Welfare Reform and Work Bill (Third sitting)

Damian Hinds Excerpts

Tuesday 15th September 2015 Public Bill Committees

[The Chair]

A quick question from Mr Hinds, and then we will move to Emily Thornberry.

[Damian Hinds (East Hampshire) (Con)]

Q 191 All the panel have talked about low income as a driver of poverty, and that is for obvious reasons. It is almost a truism. First, could you confirm whether it is your understanding that those measures of income will of course still be measured? Secondly and more importantly, when trying to tackle child poverty, should the Government have not just a target but a relentless focus on maximising employment, supporting parents as they increase their hours, particularly through childcare, and making a very significant increase in the legal minimum that people can be paid, ultimately tied perhaps to 40% below median income?

Professor Gordon: The Minister has said that they will still publish the HBAI, and that the Family Resources Survey on which it is based will still go ahead. I do not know whether that will change in the future. Alternative survey data that the UK has to collect as part of the national accounts on expenditure and income have been used in the past. So you will be able to cobble together something, even if the Minister changes his mind about the HBAI, but the UK would become an international joke if it stopped measuring income and low income.

[Damian Hinds]

Q 192 And what else should the Government be doing?

Dr Callan: We have to hit this in every way, not just education and worklessness, terribly important though they are. I have already mentioned addressing family breakdown, addiction, serious personal debt, mental health and poor housing— anything that is driving children’s poor life chances. So, more.

Alison Garnham: It is a no-brainer. As you said, it is a no-brainer; we need to look at low income, because that is everyone’s common understanding of what poverty is. It is also a no-brainer that we need to look at maximising employment, supporting parents and so on. We used to have to write strategies, and that is what we will lose with the Child Poverty Act—

[The Chair]

I am sorry. You’re nodding, you’re happy, I have to conclude this in five minutes’ time under Standing Orders and I must give Emily Thornberry the last couple of questions.

--- Later in debate ---

[Emily Thornberry]

In the way that it is being introduced.

Julia Unwin: The way that the benefit cap is being introduced has huge implications for childcare costs, and we know that reliable childcare is the only way for parents to get back into sustainable work. It also has huge implications for housing costs, which will make some parts of the country uninhabitable for people on benefits.

Dr Niemietz: This links back to what I said earlier. It seems to me that the benefit cap is really just a clumsy way of capping housing benefit. There is actually no way in which someone could substantially exceed that cap unless they are in receipt of housing benefit, and probably in receipt of fairly large sums. This is a roundabout way of capping housing benefit, whereas, as I said before, I would have started at the other end. Build enough houses, and you will not need a cap of that kind any more, because rents will fall automatically and housing benefit rates will fall with them.

[Damian Hinds]

Q 209 I want to ask Julia a quick question for clarification. We were talking earlier about single parents, and we have talked about the importance to tackling poverty of being in work and having access to enough hours. Obviously, a big part of that is ensuring that childcare support is there. You talked about the childcare allowance in tax credits. Can you talk us through your understanding of the full set of childcare changes to come?

Julia Unwin: As I understand it, by introducing a childcare allowance, the Government made big steps to enable people to go back into work. However, by making that part of the cap, we have reduced its value. In some parts of the country, and in London specifically, the costs of childcare have gone way above what can be covered by that allowance.

[Damian Hinds]

Q 210 Sorry, I was asking about the full set of childcare changes to come: the 30 hours offer in universal credit and so on.

Julia Unwin: The 30 hours offer, on its own, does not provide enough time to enable a parent to work full-time, and the evidence is that that is what you are required to do.

[Damian Hinds]

Q 211 I am not trying to put words in your mouth, but it is clearly 15 hours more than 15 hours. The subsidised 70% can therefore come on top of that. Is there also a change coming, to the best of your knowledge, in terms of the proportion of reimbursement under universal credit?

Julia Unwin: I am showing my ignorance on the third part of your question. On the first two bits, yes, absolutely. We see those as steps in the right direction and a serious intent about childcare. I am posing a warning about what it might mean in practice.

[Damian Hinds]

For the record, Chair, under universal credit, the 70% rises to 85%.

[The Chair]

I am sure we will be hearing more about that over the next few weeks. Dr Niemietz, did you want to comment on that?

Dr Niemietz: That is an issue where I would have started from a different angle by asking why childcare is so expensive in the first place. For a long time the argument has been that we have to raise childcare subsidies to Swedish or Danish levels and the problem will go away but, in terms of total tax spending on childcare subsidies, we are already at Swedish and Danish levels. The difference is in unit costs. Here, it is not just the taxpayer who spends a lot on childcare. It is also the actual user. People pay twice: first in their role as taxpayers and then again in their role as childcare consumers. I would start by looking at the structural drivers of costs in that sector—which those are, I cannot tell in detail, but there has to be something. There has to be a reason that the UK spends more on childcare subsidies than almost all of continental Europe and without having higher usage rates.

Julia Unwin: Part of the reason is that ours is a purchase system, not a provided system. We have a patchwork of childcare benefits and a patchwork of childcare provision. That has turned out to be expensive. To drive high quality will cost in different ways.