networks and the social capital that families can provide. The third is education, and predominantly primary education. Although the context of the Bill is later years, primary education and early years education is one of the key three drivers of social mobility and the transformation of life chances, so the hon. Gentleman is right to raise the issue.

The hon. Member for Daventry drew on both his current involvement in education and his distinguished career as a higher education Minister. He will recall that we have spoken about this before, but during a previous life I served as the president of the National Union of Students for the UK. He was one of the few Ministers whom we looked forward to meeting, because he was always willing to enter into a conversation—there was a dialogue, not a diatribe. I hope that he does not mind my saying that he was a new Conservative before being one became this year’s vogue.

Jeremy Hunt (Conservative, South West Surrey)

The Minister might be in danger of inadvertently breaking up this afternoon’s friendly consensus by suggesting that the modern compassionate Conservative party is a vogue, when it is in fact much more fundamental than that.

Jim Murphy (Labour, East Renfrewshire)

Mr. Hood—

Jimmy Hood (Labour, Lanark and Hamilton East)

Yes, I am about to rule you out of order.

Jim Murphy (Labour, East Renfrewshire)

I have not said anything yet. All I can say is that we are judged by our actions as well as our words. The hon. Member for South-West Surrey has not been here long enough to vote against the new deal, tax credits or all the investments that have helped to drive our labour market interventions, which make some of the Bill entirely possible.

To return to the point that the hon. Member for Daventry and others made, my experience is not based on statistical analysis or the fact that I was the president of the NUS. I went back to a further education college—Cardonald college, on the south side of Glasgow—to have another shot at doing my school qualifications part-time, and I remember the sheer diversity of that college, in the mid-’80s. Further education has played an enormous role, and will continue to do so, in supporting people from all sorts of backgrounds, particularly those with a disability and a fluctuating mental health condition. I think back to that time, when the college played a remarkable role in trying to intervene and improve people’s lives. Further education is not all about basket weaving or recreational Japanese, as the hon. Member for South-West Surrey, speaking for the new Conservative party, belatedly acknowledges.

Jeremy Hunt (Conservative, South West Surrey)

I am just going to bring the Minister back to the debate for a moment. He mentioned disability, and one of the concerns, which I am sure he will be able to address quickly, is that the draft regulations, which he kindly sent to us before the Committee started, have not been published in an accessible format. I wonder whether he could look into that, because we have received indications that his Department was unwilling to publish the draft regulations in an accessible format. I am sure that that was an oversight, the simple reason being that the whole Committee depends very much on the input of disability organisations, with disabled people giving an important part of that feedback. We would not want not to have that feedback on the draft regulations.

Jim Murphy (Labour, East Renfrewshire)

The hon. Gentleman is entirely correct that we must ensure a diversity of feedback. If the point that he raises is genuine, I will of course look into it.

David Ruffley (Conservative, Bury St Edmunds)

On that point, the publication of the Green Paper in an accessible form was delayed, so we are not suggesting for a minute that the Department is not aware of the issues. I received complaints that an accessible form of Green Paper was not available at the time that everyone else had it, so perhaps the Minister could share his thoughts on that.

Jim Murphy (Labour, East Renfrewshire)

I have already offered my thoughts on it. The hon. Gentleman will be aware that we extended the consultation period on the Green Paper for that very reason. That was the reasonable thing to do at the time. Of course we as a Government and all public agencies must continually find ways to ensure that our communications, our conversations, our websites and our electronic communications touch the lives of people, regardless of their experience and background.

Returning to the point about education, I should stress that education in its various forms will be an important part of work-related activity as envisaged in the Bill. The chance to reskill and retrain would be an important part of work-related activity. It is our intention to bring forward into the contributory and income-related allowances the corresponding provisions from incapacity benefit and income support. These rules currently mean that where someone has been sick or disabled for more than 28 weeks they will normally be able to claim income-related benefit while in full-time education. The Bill, as drafted, would allow us to maintain the current position and we intend to do just that.

The rules are intended to draw a distinction between short-term sickness while in education, and education while in a period of long-term sickness or disability. The Bill as currently drafted allows us the flexibility to accommodate changes in the way that education is provided and studies are funded. I realise that the amendment tabled by the hon. Member for Inverness, Nairn, Badenoch and Strathspey was a probing amendment, so I will not make a substantial point about it. However, it takes away some of that flexibility by seeking to insert “full time” before “education”.

The nature of income-related benefits is such that they need to take account of other support that is available to people. That is why the provision relating to the income-related strand of the benefit does not specify that it is full-time education that is incompatible with receiving the benefit. We have a provision allowing us to define the meaning of “education” in regulations, as the hon. Gentleman is aware.

We also want people to undertake education in respect of work-related activity, and if necessary we can make adjustments to the rules through regulations to ensure that the interface between education and work-related activity is fit for purpose and makes possible the type of thing that we all wish to see which we have already mentioned today. I think that is the point that the hon. Member for Daventry wanted me to address.

Jeremy Hunt (Conservative, South West Surrey)

The Minister said that that flexibility applies to people on the income-related part of the ESA. Should that flexibility not also apply to people on the contributions-related part? For example, if someone with acquired brain injury from a very bad car crash goes on a course, it might be a stepping-stone towards part-time education and then full-time education. He or she may well be on the contributions-based element of the ESA rather than the income-related one. Should that flexibility not also apply to such a person?

Jim Murphy (Labour, East Renfrewshire)

The hon. Gentleman raises a reasonable point. We can continue our conversation about who has access to what aspect of education and whether it is income-related or contributory. The important point, which I made in my response to the hon. Member for Daventry, is that we will take the flexibility to ensure that the regulations can evolve through time in response to the changing nature of education and the changing opportunities in information technology and the changing demands of the customers of ESA, in terms of their educational aspirations.

The regulations will set out in more detail the policy, but the current definitions of education for income support are in regulations and we will bring forward what is currently in income support regulations, for example, in schedule 1. How will students be identified as qualifying for income-related ESA while studying full-time? We will define that in regulations. There will be consultation with the organisations that one would expect about the draft regulations which will be entirely appropriate. But we intend to bring forward the same definitions as currently apply to disabled students. I think that will reassure the hon. Gentleman on the specific point that he raised.

As I said this morning, Mr. Hood, our officials often write excellently drafted and crafted speeches and they also write excellently drafted and crafted paragraphs. I shall share one with the Committee and then explain what I think it means. Paragraph 6(4) of schedule 1 provides that we can treat a claimant as being in education when they are not and a claimant who is in education as if they are not. I was puzzled by that. To pre-empt questions from hon. Members, the paragraph is what is generally regarded as a training provision and is standard in social security legislation.

Again, to reassure hon. Members, if someone is in education but we want to treat them as though they are not, so that they can still claim income-related allowances, the power in the paragraph enables us to do so. For example, if they are undertaking approved training to enable them to evolve their skills and career we would define them as not being in education for the purposes of those ESA contributions. I hope that that reassures hon. Members.

Specifically on the points raised about prescribed places, I am advised that we shall stipulate in regulations, following consultation, exactly what my hon. Friend the Member for Plymouth, Devonport (Alison Seabeck) asked about. I would be happy to see her take part in the conversation about how we get those regulations just right.

With that, I encourage the hon. Member for Inverness, Nairn, Badenoch and Strathspey, in the spirit in which he tabled them, to consider withdrawing his probing amendments. If there are additional specifics that need discussing, we can continue that conversation as we consider the drafting of the regulations to which I have already alluded.

