Working Tax Credit and Universal Credit: Two-Child Limit

Jim Shannon Excerpts

Thursday 21st April 2022 Westminster Hall

[Alison Thewliss]

I absolutely agree with the hon. Member on that point and with those religious leaders who wrote that letter then and who continue to campaign on the issue now. I will touch on some of that a little later.

The effect of the two-tier policy that has been created is that a family with three children, the youngest being six, will receive support. However, a family with three children, the youngest being four, will not. The needs of these families are exactly the same, but this Government have decided that they are not entitled to the same support. Previous research on the issue has found that in some cases older siblings can come to resent the new baby in the family, because they have lost out on their activities, their sports clubs and the things they used to do because the family no longer has the money to get by. It is desperately unfair that children are already losing out on wider life experiences because of this discriminatory policy, as well as now on the very basics because of the cost of living crisis.

I will describe some of the other inconsistencies in the policy in some detail, because every time I explain them to people they are absolutely baffled; I would like to hear the Minister’s answer to the mad exemptions that exist. On the exemption policy for multiple births, if someone happens to have twins after having a single birth, there is an exemption to the policy, which is fine. If they have twins first and then go on to have another baby, they are not entitled to support, presumably because they should have known better. There are three children in each scenario, but different support.

As my hon. Friend the Member for Rutherglen and Hamilton West (Margaret Ferrier) mentioned, the rape clause is even more pernicious. For this exemption, a woman has to fill in a form and have her traumatic experience verified by an official to say that her third child was conceived through rape or a coercive relationship. This form exists and has to be signed off by a professional to verify that someone has had a child in that circumstance. However, it can be claimed only if the person is not living with the parent of that child.

We know that forcing a woman to leave a relationship can put her and her children in danger, but that reality does not appear to trouble the Department for Work and Pensions. Some 1,330 women claimed under the exemption in 2021. The really perverse part of this pernicious and stigmatising policy is that it applies only to third and subsequent children. If someone’s first child was conceived as the result of rape and they went on to have two more children, that is just unlucky for them as far as the DWP is concerned.

The exemptions around adoption are also perverse. There is no additional support for an adopted child if they are adopted from abroad, or if a person and their partner were that child’s parent or step-parent immediately before they adopted them. Why on earth would this Government want to disincentivise adoption? The exemption for kinship carers, who were losing out on support for their own children because they had been so good as to care for others, was only granted after the Government were taken to court. It should not take legal action for this Government to recognise and fix their mistakes, but we know the DWP repeats this pattern again and again.

The effect of this policy is well documented and well assessed, and I pay tribute to the Child Poverty Action Group, the Church of England and other faith groups including the Interlink Foundation, which represents the orthodox Jewish community. As my hon. Friend mentioned, there is a discrimination at the heart of this policy that affects people of faith. It sticks in my craw to see Easter greetings from Members of this place—the Holy Willies of this place—when their faith does not extend to supporting children, who they are instead actively pushing into poverty through the policies they advocate. How does the Minister believe this policy affects people of differing backgrounds and faiths, and how can he say the policy is fair in this context?

[Jim Shannon (Strangford) (DUP)]

I am normally pleased to hear the hon. Lady speak on any issue, but particularly so on this issue, given her knowledge and expertise. On her point about faith, does the hon. Lady feel that a human rights issue could well be at stake here? While that is not a direct responsibility of the Minister, it is a part of this debate that must be considered. By enforcing this rule, the Government are creating a human rights issue for people who do not want to be under that law.

[Alison Thewliss]

The hon. Gentleman is absolutely correct to point that out. There are particular issues with this policy for women in Northern Ireland, related to the rape clause and issues of abortion. When this policy was brought in and was being implemented, Northern Ireland particularly was an afterthought to this Government, just as faith groups have been. Children are regarded as a blessing—not just by people of faith, but particularly by them. Therefore, the policy of this Government to limit support to the first two children in a family has a disproportionate effect on people of orthodox Jewish, Muslim or Catholic faith, for whom abortion and contraception just are not options. We already know that this policy is forcing some of those families into significant poverty.

We all know that contraception is not infallible, even for those who actively choose it. In one of its reports, CPAG has quoted a parent who said:

“I got pregnant despite having an implant. When I found out it was too late for [an] abortion. I’m struggling since then as I had to give up my work”.

I very much support a woman’s right to choose, but a Government welfare policy should not be forcing people into abortions. The British Pregnancy Advisory Service has carried out its own research on this issue and found that it was a factor in the decision making of women who were aware of the policy. BPAS has said:

“We have warned the government that the two-child limit is forcing some women to end what would otherwise be wanted pregnancies. Since 2016, the number of abortions performed to women with two or more existing children has risen by 24%, compared with an increase of 11% performed to women with one existing child.”

