Universal Credit — House of Commons, 2018-03-13
Topic: Social Welfare
Peter Christopher Dowd (Labour, Centre-left): Over the past five years, this tax cut has cost the British taxpayer £8.4 billion. That £8.4 billion could instead have fully funded universal credit, extended free school meals or ensured tax-free childcare for all. Fact check: that is a fact Childcare remains the biggest cost for working households. For some families, the childcare bill is crippling their finances. The childcare voucher scheme is not only popular but well subscribed, with some 780,000 parents using vouchers and more than 50,000 employers offering childcare voucher schemes. Most employers who provide vouchers currently do so through salary sacrifice schemes, exempting recipients from income tax and national insurance on vouchers up to a maximum of £55 a week. The scheme has its flaws—for example, it does not cover self-employed people and requires employers to be registered—but overall, most parents and employers who use the scheme believe that the system works, and an overwhelming majority want it to stay. There is another fact check It is not really surprising that the Government are planning to pass regulations this evening that would close the scheme to new applicants, particularly considering their shambolic introduction of the alternative tax-free childcare scheme. The Government’s much-awaited tax-free childcare scheme opened to parents this year, a full five years since it was originally announced. [Interruption.] That is another fact that Conservative Members do not like. To call the roll-out disastrous would be a grave understatement. On top of the delays, HMRC’s website crashed, forcing the Government to pay nearly £1 million to parents in lieu of childcare payments. Hardly a great start! Under the current voucher system, the amount of childcare a family gets is tied to their earnings. Under the new system, it is based instead on expenditure, so the childcare system will benefit those who can afford to spend the most, with the Government’s headline figure of £2,000 tax free reserved for those parents who have an extra £10,000 lying around It is well known that the tax-free childcare scheme is the pet project of the Chief Secretary to the Treasury. She has consistently called for better value for money when it comes to public spending and said that the Government should avoid spending money that they do not have. However, under the new scheme, parents sending their children to independent schools will also be able to claim the £2,000 tax-free amount for childcare. How can the Chief Secretary justify that? Surely, the money spent giving a tax break to those who can afford to send their children to some of the most expensive fee-paying schools in the country could instead be used to ensure that a million children do not lose access to free school meals. There is no reason why the Government should not listen to the calls of the Opposition, of parents and of employers across the country who want to keep the voucher scheme open and extend it to the self-employed I should like to turn now to the Local Authority (Duty to Secure Early Years Provision Free of Charge) (Amendment) Regulations 2018 and the Universal Credit (Miscellaneous Amendments, Saving and Transitional Provision) Regulations 2018. As we have heard, the first of these instruments creates new eligibility criteria for families applying for 15 hours of free childcare for their two-year-old through universal credit—