Danny Alexander (Liberal Democrat, Inverness, Nairn, Badenoch and Strathspey)

I am grateful to the Minister for his reply; it reassured me on almost all my points, so I shall not press any of my amendments.

The Minister did not, however, answer my question about fee reductions and waivers. Although he might not have an answer now—I see from his expression that he might not—I should be grateful if he would give the matter further consideration because it is important to ESA recipients given the additional cost of some educational provision, particularly that which might not be counted as work-related activity in the way that he described. It would be useful to have some reassurance that the Minister at least will consider what can be done about that.

In relation to the contributory part of the allowance, I note that paragraph 4(1) of schedule 1 on conditions relating to youth reads:

“The third condition is that...he is not receiving full-time education”.

Again, perhaps the Minister will reflect on that in relation to the contributory part of the allowance.

I beg to ask leave to withdraw the amendment.

Clause 2

Jimmy Hood (Labour, Lanark and Hamilton East)

I would like to inform the Committee that given the wide-ranging amendments, it is not my intention to allow a clause stand part debate after we have discussed the amendments.

John Robertson (Labour, Glasgow North West)

I beg to move amendment No. 180, in clause 2, page 2, line 20, at end insert

‘irrespective of the age of the claimant’.

Jimmy Hood (Labour, Lanark and Hamilton East)

With this it will be convenient to discuss the following amendments: No. 181, in clause 2, page 2, line 25, at end insert—

‘(1A) The total amount payable under subsection (1) above may not be less than the relevant rate or rates of benefit payable under paragraph 2A of Part 1 and paragraph 2 of Part 2 of Schedule 4 to the Social Security Contributions and Benefits Act 1992 which would have been payable to the claimant on the day immediately before section 2 of this Act comes into effect had he made a claim for and otherwise been entitled to those amounts.’.

No. 182, in clause 2, page 2, line 35, at beginning insert ‘subject to subsection (1A)’.

No. 177, in clause 2, page 2, line 40, leave out paragraph (c).

John Robertson (Labour, Glasgow North West)

May I, too, welcome you to the Chair, Mr. Hood? I know that your words of wisdom about temptation will be taken on board by every Member, even myself. There are three kinds of MP in the Room today—the good, the bad and the weak. I might be weak, but I am never bad, so I shall do my best to adhere to your instructions.

I tabled my amendments in order to probe the Government and to tease out some more information from them. Clause 2(1) deals with the amount of contributory allowance. The amount of the contributory ESA is not set out in the Bill, but will be set out in regulations. Page 42 of the Green Paper states that the additional amount for the work-related activity group

“will fix the total received by a claimant at a rate above the current long-term rate”.

In respect of the support group it continues:

“After the assessment phase, they...will receive more money than they do now.”

It is important that while we are asking people to take part voluntarily, we look after them to ensure that they are not worse off and that we protect the most vulnerable at all times. Under the IB scheme, additional amounts can be paid if conditions are met. They are age-related and adult dependent additions. The intention is that the ESA will not contain those additions.

To ensure that people on ESA are not worse off than on the current scheme and taking the statements in the Green Paper to mean that no one will lose out financially, the amount of contributory allowance must be at least equal to the stated rate of the IB scheme, including any additions to which they will be entitled; otherwise, the effect will be to push more people into the means-tested element of ESA. That might be the Government’s wish and unless someone has come up with a better way of assessing whether people need allowances, I appreciate that we must go down the road of means-testing. I hope that the Minister can assure me that the effect on those who most need help will be considered individually.

In conclusion, these amendments are small but the amount of money that people receive in cases of hardship must be looked at and taken care of. These are probing amendments because I want to hear from the Minister that the Government will always consider the people who most need help.

Jeremy Hunt (Conservative, South West Surrey)

I want to speak briefly because the hon. Gentleman has raised some interesting points. On the precise level of the benefit, can the Minister confirm whether he intends that people who go on to ESA on an income-related and contributory basis will be given the same level of benefit? Obviously, the income-related basis will take them up to a certain level of income, but the intention is that that level should be the same. I am concerned about minimising complexity in a system that is already complicated.

On the level of benefits and ensuring that people do not lose out, I notice that the intention is that people on the support element of the package will receive slightly more than those on the work-related element. It is extremely welcome that people with the severest disabilities will be given additional help, but it is also the Government’s intention that people should transfer from the support element of the package to the work-related element. One case study in the regulations is of someone who transfers from one to the other. Was there any evidence in any of the pilots that people are deterred from transferring from the support element to the work-related element because of the small reduction in benefits? That would be of great concern as the purpose of the Bill is to move people towards the world of work.

Jim Murphy (Labour, East Renfrewshire)

In response to the brief points that have been fairly raised by my hon. Friend the Member for Glasgow, North-West (John Robertson), as he said, the amendments refer to the rate of benefit and we said throughout the process—in the Green Paper and since—that all existing customers will have their rate of benefit protected and new customers will have a higher rate of benefit than the current long-term rate of incapacity benefit.

Amendment No. 180 would introduce benefit rates into the Bill, but the Government’s commitment is about protecting rates for existing claimants and putting future customers on a higher rate than the current long-term IB rate.

There was an important concession on benefit rates in the Green Paper. We had initially intended to set a youth rate in the main phase. Not unreasonably, representations from the TUC and others said that that would be the wrong thing to do, so we announced that we would not be introducing a youth rate in the main phase, which has been welcomed as an important concession.

Three different rates will remain in the assessment phase—

Adam Afriyie (Conservative, Windsor)

On the issue of rates for ESA, can the Minister confirm that the level will be similar, not directly equivalent, to the ESA that has been available through the pathways to work pilot? Will it be at the same level?

Jim Murphy (Labour, East Renfrewshire)

We have announced our intention that the ESA rate will be above the current long-term IB rate. The hon. Gentleman would not expect me to go further than that today but I shall make a couple of points on the comments made by the hon. Member for South-West Surrey. There remain three different rates in the assessment phase: one for customers aged under 18; another for those aged 18 to 24; and another for those of 25 and over. The reason for the assessment phase is to ensure that the rates line up with jobseeker’s allowance rates.

We do not want to make any assumptions during the assessment phase about a person’s capability, which is why we deliberately sought to align benefit rates with the JSA rate in the three-month assessment phase. That means that the customers who are not entitled to the employment and support allowance can move back on to JSA at the existing rate.

As the new age discrimination legislation shows, the Government are committed to combating unfair treatment on the grounds of age; in the case of benefit levels there are differentials because in general younger people are likely to have fewer demands on their income. For example, they are less likely to have dependants and more likely still to be supported by their family. I acknowledge that those are generalisations, but they have permeated the benefit system for many years.

We have said that no young people on incapacity benefit now will be worse off under the employment and support allowance. I go further: we will continue to make special provisions so that many young people can access the contributory allowance even without meeting the national insurance contribution conditions. That is a small measure in the Bill but it is very important as it removes any unforeseen penalisation of young people on the basis that they are unable to qualify for the contributory allowance because of their age.

We are introducing an entirely new structure for the ESA which moves away from a system where benefit rises with the length of incapacity, which we believe undermines incentives to return to work. We have made it clear that existing customers’ benefit will be fully protected and the new structure ensures that new customers will gain after the end of the assessment phase. The allowance has a two-tier structure because it is important to distinguish between those whom we would reasonably expect to participate in work-related activity and those whom it would not be reasonable to encourage to do so.

