Working Tax Credit and Universal Credit: Two-Child Limit

Hywel Williams Excerpts

Thursday 21st April 2022 Westminster Hall

[Hywel Williams (Arfon) (PC)]

I am very glad to follow my friend, the hon. Member for Cynon Valley (Beth Winter), and the hon. Member for Glasgow Central (Alison Thewliss).

Ahead of the debate, I asked people what they thought of the two-child limit, and the responses were interesting, revealing and quite varied. People thought that it had been a short-term measure; that it had been withdrawn; that it had had little effect; and, most revealingly, some said, “I had just forgotten about it.” The point is that it had become supposedly normal; it had disappeared from public debates.

The two-child rule has indeed disappeared as a matter of public concern. It has become the unquestioned common sense of the system, but it remains an excruciating burden on families, particularly innocent children, who are subject to its evil effects and sometimes suffer as a consequence of the voluntary or involuntary actions of parents driven by religious or social beliefs on polygamy, contraception or abortion, for example; as a consequence of contraceptive failure or accidents; more sinisterly, as a consequence of patriarchal attitudes and oppression; or, even worse, as a consequence of the rules around rape, as we have heard.

I congratulate the hon. Member for Glasgow Central on securing the debate and for shining a light on a cruel and oppressive measure, bringing it into the light, if not the comfort, of truth’s flame—as the poet R. S. Thomas said in another case. I join her, the hon. Member for Cynon Valley and others in calling for the two-child rule to be withdrawn forthwith.

I hope hon. Members will forgive me, but this matter has a particular resonance for me as one of seven children, one of whom died in infancy. We were brought up in a council house—a very good council house built to high post-war standards—and we were fortunate in many ways, three of which I will refer to. First, my parents were extremely hardworking at a time of full employment, so we lacked for nothing. Secondly, we lived at a time of consensus on wide-ranging social provisions, so we had the health service, vitamins, glasses, free school milk and all the rest of it. We all went on to further and higher education, initial and higher degrees, professional qualifications, and professional careers, all of which was grant aided.

The third point about my family is that we were not subject to the two-child limit. Otherwise, I would scarcely be standing here today. There is always a danger of idealising the past in comparison with the wretched present. In Welsh, we say, “Teg edrych tuag adra”—it is a fine thing to look back at one’s home—meaning to look at the past with rose-tinted glasses.

The evidence shows a change in the provision, and it is very much a change for the worse. The two-child limit is a particularly bad case. The real point of my speech is that there has been a change in attitudes since 1979, I suppose—I referred to school milk a moment ago, and I do not have to emphasise the significance of that debate. There has been a change in the accepted common sense that we all owe a duty to each other—that a provision for one is a provision for all. That is, with very few exceptions, a common provision. The exceptions in earlier times would have been made on the basis of the violation of legal requirements, social and religious norms or on the judgment of moral turpitude. That was the accepted common sense, and there has been a change.

I will digress for a moment to mention part of my earlier career. Years ago I was a mental health social worker and would visit the psychiatric hospital at Denbigh, which served all of north Wales. In the back ward of that mental hospital there lived a dozen or so older women, mainly in their late 70s. They had been there since the 1930s; they were totally institutionalised and unable to leave. They were initially detained on the basis of “moral imbecility”; that is why they were locked up. They had had illegitimate children. Supposedly we do not make those sorts of moral judgments these days. However, I have to say that some of the arguments for the two-child rule—which will be familiar to many of us and I will not rehearse—have that flavour of moral condemnation. Those arguments are based supposedly on the common sense that they—that is, the generalised other—should take responsibility for the exceptions that prove the rule here. Well, those exceptions are surely irrelevant, and hence, so are the children who suffer—they are irrelevant as well.

I could make many further points about this general argument and I could talk about the practicalities. As we have already heard, Wales has the highest rates of child poverty of any part of the UK, at 31%. In 2021 14,800 households were affected by the two-child limit; 570 of those households were in Gwynedd, the county where my constituency is located. The Welsh Affairs Committee has published its report on the benefits system in Wales, which raised concerns about the two-child limit. It said that devolving powers to Wales—equivalent to those in Scotland—would mean that we could take real measures to tackle child poverty, such as the additional child payments for low-income families introduced in Scotland. I concede that that affects only a small part of the social security system, but it is much better than the situation that we face in Wales.

