Universal Credit

Baroness Laing of Elderslie Excerpts

Tuesday 13th March 2018 Commons Chamber

[Several hon. Members rose—]

[Madam Deputy Speaker (Mrs Eleanor Laing)]

Order. I have to reduce the time limit to three minutes, because so many Members wish to speak.

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[Laura Pidcock]

Well, that was not my experience. Anyway, the idea that claimants in my area—[Interruption.]

[Madam Deputy Speaker (Mrs Eleanor Laing)]

Order. I cannot hear the hon. Lady. [Interruption.] The hon. Lady should not shout from a sedentary position when I am defending her and giving her space.

[Laura Pidcock]

I have 17 seconds left and there have been so many interruptions.

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[Peter Dowd]

No, I will not.

Far from seeing the light at the end of the tunnel, this Government have indicated once more their relentless desire to throw some of the poorest into the shade. While the Chancellor came to the House today to pat himself on the back, with no sense of irony whatsoever, these new regulations remind us that austerity is far from over. Depriving some of the poorest children in the country access to a free school meal on its own would be considered shameful, but paired with the restriction on childcare vouchers and the introduction of tougher criteria for universal credit, we have a cruel cocktail of cuts and misery—and Tory Members know a lot about cocktails as well when they are at their meals.

The Children’s Society estimates—[Interruption.] Fact check: the Children’s Society estimates that the changes the measures the Government are seeking to introduce will see 1 million children in poverty unable to benefit from free school meals because of them pulling the rug on the current transitional arrangements, and to add insult to injury, by setting an income threshold for the children of those on universal credit to qualify for free school meals, the Government are creating a cliff-hanger which will leave around 350,000 families worse off. [Interruption.]

[Madam Deputy Speaker (Mrs Eleanor Laing)]

Order. There are clearly heightened tempers, but we must have some decorum to allow us to listen to Mr Dowd.

[Peter Dowd]

Thank you; “They don’t like it up ’em.”

These families, who will move just above the threshold, will be forced to shoulder the cost of school meals from their household budgets at the cost of hundreds of pounds per child.

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[Peter Dowd]

What I will say is this—[Interruption.] If Tory Members want to listen, I am more than happy to say this:

“I am unable to watch passively whilst certain policies are enacted in order to meet the fiscal self-imposed restraints that I believe are more and more perceived as distinctly political rather than in the national economic interest.”

That is from the right hon. Gentleman’s resignation letter.

Why do the Government feel the need to cut the number of children who are eligible for free school meals? Why are the Conservatives keen to limit the number of parents eligible for childcare vouchers? And why do Ministers seem content with ensuring that the self-employed and disabled on universal credit are worse off and at further risk of sanctions?

The Chancellor’s mantra, as with his predecessor, has been fiscal prudence, a concept hijacked by an ideologue for ideological purposes. He has long proclaimed, whether on spending on public services or on the welfare state, that there must be belt-tightening. In the name of balancing the Budget, we have seen almost a fifth of women’s refuge shelters close under this Government’s cuts, while 41% of children’s services are unable to perform their statutory duties. Yet the Chancellor can somehow conjure up money to give large multinational corporations and the wealthiest £70 billion-worth of tax cuts by the end of the Parliament; no belt-tightening there.

If we look at the decision to cut the top rate of income tax from 50p to 45p alone, research—fact—has shown that those earning over £1 million pounds a year have saved on average £554,000 from 2013 to 2018. There was no belt-tightening there, either. [Interruption.]

[Madam Deputy Speaker (Mrs Eleanor Laing)]

Order. Members must not shout at the hon. Gentleman.

[Peter Dowd]

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—

[Several hon. Members rose—]

[Madam Deputy Speaker (Mrs Eleanor Laing)]

Order. The hon. Gentleman is not going to give way. Please allow him to finish.

[Peter Dowd]

The facts do rile them, don’t they? They have asked for facts all afternoon. Then they get a few and they just don’t like them. I shall be coming to a close very shortly. It is as simple as this. Fortunately, at least the public now have a clear choice between the two parties: a Government of the past wedded to a failed ideological nightmare, or a Labour party that will govern for the many, not the few. Finally, is there any vulnerable group or person that this self-obsessed, clapped-out, washed-out, out-of-time Government are not prepared to attack?