I assure my hon. Friend the Member for Glasgow, North-West that we are determined not to write anyone off but we recognise that some people on ESA will have severe health conditions and disabilities, and they will need our support. The existence of the support component will enable us to provide extra financial support to those who suffer the most severe conditions.

Jim Murphy (Labour, East Renfrewshire)

I was on the verge of drawing my comments to a conclusion, having offered reassurance to my hon. Friend the Member for Glasgow, North-West that the benefit rates of current customers will be protected. In respect of new ESA customers the commitment will be above the present long-term IBA rate, as I said.

I want to turn briefly to two specific questions: the first was about the income allowance and whether the contributory level will be the same. It is our intention to set the contributory level and if a person on the income allowance has no other income, it will of course be at the same level. However, with the income allowance, as with other benefits, the state will take additional income into account in any assessment. In general, what was suggested was correct.

We will discuss the second point on the existence of a support group a little later, but the hon. Gentleman asked about the evidence provided by pilot schemes. We had not set up the structure when we started the pilots, so the structure will not be used with the new benefit until 2008, but our manifesto stated that we would provide additional financial support to those with the most severe disabilities. We have to structure that carefully so that we do not write anyone off. It is important to ensure that that when creating a support group to support those for whom there is no conditionality—they will get a higher level of benefit—that we do not reintroduce a version of incapacity benefit for a relatively small but important group of people.

For example, we are now considering how to ensure that those in the support group—it is based on a limited capacity of work, with assessments being made through the severe disablement allowance—can nevertheless say that they do not want to be written off; we are seeking to ensure that those folk can volunteer for, and not be forced into, the support that is available to others. We have worked through the details, but it is important to set out the principle. Although there is no conditionality and people get a higher rate of benefit, we also wish to say clearly to each individual in the support group that they can volunteer for the appropriate support. That is an important distinction when compared with incapacity benefit. I hope that I have reassured the Committee.

With those comments, and given the tone in which my hon. Friend the Member for Glasgow, North-West moved the amendment, I encourage him to consider withdrawing it.

John Robertson (Labour, Glasgow North West)

I thank my hon. Friend for his words. Needless to say, I am convinced by his argument; however, I shall keep an eye on future matters. I beg to ask leave to withdraw the amendment.

Danny Alexander (Liberal Democrat, Inverness, Nairn, Badenoch and Strathspey)

I beg to move amendment No. 184, in clause 2, page 2, line 21, leave out ‘support component or the’.

Jimmy Hood (Labour, Lanark and Hamilton East)

With this it will be convenient to discuss the following amendments: No. 185, in clause 2, page 2, line 22, leave out ‘are’ and insert ‘is’.

No. 186, in clause 2, page 2, line 26, leave out subsection (2).

No. 187, in clause 4, page 4, line 16, leave out ‘the support component or’.

No. 188, in clause 4, page 4, line 21, leave out subsection (4).

Danny Alexander (Liberal Democrat, Inverness, Nairn, Badenoch and Strathspey)

My intention is to probe the Government about the rationale and structure of the two-tier benefit and the support group, the criteria for including people in the support group and how it is intended to work in practice.

Conceptually, at least, it is an important point. In the context of our brief discussion on the longer-term objective of simplifying the benefit system, serious questions have to be asked about the justification for having a higher rate of benefit for the support group. Is the Minister’s justification that it will replace some of the income lost because of the likelihood of someone being on benefit for longer? Is it trying to meet the extra costs that such a person might have because they suffer a more severe impairment or condition? If it is the latter, might it not make more sense simply to have one rate of ESA, and to provide the additional support through the mechanism of the disability living allowance? That would have the further benefit that the additional amounts would be provided on an extra-cost basis and would not necessarily be withdrawn when the person receiving them found work.

If the longer-term objective is to move to a single working-age benefit, having the two different rates will be an additional complication that might not be necessary. The objective—it is a good one—of meeting the extra costs of people who are more severely impaired or disabled might better be met through the disability living allowance system. That is food for thought for the Minister, and I invite him to explain in full the rationale behind the two components.

Jeremy Hunt (Conservative, South West Surrey)

Does the hon. Gentleman not share my concern that having the support level at a higher rate could have an unintended consequence? Those who get on to the support level will want to protect their position and will not want to risk going on to a lower level by transferring to the work-related part of the package. Is that a cause that drives him to move his amendment?

Danny Alexander (Liberal Democrat, Inverness, Nairn, Badenoch and Strathspey)

There are two different unintended consequences. The first is that which the hon. Gentleman describes, but the difference between the support component and the work-related activity is not only the level of benefit, but the level of obligation or conditionality of that benefit—the exchange for undertaking or not work-related activity. Both could provide an incentive.

David Ruffley (Conservative, Bury St Edmunds)

Is not there another difference? If a man or woman were on the work-related component, they could access cognitive behaviour therapy through condition management programmes and so on. There would be a difference in the level of active support.

Danny Alexander (Liberal Democrat, Inverness, Nairn, Badenoch and Strathspey)

The hon. Gentleman anticipates a point I was going to make. There are questions to be answered. The Minister said that those people in receipt of the support component will have the opportunity to opt in to employment support and other pathways aspects. That is welcome, but will the Minister guarantee the same opportunities for those who go into the support group, given the concern I expressed this morning about the finance for the introduction of pathways to work?

The provision is calculated on the basis of assisting principally new claimants, not necessarily “the stock”—a ghastly term used in such proceedings—of claimants. Taking one step back, with new claimants in the support group, will the Minister describe how it will work in practice? Will he assure the Committee that resources will be available for those people in receipt of the support components, so that they can take part in those opportunities?

Tim Boswell (Conservative, Daventry)

As I interpret the hon. Gentleman—and I shall be grateful for his confirmation—he fears that, with reference to any point decision, Ministers might find it more convenient to park persons in the support group and pay them off with a higher allowance, rather than commit resources to their re-engagement in the labour market. Ministers might also find it more convenient to do similarly with new entrants, who would go on to the employment and support allowance, leaving substantially untouched the historic cases who are on incapacity benefit. Other members of the Committee might share the hon. Gentleman’s fears.

Danny Alexander (Liberal Democrat, Inverness, Nairn, Badenoch and Strathspey)

I am not so fearful about the first point. From the Minister’s tone, I genuinely do not think it his intention to try to park people in the support group. When so many provisions are left to regulations, however, there is the risk that a future Minister—from another party perhaps—might see the convenience of the point that the hon. Member for Daventry outlines.

On the other hand, there is great uncertainty about the “stock” of claimants, and how people from that group who end up in the support group will access help, given the restricted funding on offer. First, what is the conceptual basis for that distinction and the justification for the different rates? Secondly, I should be grateful if the Minister could flesh out the way in which the provision will work in practice.

The criteria for inclusion in the support group have not been provided, so the Committee is being asked to endorse a division or distinction that has not been outlined in detail, let alone rationalised. Will, for example, the distinction between the support group and the work-related activity group be determined principally on medical grounds, or by other criteria? Will the Minister say something about that? With reference to my earlier point, will other labour market disadvantages, such as the refusal of employers to provide employment opportunities for certain categories of people, be taken into account? I know that several hon. Members have expressed particular concern about the exclusion from the labour market of people with mental health problems. Will other factors such as child care and care responsibilities be considered when making the distinction?