I would like the Minister to comment specifically on how he is monitoring the impact of this policy on women’s decisions, and why he considers this to be an appropriate part of social security policy.

We are in a cost of living crisis, and the impact of that crisis on larger families is particularly acute. Energy and food prices are soaring, and this Government did little in the spring statement to hand out a lifeline to people who are struggling right now. Can the Minister outline what, five years in, is the ongoing monitoring of this policy? What consideration has been given to removing it altogether? What conversations has he had with the Chancellor about this policy? When the modelling of its impact on child poverty is so clear—I almost wish we were in one of those American Senate hearings where I could show the graph, because it is absolutely crystal clear—why are this Government, dystopian as they are, continuing to pursue a policy that they know has failed in its objectives? It is simply causing more hardship in every passing year. Almost half of all children living in families with more than two children are in poverty, and the Government must know that. I want to know why they refuse to act.

The Scottish Government have done their best to support families with the Scottish child payment, which we brought in and are increasing, and on which there is no two-child limit, under the social security powers we have. With 85% of social security powers still held in this place, the UK Government bear a responsibility to do what they can. In the face of the UK Government cutting giant holes in the safety net, tackling poverty and making Scotland the best place in the world to grow up in is a challenge. Our devolved powers go only so far. We need all the powers of a normal nation to ensure that we can support all our people and value every child, and not just the first two.

--- Later in debate ---

[Jim Shannon (Strangford) (DUP)]

It is always a pleasure to speak in Westminster Hall, but it is a special pleasure to follow the hon. Member for Glasgow Central (Alison Thewliss). The hon. Lady and I have many things in common—apart from the independence of Scotland, of course. However, when it comes to social issues we are on the same page on just about everything; I can comfortably support her on those issues. I thank her for setting the scene, and I thank all other Members who have contributed.

I love accents. I love the accent of the hon. Member for Cynon Valley (Beth Winter). I hope I have pronounced that correctly—I probably have not. I think the Welsh accent adds to this Chamber; there are a number of Welsh Members who, through their voice and accent, add to the Chamber. I hope that my Ulster Scots accent from Northern Ireland also adds in some way to the Chamber, bringing the cultural values of all four nations together. It is always a pleasure to do that.

I fully support the comments of the hon. Member for Glasgow Central, and indeed those of everyone who has spoken and will speak afterwards. Hopefully, the Minister will give us some succour and support. Opposition Members’ comments are clear, and we look to the Minister in hope of a response. I am going to take a slightly different angle. I think the hon. Lady probably knows this, because she is always well versed in the subject matter, but the London School of Economics has been very clear. Its research set out to explore how the policy, in operation since April 2017, has affected fertility of third and subsequent births, and it said:

“Using quantitative methods, we find the policy led to only a small decline in fertility among those households directly affected. This implies that the main impact of the policy has been to reduce incomes”—

this hits on the issue that the hon. Lady referred to—

“among larger families who are already living on a low income”.

There are therefore two issues to this debate. It continued:

“and hence to increase child poverty.”

Those are the things that this debate and my short contribution will address. That is why I am very much opposed to the two-child policy and its effect on tax credits and universal credit.

[Margaret Ferrier]

Research from the New Field Foundation found that the limit does not discourage families from having more children, and has only worsened their financial difficulties. Does the hon. Gentleman agree that Ministers must actively engage with charities and organisations with expertise in policy impact to understand the real-terms impact of such policies?

[Jim Shannon]

I wholeheartedly support the hon. Lady’s comments.

I am going to say something fairly harsh. I am not a harsh person, or I try not to be, but I always had a fear about the two-child limit—perhaps others agree with me—which is why I opposed what I dubbed at that time the “Chinese limit”. We do not have an authoritarian state just yet, but in China they have—I know they are going to change the two-child rule, or at least they are hoping to change it—and in a way that is the authoritarianism of this DWP directive, which inadvertently or directly has put in place the Chinese limit.

I was talking to the hon. Lady before the debate, and I said that if there had been a two-child limit when our parents were born, I would not be here because my mother would not be here; she was the fourth child out of five. The hon. Lady and others—perhaps even the Minister—would not be here either. If the two-child limit were enforced here with the regularity that it is in China, but with an income base that makes it almost authoritarian, there would be children who are not born—people who would not be here. I want to highlight that dark perspective, because that is where I see this draconian, dictatorial and very authoritarian directive from the DWP going.

[Carol Monaghan (Glasgow North West) (SNP)]

The hon. Gentleman mentions China, and he knows that it is having huge problems now because there is an expectation of low numbers of children. It is having difficulties with its birth rate. It is interesting that since 2012—since austerity kicked in—the birth rate in the UK has dropped by 12%. That is significant, and it has huge implications for pension contributions and for many jobs.

