Welfare Reform and Work Bill

Baroness Hollis of Heigham Excerpts

Monday 7th December 2015 Lords Chamber

[Baroness Hollis of Heigham (Lab)]

I was not going to add to the very powerful opening speech by the noble Baroness, Lady Meacher, but I will just say to the Minister that, when he faced a similar problem with housing and the cut in benefit to those with a so-called spare bedroom—I refer to the bedroom tax—the Minister understood the degree of disquiet around the House and invested in discretionary housing payments, which he increased and increased. In other words, there was a recognition that there needed to be some head space in the system for dealing with difficult issues, many of which we have discussed today. I suggest to him that we have had so many of those in the previous amendments and most powerfully again on the issue of disabled children that he should seek a similar discretion which then the Government can come back with in proposed draft regulations which the House can discuss before they then become part of the legislative process by the time we get to Report.

[The Earl of Listowel (CB)]

My Lords, I support my noble friend Lady Meacher in her amendment, which she so eloquently moved. A couple of years ago a woman called Stacie visited Parliament to talk to your Lordships in preparation for a childcare Bill. She talked about her difficulty, as a mother of a disabled child, in finding appropriate childcare. I think she went through more than 20 childcare providers who just said, “Look, we cannot deal with the needs of your child”. Eventually she found a very good provider that was prepared to go the extra mile. I know that this is an issue we have to take seriously and are looking to improve in terms of making childcare more easily accessible. It continues to be a problem. So there is that additional issue that I would highlight to your Lordships.

My noble friend also highlighted the fact that so many of these women are bringing up disabled children on their own. I invite your Lordships, women and men, to think about trying to bring up a child on your own when that child has a disability. The risks of isolation, of being overwhelmed—all those things must be exacerbated.

The Minister, in the early discussion about popular feeling with regard to taxation, made his response. It made me reflect a little that perhaps part of the way the public sees these issues is mediated by how the Government present them. I encourage the Government to be very careful, and I hope that this will not be taken the wrong way. On Saturday morning I was speaking to a mother with a two week-old baby, and she was speaking with another mother. The other mother, perhaps a little unkindly, because this two week-old baby had an elder sister, who was three, said, “Has the older sister started trying to kill her yet?”. What this highlighted for me is that it is such a basic element of human nature to be envious, to resent something that somebody else has, that one has to think through very carefully how one presents sharing resources with somebody else, or giving resources to somebody else and not giving it to another person. I am afraid that that may not come across very well. I say to the Government that I hope they are being very careful about how they present these things.

--- Later in debate ---

[The Minister of State, Department for Work and Pensions (Lord Freud) (Con)]

I thank noble Lords for this debate and, particularly, I heard the point made by the noble Baroness, Lady Meacher, about how the lone parent—the mother—is so often left on her own with a disabled child. That is a very moving point and clearly rings true.

Perhaps I may look at the technical position. Amendment 3 would exempt those families who have at least one disabled child from the policy which limits support to two children. The intention of this amendment is to allow families with a disabled child to claim the child element of child tax credit for an unlimited number of children. Under Amendment 19, that intention would apply to both tax credit and universal credit. I should point out, as a matter of information, that the difference in having the child element allowed for a third child is not actually that great, if you look at the statistics. That is because the number of parents who go on to have more children is actually very few, as the noble Baroness, Lady Meacher, will probably know, so there is not a lot of difference in the cost. I know that she will appreciate the thinking behind that point. Amendment 8, meanwhile, which goes on to the point about paying the child element, is technically a bit misdrafted, but I know that the intention of the amendment is to allow that child element to be paid.

The noble Baroness, Lady Sherlock, drew on the issue of whether a choice has been made. Clearly, we have considered the issue of disabled children carefully and looked at the challenges which these families face. We are committed to supporting those families with disabled children by paying the disability element of child tax credit and the equivalent in universal credit. That is true for all disabled children, although there are in practice rather few—I mean that there will be some, but relatively few—so, however many there are, it will be for not just the first disabled child but all of them. From what I am hearing, I think that the debate is now around the child element as well as the disability element and that that is where the differences lie in practical terms.

I acknowledge broadly the figures to which the noble Baroness, Lady Meacher, drew attention in regard to the reduction without the child element. When that is in UC as a unified benefit, it will be only one part of the total payment. On the amount that the family gets, the reduction will be much less than the “down to a quarter” figure to which she was referring. On top of the disability element that we are exempting, we are exempting from the benefit freeze all those benefits which relate to the additional costs of disability, including PIP and DLA.

On Amendment 19, which would create a duty for an appeals process, I repeat the point that I made earlier: we already have comprehensive appeal arrangements and therefore do not need this amendment.