The question that still has to be answered is how easy will it be in practice to draw a clear dividing line through the operation of the revised personal capability assessment. The decision as to whether someone qualifies for the support group rather than the work-related activity group will be taken very quickly in the PCA. That will determine whether someone has to come back 10 minutes later for their work-related, health-focused assessment to establish the amount of work-related activity that they can undertake. If we could hear a bit more, therefore, about the dividing line and how it will be established in practice through the PCA, it would be gratefully received.

Perhaps the Minister could also say a bit more about the difference in income for the support group, as against other ESA recipients. Will the increased amount be determined on the basis of the likely duration of benefits or extra support requirements? Importantly, how will the dividing line work as regards people with fluctuating conditions? Several hon. Members have mentioned such conditions and, depending on how the dividing line is drawn in the PCA, it would be quite possible for someone to be assessed one day and put in the support group, but to turn up another day, when their condition was going through a better phase, and end up in the work-related activity group. Clearly, that would have substantial implications for the conditionality regime in which that person might be engaged and for the income that they would then receive.

For a number of reasons, therefore, I am concerned about whether the distinction is needed and, if it is, about how it will work in practice. I would be grateful for the Minister’s response before I decide how to proceed on the amendments.

Adam Afriyie (Conservative, Windsor)

I have just one point to make, which is of great concern to me. It relates to those who suffer a mental health challenge and, in particular, to mainstream sufferers with bipolar depression or one of the various flavours of depression that are around, of whom there are approximately 2 million to 3 million at any one time. There is an enormous number of people in the variable groups that we are discussing, and some within them—particularly those with depression—are among the most vulnerable people in society. Will the Minister clarify how the Bill will give due heed to the needs of those people, whose conditions vary from day to day? That is my primary concern in relation to these provisions.

Jeremy Hunt (Conservative, South West Surrey)

I support several of the sentiments expressed by the hon. Member for Inverness, Nairn, Badenoch and Strathspey. If we stand back from the Bill, we see that there are some general themes. It is important to think not only about the Government’s intentions in the Bill—Conservative Members share many of them—but about what will happen in practice, when the Bill is implemented. When we step back and take a helicopter view of the Bill, we see that there is one group of people whom the Government consider it reasonable to ask to look for work and then to work, and another group of whom they do not consider it reasonable to make that request.

In the Bill, the Government aim to solve the problem of those whom it is reasonable to ask to look for work, and that is what the work-related component of the ESA will do. The trouble is that the same opportunities do not appear to have been made available to those whom it is not reasonable to ask to look for work. The Bill is a huge opportunity not only for those with milder disabilities, but for those with more severe disabilities who are looking to it to give them the opportunity, perhaps for the first time, to be included in the world of work. For example, people with learning disabilities might require a huge amount of coaching, and there might need to be a huge amount of employer support. That is exactly the kind of thing for which a pathways adviser would be perfect. We must be careful that those kinds of people do not get parked.

There is something good and something bad about what the Government have done. The good thing is the statement by the Secretary of State that people in the support group

“will be able to volunteer to participate in work-related activity and access all the appropriate support available, but it will not be a condition of their entitlement to any part of their benefit.”—[Official Report, 24 July 2006; Vol. 449, c. 623.]

In addition, the explanatory notes to the Bill state:

“the Government’s intention is that those receiving the support component should be able to volunteer to take part in these if they wish to do so.”

That is excellent but it is stated as being the Government’s intention only; that people in the support group should have a statutory right to involve themselves in the work-related component is not part of the primary legislation. That is important. We are talking about people with severe disabilities, so it is not just a question of saying, “Here’s the programme, volunteer for it if you wish.” For the programme to be meaningful for them, it is likely to have to be a different type of programme from the ones being set up for people with less severe disabilities. Such a programme is also likely to want to draw on the resources of such specialist organisations as Mencap, which have expertise in dealing with people with more severe disabilities.

If the programme is set up with contractors who are geared up towards the larger group of people who are nearer to the labour market and if that is all the funds will stretch to, there is a risk of the people in the support group being what the hon. Member for Inverness, Nairn, Badenoch and Strathspey described as “parked”. Unintentionally, that could be exacerbated by people in the support group getting a higher rate allowance than people in the work-related component. It might be sensible to consider giving that extra help through other channels. I would be grateful if the Minister would reflect on that.

Tim Boswell (Conservative, Daventry)

I agree with the argument that my hon. Friend is making. Is he not also concerned that if the nature of the contracting process into the private sector or voluntary providers is such as to have a limited number of very large providers who are, as it were, generalists, some of the specialist services for particular kinds of disability, for example those in mental health, which may be required by members of the support group will simply not be available through the contractors who win the particular contract in that area?

Jeremy Hunt (Conservative, South West Surrey)

As ever, my hon. Friend’s experience shines through his comments. He is right to say that there is a possible danger in the way that these contracts are awarded. In the most lucrative contracts, particularly if they are operated on a payment-by-results basis—whereby contractors get paid when they manage to place someone in full-time employment—the most attractive client group from a financial point of view will obviously be those nearest the labour market: that is, those with the less severe disabilities. It is important that the structure of the contracts is set up so that it does not inadvertently discriminate against people with more severe disabilities.

Kali Mountford (Labour, Colne Valley)

I am worried about the hon. Gentleman’s suggestions on two grounds. The first is that, as he has just described, people who are usually described as “difficult to reach” are difficult to reach. One difficulty is people not being, and not willing to be, work ready. That must be dealt with. A group of people who are not only not work ready but who perceive themselves as never being work ready because of the nature of their illness, and who are in addition fearful that we might interfere in the living arrangements that they have established for themselves, would be even more difficult to reach.

One of the things that perhaps makes a person more capable of moving from one group to the other is their willingness to change their circumstances. I understand what the hon. Gentleman is saying about being parked—

Jimmy Hood (Labour, Lanark and Hamilton East)

Order. I am afraid that the hon. Lady will have to make her comments a little shorter than that.

Jeremy Hunt (Conservative, South West Surrey)

I am grateful, Mr. Hood. The hon. Member for Colne Valley (Kali Mountford) makes an important point; we must examine the motivations of individuals. One of my concerns is that, by setting the support level slightly higher than the work-related level, we inadvertently create a major disincentive for anyone in the support group ever to want to transfer out of that group. Opposition Members fully support giving more generous support to the people with the most severe disabilities, but we ask whether this is the right mechanism by which to do so.

I put it to the Government that if we go for the big goal—making the world of work more accessible even to the people with the most severe disabilities—and we have to have two groups of people, we need a seamless transition between the two. The difference between the two might be the conditionality—the requirement to participate in the programme, which is decided at the outset—but at every stage we want to encourage people in the support group to be willing to transfer themselves into the work-related category so they do not feel scared that they will lose £5 a week or whatever from their benefits if they do so.

All I am asking the Government to do is to be as bold in their ambitions for the support group as they are for the work-related group, because there is a real opportunity to transform the lives of people with severe disabilities. I accept that the Government have excellent intentions in respect of this Bill, but there might be an unintended consequence whereby that transformation does not happen.

Jim Murphy (Labour, East Renfrewshire)

Again, we have heard a very interesting set of contributions from a variety of hon. Members and again, with the Committee’s indulgence, I will save my excellent speech for another time and simply respond to many of the points that were raised.

The hon. Member for Inverness, Nairn, Badenoch and Strathspey asked why we were taking this approach. I alluded to this earlier. Again, it is a generalisation but the people in the support group would be more likely to be out of the labour market for a longer period, and the statistics show that the longer people are on incapacity benefit, the less likely they are, in general, to get into work.