[Jim Shannon]

I thank the hon. Lady for that intervention. It is about not just the two-child limit on its own, which means that a person cannot have a third child because there will not be the same structures in place to help them. It is also about issues such as the impact on income and pensions. She is absolutely right. The Minister in his place is the man who is placed to answer all these questions. I hope he will give us his thoughts on how this situation can be corrected. I go back to my point of a few moments ago about the Chinese Government. The policy does not simply impact the third child—it impacts every child in that home.

I have three sons. The first two each have two children and made a decision themselves not to have a third one. The third boy has one child and another one on the way. That is not because China’s limits are impacting upon the Shannon family, because they are not—it is a decision made by families themselves. If a family was to have a third child, why should they not be allowed to? Why should we not look at the issue of income of all the other families, and maybe say to those who said that the policy would cause there to be fewer births and cause people to use birth control, that that is proving not to be the case? We are simply taking money from households.

I referred to the fertility aspect of the two-child limit in the research summary, and want to quote further from the research:

“This raises the question of whether the two-child limit reduced the overall fertility of third and subsequent births in the UK. Survey evidence from the British Pregnancy Advisory Service found that 57 percent of women who were likely to be affected by the two-child limit said it was a relevant factor in their decision to have an abortion”.

I know some may not agree with me—I know others who do—but I am very clear in my mind. We have a duty. That is how I have always voted in this House, though others may have a different opinion. I believe in the sanctity of life—the life of the mother and the life of the child—and this policy has done something that I think is morally wrong. I think it is wrong that people should have an abortion because they cannot afford to keep the child that they carry. It is as simple as that. I very much disagree with the policy.

The researchers say that the 57% is a random sample, but also that it is bigger than that. They took it a wee stage further on income and divided

“adult women of childbearing age into those who are on benefits (or are likely, given their socio-economic status, to be on benefits) or not; and those who already have two or more children or not.”

The stats provide an evidential base for the Minister; I am happy to make them available to him, if he thinks they would be helpful. I think they would be, including for civil servants, when it comes to looking at the bigger picture.

Data published in April 2021 shows that 1.1 million children were affected by the two-child limit—237,000 more than the previous year. Updates for 2022 are not yet available. The number of children affected will continue to grow as nearly all low-income families with three or more children eventually become subject to the limit. What we are doing—I say “we”, but it is not the people here; it is the Government—is imposing an income limit on those who already have three children or more.

I have already discussed in this place on several occasions the need for the child benefit limit, set in 2013, to be uplifted, because working families are affected. Someone who earned, for example, £49,000 in 2013 was on a good wage that would allow their partner to work part-time hours to take care of their children. They are in a completely different scenario today, with energy costs. The hon. Member for Cynon Valley spoke at some length about energy costs and the impact on income. It is no different in Cynon Valley from Strangford or Glasgow Central, or anywhere else.

With gas, electric and fuel at treble the price of 2013, now more than ever we need to do the right thing by families—review, change and abolish this rule. We need to give some decency, compassion and understanding back to families, who are under incredible pressure. A review of the policy and then its abolition are essential.

The data also suggests that the probability of having a third or subsequent child declined by some 5% after the reform, which suggests that the two-child limit has led to a decline in the number of third and subsequent births of approximately 1%. The evidential base is there. This measure has a success rate of only 1%, while children in our homes are suffering. If it has only achieved a change of 1%, why pursue it? Some might say that if a party wins an election by 51% to 49% they have still won it, but as I understand it, the whole idea behind this policy was to focus on saving money. The savings are not there, so it comes down to the critical question of what this policy is really all about. Five years on from its implementation, research has found that the policy has a very marginal impact on families having more than two children but has deprived low-income families of approximately £3,000 per year—the hon. Member for Cynon Valley referred to that at some length, and the hon. Member for Arfon (Hywel Williams) spoke about it as well. They both did surveys in their constituencies, so they have done their homework. They have got the evidential base; they have got the proof.

I am conscious of time, so I will conclude with this: given the pressure that families are under, we in this place must take appropriate steps to alleviate that pressure. The Minister is an honourable man and is always incredibly friendly; it is his nature, and he does take on board the issues that we bring to his attention. However, today we are not just looking for the decent side of the Minister—which we will always get—but for concrete evidence that some of the changes that we on the Opposition side of the Chamber seek, which we feel are important, will be made. I can foresee a time when working families will be unable to make ends meet, and we in this place have a duty to the vulnerable and to the children who are suffering as a result of policies that do not reflect the issues that people have but are outdated and based on wrong assumptions. In my opinion, that 1% figure means that a wrong assumption has been made, so it must change. The time is right to make those changes, so again I look to the Minister, not just for reassurances but for a change in the law.