Liz Kendall can succeed where John Hutton failed
Director
Almost exactly nine years ago – February 2016 – we wrote “The out-of-work benefits system for people with a health condition or disability is broken”. That was the opening line of a paper calling for a radically new approach to sickness and disability benefits. Today it appears government has caught up with us, and the core of our recommendations are being implemented.
There is, understandably, a lot of anguish among disabled people about the reforms. Millions of people now rely on these benefits as their only source of income. For those who really cannot work, that will remain the case – and it is morally right that we make sure they are appropriately supported.
However it is equally the case that many of those people dependent on out of work incapacity-related benefits could work, indeed want to work, and there is an equally strong moral imperative for them, and the State, to do all they can to make that happen.
Because, let’s be clear, there is nothing compassionate about writing someone off to a life of benefits. Barely anyone moved off ESA (the pre-UC benefit), and barely anyone is moving off UC LCWRA (limited capability for work related activity) – we’re talking a few percentage points at best.
We can surely agree that sticking a 23-year-old with anxiety on a benefit that requires nothing of them and offers nothing by way of support is the very definition of state failure. It is a tragic waste of human potential, and builds in a lifetime of cost for the taxpayer – money that could have been spent on health or education or policing. That is exactly what we are doing multiple times over.
Almost two decades ago, John Hutton, then Secretary of State for Work and Pensions, pledged to end this “passive” system so that “no one [is] left behind and no one written off”. Here’s what he said at the second reading of the 2006 Welfare Reform Bill (you can imagine Liz Kendall saying exactly this today):
“At present, nine out of 10 people who come on to incapacity benefit expect to get back into work. Yet as we all know, if they have been on incapacity benefit for more than two years, they are more likely to retire or die than ever to get another job. Little is expected of claimants, and almost no support is offered to them. The gateway to the benefit is poorly managed, and a person gets paid more the longer their claim continues. Even the name of the benefit sends a signal that a person is incapable, and that there is nothing that can be done.”
The last Labour government failed to deliver this step change – as did the Conservative governments of the last 14 years – but the current one is picking up the baton and may just succeed.
Why is it different this time?
In ‘Working welfare’ we identified two big issues: benefits levels and conditionality, and the corresponding labelling of claimants by what they can’t do. On all of these things there is international evidence of the negative impacts that decisions we think of as compassionate actually have. As the OECD said in 2010: “what is needed is to bring the disability benefit scheme closer in all its aspects to existing unemployment benefit schemes”.
We therefore called for a single rate of out of work benefit, set at a higher level than the current UC standard allowance, accompanied by (indeed enabling) the scrapping of the WCA. This, we are told, is exactly what the Government intends to do.
In our paper, to ensure that those with the most severe disabilities did not lose out, we also recommended more generous payments at the higher rates of PIP. The Government’s intentions to refocus PIP as a benefit that contributes to the significant extras costs incurred due to a disability is not out of line with what we argued (and we too questioned the substantial growth in mental health based claims).
Alongside this radical reform of the social security system, we also called for serious investment in the employment support side. If we, rightly, expect people to move towards and then into work, then we have to help equip them to do so. In fact we wrote a whole other paper on exactly what this could look like (‘Stepping up, breaking barriers’) – with devolution of these services a central tenet!
Again, we’re told the Government is intending to do this and invest a lot more in this support. This will be vital in delivering the objectives of welfare reform: yes a lower benefits bill (which is squeezing out spending on other public services), but crucially, more people in work and realising the well-evidenced benefits of work.
It took a decade, but we’re delighted that our ideas are being actioned.