The noble Baroness, Lady Lister, made a point about what happens to HBAI figures. As we have found out year after year, it is impossible to predict with accuracy future HBAI figures. As is customary, the noble Baroness, Lady Hollis, has a solution to it all, but I am not convinced that the discretionary approach would be the optimum one in this area. Whatever happens, I do not think that any kind of solution would come from that.

[Baroness Hollis of Heigham]

Given the amendments that we have debated so far—in the first group, the second group and now this one—what proportion of the estimated £1.3 billion in savings that I think the Government were expecting to make from this would therefore be lost to the Government?

[Lord Freud]

I am simply not in a position to deal with what are entirely hypothetical issues. I am not in a position today to offer very much satisfaction in these areas, as noble Lords know.

[Baroness Hollis of Heigham]

Can I push the Minister on this? In earlier debates, he was saying that the two main drivers for these proposals on the two-child policy were, first, the need to get financial control—he quoted very large figures that he expressed great concern about—and, secondly, the need to produce a level playing field between working families and non-working families. He must know the cost of all these amendments, because he will have had the briefing from the Box about them, but I have not heard him tell us that. How much would the cost be of the previous exemptions and, in addition, the exemptions referred to so powerfully by my noble friend Lady Pitkeathley and the noble Baroness, Lady Meacher? How much of those savings would the Government lose if they were to meet the exceptions that all the Committee has, so far, argued for today?

[Lord Freud]

I am not in a position to answer those questions because I have had all kinds of amendments tabled—including one from the noble Baroness, which would remove the policy and lose all of the £1.3 billion. I am not in a position to go through the exemptions at this stage like that.

[Baroness Hollis of Heigham]

So are the Government really saying, “We are opposing amendments because we can’t afford them”, but do not know what they will cost?

[Lord Freud]

I have given out as much information as I can on the questions at this stage and indicated what the relative positions are. On this amendment in particular, I was careful to make it clear that there is not a huge difference in cost terms—and I will double-check this—between allowing a child element for the disabled and exempting the family which has a disabled child. That is the main cost implication which I have been able to provide today.

--- Later in debate ---

[Lord Freud]

Can I look at that? I am not sure quite how much of this is in my own purview. If I can, I will.

[Baroness Hollis of Heigham]

I am amazed this information was not available at the Commons stage of this Bill, given it has been discussed in Parliament for several months— I think it was back in July that Second Reading took place—and to still not to know these figures surprises me enormously. While the Minister is being helpful in producing information, given that we know that 85% of the welfare cuts proposed by the Chancellor will fall on women and given we know that nearly all the “victims”—the recipients of concern in the exempted groups that we were talking about in previous amendments—are women, will he also do us a gender breakdown? He is absolutely right, as other noble Lords have also said, that it is usually the mother who is left caring for disabled children. I remember meeting vaccine-damaged children—part of the Minister’s responsibility, I think—and every parent there with a disabled child was a woman. Can I ask the Minister if he will add a gender analysis to the financial analysis of where some of these cuts fall and who the exemptions, therefore, would help to protect?

--- Later in debate ---

To my mind, this is a very harsh way of treating some of our poorest, often working families. I very much regret that the Government are taking this step. I hope that we can reduce the harm in the way that the noble Lord, Lord Kirkwood, referred to. Having listened to this debate with its very well-informed contributions, though, I feel more concerned than I did when it began.

[Baroness Hollis of Heigham]

My Lords, this is a Bill that my noble friend Lord McKenzie has gone on record as saying—and I certainly support him in this—is one of the most wretched that he has known in this House. Most of it deals with cuts that many of us find objectionable because they fall on the poorest and most vulnerable in our society. We will oppose those, and on Report we will try to persuade the Minister to make some mitigation if that is possible.

However, the two-child policy is of a different order from the issue of cuts, primarily because it is saying to those families who have a third child, “We are hugely increasing the odds that you as a family will descend into poverty, that your poverty will be persistent, that you will not be able to get out of it and that your children will carry that poverty into the next generation”. We know this to be the case, yet the Government, and the Minister on their behalf—I cannot believe that his heart is in this—are actually willing to go down a policy route that knowingly sends poor children into longer, deeper and more persistent poverty, not only for their childhood but for a substantial chunk of their adulthood as well. We know that the children of poor parents are twice as likely to be poor at the age of 30 as others of the same age, yet the Government are going down a route that, to me, is deeply morally offensive. As opposed to the cuts, over which we have argued and will continue to argue, this seems to be a knowing castigation of poor children into permanent poverty for sums of money that we do not even have any evidence for. I say to the Government that they really should not go down this path: it is a damned path to go down.

[The Lord Bishop of Portsmouth]

My Lords, I express my strong concern about these clauses remaining part of the Bill. I offer three straightforward and, I hope, succinct comments: first, about the implications of these clauses; secondly, about the motivation of parents that is implied; and, thirdly, about where responsibility lies.