I could refer to the rationale behind the policy of ensuring that families receiving means-tested benefits should face the same financial choices about having children as those supporting themselves through work. However, we know that the majority of claimants—that is 56%—are actually employed. The arguments around people working or not, and having lots of children, are entirely bogus to my mind. My request to the Minister today is fairly simple. I ask him to signal a desire to move away from the supposed common sense of this policy and from the rationale that underpins it—the cruel rationale of less eligibility.

--- Later in debate ---

[The Parliamentary Under-Secretary of State for Work and Pensions (David Rutley)]

It is a pleasure to serve under your chairmanship, Mr McCabe; we have seen a fair bit of each other this week. I congratulate the hon. Member for Glasgow Central (Alison Thewliss) on securing this debate, on a subject on which I know she has campaigned at length. In fact, we have sparred on a few different issues, because this is not the only subject she has concerns about.

The Department for Work and Pensions is committed to supporting families and helping parents into work. Since this has come up in the debate, it is worth reminding colleagues of the 1.3 million vacancies available for people to find work. We want there to be strong work incentives to help people to fill the opportunities that are available, while providing support for those who need it. We also need to ensure that there is a sense of fairness for the taxpayer; many working families who do not receive benefits do not see their incomes rise when they have more children. That is why we judge that the policy to support a maximum of two children, whether that is with universal credit or child tax credit, is a proportionate way to achieve those aims. Our overall approach is working, as evidenced by the fact that between 2016 and 2021, the number of couples who are in employment and have children increased by 460,000; that is a 2.3 percentage point increase in the employment rate for that group.

The two-child policy was introduced five years ago. Since April 2017, families have been able to claim support for up to two children. There may be further entitlement for other children if they were born before 6 April 2017 or if an exception applies—I will come back to that in a minute. The child element of universal credit is worth £290 for the first child born before 6 April 2017. It is worth a standard rate of £244.58 per child for the second and any other eligible children. Child benefit continues to be paid for all children, plus the additional element in child tax credit or universal credit for any disabled children. The 2021-22 rates for the disabled child addition in universal credit are £128.89 per month for the lower rate and £402.41 per month for the higher rate. Additional help for eligible childcare costs through working tax credit and universal credit are also available, regardless of the total number of children in the household. We discussed that at length in the Work and Pensions Committee yesterday—although that feels like quite a long time ago.

We recognise that some claimants are not able to make the same choices about the number of children in their family. That is why exceptions have been put in place to protect certain groups. Exceptions apply to third and subsequent children who are additional children in a multiple birth; an extra amount is payable for all children in a multiple birth other than the first child. Exceptions also apply where the child is likely to have been born as a result of non-consensual conception, which for this purpose includes rape or where the claimant was in a controlling or coercive relationship with the child’s other biological parent at the time of conception. A further exception applies to any children in a household who are adopted when they would otherwise be in local authority care, or who are living long term with friends or family and would otherwise be at risk of entering the care system. Another exemption is where a child under the age of 16 who is living with their parents or carers has a child of their own—until they make a separate claim upon turning 16.

Statistics from the Office for National Statistics show that in 2020, 85% of all families with dependent children had a maximum of two in their family. For lone parent families, the figure was 83%. Based on the latest figures, 62% of households with a third or subsequent child who are in receipt of universal credit or child tax credit are not affected by the two-child policy.

[Hywel Williams]

The Minister has given a long list of the benefits available to people and some of the ameliorative procedures that have been put in place, but what is the actual effect of the two-child limit? Is he saying that it has no effect at all or that its effects have been ameliorated? What is the effect on the kids in those families?

[David Rutley]

The point that I am trying to make is that the benefits system is important—it provides support—but it is not the only thing that we are trying to do for people and for claimants.

As the hon. Member for Westminster North (Ms Buck) has highlighted, many of those people are working while on benefits. We want them to get into work and, when they are in employment, to progress. As has been debated long and hard in this Chamber, we have recently introduced work coaches who focus on in-work progression; we have 37 champions across the country who are helping to push that agenda forward. That is vital so that people can progress. People do not depend just on the benefits system; we want them to see more in their wage packet, and we have provided work incentives to do that, be it through the UC taper rate changes that have been put in place or through the increased work allowances. Those are vital incentives.