Adam Afriyie (Conservative, Windsor)

The Minister points out that people who may move into the support group have historically been supported for longer by the state, but is that not partly because of the lack of treatments available for people with mental health challenges? About 1 million people on incapacity benefit have depression or anxiety disorder and it is clear, with regard to the treatment recommended by the National Institute for Health and Clinical Excellence, that cognitive-based therapies would possibly lift half of them out of that predicament, so I am just a bit concerned about the assumption that the Minister is making that that situation cannot change.

Jim Murphy (Labour, East Renfrewshire)

That is not the impression that I gave or sought to give, as I think the hon. Gentleman, when he reflects on the record of the debate in Hansard, will realise. It is just an assessment of the reality of the unfortunate nature of incapacity benefit to say that it rewards people financially for being on the benefit longer. The hon. Gentleman scowls, but it does. It should not, but it does. That is an inherent weakness in the system.

Adam Afriyie (Conservative, Windsor)

I scowled because the issue is not that the people suffering with mental health difficulties feel incentivised to stay on benefit; it is that they find themselves incapable of running their lives in the way that they would choose.

Jim Murphy (Labour, East Renfrewshire)

The weakness in the current system is that it pays people for being on the benefit longer, there is no parallel level of support and, until now, there has not been pathways. We can have a conversation about whether pathways is effective, as we would all like it to be, and we will of course have that conversation as we go through Committee, but I say gently to the hon. Member for Windsor (Adam Afriyie) that pathways is the first initiative of its type that has achieved the scale of success that it has for this group of customers, who have had so many different and complicated experiences in their lives. It is the first such initiative to deliver in that way that any Government have managed to introduce.

The hon. Gentleman has not been in the House long enough to make this mistake, but it is my understanding that, when these issues arose in relation to the Finance Bill and elsewhere, not everyone in his party supported the additional investment that pathways has brought about, the other labour market interventions that have brought about the effectiveness of pathways, the new deal for the disabled, which goes alongside that, or, indeed, all the new deal labour market interventions. They are part of an overall strategy that can, if everything is put together co-operatively across government, deliver the success that all of us in Committee today seek, in principle, to achieve.

All I say again gently to the hon. Gentleman is that although it is fair to say that not everything has been achieved, and we all acknowledge that, there has been a remarkable increase in investment and real determination in policy structure, sometimes in the face of fierce opposition from other parties. That is simply a statement of recent parliamentary history.

David Ruffley (Conservative, Bury St Edmunds)

I wish to put it on record that, as evidence of our support on Second Reading, the principle of pathways and its objectives and its results have so far received the unambiguous support of my party. There are, of course, issues the Minister has alluded to about how pathways can be made more effective but it is, as he would be the first to admit, a work in progress. We agree the principle, but how can we all make it better in the future?

Jim Murphy (Labour, East Renfrewshire)

I accept and welcome what the hon. Gentleman says. However, pathways is, of course, part of the support available to people from different backgrounds and experiences, and those with different disabilities are partly supported through the new deal for disabled people. The Conservative Front-Bench team only recently described the new deal as an expensive flop.

David Ruffley (Conservative, Bury St Edmunds)

I do not know the shadow spokesman to whom the Minister is referring. However, in March, as Hansard shows, I made an intervention in which I said that the Conservative policy at the last general election of scrapping all new deals and putting nothing in their place was no longer our policy and was not something the Department for Work and Pensions shadow team supports. There are active market interventions that we support, but we just might not call them new deal.

Jim Murphy (Labour, East Renfrewshire)

Thank you, Mr. Hood, for allowing us this latitude and this gentle boxing—and it is gentle compared to what has happened before. Before I move on to something more specific, I can tell the hon. Gentleman that the Front-Bench spokesperson I have in mind is someone he knows: it is his boss, the shadow Secretary of State for Work and Pensions, the hon. Member for Runnymede and Weybridge (Mr. Hammond).

Danny Alexander (Liberal Democrat, Inverness, Nairn, Badenoch and Strathspey)

I hate to break up this debate about what the policy of the Conservative party is today, entertaining a diversion though it is, but before that diversion was entered into, the Minister said something I agreed with very much. He said that on the one hand, one of problems of the current structure of incapacity benefit is that it offers people incentives to be on benefit for a longer period. On the other hand, he said that the justification for having a higher rate for the support group was that those people are likely to be on the benefit for a longer period. Does the Minister think that is entirely consistent?

Jim Murphy (Labour, East Renfrewshire)

I wonder whether I might be encouraged to make a little progress because I am still trying to answer the first of the many questions that were raised. My hon. Friend the Whip will I am sure scowl shortly because we are not making as much progress as he anticipated.

The rationale is simply that the longer someone is out of the labour market, the greater the preponderance of poverty. We know that that is the nature of people’s experiences in this country. It is our assessment that, in general, those people who go through the PCA and are assessed as having the greatest limited capability for work should be in the support group, and we should not demand any conditionality of them or force them to do something that in many circumstances may indeed make their condition worse. We should not force them even to go to interviews or into work-related activity, but we should allow them time, if appropriate. Simply, we should not be adding to the challenges that they face. However, neither should we write them off, and that is why we have said that we will enable those in the support group to volunteer.

I reassure the hon. Member for South-West Surrey and others who raised this matter: if a customer in the support group was to volunteer but say, “I acknowledge what you’ve said about my condition, but I don’t want to be written off and treated the way people used to be treated when they were on incapacity benefit. I want to volunteer for some of the support that’s available”, we would say, “Good.” Not only that, but we would say that the person could keep the higher rate of benefit so that there were no perverse incentives to stay in the support group: they can keep the higher rate of benefit without going through the conditionality. It is important that, when someone is objectively assessed and goes into a support group, no additional hurdles to leaving that group voluntarily should be placed in their way. Those two concessions are very important.

Jeremy Hunt (Conservative, South West Surrey)

I am reassured by the Minister’s comments, but why, if that is so, does the primary legislation not mention that people in the support group will have the right to volunteer for the pathways programme?

Jim Murphy (Labour, East Renfrewshire)

We will, of course, make that clear in the regulations. However, perhaps I can make some progress, with the Committee’s indulgence—and in response to points that have been made—because there are various outstanding issues that I have not had a chance to address yet.

The hon. Member for Windsor asked about the safeguards that would be put in place. Some of the safeguards are identified on page 6 of the draft regulations and supporting materials, and we can discuss those as the Committee progresses. The hon. Gentleman also asked quite reasonably why the assessment cannot be a snapshot but has to be about understanding someone’s condition through a period of time. He is entirely right. We will ensure that that is how we will give effect to the reformed PCA. We will continue to provide work-focused interviews and so on, which are not based on one moment of one day of one week. The new PCA will try to capture, much better than the current PCA does, the range of people’s experiences, and it should reflect how every day—and for many people, every hour—is often different. Our approach has to be reflected in the way we treat people in those circumstances.

The hon. Member for Daventry was uncharacteristically negative—although he is entirely entitled to be so—in suggesting that we will structure a system that will allow people to be parked in the support group. I know that that is what used to happen. People who were unemployed used to be parked on incapacity benefit. That is why incapacity benefit numbers trebled and why in two years in the 1980s 1 million people went on to incapacity benefit. For a Government, and a government system, incapacity benefit was seen as an alternative to the unemployment claimant count. There is a general acceptance that that is so. We can, if hon. Members wish, have a conversation about whether or not that happened, but in structuring this new benefit we do not want to recreate the sort of system that led to what happened throughout large parts of the 1980s. We will ensure, through the way we structure contracts and advice and through the way the PCA operates, that people cannot be pushed into and get trapped in the support group, as the hon. Member for Daventry rather uncharitably described it.

