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The benefit cut that isn’t quite as it seems

20 July 2015

4:30 PM

20 July 2015

4:30 PM

MPs are voting on the Welfare Reform and Work Bill this afternoon, with the big story being about Labour turmoil over the second reading. Harriet Harman’s amendment looks rather forlorn on the order paper this morning, with just five frontbenchers signed up to support it. Helen Goodman, who was explaining why she was pressing ahead with her own rebel amendment on this morning’s Today programme, has 57 MPs — not all of them Labour — supporting her motion.

The difference between the two amendments is mainly that Goodman’s declines to give a second reading to the Bill and offers only the ‘potentially useful provisions on apprenticeships’ in its favour, while Harman’s declines to give a second reading while expressing support for the benefits cap and loans for mortgage interest, and opposing measures on child poverty and cuts to employment and support allowance.

The Tories are enjoying the Labour turmoil, with George Osborne effectively trolling the Opposition in today’s Guardian by urging them to support his changes. But there’s one point that both Harman and Goodman agree on that many Tories might want to ponder at some point in the Bill’s progress through the Commons.

Both amendments oppose changes to payments for those on employment and support allowance, which will see new claimants in the ‘work-related activity group’ paid the same rate as those on Job Seeker’s Allowance. Currently WRAG members receive £102.15 a week, while the JSA rate for those over 25 is £73.10 a week.

In his Budget speech George Osborne said:

‘The employment and support allowance was supposed to end some of the perverse incentives in the old Incapacity Benefit. Instead it has introduced new ones. One of these is that those who are placed in the work-related activity group receive more money a week than those on Job Seekers Allowance, but get nothing like the help to find suitable employment.

‘The number of JSA claimants has fallen by 700,000 since 2010, whilst the number of incapacity benefits claimants has fallen by just 90,000. This is despite 61 per cent of the claimants in the ESA WRAG benefit saying they want to work.’

This all sounds very sensible at face value, especially given the new lower rate applies only to new claimants in the WRAG, not new ones who will suddenly find their circumstances change.

But the whole cut is being sold in a way that, to put it kindly, does not reflect what is actually happening. The way the Chancellor and those now promoting the policy talk about the WRAG suggests that this group of benefits claimants were once sick, but have now been assessed as being fit to work and are just not hunting for a job. This is not the case.

Those who believe they are too sick or disabled to be able to work must go through the Work Capability Assessment. Now this test has many critics, but that is for another piece (like this one). The DWP will decide on the basis of the WCA whether someone is fit for work and therefore eligible for Job Seeker’s Allowance, or not fit for work and therefore eligible for ESA. Those eligible for ESA are split into two groups: the support group, where someone is considered so unwell or disabled that the chance of them being able to work soon is remote and is paid up to £109.30 a week, or the WRAG, where someone may at some point in the future be able to work, but is stilll not fit for work currently.

They may still be undergoing treatment for or recovering from cancer, for instance, or suffering from an illness which many patients do recover from but which can last for years, like ME. Or they might have an illness that they could recover from, but in reality they never do. They will receive support and training to improve their skills so that when they are well enough to enter employment, they don’t find that their confidence is so low or their skills so out of date that they struggle to get a job. But they are not, if they are in this group, considered by the government to be ready to take a job.

So 61 per cent of the claimants in the ESA WRAG benefit may well, as Osborne points out, want to work, but the main barrier to them doing so is not financial or to do with the amount of training they receive. The barrier to those people who want to work going into work is that they are too ill to work.

Now, it might be that ministers really think that a lot of people in the ESA WRAG are actually fit to work, and are just loafing about. If they do think that, then they need to look again at the test that enables the DWP to put those people in the group. But if they accept that the test is largely doing its job and putting people who are not fit to work in a group designed for people who are not fit for work, why are they suggesting otherwise when trying to sell the benefit cut?

The DWP says it doesn’t know why the ESA WRAG benefit payment has been so much higher than it is for JSA for so long. Disability charities argue that this is because not only does being ill or disabled make for a much more expensive day-to-day life (if you are too ill to walk or drive then you must pay to catch the bus to travel the sort of short distance that even quite lazy healthy people would walk, or book a taxi to visit the doctor, or pay parking charges to go to hospital appointments, as well as buying endless prescriptions and non-prescription painkillers to deal with your affliction), but your time on benefits will probably last much longer than for a healthy person who is temporarily out of work and needing JSA. This is why a higher rate is paid to ESA WRAG claimants.

There are other benefits that deal with the cost of being disabled, such as the Personal Independence Payment, so perhaps ministers feel that disability benefits are a little too generous, but they have not made this case either. Instead their argument is about incentives to return to work.

Tory MPs will naturally support the second reading of tonight’s Bill, but any chance to quibble the detail of this benefit cut will come either in the committee stage or at report stage. Perhaps some of them are not yet aware of what this change really means. But I hear from those who have picked up that this will not affect people who just need some more help with interview skills, but people who are too ill to work that ministers are suggesting the benefit cut will be reversed when the government starts running a surplus. This suggests that not even those in charge of this particular policy are confident that it is sensible to put sick people on a very low benefit rate for what could be a long time.

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