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You are here: Home / News Archive / New evidence of corporate giant’s influence on welfare reform

New evidence of corporate giant’s influence on welfare reform

By guest on 1st November 2011 Category: News Archive

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New evidence suggests that an insurance giant that could make huge financial gains from government reform of incapacity benefit played a much larger part in influencing those reforms than it previously admitted.

Last month, Unum, the UK’s largest provider of “income protection insurance” (IPI), denied that it had attempted to influence government policy on welfare reform.

Campaigners believe that tougher welfare rules – particularly those replacing incapacity benefit (IB) with the new employment and support allowance (ESA) – could persuade more people to take out IPI, and so boost Unum’s profits.

Unum has denied that it stands to gain from the reforms, even though it launched a major media campaign this year just as the coalition government began a three-year programme to reassess about 1.5 million existing IB claimants through a new, stricter test, the work capability assessment (WCA).

But now a detailed memo has emerged, which was submitted to the Commons work and pensions committee in 2002 and was written by Joanne Hindle, Unum’s corporate services director.

In the memo, Unum calls for fundamental reform of the welfare system, while it says the government “must ensure both that work always pays more than benefits, and more importantly that it is clearly seen to do so”.

The memo includes proposals with a strong resemblance to reforms introduced several years later by the Labour government, when it replaced IB with ESA.

The Unum memo suggests retaining a form of IB for those “genuinely incapable of undertaking any work whatsoever”, as Labour did with the ESA support group.

And it suggests a new benefit for those with “limited capacity to work”, who would be “properly supported in their search for and transition into work”, a suggestion which mirrors the ESA work-related activity group introduced by Labour.

The memo also says Unum was “actively engaged” with the government on sharing best practice on returning disabled people to work, while its executives had “met with [government] officials to help better understand the nature of the IB casebook, and to discuss how our commercial experience and expertise might be more widely applied”.

Hindle stresses in her memo that the company – then known as UnumProvident – “is confident that its policies and approach to [IPI] claim management and rehabilitation can be replicated more widely for those on IB” and would “particularly welcome the opportunity to put them into practice”.

The subsequent reform of IB was hugely controversial, with widespread anger among disabled people at the severity and inflexibility of the WCA, and the number of claimants subsequently found “fit for work”.

The anger has grown over the last 18 months under the Conservative-led government, with claims that its reforms – which are even harsher than those introduced by Labour – are merely a cover for cuts to welfare spending and are plunging tens of thousands of disabled people further into poverty and distress.

The disabled activist who has done most to raise concerns about Unum’s influence is Mo Stewart, a retired healthcare professional and veteran of the Women’s Royal Air Force, who has been researching Unum for nearly a year.

She said it was “incomprehensible that Unum have denied benefiting from the ongoing radical welfare reforms when the wording of some of the reforms closely mirror” comments in the memo submitted by the company.

She said: “The recent mass marketing of Unum IPI, combined with the excessive publicity about the ongoing destructive welfare reforms, is no doubt reminding the able-bodied ‘squeezed middle’ population to be prepared in case of unexpected serious health or disability difficulties which, inevitably, will lead many to invest in IPI from this American corporate giant.”

Further information has emerged this week suggesting that Unum had influence within the Department for Work and Pensions as the government was drawing up its proposals for IB reform.

Last month, Unum admitted that two of its executives – a doctor and an occupational therapist – were involved in “technical working groups” set up by the government in 2006.

The working groups were asked to review the assessment that was being used at the time to test disabled people’s eligibility for IB.

Unum told Disability News Service (DNS) that the working groups met just once and that the company had “no further influence” on the design of the test’s eventual replacement, the WCA.

But a response by the Department for Work and Pensions to a Freedom of Information Act request from DNS suggests that the Unum officials were present at three meetings of one working group and at least five of the other.

This week, Unum repeated its denial that it had influenced the welfare reforms of the Labour and coalition governments.

John Letizia, Unum’s head of public affairs, said in a statement: “While Unum, like the vast majority of Britons, believes a review of the current welfare system is necessary, we are not working to influence the government to reduce welfare benefits as you seem to be suggesting.

“Rather, given our expertise in income protection and vocational rehabilitation, we have been one of a number of entities from industry, trade unions and health invited from time to time to participate on committees and provide input to government.

“Our primary interest is in promoting the role the private sector can usefully play not only in helping people to protect themselves should illness or injury occur, but also to achieve a successful return to work where possible.

“Income protection does not replace state benefit, but it is a vital protection for the ‘squeezed middle’ who would not be able to maintain their current lifestyle should something unexpected occur. This would also provide significant direct and indirect benefit to the state.

“At no time have we influenced the government on the design of the reforms to the welfare state or on the level of benefits that claimants receive.

“Additionally, as you know, it is ultimately the government and not Unum or any other third party that makes decisions about policy matters.”

He added: “Whilst we are always willing to answer questions… please understand that we do not intend to continue to discuss events from 10 years ago or engage in a back-and-forth that is based on a false premise, particularly if your mind is made up as it appears to be.”

17 November 2011

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