Politicians of both parties have been promising to reform Incapacity Benefit for as long as I can remember. During its 13-year period in office, Labour repeatedly said it would overhaul the system so that more people claiming the benefit would be encouraged into work.
Despite all the pledges, little or no progress was made. In 2010, the number of claimants was 2.6 million, roughly what it had been in 1997. The cost had risen to £12.5billion a year.
In many ways things had actually got worse, because the number of people staying on sickness hand-outs for longer than five years rose twentyfold — from 68,000 in 1997 to almost 1.5 million in 2006. Whatever it may have said, New Labour clearly lacked the determination to introduce reform.
So it is with a mixture of disbelief and admiration that I read of the Coalition’s apparent success in tackling the problem. All fresh applicants for the Employment and Support Allowance, which is replacing Incapacity Benefit, must undergo what are called work capability assessments.
Some 1.3 million people have been tested since the assessment was introduced — admittedly by Labour — in 2008. Almost unbelievably, 39 per cent of claimants have been deemed fit enough to take a job immediately, while a further 17 per cent have been judged able to do some sort of work with the right support. Only 7 per cent were thought sick enough to stay on benefits for good.
Predictably, there have been complaints that the new tests are too tough. That is the line of Brendan Barber, TUC general-secretary, and some charities. Anne Begg, the Labour chairwoman of the Commons Work and Pensions Select Committee, has pointed out that 40 per cent of decisions not to award the benefit are overturned on appeal, and she says that Government figures should carry ‘health warnings’.
Of course, no one can guarantee that some deserving cases are not being wrongly rejected. But the really amazing disclosure is that 36 per cent of applicants have dropped out of the application process before being subjected to a test. They cannot have been victims of unfair discrimination for the simple reason that they did not submit themselves to the process.
It is impossible to escape the conclusion that many, if not most, of these claimants withdrew their applications because they knew in their hearts they weren’t proper recipients of Incapacity Benefit, and therefore wouldn’t pass the new test.
Naturally, I don’t deny that there are some who are too sick to work, sometimes for long periods, and it is absolutely right that they should be helped adequately. But, if you combine those people deemed fit enough to work immediately with those who dropped out, you have more than three-quarters of claimants who, on the face of it, have a weak case.
In other words, for many people, Incapacity Benefit has been a costly racket — as politicians of all parties have long privately recognised. Why, then, have they not reformed it? One reason is that it disguised the true level of unemployment, and in this the Thatcher government was originally much to blame.
Between 1979 and 1997 — the 18 years of Tory rule — the number of claimants trebled. It suited Margaret Thatcher, and her successor John Major, to massage the true unemployment figures by shifting some people into another category. The trouble is that more and more of them festered there.
Once the number of claimants had ballooned, it required a brave politician to address the problem, and risk the inevitable charge of being unfeeling towards the disabled and mentally ill. At a time of plenty, the easy path for Labour was to do nothing. No doubt it also saw an electoral advantage in having a large group of people reliant on its patrimony.
But think of the terrible human waste. First, there has been the huge cost to taxpayers. The Coalition hopes to make savings of £4 billion a year, or about one-third of the incapacity budget, by 2014/15 — not a very daunting task, I would suggest, on the basis of the figures I have quoted.
Over the past decade, some £130 billion has been spent on the benefit. If a third of that enormous amount had been saved, hard-pressed taxpayers would have enjoyed a welcome respite. As it is, this shamefully unchecked extravagance has caused justifiable resentment among the working population.
People have understandably marvelled at horror stories of 1,000 claimants receiving £5million because they are ‘too fat’ to work, or millions of pounds going to claimants supposedly disabled by headaches, indigestion and even blisters — let alone the various tales of outright fraud. Such behaviour is divisive and demoralising.
There is also another form of human waste, more difficult to quantify, but in its way no less significant. It may have suited successive governments to ‘park’ hundreds of thousands of people who are difficult to employ, and may not want employment, among bona fide disability claimants, but these people have been done a great disservice.
The need to make savings has been driven in the first place by the Chancellor’s programme of deficit reduction. But the Work and Pensions Secretary, Iain Duncan Smith, seems also to have a moral and social agenda to encourage those who are capable of holding down jobs back into the workplace.
We heard a lot about the value and dignity of work from Gordon Brown when he was Chancellor and Prime Minister, but his insight was never translated into any sustained attempt to slash the number of Incapacity Benefit claimants — many of whom, as has now been shown, are capable of work.
One undeniable difficulty, though, is that in our present straitened economic circumstances there are a limited number of jobs for former claimants to take — despite more than 400,000 new jobs being created in the past 14 months.
It is also the case, as Mr Duncan Smith recently pointed out, that even in the past year, three in four new jobs have gone to foreigners. All the Coalition’s good work may come to nought unless — to borrow a phrase — it finds a way of keeping more jobs for British workers. That will entail putting a brake on immigration, which the Government seems unable or reluctant to do.
For all that, some sort of revolution does appear to be under way. No doubt over the coming months we will be treated to television pictures of severely disabled people who have inexplicably been deprived of their benefits. Yet the apparent injustice of individual cases should not blind us to the fact that hundreds of thousands of people have been wrongly pocketing hand-outs.
None of us should resent those who can’t work receiving generous assistance. Indeed, I would be in favour of the truly sick and disabled being given a more generous share of a reduced budget. But, on behalf of the taxpayer and society, we should rejoice that politicians have at long last had the courage to address an exorbitant and debilitating scam.