Universal Credit (Removal of Two Child Limit) Bill [HL] — House of Lords, 2022-07-08
Topic: Social Welfare
Deborah Stedman-Scott (Conservative, Centre-right): Of course we accept that there are regional variations, which is why, with the levelling-up agenda, we are doing our very best to improve the work opportunities for people in those areas and to support them. That is, again, another policy of this Government that we are actively pursuing. Our support for people out of work is tailored to individual circumstances, recognising the different issues that people face in the labour market, notwithstanding the points that the noble Baroness, Lady Bennett, made about the regional differences Improving work incentives was a key design criterion for universal credit. We have cut the universal credit taper rate from 63% to 55%—a major step forward—and increased the universal credit work allowance by £500 per year. These two measures mean that 1.7 million households will keep, on average, an extra £1,000 a year. These changes represent an effective tax cut for low-income working households in receipt of universal credit worth £1.9 billion a year in 2022-23. This will allow working households to keep more of what they earn and strengthen incentives to move into, and progress in, work The noble Baroness, Lady Brinton, raised the issue of the cost of living, which is a subject on all our hearts and minds. Millions of households across the UK are struggling to make their incomes stretch to cover the cost of living. The Government have stepped up to the plate in order to make sure that we support people, providing £37 billion, which includes the £650 payment, as I have regularly repeated in the House—I do not intend to do today, as I want to get on to some of the other issues that noble Lords have raised The right reverend Prelate the Bishop of Durham raised the issue of poverty increasing due to policy choices. Again, providing £22 billion of funding in 2022-23 to help families with the cost of living, including through universal credit changes, means that working families and households are much better off, as I have already said The delicate subject of abortion has been raised, which I completely understand. Research from the Nuffield Foundation larger families consortium of researchers published this month has outlined that fertility rates for those claiming or eligible to claim benefits have changed very little since the introduction of this policy. This evidence refutes earlier evidence from the British Pregnancy Advisory Service, which suggested that people were having abortions in response to the policy. The report argues that this was in fact a small and self-selected sample. This wider, more robust study takes evidence from administrative data on births and the annual population survey and uses a difference-in-differences approach to compare before and after the policy for different groups. It concludes that, while fertility rates have fallen, this has been the case for all socioeconomic groups The right reverend Prelate asked if I could commit to carrying out an impact assessment and to taking all this back to the Government. To be truthful and straightforward, I cannot commit to an impact assessment. I do not believe, with what I know, that the Government would welcome from me the request that he has made; however, having said that, I will make sure that they understand that it is in Hansard The right reverend Prelate also asked about policy exemptions not accounting for those from ethnic backgrounds. The Government’s published impact assessment noted that ethnic minority households may be more likely to be impacted by the policy. This is because they are, on average, more likely to be in receipt of tax credits and universal credit and, on average, have larger families The noble Baroness, Lady Brinton, raised the issue of half of all children living in lone-parent households living in relative poverty. The latest available data on in-work poverty shows that, in 2019-20, children in households where all adults were in work were around six times less likely to be in absolute poverty, before housing costs. Through our plan for jobs campaign, the department is providing broad-ranging support for all jobseekers with our sector-based work academy programme and job entry targeted support scheme The right reverend Prelate the Bishop of Durham and the noble Baroness, Lady Brinton, raised the important point, as did others, about claimants being aware of the policy. There is information on the GOV.UK website, but this is something I am absolutely content to take back to the department to review how we communicate it and see if there are other things we can do to promote it. The noble Baroness, Lady Sherlock, and the right reverend Prelate the Bishop of Durham talked about paying childcare costs up-front being a barrier to moving into and progressing in work. Where people need up-front childcare costs on universal credit, the flexible support scheme is used and will continue to be so; if anybody knows of anybody who has been denied that, let me know and I will sort that out. The noble Baroness, Lady Sherlock, asked me what level of spending on benefits is sustainable. I can only tell her that in 2021-22 we spent around £244 billion on welfare, with £41 billion on UC specifically. On the exam question, "How did the Government decide on two children?"—for which I thank her—I will need to write to her. She made a point about the two-child limit increasing policy and punishing families, so I say that the Government have a range of policies which support children and families across the tax and benefit system and public services. We remain committed to supporting families on low incomes and will spend around £108 billion through the welfare system, as I have already said In conclusion, the most sustainable way to lift children out of poverty—I keep going on and on about this, but it is government policy—is by supporting people and parents to progress in work wherever possible. This Government have a range of policies to support children and families across the tax and benefits system and public services. The policy to support a maximum of two children must strike a balance between providing support for those who need it and ensuring a sense of fairness to taxpayers, which I know noble Lords have already raised. I am quite sure that the answers I have given today have not been well received, but I am sure the debate will continue.