Universal Credit

Damian Hinds Excerpts

Tuesday 13th March 2018 Commons Chamber

[The Secretary of State for Education (Damian Hinds)]

There are sometimes days when Ministers have to come to this House to defend difficult decisions that have had to be made, but this is not one of those days. Today, we are talking about increasing spending and widening eligibility. I would never dream of accusing any Member on either side of seeking to mislead the House, but I will make a more general point: the mere repetition of a falsehood does not turn it into the truth.

We have had fully 24 Back-Bench speeches in this debate, and I will seek to respond to as many as I can in the short time available. There are five main elements to our support in early years and childcare, and each one is a bigger offer than under Labour. First, there are 15 hours a week of free early education for disadvantaged two-year-olds. There was no such entitlement under Labour. Today’s regulations amend the eligibility criteria, introducing an equivalent earnings threshold of £15,400, which typically equates to somewhere between £24,000 and £32,000 in total household income. By 2023, we estimate that around 7,000 more children will benefit from the entitlement compared with the previous system.

Secondly, there is the universal 15 hours a week free childcare for three and four-year-olds—more hours than under Labour and now with the early years pupil premium, which was also not available under Labour. Thirdly, there are an additional 15 hours for working parents, and guess what? No such offer existed before 2010. Fourthly, up to 85% of childcare costs can be reimbursed through universal credit, which is a higher percentage than was ever available under tax credits. Finally, tax-free childcare will provide support for nearly 1 million more families than the existing vouchers scheme.

[Emma Little Pengelly (Belfast South) (DUP)]

Given the concerns raised across the House about the April closure of the childcare vouchers scheme, does the Secretary of State agree that the closure should be delayed to allow for those concerns to be addressed?

[Damian Hinds]

I have heard the concerns about the timing, and I can confirm that, following the hon. Lady’s representations, we will be able to keep the voucher scheme open to new entrants for a further six months.

Tax-free childcare will mean that more people become eligible, regardless of their employer and including the self-employed for the first time. The hon. Member for Ashton-under-Lyne (Angela Rayner) raised concerns about families having to pay childcare costs up front, but I reassure her that the flexible support fund is available to help in such cases.

[Lucy Powell]

Will the Secretary of State give way on that point?

[Damian Hinds]

I am short of time, so if the hon. Lady will forgive me, I will come back to her if there is time.

Turning to free school meals, we have extended the availability of free meals since 2010, going much further than Labour. The Conservative-led coalition extended free meals to disadvantaged students in further education institutions and introduced universal infant free school meals. We are investing £26 million in a breakfast club programme over the next three years, using the soft drinks industry levy.

When universal credit was introduced, we made clear our intention to set new criteria for free school meals, as my hon. Friend the Member for Fylde (Mark Menzies) rightly pointed out. We stated that intention in our response to the Social Security Advisory Committee report on passported benefits in March 2012. We repeated it in April 2013, when we introduced a temporary measure enabling all universal credit families to receive free school meals during the early phase of universal credit, and we have repeated it again several times since, as my hon. Friend the Member for Croydon South (Chris Philp) mentioned. We are now, as we always planned, introducing new eligibility criteria to ensure that those entitlements continue to benefit those who need them the most.

Under our new regulations, we estimate that by 2022 around 50,000 more children will benefit from a free school meal compared with the previous system. The hon. Member for Washington and Sunderland West (Mrs Hodgson), who is shaking her head, asked about the methodology, as did the hon. Member for High Peak (Ruth George) and, I believe, the hon. Member for North West Durham (Laura Pidcock). We responded to the Social Security Advisory Committee on that exact point, and it put the information into the public domain.

[Lucy Powell]

Will the Secretary of State give way?

