Social Security (Contributions) (Rates, Limits and Thresholds Amendments and National Insurance Funds Payments) Regulations 2019

Debate between Baroness Lister of Burtersett and Lord Bates

Monday 11th February 2019 Lords Chamber

[Lord Bates]

My Lords, I thank the noble Baronesses, Lady Janke and Lady Sherlock, for their questions on these important orders. I do not dissent at all from the assessment by the noble Baroness, Lady Janke, that we are talking here about some of the most vulnerable people in society, and therefore that our approach should be extremely focused.

Nor, though, would I want the accusation to stand that we have been somewhat impassive to the needs of people in the circumstances in which they find themselves, because one of the greatest routes out of poverty, as we all know, is that of employment. This may not be very helpful, but the noble Baroness referred to my noble friend Lord Young taking these orders through last year. At the time he mentioned the increase in employment, which is now at record levels—I am sure that she, being fair-minded, would recognise that as being something that is helping the poorest in our society immensely; the reform of benefits to ensure that work always pays; and some of the important measures that have been taken, not least the national living wage, the increase in which by 4.9% to £8.21, significantly above CPI, will mean an increase in full- time wage workers’ annual earnings of over £690. Unemployment has fallen by over 1.1 million since 2010.

At the time when my noble friend took the orders through, we made a serious point and there was a rationale for the arguments being made for welfare reform. From 1997-98, welfare spending rose by £84 billion in real terms—

[Baroness Lister of Burtersett (Lab)]

I am sorry to interrupt, and I am sorry that I missed the beginning of the Minister’s statement. Before we move on to the more general question about spending, I do not think he has addressed my noble friend’s point. Given that paid work is supposed to be the best route out of poverty, why are the Government freezing the tax credits paid to people in paid work?

[Lord Bates]

That decision was taken through the 2016 Act that I mentioned in my introduction. It was taken then as part of the need to get our public finances into the right order. That was the rationale for it. I say to the noble Baroness, who is someone else who cares immensely and focuses on these areas, that that was the rationale that we used at the time.

On the specific questions, I turn to the point about CPI that was raised by the noble Baroness, Lady Sherlock. She said the previous Government had announced in the Summer Budget of 2010 that CPI would be used for the indexation of benefits and that they would review the use of CPI for the indexation of taxation and duties. Consistent with that, the default indexation assumption is CPI. RPI is no longer recognised as a national statistic.

The noble Baroness, Lady Janke, asked about the impact of the benefit freeze. The Government are committed to taking action to help the most disadvantaged, with the focus on tackling the root causes of poverty. Our welfare reforms are incentivising work and supporting working families. Since April 2016, the universal credit childcare element has covered up to 85% of eligible childcare costs. We will be investing over £6 billion a year in childcare by 2020. Since 2010, 300,000 fewer children are living in absolute poverty and 630,000 fewer children are living in workless households—a record low. We are committed to helping lone parents to find work that fits around their caring responsibilities. We have extended free childcare for three to four year-olds for working families to 30 hours a week, with over 340,000 children benefiting in the first year.

The noble Baroness, Lady Sherlock, asked some specific questions, which she very kindly said that she would give me the opportunity to answer in writing. If that is acceptable, I will write to her and copy in the noble Baronesses, Lady Janke and Lady Lister, who have also spoken in the debate.

Brexit: Economic Effects

Debate between Baroness Lister of Burtersett and Lord Bates

Wednesday 21st November 2018 Lords Chamber

[Baroness Lister of Burtersett (Lab)]

My Lords, in a statement last week, the UN rapporteur on extreme poverty and human rights said that Ministers were treating,

“the impact of Brexit on … poverty”,

as “an afterthought”. What assessment are the Government making of the likely impact of Brexit on the very high poverty levels in this country?

[Lord Bates]

Many people looked at the special rapporteur’s response, but also at the fact that the number of people in poverty has been steadily falling, that the number of children in poverty has been steadily falling, that employment is at record levels, that growth is on the up, that inflation is on the down, that our exports are rising and that growth and opportunity are there for jobs and education—which are the best routes out of poverty.

Benefits: Two-Child Limit

Debate between Baroness Lister of Burtersett and Lord Bates

Monday 26th March 2018 Lords Chamber

[Lord Bates]

I pay tribute to the work that the right reverend Prelate does as an advocate for children among the Bishops and his consistent interest in this. The change in policy that he is referring to in effect came in at the beginning of April last year. We have said we will look at the statistics as they are gathered over a period of time and keep them under close review, particularly in relation to the exemptions, and will publish information on that. Ultimately, in the short term, the key message that we want to send is that the heart of the policy was built on the principle that work should always pay and that people should always be better off if they are working. The fact that we have near-record levels of people in employment, which is continuing to happen, is some evidence that the policy is working, but we need to keep the specific effect of this particular change under review, and we will.

[Baroness Lister of Burtersett (Lab)]

The policy is affecting those in work in particular. The Government claim that their policy-making gives primary consideration to the best interests of the child, in line with the UN Convention on the Rights of the Child. Can the Minister explain how the policy fulfils that principle, when all the independent analysis indicates that it will worsen child poverty significantly in addition to the increase in relative child poverty among larger families, particularly among certain ethnic minority groups and those in paid work?

[Lord Bates]

The benefit applies to those in work and those who are not. However, we were also seeking to introduce an element of fairness. People on very low incomes, in the low £20,000s , who may not have any children are forced to make very difficult decisions that impact upon themselves financially when they are about to have a child, and they will do so without any support—certainly child benefit, but also in terms of any additional support from the state. We feel it is only fair to them that other people ought to be in similar positions when considering whether to have a third or subsequent child.