Universal Credit (Children) — House of Commons, 2016-05-10
Topic: Social Welfare
Stephen Creswell Timms (Labour, Centre-left): My hon. Friend is right, and Citizens Advice made exactly that point about the change to support for disabled children that my hon. Friend the Member for Salford and Eccles (Rebecca Long Bailey) referred to. A large proportion of those affected say that they will have to cut back on food, and are likely to get into debt as a result of the cuts Deven Ghelani refers to "the challenges that arise from weakening work incentives within this Government’s flagship welfare reform." The Minister will understand why that is a problem, given what the Government have been telling us for years about what universal credit was going to do The IFS’s projections for dramatically rising levels of child poverty over the next few years are not only about universal credit; other factors also have an impact. As far as I can see, however, the projections are consistent not with universal credit reducing child poverty—we were originally told it would reduce child poverty—but with universal credit increasing child poverty. It is low-income families and children who will bear the brunt of the cuts, while older and better off people will not be affected at all. I press the Minister to tell us the Government’s current estimate of the effect of the implementation of universal credit on the child poverty figures That is the big picture impact of universal credit, but there are a number of other aspects of its design that I want to touch on. I will try to do so very briefly. The first aspect is the eligibility of universal credit claimants to free school meals. At the moment, entitlement to so-called "passported benefits" is dependent on receiving means-tested, out-of-work benefits. That simple test is no longer available in universal credit, because the benefit does not indicate whether the claimant is working or not—indeed, that is one of the advantages of universal credit. The Government therefore have to devise a new eligibility test There has been discussion about how, instead of free school meals, claimants could be given cash which could be tapered away with the rest of their universal credit payment. The problem, however, is that we know much of the cash would not be spent on school meals but on something else. There is a real danger of the school meal system collapsing. The Government have rightly rejected that option. We could envisage an electronic system, where claimants are given credits that could be used only to buy school meals. Those, too, could be tapered, but currently there is no IT system in place to do that. The Welfare Reform and Work Bill Committee asked about this during pre-legislative scrutiny in 2011. The Secretary of State at the time told us we would have an answer before the Bill gained Royal Assent in summer 2011. Five years later, we still have not had an answer. Ministers often tell us it is a matter for the Department for Education. The problem is this: the way this question is answered is crucial to whether universal credit will achieve its goal It has been hinted that free school meals eligibility will depend on a family’s income being below a particular threshold. The huge problem with that is that it would introduce an enormous new cliff edge into the benefit system, which is exactly the kind of perverse incentive that universal credit is intended to remove. In fact, it would be far worse than any of the perverse incentives currently in the system. If one’s income is just below the threshold—whatever it may be—the last thing you would want is any kind of pay rise or hours increase that would cause you to lose, overnight, the benefit of free school meals for your children. With three children, well over £1,000 a year could be lost What is the answer? I recognise that this is a genuinely difficult issue. I do not criticise Ministers for the fact that it is difficult, but I do criticise Ministers for the fact that five years later we still do not have an answer. Increasingly, it seems to me that the viable solution, albeit quite a costly one, will be to extend the current temporary solution that free school meals should be made available to everyone who claims universal credit whether they are in work or not. I ask the Minister when it is likely that we will get a decision on this issue My hon. Friend the Member for Salford and Eccles drew attention to the severity of the proposed cuts to the incomes of disabled children through universal credit. The tax credit support of about £60 a week will be cut to £29 a week. I think all of us can see that for an estimated 100,000 families with disabled children that will be a dramatic reduction in their income. My hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty) drew attention to the problems with the long delay between someone making a claim for universal credit and receiving the money. The assumption that people will have a month’s pay cheque in the bank to keep them going in the meantime is proving to be unfounded. The Trussell Trust published its annual statistics last month, which show another increase in food bank demand in the past year. It notes: "In some areas food banks report increased referrals due to delays and arrears in Universal Credit payments." Will the Minister look again at the administrative arrangements for universal credit, as it seems the current arrangements will be a serious problem for many families with children The final point I want to raise is that at the moment local authorities pay housing benefit. They can see which claimants will be hit by cuts to benefits of various kinds and provide additional help and tailored support. That is what we have seen in practice. Under universal credit, however, the payment will be made by the DWP. Local authorities will no longer have the data about people’s circumstances. Will the Department provide that data, which it will have instead of local authorities, to local authorities so they will be in a position to continue to provide the kind of tailored support we have seen in the past couple of years My fear is that the implementation of universal credit may well have a deeply damaging impact on Britain’s children. In particular, I would like the Minister to give us an update on the Department’s estimates, published in 2011 and updated in 2013, for the impact of universal credit on the number of children living in poverty.