[Damian Hinds]

I cannot. No child who is receiving free meals now or who gained them during the roll-out of universal credit will lose their entitlement during the roll-out, even if family earnings rise above the threshold, as my hon. Friends the Members for Nuneaton (Mr Jones) and for Harborough (Neil O’Brien) mentioned. Once roll-out is complete, those children will be protected until the end of their phase of education—primary or secondary—as my hon. Friend the Member for Charnwood (Edward Argar) reminded us.

The protection arrangements will enable hundreds of thousands of children to continue to receive a meal during the roll-out, even if family earnings exceed the threshold. The £7,400 threshold relates to earned income, and it does not include additional incomings through universal credit. Depending on their exact circumstances, a typical family earning around our threshold would have a total annual household income of between £18,000 and £24,000.

The hon. Member for Manchester Central (Lucy Powell) said that the threshold was arbitrary. It is not arbitrary; the thresholds for these passported benefits are set at such a level as to hold the eligibility cohort steady, except that in the case of free school meals we took the decision to make it somewhat more generous than the previous system. The threshold is comparable, by the way, to that in the approach in Scotland, where there is a net earnings threshold equivalent of £7,320.

It is simply not true to say that we are introducing a cliff edge; there has always been one. The simple fact is that a child either gets a lunch or does not. A plate of food does not lend itself well to being tapered, as my hon. Friend the Member for South Cambridgeshire (Heidi Allen) has said. Some have suggested that we could convert the benefit into cash—that is true, of course—so that we could have a taper, but the whole point of free school meals is to guarantee that an individual child will receive a nutritious and healthy lunch.

Extending eligibility to all children in households on universal credit would result in around half of pupils becoming eligible. We estimate that that would cost in excess of £3 billion a year more by 2022. The additional meal costs alone, excepting the deprivation funding, would be in excess of £450 million a year—quite close to the figure mentioned by the hon. Member for Washington and Sunderland West. I reiterate that eligibility is going up, not down, as my hon. Friend the Member for Middlesbrough South and East Cleveland (Mr Clarke) said.

I am running short of time, so I will turn to the regulations on universal credit. My right hon. Friend the Secretary of State for Work and Pensions earlier outlined the changes in these regulations for UC. They include the removal of waiting days, which will put an average of £160 extra in people’s pockets and get them into the monthly routine sooner, and an additional two weeks of housing benefit to smooth the transition to universal credit. That one-off, additional, non-recoverable payment is worth an average of £233 to 2.3 million claimants over the roll-out period. Those measures form part of the £1.5 billion package of reforms that the Chancellor announced at the Budget. My hon. Friend the Member for Mid Dorset and North Poole (Michael Tomlinson) said that he was surprised to hear that Labour Members would be voting against those measures. I suggest that their constituents will be even more surprised.

[Paul Masterton]

Wil my right hon. Friend give way?

[Damian Hinds]

I hope my hon. Friend will forgive me if I do not; we are very short of time. As my hon. Friend the Member for Lewes (Maria Caulfield) reminded us in her unique style, the Government are committed to tackling injustices, removing barriers and widening opportunity. Because of the strong economic management that my right hon. Friend the Chancellor recapped for us earlier, we are able to continue our bold and ambitious programme of social reform extremely quickly.

[Emma Little Pengelly]

Can the Secretary of State confirm clearly for the House—this is very important—that the six-month delay in the closure of the childcare voucher scheme will be used to address concerns and issues that have been raised in the House today?

[Damian Hinds]

I already confirmed that we would have this period to reflect concerns and to allow the bed-in.

Our approach is working, including through advances in education, ensuring everyone can get the best start, unprecedented investment in childcare to support career choices and household budgets and universal credit, helping people into work, faster. In this generation, we have employment at record levels, household incomes at record levels and income inequality down. For the next generation, we have major improvements in the early years foundation stages, 1.9 million more children in good or outstanding schools and a 10% narrowing in attainment between the rich and poor. Today’s legislation continues this important work. I am proud of the enhanced support we are offering families through these programmes, and I commend the regulations to the House.

Question put.