Other points were raised about contracts and how we ensure that private and voluntary sector providers are not incentivised simply on outcomes. Not all pathways will be provided through the private and voluntary sectors; at least one third will be provided through Jobcentre Plus, as in the first roll-out. I have had conversations with those who have expressed interest in providing this private and voluntary sector support to ESA customers in future, and officials continue to discuss the matter with them. We will structure the contracts so that people and organisations are not just able to support those people who are easiest to support. We will ensure that that does not happen, and it is appropriate that we do so.

In passing, there was an exchange in the Chamber about how we intend to structure the contracts and the outcomes. I think we have settled on about 70 per cent. outcomes-based funding in terms of reward for the private and voluntary sector. Those on the Conservative Front Bench were arguing for 100 per cent. outcomes-based funding.

Mr. Ruffleyrose—

Jim Murphy (Labour, East Renfrewshire)

Of course, because I made that comment I shall allow the hon. Gentleman to respond.

On balance, we thought that 100 per cent. outcomes-based funding would not enable smaller organisations, charities and the voluntary sector to get the necessary investment to set up the infrastructure to provide these contracts. Frankly, 100 per cent. outcomes-based funding would provide unreasonable advantage to those established, large private voluntary sector organisations, although they have an important part to play. It would be a mistake and would prevent smaller organisations from being able to provide the niche support that we all wish to be provided.

David Ruffley (Conservative, Bury St Edmunds)

We will make a fuller announcement on that point, but—I hope that hon. Members will take at face value my good faith on this—our proposition was never for a 100 per cent. payment-by-results system. I do not have time in an intervention to set this matter right, but we will discuss this later in our debates. The 30 per cent. guaranteed fee, which I believe the Minister has spoken to contractors about, will clearly be necessary for a lot of niche and smaller providers.

Jim Murphy (Labour, East Renfrewshire)

I welcome another new policy—[Interruption.]

Jimmy Hood (Labour, Lanark and Hamilton East)

Order. I do not want to have to start telling Members off for being disrespectful to those who are addressing the Committee.

Jim Murphy (Labour, East Renfrewshire)

Mr. Hood, this Committee has 16 sittings; I wonder whether we will have 16 separate policies from the Conservative Front-Bench team. Like my hon. Friend the Member for Glasgow, North-West, I wonder how many will last the entire 16 sittings.

All I can say to the hon. Gentleman—again gently—is that it was his boss, the shadow Secretary of State for Work and Pensions, who pushed me on 100 per cent. outcomes on the Floor of the House not long ago. That was certainly the impression that was then created. I will look again at Hansard, and we will, I am sure, return to this point in future sittings.

David Ruffley (Conservative, Bury St Edmunds)

I think that Hansard will demonstrate that the shadow Secretary of State was talking about a 100 per cent. system tied to existing claimants, and that he was talking about a very specific part of the target audience. It will be my pleasure to discuss the Hansard report.

Jim Murphy (Labour, East Renfrewshire)

I am not sure that Mr. Hood will allow that.

Jimmy Hood (Labour, Lanark and Hamilton East)

Order. I advise Front-Bench Members that I do not want us to go over history, previous speeches and what is in Hansard. I ask the Minister to return to the Bill and address the amendment that we are debating so that we can let the business proceed.

Jim Murphy (Labour, East Renfrewshire)

Of course, Mr. Hood. I am drawing my remarks to a conclusion, but I want first to respond to a couple of the points raised by the hon. Member for Inverness, Nairn, Badenoch and Strathspey. I know that he is concerned about pathways and funding for pathways, and I seek to reassure him. We have made it clear that the future contracting model for the roll-out of private and voluntary sector pathways will, to a large extent, be based on the current contracting model. It will not be pathways on the cheap, because that investment in pathways and the national roll-out of pathways by 2008 is absolutely essential if the measures we are considering are to be made a reality on the ground. It is a fundamental principle of the Bill that it will be underpinned by the national roll-out of pathways properly funded in a way that can provide support to people with learning disabilities, which the current system does not, and with mental or physical health conditions. I hope that that reassures the hon. Gentleman and that I can tempt him to withdraw his amendment.

Danny Alexander (Liberal Democrat, Inverness, Nairn, Badenoch and Strathspey)

I am grateful to the Minister for that response. He explained his justification for having a higher rate for the support group. I am not convinced that that necessarily justifies paying the higher rate of benefit through the ESA system, but I accept the justification for paying a higher rate of benefit to people in the category that he described. I am not sure that the disability living allowance system might not be a more effective way of doing that, but I do not want to press that point.

The Minister did not address my points about how the division between the support group and the work-related activity group would work through the PCA. I know that we do not have the regulations before us, but I would be grateful if he would say a bit more about how that distinction will work in practice when someone goes into the assessment. How will it be decided whether someone is in one group or another? That is crucial. Subject to receiving that assurance, I will, of course, be happy to follow the Minister down the tempting line he offered and withdraw the amendment.

Jim Murphy (Labour, East Renfrewshire)

Committee members have the details of the revised PCA, which sets out how we would deal with the important issues raised by the hon. Gentleman. The new PCA discusses in great detail mental health descriptors and how it will take account of learning disabilities; the current PCA does not take account of them.

I hope that I shall reassure the hon. Gentleman by telling him that we intend to pilot the reformed PCA alongside the existing one. We are starting that work now, over a two-week period. Current customers will be assessed against both the existing and new draft PCAs to ensure that we have the details right, that we have not inadvertently created unintended consequences or perverse incentives and that there is not an entirely divergent outcome; the existing customer will be sitting in front of an Atos Origin doctor. Our intention is to ensure that the revised PCA delivers the outcomes that we want in respect of learning disability and mental illness. At a later point, we shall consult further on how the PCA will operate.

Danny Alexander (Liberal Democrat, Inverness, Nairn, Badenoch and Strathspey)

I beg to ask leave to withdraw the amendment.

John Robertson (Labour, Glasgow North West)

I beg to move amendment No. 174, in clause 2, page 2, line 27, leave out paragraph (a).

Jimmy Hood (Labour, Lanark and Hamilton East)

With this it will be convenient to discuss the following amendments: No. 222, in clause 2, page 2, line 29, leave out paragraph (c).

No. 3, in clause 2, page 2, line 29, after ‘conditions’, insert

‘relating to health, disability or capability for work-related activities’.

No. 175, in clause 2, page 2, line 31, leave out paragraph (a).

No. 4, in clause 2, page 2, line 34, leave out paragraph (c).

No. 176, in clause 2, page 2, line 36, leave out paragraphs (a) and (b).

No. 202, in clause 2, page 2, line 39, after ‘backdated’, insert

‘to the date of claim, or to another such date as may be determined by the Secretary of State’.

No. 50, in clause 2, page 2, line 41, at end insert—

‘(d) prescribe circumstances in which paragraph (b) of subsection (2) is not to apply.’.

No. 178, in clause 4, page 4, line 22, leave out paragraph (a).

No. 223, in clause 4, page 4, line 24, leave out paragraph (c).

