Universal Credit: Benefit Cap and Two Child Limit

Tuesday 24th January 2023 Lords Chamber

Question

14:46

Asked by

[Baroness Lister of Burtersett]

To ask His Majesty’s Government how many families in receipt of Universal Credit are subject simultaneously to the benefit cap and the two child limit.

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Viscount Younger of Leckie) (Con)]

My Lords, both policies aim to introduce fairness between households claiming benefits and taxpayers who support themselves solely through work. We estimate from published statistics that fewer than 30,000 households were impacted by both policies in April 2022, which is under 1% of households on universal credit. These families may benefit from additional financial help, such as the cost of living payment and discretionary housing payment, if they need additional support to meet rental costs.

[Baroness Lister of Burtersett (Lab)]

My Lords, in the absence of official data hitherto, the Benefit Changes and Larger Families Project estimates that at least 110,000 children are being pushed deeper into poverty because their parents are caught by both the cap and the two-child limit. Evidence of the damaging effects strengthens the case for scrapping both policies, which are far from fair. At the very least, will the Government now undertake to publish regular data on the numbers affected and monitor the impact on children and their parents?

[Viscount Younger of Leckie (Con)]

I am certainly aware of the larger families project. The latest published statistics on households on universal credit show that the majority of families—79%—on universal credit had fewer than three children, with 21% of universal credit households with children having three or more children. Having said that, it is important to note that there are a number of other initiatives where we can help families with more than two children if they get into difficulty.

[Baroness Meacher (CB)]

My Lords, one of the major contributors to poverty is the absence of affordable housing. Shelter produced a really alarming report this week which showed a year-by-year reduction in the building of affordable housing over the past 12 years. Do the Government have a commitment to reverse that policy and to increase the number of affordable homes built every year so that people living in abject poverty—particularly those depending on universal credit—will at least be able to find an affordable home?

[Viscount Younger of Leckie (Con)]

Absolutely. There are a number of initiatives on housing, which I am sure the noble Baroness will be aware of. One example is the discretionary housing payment, which can be paid to those entitled to housing benefit or the housing element of universal credit, particularly those who face a shortfall in meeting their housing costs. It is certainly a matter that I am aware of, and I know that my noble friend Lady Scott will be very much on top of that. We are working across government on this issue.

[Lord Farmer (Con)]

My Lords, can my noble friend reassure me that universal credit still makes work pay despite childcare costs when there is more than one child? Of course, an at-home parent conscientiously doing their own childcare in the early years is, in fact, working. What expectation is placed on claimants to work when parental care is their strong preference?

[Viscount Younger of Leckie (Con)]

Yes, my noble friend makes an important point. I should say at the outset that the Government firmly believe that, where possible, it is in the best interests of children to be in working households. That is why the department has continually provided support to help move people into work. To further that, this sort of support in making people financially resilient by moving them into work and also ensuring that they are progressing in work is important; up to 85% of the registered childcare costs each month is paid regardless of the number of hours that they work, compared with 70% for tax credits.

[The Archbishop of York]

My Lords, it is encouraging to see that the Government are keeping a check on the numbers of people being affected by these policies, but I was not quite sure whether I heard that work is being done to measure the impact of the policies on families. I can say, and it gives me no joy to say it, that from where I serve in the north of England—I am thinking particularly of Middlesbrough and Hull—I see the disturbing impact of an increase in poverty, child poverty and families in very difficult situations, not least with the cost of living crisis on top of all this. My simple, genuine and heartfelt question is: how would you explain this to a mum expecting her third child, or a family with three or four children who have been pushed into benefits over the past couple of years? They do not understand why this is happening but they are suffering as a consequence of it. How do we explain to them the rightness of this policy?

[Viscount Younger of Leckie (Con)]

My Lords, first, we are very aware of the fact that some people are finding it particularly difficult at the moment—some very good points have been made about that. One of the issues to focus on, which we are doing, is childcare, which is a key enabler of employment for parents and has clear developmental benefits for children. Of course, the onus falls on the caseworkers in the jobcentres. Often they are very well trained, and they have to deal directly with these people who come with some heartfelt stories.

[Baroness Sherlock (Lab)]

My Lords, can I give a specific example? The most reverend Primate has talked about the impact on individuals. The larger families study that the Minister mentioned interviewed parents who have been affected by this. It gives the example of a single mother who had experienced domestic abuse. She was given an exemption from the two-child limit under the rape clause because the child was conceived by rape, so she was then awarded an extra £237 a month. But then the benefit cap kicked in and she got only £30 a month of it. Because she struggled to provide for her children, she ended up returning to a violent relationship. I ask the Minister again: what does he think about the impact of these policies, not just their number?

[Viscount Younger of Leckie (Con)]

The noble Baroness makes a good point because we should be aware of the impact, which is why we are working hard on a number of initiatives. As she will know, there are a number of fallbacks on top of this, particularly the provision of cost of living support worth over £37 billion for 2022-23, including £400 for the non-repayable discount to eligible households. However, it is more than this. I am in awe of people on the front, including those who work in the front line of the jobcentres, who work with the social workers, and indeed with the Church, to see through these very challenging issues for some families.

[Lord Goddard of Stockport (LD)]

My Lords, does the Minister agree that larger families on benefits are doubly penalised by the Government’s policy, not only by losing support for third or subsequent children but also due to the lack of affordable childcare to enable them to work? Those families are, in effect, losing £2,935 a year.

[Viscount Younger of Leckie (Con)]

I mentioned childcare costs before and it is important to support parents who have childcare needs. Of course, we have the child benefit but on top of that there are other support mechanisms to ensure that those who have children—particularly more than two, which is the subject of this Question—can survive and, in many cases, find the next meal.

[Baroness Deech (CB)]

My Lords, research has shown that the majority of children of single parents would be lifted above the poverty line if the absent fathers paid what they owe. For decades, the child maintenance system has let single mothers down, condemned children to poverty and let men get away with it. What is the Minister’s advice?

[Viscount Younger of Leckie (Con)]

This is another important subject. The child maintenance system supports separated parents to agree their own family-based arrangements where it is possible. Where it is not possible, the child maintenance system steps in. It is incredibly important that the paying parent pays, and this is where the system is dealing with some extremely challenging issues in order that the receiving parent receives what they are due.

[Baroness Berridge (Con)]

My Lords, all noble Lords will be pleased that it is a small number of families that are affected. Can the Minister inform us whether any of those families are also being affected by having to pay back money, such as aged debts, when they are on such limited income? It has always struck me as rather odd since when you get fined in a court, very careful consideration is given to your means to pay, and if you borrow money from the Government for your education, you are not asked to repay it until you are earning a fair sum of money. The poorest in our society are being asked to pay money back to the Government, so can the Minister provide us with information on that?

[Viscount Younger of Leckie (Con)]

I will need to write to my noble friend about that issue. I am certain that this system allows for payback whenever possible, but I will certainly look into that.

[Baroness Finlay of Llandaff (CB)]

Can the Minister tell us when the special rules, which have passed through Parliament, will come into force for people caring for a terminally ill person at home, given that the cost of care has gone up quite significantly and that if it is a young parent, some people can find themselves in such poverty that they have to go bankrupt?

[Viscount Younger of Leckie (Con)]

I do not have any information to hand on the future of any legislation, but I will certainly follow up with the noble Baroness and let her know whatever I have.