Benefits: Reductions

Baroness Drake Excerpts

Thursday 1st November 2018 Lords Chamber

[Baroness Drake (Lab)]

My Lords, I too congratulate my noble friend Lord Bassam on securing today’s debate and on his powerful contribution. The debate, with so many excellent contributions, has drawn out very clearly the need to look at social security as a whole and at the impact that it has on the day-to-day life that people and families in the UK lead, not just as a spreadsheet of discrete numbers.

In the recent Public Accounts Committee report on universal credit, some of the most striking criticisms were that the department has “persistently dismissed evidence” and,

“refuses to measure what it does not want to see”.

I am sure that the Minister has listened carefully to every contribution today, even where it has been of a nature that the Government might not wish to hear. Discussing what a system aspires to achieve is but one element; assessing the evidence of actual outcomes is quite another.

Four million children—30%—live in poverty in England according to the Child Poverty Action Group. In Wales, the figure is 200,000. The Institute for Fiscal Studies predicts a further increase of 400,000 by 2021. The Equality and Human Rights Commission estimates a higher number, at 5.5 million children. One can vary the data source, but that does not vary the message: levels of child poverty are rising. Falling state support for those on low incomes, cuts to benefits and tax credits, rising household debt, rising private sector rents, a labour market with more part-time or self-employed workers or workers on insecure contracts are pushing children into poverty. Most of the projected increase in absolute poverty is due to the two-child limit on child benefits.

Child protection inquiries have risen by over 150% and the number of children in care is the highest since the advent of the Children Act 1989. Perhaps I may quote from the Children’s Commissioner briefing, which states that the,

“biggest losers under universal credit are …families with children, especially single parents. The Government have never fully justified this. When presented with … IFS and Resolution Foundation research, the …Secretary of State … said there would be ‘winners and losers’. There is no clear rationale for making children the losers when they already have higher levels of poverty”.

David Cameron, in announcing the family test in August 2014, said that he wanted to introduced a family test,

“as part of the impact assessment for all domestic policies … that means every single domestic policy that government comes up with will be examined for its impact on the family”.

Few family test results have been published.

The Care Crisis Review was facilitated by the Family Rights Group and funded by the Nuffield Foundation. It captures the complex contributions at play and recommends that the DWP and DfE should lead a review into the impact of benefit rules and policies, and the projected effect of benefit changes on children entering or remaining in care. The Child Poverty Action Group calls for a root-and-branch review of universal credit, echoing concerns expressed by the Children’s Commissioner, the Resolution Foundation and many others.

The funding announcement in the Budget this week for some claimants of universal credit is welcome, but it is a kind of recognition by the Government that their flagship scheme is not working in all parts. What is missing is an admission that much more has to change. There are flaws in the design and the delivery of universal credit. Unacceptable and unrealistic waiting times, rent arrears, single household payments and the impact on domestic abuse victims are just a few of the issues that people are facing. This system is causing anxiety and hardship wherever it is rolled out. Can the Minister tell the House what plans the Government have to recognise these issues and overhaul universal credit to make it fit for purpose?

The Budget was a missed opportunity to bring children in from the cold. Child benefit—core money for struggling families in and out of work—will have lost nearly a quarter of its real value by 2020. I agree that jobs and enterprise are important, but increases in employment cannot conceal that two-thirds of poor children have parents in work. The noble Lord, Lord Livermore, demonstrated so ably that higher personal tax allowances are not pro poor children. The increases in the Budget are very small against cuts introduced since 2015 and still to come. The benefit freeze continues. Since 2010, £37 billion of funding has gone from social security.

I would like to take a little time to refer to the 200,000 children in kinship care. The Care Crisis Review concludes that,

“a significant untapped resource … exists for some children in and on the edge of care, namely, their wider family and community … supporting this resource could safely avert more children needing to come into care or could help them thrive in the care system”.

Kinship carers try to provide stable homes with little or no financial support, often giving up their jobs for often traumatised children who would otherwise go into the care system. A recent survey by Family Rights Group and Grandparents Plus found that for 94% of such carers, caring had caused financial hardship, despite keeping children out of care and saving the state millions of pounds; and 41% of those receiving some form of local authority allowance have had it reduced or removed.

Notwithstanding the commitment that children in kinship care would be exempt from the two-child limit on benefits and tax credits, the Government still penalise some kinship carers, including siblings who were raising their younger brothers and sisters and who subsequently had a child of their own. Child Poverty Action Group had to go to the High Court to win the declaration that government policy was perverse and unlawful. The Budget rectifies that unfairness from November 2018, but I ask the Minister whether it will be retrospective to when the two-child limit was introduced.

For some families, exempting kinship care children from the two-child limit provides little relief if the additional benefits are restricted by the benefit cap. Kinship care and adoptive households should be exempt from the benefit cap. In keeping with the Care Crisis Review, the Government should at least discount income received from tax credits and child benefit for kinship care children from the benefit cap and add it to the list of benefits that are not treated as income when the cap is calculated.

Finally, I too wish to pay tribute to the amazing Baroness Hollis, her wonderful achievements and unquenchable commitment to those less well off—from supporting black workers at Selma when a young undergraduate, to winning literary prizes and taking on the Government over cuts in tax credits. My noble friend Lady Sherlock and I were privileged to be her roommates for eight years and to witness her extraordinary mental and physical resilience and generosity of spirit in the face of what became an overwhelming illness. Patricia rooted her contribution in the reality of people’s experience. Her benchmarks always included what it would like to the single mum in Norwich, her beloved city. The single mums of Norwich and across the UK had a doughty fighter in Patricia. O that she were here today to do justice—far more than I can do—to the issues that she cared about. My noble friend Lady Sherlock and I were ringside as she prepared for the battle with George Osborne on the statutory instrument on tax credits. Her determination, eloquence and intellect were awesome, even though she was so unwell. We were proud of her. We had had many private and moving conversations in the sanctuary of our little office. She was an extraordinary woman.