No. 6, in clause 4, page 4, line 24, after ‘conditions’, insert

‘relating to, health, disability or capability for work-related activities’.

No. 179, in clause 4, page 4, line 26, leave out paragraph (a).

No. 7, in clause 4, page 4, line 29, leave out paragraph (c).

John Robertson (Labour, Glasgow North West)

I am still trying not to be weak, Mr. Hood, although it was difficult during the last contributions.

Amendments Nos. 174 to 179 are to do with the assessment phase. They are probing amendments; I intend to tease from the Government more information about how we can help those who most need it. The amendments would ensure that young people were not discriminated against during the assessment phase and that sick and disabled persons received the appropriate support from the beginning of their claim, rather than from the end of the fixed assessment phase.

The issue of the 13-week assessment period and the problems that would ensue during it was raised by a number of hon. Members on Second Reading. In their Green Paper and consultation report, the Government accepted that they did not intend to penalise young people by aligning the basic rates of main-phase ESA with jobseeker’s allowance rates. That was mentioned previously, and it is reflected in the Bill. However, young people appear to be penalised during the assessment phase, as the holding benefit is paid in line with JSA rates. That discrimination will leave some sick and disabled people with inadequate incomes for three months, simply because of their age.

The amendments would also remove the requirement for the assessment phase to have ended before the work-related activity or support component is paid. The Bill proposes that those who can be immediately identified as severely disabled and eligible for the support group will receive only JSA rates for the first three months of their claim—substantially below what might be their real entitlement.

The amendments would enable all claimants who subsequently pass the personal capability assessment to go on to the main phase of ESA and receive the appropriate financial support from the start of the claim, rather than from the end of the 13-week period. The Bill proposes that such people will be paid only JSA rates for those 13 weeks; they are well below the financial support required by sick and disabled pensioners and could increase poverty and social exclusion. As I said earlier, many colleagues raised the 13-week assessment period on Second Reading. It is of concern not just to them but to many of the groups that have aided and abetted us. It is time that I mentioned some of them. The Child Poverty Action Group, Disability Alliance, Citizens Advice, Citizens Advice in Scotland, CPAG in Scotland, Barnardo’s, Poverty Alliance and Margaret Blackwood Housing Association all associate themselves with the amendments. A broad range of concerned bodies have made these suggestions.

Is it not unfair that people who will be rewarded should have to wait 13 weeks for an assessment as to whether they are entitled to money that they should get? They may experience payment problems or have to live in poverty for that length of time only because of their age and disability. What kind of help or assistance will be given to those who find themselves in debt because of their age or the assessment? I hope that my hon. Friend will answer those points.

Jeremy Hunt (Conservative, South West Surrey)

Briefly, I believe that the hon. Member for Glasgow, North-West makes an important point. Has the Minister done any analysis of whether it would be expensive to set up an assessment process that took only four weeks rather than 13? Given the number of claimants, getting people through the system more quickly might not involve any extra cost, and then we could avoid some of the problems that the hon. Gentleman described. I should be grateful if the Minister would comment on that.

Danny Alexander (Liberal Democrat, Inverness, Nairn, Badenoch and Strathspey)

I would like to express my support for the amendments that the hon. Member for Glasgow, North-West tabled and the points that he made. They are important, particularly in respect of the younger group of claimants.

The group also contains amendments that my hon. Friend the Member for Yeovil (Mr. Laws) and I tabled to get further clarification on some related issues. I shall take a couple of minutes to describe them and to ask the Minister for further reassurance or clarification.

On amendments Nos. 3 and 6, I should be grateful if the Minister would explain a bit more about the scope of the powers given in clauses 2(2)(c) and 4(4)(c) to prescribe conditions for qualifying for income and contribution-based employment and support allowance. What qualifying criteria will and will not be set beyond those

“relating to health, disability or capability for work-related activities”,

if any? For example, will replacement of the PCA take into account labour market disadvantages? Is the power that is set out in the clauses intended to be used in that way?

On amendments Nos. 4 and 7, I should be grateful if the Minister would say a little more about the use of delegated legislation. Will it be limited to the regulations made under clauses 10 to 15, which deal with conditionality? If not, what else is intended by the powers?

With amendment No. 202, we are trying to provide an opportunity for backdating ESA payments to the start of the claim. This follows on from the point made by the hon. Member for Glasgow, North-West that the Bill allows backdating to a maximum of the 13-week period, but if someone’s case has taken longer than 13 weeks to process, for whatever reason, there is no provision to allow backdating to the date of the claim. Amendment No. 202 would provide powers to allow the Secretary of State to specify a date earlier than the 13-week period in cases where that is necessary. That backdating power does not provide any additional incentive for people to apply for the benefit over jobseeker’s allowance, because the backdating takes place only once a decision about a person’s eligibility for the benefit has been made. The intention is merely to ensure that someone who has perhaps been subjected to a delay in the assessment period of longer than 13 weeks is not disadvantaged unduly by how the Bill is currently phrased.

In amendment No. 202 we deal specifically with the contributory allowance, but similar points could be made in relation to the income-based allowance too. I hope that the Minister can set my mind at rest on those points, particularly in relation to amendment No. 202, which the Government might wish to bring forward themselves, to ensure that the point is taken into account.

David Ruffley (Conservative, Bury St Edmunds)

I support amendments Nos. 222, 50 and 223, which stand in my name and those of my hon. Friends, and amendments Nos. 4 and 7, which stand in our names and those of the Liberal Democrats.

Amendment No. 222 is designed to simplify and clarify the conditions to entitlement for the support component of contributory ESA and would delete subsection (2)(c). The conditions of entitlement for the support component of contributory ESA are set out in clause 2. They are that a claimant has been assessed and found to have

“limited capability for work-related activity”,

which would seem to be sufficient. From the claimant’s point of view those conditions are pretty transparent and fairly easily understood, one hopes.

However, subsection (2)(c), which amendment No. 222 would delete, refers to additional conditions, but it is difficult to envisage what additional conditions the Secretary of State might wish to prescribe in relation to the support component and claimants of it. It is not possible to assess the desirability of any such conditions referred to in subsection (2)(c) without a better idea from the Minister of exactly what those conditions might be. What do Ministers potentially intend? Amendment No. 222 therefore invites the Minister to clarify what additional conditions may be prescribed. Because of its importance, we would press amendment No. 222 to a vote if such clarification was not forthcoming from the Minister.

In the interests of dispatch, I can say that corresponding deletions on the same logic that I have outlined would be made by amendment No. 223 in relation to income-related ESA for those on the support component, by amendment No. 4 in relation to those claimants of the work-related components of contributory ESA, and by amendment No. 7 in relation to work-related component claimants who have income-related ESA. The point in those four cases, which are all analogous, is to seek clarification and elucidation from the Minister.

Amendment No. 50 stands in my name and that of my hon. Friend the Member for Daventry, and nobody else. It would insert a new subsection (4)(d), to the effect that regulations may

“prescribe circumstances in which paragraph (b) of subsection (2) is not to apply”.

The purport of amendment No. 50 is so great that I am sure the Minister and his colleagues have thought about it. It is to allow ESA claimants to move from the work-related activity component to the support component after a period during which they have not progressed toward work through work-related activity. Let us say that for all the best efforts of those who have been lending support, the condition management programme—or the training or voluntary work, or whatever the work-related activity might be—has not resulted over a long period in a placement in full or part-time work, as the claimant and all of us would wish, and the person realises that they are—

Alison Seabeck (Labour, Plymouth, Devonport)

I have a question. You refer to a long period of time. Do you have a particular fixed period in mind?

