Welfare Benefits Up-rating Bill

Baroness Howe of Idlicote Excerpts

Monday 25th February 2013 Lords Chamber

[Lord Kirkwood of Kirkhope]

Indeed. I am looking at the Treasury Autumn Statement 2012, Table 2.1, which has a category headed, “Exchequer savings resulting from 1% uprating of benefits and tax credits”. This is over the three years, not just the two years in the Bill. The table also has a category headed, “Universal Credit: finalise disregards and increase by 1% for two years from 2014-15”. The figure given suggests that the saving for 2015-16 will be £640 million. However, my honourable friend Steve Webb, in a Written Answer to Stephen Timms on 13 February, identified universal credit additional savings as £20 million in 2014-15, £100 million in 2015-16 and £150 million in 2016-17. I am not sure how these figures relate to one another. I may be misreading the statistics and the tables may be drawn up using different bases, but between now and Report I would like to understand how these figures are worked out.

As the noble Baroness, Lady Hollis, said, the assumptions about how many people will be translated on to universal credit are best guesses, to put it mildly. I think the roll-out programme will take much longer, for the reasons that I explained earlier, and the story in the Financial Times compounds my anxieties in this regard. I think the figures that the right reverend Prelate gave of 10% of claimants being on universal credit by 2014-15 and 30% by 2015-16 are ambitious, to put it mildly, so can we have some greater clarity?

This is an important Bill. I understand the significance of the situation in which the Government find themselves. If I did not believe that before this weekend, all the financial circumstances of the past few days have confirmed the difficulty of the situation. However, before Report, we must try to get a better fix, in particular on the savings related to the universal credit inclusion in the Bill, because it is unclear to me. It is important and, from where I am sitting at the moment, I do not think that the savings are worth the candle. I would be much happier leaving universal credit out of the Bill. Let it be the future and let us all work on it, try to protect it and build on it in the best way we can. The Bill is a retrograde step as it affects universal credit, and I support these amendments for that reason.

[Baroness Howe of Idlicote]

My Lords, I want to say a very brief word about two groups—children and families. Before I do so, I congratulate the right reverend Prelate the Bishop of Leicester on his excellent briefing on these very important areas. I agree with a great deal of what the noble Lord, Lord Kirkwood, said.

We know that the Government are not on target to meet the Child Poverty Act commitment to eradicate child poverty by 2020. The right reverend Prelate referred to that. We are told by the Institute for Fiscal Studies that there can be almost no chance of eradicating child poverty, as defined in the Child Poverty Act, by 2020. It predicted that there would be an additional 500,000 children living in absolute poverty by 2015. However, that leaves out a further 200,000 children who will be pushed into relative income poverty. How on earth will this Bill help the Government to meet their commitments under the Child Poverty Act?

I am even more concerned about the disproportionate impact that all this is having on women. The Bill disproportionately affects women, including through the cap on child benefit payments and statutory maternity pay. Furthermore, those in low-paid work, who are more likely to be women, will lose the most. It is estimated that 300,000 nurses and midwives, 150,000 primary and nursery school teachers and 1.14 million admin workers and secretaries will be affected by the cap. Some 98% of child benefit payments are paid to women. Child benefit has already been frozen for three years, meaning that over five years there will be a total of a 2% increase; for the same period, CPI will have risen by 16%. Of different family types, lone parents, who are mostly women, as we know, will lose the most: £261 a year by 2015.