First, the Government place great emphasis on choice and personal responsibility for family size. I have to say that that assumes a remarkable assumption about the fail-safe effectiveness of contraception—or, if not, an apparent willingness for abortion to be appropriate as a sort of emergency contraception to keep family size to two children. I doubt the assumption, and would deeply regret driving people to seek termination on economic grounds. Is that really what the Government wish?

Secondly, over 35 years now I have played some part alongside others in preparing engaged couples for marriage and have often heard myself saying, “If you wait until you are sure you can afford children, you will never have them”. Religious traditions other than my own go further and specifically enjoin the blessing of children and family life. Are the Government aware of how these clauses will be received?

Thirdly, as I mentioned earlier in Committee, we—that is, a number of faith groups and organisations—made clear, in a letter circulated to all Members of the House prior to Second Reading, our belief that children are a blessing and not burdensome, a problem or a difficulty. To consign a child to being a financial problem over which the child himself or herself has had, and has, no control is indeed a singular responsibility—a responsibility for the mother and father indeed but, if these clauses go forward, it is a responsibility in which we shall all share. How sad it will be that a child growing up, becoming increasingly aware, will one day hear or discover that he or she is responsible in part for the family’s level of income simply by having been born. Although the Government seem to place that responsibility wholly on parents, I fear that the responsibility for this change would rest with us all. Is that what the Government want, and are we all prepared to accept that responsibility?

[Lord Freud]

My Lords, Clauses 11 and 12 introduce the Government’s reform to the child element of child tax credit and universal credit, which was announced by the then Chancellor in the Summer Budget of 2005. The purpose of child tax credit is to provide support to low-income families to help them with the cost of raising children, while universal credit, which replaces the child tax credit, is a unified benefit that provides support to low-income families both in and out of work. As it is being rolled out across the country it is providing a clearer and simpler system of support for families and provides real incentives for work. However, it is important that universal credit is kept on a sustainable basis and encourages families to make similar decisions to those who support themselves fully through work. The Government believe that child tax credit has become unsustainable, with expenditure trebling in real terms between 1999 and 2010, and going up the income scale to a level where a family with three children earning up to £40,000 will still be eligible for support. Last year the Government spent almost £30 billion on tax credits.

I will deal with the issue raised by the noble Baroness, Lady Sherlock, on the dependency ratio. In recent decades Britain has had a higher total fertility rate than the average of the older EU member states. Most families will not be affected by this measure. The mean number of dependent children per family is 1.7, and 86% of families have one or two dependent children. In fact, those families with two or fewer children are remarkably stable, whether they are lone parents, at 88%; opposite-sex cohabiting couples, at 87%; or married couples, at 84%.

[Baroness Hollis of Heigham]

My Lords, the point my noble friend was making was not just about replacement fertility rates. Given the time all of us hope to live longer, one of the responses of government has been to say that unless we can improve the worker-to-pensioner ratio we have to defer the age at which people begin to draw their state pensions, even if they have had hard lives previously. We do not have the resources to pay for it from existing workers as we do not have enough of them to sustain that pensioner support in the future. Nothing the Minister has said has challenged that.

[Lord Freud]

We are going way off the core issues by looking at the times people retire. A lot of things are changing, and it is almost impossible to fine-tune for that.

I will address the challenge set by the noble Baroness, Lady Sherlock, on what our rationale for this is. It is very simple: the Government want to ensure that the system is fair to those who pay for it as well as those who benefit from it. That is the government position. I should add that the Bill should not be taken in isolation. We are introducing a number of measures to support households in work by reducing income tax through increasing personal allowances, increasing wages and increasing free childcare.

The right reverend Prelate the Bishop of Portsmouth and the noble Baroness, Lady Sherlock, raised the issue of those areas where there is a cultural disposition for larger families. To that, we make the point that all families need to think carefully and ensure that they can afford to provide for a new child in their household.

I make it clear that these changes will not mean a reduction in entitlement for those families already receiving child tax credit for children born before the 6 April 2017. In universal credit, for families already receiving the child element of universal credit, the changes will apply only to children joining the household on or after that date. I think that we have another amendment on which we can go into that in more detail.

Families moving to universal credit from child tax credit and receiving child tax credit for more than two children, and families claiming universal credit within six months of a previous universal credit or child tax credit claim that included the child element, will continue to be able to receive the child element for those children.

On the point raised by the noble Baroness, Lady Lister, on the EHRC, as she knows, the Government set out their assessment of the impacts of the policies in the Bill on 20 July, and the memorandum to the Joint Committee on Human Rights was published on 8 September. Ministers have considered impacts with regard to all the relevant legal obligations when formulating the welfare policies announced in the Bill. The intended impact of these reforms is to incentivise work and ensure that work always pays.