Jimmy Hood (Labour, Lanark and Hamilton East)

Order. The hon. Lady should not be asking me questions. She should be asking the hon. Gentleman questions.

David Ruffley (Conservative, Bury St Edmunds)

I hope that the hon. Lady will not think that I am avoiding the question by saying that I do not have a number in mind, but it would be a long period, as judged by the personal adviser and by the claimant themselves, in which work-related activity was not likely to get that person into work. It could be a year, 18 months or two years in which the condition was not susceptible to work-related activity. In that hypothetical case, the higher rate of the support component would be judged by the personal adviser and the claimant to be a more appropriate part of ESA.

I am advised by the Child Poverty Action Group, the Royal National Institute of the Blind, Action for Blind People and other groups that departmental officials have briefed them this year that claimants who have not progressed toward work after undertaking work-focused activity for some time—I shall not put a number on it—could be moved into what is described as a self-managed phase of ESA. I should be grateful for the Minister’s elucidation of what that might mean in practice. We tabled the amendment because we share the fear that those with disabilities might be sidelined after time, with serious help and support re-prioritised to newer claimants who might be nearer the labour market.

Were that to occur, it would mean that claimants would be stuck, for want of a better word, at the lower rate of benefit in the work-related component, even if it were understood that that would not work for them. Even worse, they might be sidelined from getting the higher rate in the support group, where they should be and where they and the personal adviser felt that they should be.

Tim Boswell (Conservative, Daventry)

Is it clear to my hon. Friend—it is not completely clear to me—whether there is a free-standing right to apply for a fresh capability assessment? Even if that were established, would it not be a rather long-winded way of making the entirely reasonable changes he is advancing, as against an agreed and consensual change of status?

David Ruffley (Conservative, Bury St Edmunds)

My hon. Friend anticipates me. The Minister could well have a good answer. Logically, based on the clauses that we will come to in the next few days, there could be a reassessment on the request of a personal adviser and a claimant. It is not clear to me that rights in the Bill will meet the case of the hypothetical recipient of the work-related activity component who believes that it will not work for them, that a route back into work will not happen through work-related activity and that they need higher support. But how will they get it? Will they not be between two worlds? How do they access the support component without getting a rapid assessment and, I suggest, a right to self-assessment, when all agree that the support component is likely to be the more appropriate one for them?

I do not know whether the answer is the prescription of circumstances, which is the meat of the amendment and is for Ministers to outline, or whether provision is made elsewhere in the Bill for a rapid reassessment for someone in that situation. I ask in a spirit of good faith and general inquiry, even though the problem might not apply to many people. It is more than a theoretical possibility and it would be useful to hear the Minister’s thoughts on it.

Jim Murphy (Labour, East Renfrewshire)

A number of points have been raised, and I shall again seek to address as many of them as possible. The amendments cover various matters relating to clause 2 and also touch upon the provisions in clause 4 on the structure of the contribution allowance.

Some of the amendments are on the conditions of entitlement to work-related activity and the support components of the allowance. They would either remove our ability to prescribe further conditions of entitlement, or limit the conditions to those relating to the health or disability of a customer. We currently have no specific intention to prescribe further conditions of entitlement, but the power to do so in future is essential to enable us to respond to new developments and to make changes in light of the operational experience of ESA and the success and lessons of the national roll-out of pathways. That flexibility will be crucial as we learn from the experiences of pathways, build on what has worked in the ESA system and identify what has not worked as well as we had expected. We need to be able to take account of societal changes and changes in the make-up of the ESA customer base. Failure to do so could result in entitlement to the support component for customers for whom it was not designed. Conversely, the benefit could be denied those to whom we wish to make it available.

David Ruffley (Conservative, Bury St Edmunds)

I hear what the Minister is saying, but will he give more examples of circumstances that he believes might require flexibility on the part of the Secretary of State? I understand his point on the need for flexibility, but in relation to what is it needed?

Jim Murphy (Labour, East Renfrewshire)

I seek to make no party point, but I imagine that if we had had this conversation only five or 10 years ago and were designing regulations and benefit entitlements, we would not have foreseen the growth that there has been in fluctuating mental health conditions, which have become common among incapacity benefit claimants. Some 40 per cent. of claimants are now coming into the incapacity benefit scheme as a consequence of such conditions. There have been societal changes such as the introduction of the Disability Discrimination Act 1995, which places employment in a different legal context. There has been a change in the governmental and cross-party perception of the role that those with learning disabilities can have in the labour market. We would not have been able to predict the extent of such changes 10, 15 or 20 years ago. We therefore need flexibility in the Bill to enable us to take account of any further changes in family structure, trends in health and poverty and all sorts of other trends such as those in the past 15 years that we could not have anticipated. I offer that as a reasonable point without apportioning party political blame or responsibility for changes. I hope that that addresses the hon. Gentleman’s point.

The second set of amendments in the group is on the assessment phase. As I said on clause 1, that phase is key to the structure of the new allowance. It is important to assess all customers, not just those in the younger age bracket. We want to avoid making assumptions about any individual until they have been through the personal capability assessment. I know that my hon. Friend the Member for Glasgow, North-West offers us a probing amendment to tease out the Government’s thinking, but someone should be entitled to the ESA not at the point of application but at the end of the assessment phase. We have set that at 13 weeks—three months—based on our experience of what we think has worked in the pathways to work programme and the way in which we have been able to support people.

We think that that assessment phase is important and we also believe that it should be a standard length. We have returned to the second basic principle of ESA, which is that there should be a national set of rules and regulations. It would be unfair for some people to move to the higher rate of benefit earlier than others because of a geographic or postcode lottery based on how quickly the assessment can take place.

I wonder whether by offering that assurance to my hon. Friend I can tempt him to withdraw his amendment. If the assessment phase takes longer than 13 weeks, not because of the actions of the customer but because of problems at DWP, Atos Origin, or the health service, or because of any other circumstance outside the reasonable control of the claimant or customer, we will backdate to that point. So, if the assessment phase were to last 16 or 17 weeks because of pressures in the health service or a lack of availability of other advice, we would certainly backdate to the 13-week limit so that people would not be punished through a postcode lottery. It is important to put that on the record.

In respect of amendment No. 50, our general approach is that people should be in the support group based on an objective assessment through a PCA. We have had the conversation about labour market disadvantage. The PCA should be a medical assessment of their functional capability and what they can still contribute to the labour market. It would not be right to put an arbitrary time limit on that commitment and to say that, after a certain point, we will allow, in some instances, the reinvention of incapacity benefit. We are determined to ensure that people should not be written off wholesale. We should not say, “You should not be written off—unless we have tried really hard for six, nine, 12 or 18 months. Gosh, we have not been able to help you. You have been passported, now enter the support group”. That is not the right way to go about things.

There is an alternative, however, which is to allow additional PCAs. If the condition changes, the revised PCA is a much better way of dealing with the matter. It will primarily be based on medical advice that the circumstances have changed. At that point, someone in the work-related activity group could be assessed in their revised PCA so that they go into the support group, and, to be truthful, that could happen the other way round.

Tim Boswell (Conservative, Daventry)

Will the Minister hazard a guess as to the proportion of such cases that is likely to come along, and the amount of resources that will be required in order to conduct the repeat PCAs?

The rest of the debate is in Hansard.