My last blogpost
argued that neither the Conservative government which introduced Disability
Living Allowance in 1992, nor the current Conservative-led Coalition
government, which is replacing it with Personal Independent Payment, paid much
attention to evidence when developing these policies.
On the other hand, in
the 1970s the initial versions of these ‘extra costs’ benefits were informed
and motivated by research evidence. As
Tania Burchardt says, “The development of extra costs benefits appears to be
one of the relatively few areas where social research has had a direct impact
on policy”
Two areas of social
research prompted the introduction of Attendance Allowance by the Conservative
government in 1971 and Mobility Allowance by the Labour government in
1975. Surveys by the Office for
Population Censuses and Surveys identified larger numbers of disabled people
than had previously been thought, and the significant costs faced by disabled
people (1). There was also increasing evidence about the negative impact of
means-testing benefits - the low take-up, the high costs of administration and
the ‘poverty trap’ created for low income households (2). This helped to
persuade the 1970-74 Conservative government and the 1974-79 Labour government
that the new Attendance and Mobility Allowances should not be means-tested.
It is interesting that
both Attendance Allowance and Mobility Allowance were introduced during times
of worsening economic conditions. In
particular, it is perhaps surprising that during an economic crisis which resulted
in significant public expenditure cuts in return for an IMF loan in 1976, the
Labour government brought in a new extra costs disability benefit which it
estimated would significantly increase the numbers eligible for help with
mobility. Less than 50,000 people
qualified for the three forms of help which were replaced by Mobility Allowance
– the three-wheeler ‘trike', the small cars, and the Personal Car Allowance. In contrast, the government estimated that
150,000 people would qualify for the new Mobility Allowance (3).
When Mobility
Allowance was first introduced in 1975, it was paid at £4 per month but over
the next three years it increased to £10.
This was partly to enable the payments to be enough for the new car
leasing scheme, Motability, launched in 1978. While this was set up with finance from the
main banks, working with the car industry, the organisation also received
government grants towards the cost of administration and to subsidise expensive
adaptations.
So, at a time of significant
economic crisis and large reductions in public expenditure, there was all-party
support for, not only increasing the amount spent on disability benefits but
also for introducing a scheme which resulted in many thousands of disabled
people having access to a car.
In retrospect, we can
see what a wise decision this was. Because not only did this benefit disabled
people but it also benefited the wider economy.
By 2009, Motability
was estimated to support 21,080 jobs; contribute £2 bn
to the UK’s
GDP; and £468m in tax receipts every year. It accounts for
10% of new cars and 2.5% of used cars sold every year.
In the current
economic difficulties, however, the government is taking a very different
approach – one which, far from generating demand in the economy and protecting
the living standards of disabled people, is reducing the numbers who are helped
with additional costs and in particular who can have access to a car.
The DWP estimates that 420,000 fewer people will be awarded
the enhanced rate of the mobility component of the new Personal Independent Payment than were eligible for the equivalent rate of Disability Living Allowance.
In a Briefing to the
All Party Parliamentary Disability Group on January16th, Motability stated “We
recognise that a significant number of our current customers will lose their
eligibility to use the Scheme as a result of their PIP reassessments”.
Motability's website makes clear that “If you are an existing DLA recipient who
has not received the Enhanced Rate of the Mobility Component of PIP, you will
not be eligible to use the Motability Scheme” and “The leasing agreement will
end” and “Motability will arrange with you for the vehicle to be returned”.
Not only will this have a devastating effect on individuals and their
families, but it will have a significant detrimental effect on the
economy. Using analysis from 2009, Jane
Young
has estimated that there will be
losses of:
- 5,692 jobs (from 21,080 jobs to 15,388 jobs in Motability-related industries)
- £544 million contribution to GDP (from around £2 billion to £1.45 billion)
- £126 million in tax receipts.
Can anyone doubt that
the introduction of Personal Independence Payment – which is entirely fueled
by a desire to reduce the money spent on supporting disabled people’s
additional costs – is one of the most foolish policies ever pursued by a
government?
(1) Harris, A. 1971. Handicapped and Impaired in Great Britain, Office for
Population Censuses and Surveys.
(2) e.g. Lister, R. 1974.
Take up of Means-Tested Benefits,
Child Poverty Action Group.
(3) Beard, A. 1998. Motability: The Road to Freedom, The
Book Guild.