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Incapacity Benefit

Volume 448: debated on Monday 10 July 2006

1. What interim targets have been set in relation to his target to reduce the number of people on incapacity benefits by 1 million by 2016; and if he will make a statement. (83298)

No interim targets have been set but, as with our successful pathways to work pilots, we will continue to monitor and publish our progress on a regular basis.

As a result of demographic changes, and without any policy change or special initiatives, the forecast incapacity benefit case load will fall from 2.7 million today to about 2.36 million in 2015-16. Does not that rather handy head start of 340,000 make the Minister’s promise to cut the incapacity benefit count by 1 million both unambitious and a little misleading?

That is an entirely unfounded claim. Recent changes have resulted from the introduction of the new deal, the policy to make work pay through the national minimum wage and new, more flexible working arrangements in the workplace. All those policies have two things in common—first, they have successfully enabled more people to enter the labour market and, secondly, they were all opposed by the Conservatives. It is therefore an ambitious target and we are determined to achieve it so that people should no longer be written off and consigned to a life on incapacity benefit, which was all too common under the previous Government.

My hon. Friend will know that there is a very low employment rate among people with mental illness. Undoubtedly, there is a problem with employer attitudes to that client group, so what are his Department and other Departments doing to try to take that agenda forward?

My hon. Friend, as Chairman of the Select Committee on Work and Pensions, has worked tirelessly on that agenda and rightly identified the fact that the biggest single factor that leads people to claim incapacity benefit is mental illness. The new personal capability assessment and the new employment support allowance will focus on that emerging trend and seek to address it. The roll-out of pathways has provided encouraging evidence about how we can support people with mental illnesses and give them the chance to return to work. I look forward to discussing those matters in more detail when I visit my hon. Friend’s constituency next Monday.

The Minister said last week that, for every £800 spent on pathways, the taxpayer is saved some £8,000 as a result of people returning to employment. If that is the case, why have Ministers briefed that they do not have enough money to roll pathways out for all claimants and may even have to ration them? Is it not bizarre that the Government can find billions of pounds of additional finance for benefits and tax credits, which can keep people in dependency, but they cannot find the money to get people back to work in this way?

I do not know whether that is another of the endless spending commitments from the hon. Gentleman, whom I had previously thought was on the moderate wing, if there is such a thing, of his party’s spending commitments. The roll-out of pathways has been shown to be the single most successful initiative ever in supporting people while they leave incapacity benefit and take up the chance to work. However, we have to go much further, which is why, last week, we announced the national roll-out of pathways throughout the country by 2008, so that everyone on incapacity benefit and the new employment and support allowance will have the chance to participate in that very successful initiative.

Does the Minister accept that the fact that a number of Labour Members wish to question him is a sign of our support for the Government’s strategy of trying to give opportunities to work to people who are on benefit? Does he realise that, over the period in which the Government aim to reduce the numbers on incapacity benefit, over 1 million claimants will either retire or die? Can he set out the net effect of the new Government policies?

I have set out a 1 million net reduction in the numbers on incapacity benefit, and I take the comments by my right hon. Friend and others as offering support in principle for our ambitious agenda. Through other initiatives, we have already ensured that there is a reduction of one third in the number of new claimants receiving incapacity benefit since 1997, but we must go further. We look forward to a conversation with him and my hon. Friends to discuss what more we can do so that people are no longer written off, as they were throughout the 1980s and 1990s.

Does the hon. Gentleman accept that psychiatrists in my constituency have serious doubts about the capability test? [Interruption.] It is a serious point, as they have serious doubts about the capability test in respect of mental illness. Will he look at that test again to ensure that it is properly standardised and has a basis of scientific rigour?

Unusually, the hon. Gentleman makes an entirely reasonable point. We are looking at how we can review the personal capability assessment, which is so crucial to ensure that every individual is treated as just that: an individual, so that an assessment can be made of their learning disability, mental illness or other injury. If the hon. Gentleman has specific ideas about how we get that right, I am happy to listen, but we are spending a huge amount of time and effort working with disability organisations such as Mind and Mencap to make sure we get personal capability assessment exactly fit for purpose.

Does my hon. Friend agree that the huge increase in the number of people receiving incapacity benefit was purely a result of the policies of the Conservative Government and their attempts to hide the unemployment figures and that, to get people on incapacity benefit back into work, we need to provide more encouragement and capacity building for them so that they have the necessary self-esteem to get back into employment?

My hon. Friend is right. The pathway back to work will be taken in a series of small steps. Importantly, that involves rebuilding self-confidence and self-esteem, refreshing skills or learning new skills, and then receiving support in the completion of CVs and preparation for interviews, which many may not have undertaken since they left school. The package of measures through pathways will be important in helping to transform the life chances and job opportunities of many who have been neglected in the past.

Conservative Members are keen to see the benefits of the pathways roll-out being achieved not only by diverting new claimants into work as soon as possible, but by engaging existing IB claimants. In his statement to the House on 24 January, the Secretary of State said:

“Over the next few years, we will ask existing claimants to attend a work-focused interview and agree an action plan to take steps to return to work.”—[Official Report, 24 January 2006; Vol. 441, c. 1307.]

Will the Minister confirm that that is the Government’s policy and that a requirement for existing claimants to attend an interview and agree a plan will be introduced as soon as sufficient resources are available?

The hon. Gentleman invites me to agree with my Secretary of State, and I am happy to do so. We are piloting ways of ensuring that the pathways scheme supports current incapacity benefit claimants. As we set out in the Green Paper and subsequent statements, we will look to migrate the existing case load of about 2.6 million across to be supported by the employment and support allowance. Of course, in the interim, individuals currently on incapacity benefit can volunteer, if they so wish.

I received a letter from my hon. Friend’s Department last week, informing me that pathways to work would start in my constituency next year. Based on the pilots that we have had so far, what impact can I expect that to have on the number of people on incapacity benefit in my constituency?

Based on the roll-out of pathways across about 40 per cent. of claimants, we anticipate continuing reductions in the number of those on inactive benefits, particularly those with more complicated multi-dimensional needs in terms of the support that they require to get a chance to work. The evidence is that about 25,000 people have entered the job market as a consequence of pathways thus far. We can learn from the best experience of those pilots and roll that out across the country as a much more substantial contribution towards our target of reducing the number of those on inactive benefits by 1 million.

With reference to the Minister’s response to me earlier, the reason I asked him to confirm the Secretary of State’s statement to House is that the Green Paper says something slightly different. The Green Paper states:

“As resources allow, we will, over time, consider extending work-focused interviews”.

That is a nuance on what the Secretary of State said. If the only constraint on extending the work-focused interview to existing claimants is resources, why does not the Minister negotiate with the voluntary and private sector providers who are to roll out 60 per cent. of the pathways programme to see whether they will include the interview stage in their package and accept a full transfer of risk—effectively, a no success, no fee basis—so that the resource constraint evaporates and the benefits of the pathways to work programme can be rolled out to existing benefit claimants as well as new claimants with the scheduled roll-out of the overall programme?

That would not be the most effective way in which we could roll out pathways support across the country. The evidence is that, if someone is on incapacity benefit for two years, they are more likely to die or retire than ever to find a job. As a priority, we will focus on those who are newest to incapacity benefit or employment support allowance, but we will not neglect those who were placed on incapacity benefit as a matter of public policy by the Opposition when they were in government. We know that it is an ambitious target to change incapacity benefit numbers by 1 million, but it was achieved in the 1980s and 1990s by the Opposition. We intend to achieve the same level of change in incapacity benefit numbers, only in the opposite direction.