Paul Foot on the Insurance Company Unum and Cuts to Disability Benefit in Private Eye from 1995

Paul Foot, the journalist brother of Labour leader Michael Foot, had a regular column in Private Eye until his death. Entitled ‘Footnotes’, this documented the abuse of corporate and political power, and Right-wing attacks on welfare, the poor, the disabled, minorities and the working class. After his death it became ‘In the Back’, and is one of the features that lift the Eye above being merely another humour magazine making cheeky comments about politicians and celebs. One of the companies standing behind the Coalitions cuts to disability benefit and the welfare state is the American private insurance company, Unum. Paul Foot turned his gaze on the company way back in the Eye’s issue for the 16th June 1995, when they were hired by Major’s Social Services Secretary, Peter Lilley. The article went as follows:

Doctor on Call

To help him in his bid to save £2 billion a year by slashing the benefits of disabled people, Peter Lilley, social services secretary7, has hired the vice-president of a big multinational insurance company which is usinig the benefit cuts to boost its sales.

Overcoming the xenophobia to which he so often gives voice at Tory party conferences, Mr Lilley has appointed an American.

Founded in Portland, Maine, in 1848, the Unum Corporation describes itself as “the world’s leading light in disability insurance”. Unum Ltd, its British arm, is based in Dorking, Surrey. It issued its annual report last September, when chairman Ward E. Graffam enthused about “exciting developments” in Britain.

He explained: “the impending changes to the State ill-health benefits system heralded in the November 1993 Budget will create unique sales opportunities across the entire disability market and we will be launching a concerted effort to harness the potential in these”. In January, the full extent of Lilley’s plans to replace invalidity benefit with incapacity benefit revealed to the Commons. Estimated “savings” for the year 1995-1996 were £410 million; for 1996-97 £1.2 billion; and for 1997-98 an astonishing £1.7 billion.

Obviously, with so much less government money going to sick and disabled people, the opportunities for private disability insurance were enormous. No longer could people rely on benefit income if they became ill or disabled. They would have to fend for themselves. Accordingly, UNUM Ltd, as its chairman had promised, “launched a concerted effort to harness the potential”. In April this year, a glamorous and expensive advertising campaign coincided with the new rules for incapacity benefit.

One UNUM ad warned: “April 13, unlucky for some. Because tomorrow the new rules on state incapacity benefit announced in the 1993 autumn budget come into effect. Which means that if you fall ill and have to rely on state incapacity benefit, you could be in serious trouble”. Lurid tables estimating weekly outgoings for an average family at £276, and benefit under the new rules at £100, urged people to “protect yourself with a Long Term Disability policy from UNUM”.

Crucial to the new rules were tougher medical tests to find out if people really are incapacitated. The Benefits Agency Medical Services (BAMS) recruited a new corps of doctors to carry out new “all-work tests”. The basic change in the tests was simple. In the past, disabled or sick people were entitled to benefit if they could no longer do their job. From now on, people are entitled to benefit only if they can do no work at all.

The new medical tests were fundamental to the “savings” Lilley hoped for. If the tests were too lax – if doctors were allowed to slide into sentimental slackness in assessing peoples’ ability to do any work at all – the whole purpose of the tests would be thwarted. So Lilley’s department set up an “incapacity benefit medical valuation group” to “monitor and validate the quality standards for the doctors involved in the all-work assessments”.

The most famous member of the group is Dr John Le Cascio, second vice-president of the Unum Corporation, who has recently been seconded to the company’s British arm. Dr Le Cascio was also invited last year by Lilley’s department to help in the extensive training of doctors in the new techniques of testing. The DSS stresses that “the doctors don’t decide the incapacity benefit – that is done by an adjudication officer”. No doubt; but the officer makes a decision on the expert medical information provided by the tests.

No press release was issued about Dr Le Cascio’s appointment. No one told taxpayers that the DSS is shelling out £40,000 to Unum Ltd for D Le Cascio’s services in the year from October 1994 to September this year. A DSS spokeswoman explained: “this comes down basically to a daily rate of £440 a day. That’s cheap for a consultancy, actually.”

The Eye asked Dr Le Cascio if he agreed there was an absolutely obvious conflict of interest in his position as validator and monitor of tests for a benefit, the cutting of which was being exploited to the full by the advertisements for his company. He replied:

“Well, I don’t feel that way of course, and if I did I wouldn’t have accepted the job. I was brought in for a specific reason, and that is to teach some of the medical principles which are contained in the design of the new test – that’s what I do, that’s my area of expertise. I’m a technical person and I can do that. To me, there is no sort of conflict as long as I do that job. I feel comfortable doing it, and I assume that those n the department feel comfortable with my contribution. The reason they’ve turned to me is because the commercial insurers have been working with this sort of valuation system for a long time and that’s where the knowledge lies”.

And in that article you can see the origins of the whole modern benefits system. The use by the government of a private company, in this case Unum, that stands to profit from cuts to the welfare system and the recruitment of new corps of professionals by BAMS to make the tests more difficult. The only difference is that BAMS has now gone and been replaced by ATOS. It’s another example of the way Blair merely inherited and developed a system that was put forward by the Tories.

Graffam

Peter Lilley

Tags: Atos, Conservatives, Disability Insurance, Disbility, Invalidity Benefit, John Le Cascio, John Major, Paul Foot, Peter Liilley, Privatisation, Tony7 Blair, Unum, Ward E. Graffam