Universal Credit (Removal of Two Child Limit) Bill [HL]

Lord Bishop of Durham Excerpts

2nd reading
Friday 8th July 2022 Lords Chamber

Moved by

[The Lord Bishop of Durham]

That the Bill be now read a second time.

[The Lord Bishop of Durham]

My Lords, I am glad to bring before you this Bill, which would abolish the two-child limit to universal credit. In doing so, I declare my interest as patron of the North East Child Poverty Commission.

When this policy was originally debated, I made it clear that we would seek to hold the Government to account for its impact. Working with others, including the Child Poverty Action Group, the Joseph Rowntree Foundation and many others, I have sought to do this. Before the policy was rolled out, its impacts were predicted—notably, that many children would pay the price. They are, with more families affected every year.

Children are a gift, not only to their parents but to the wider family and to society. Every child should be treated as of equal value. I believe this is recognised across all Benches of this House. Sadly, this policy directly contradicts that.

This policy is the biggest driver of the increase in child poverty. Families falling into difficulty are discovering that the social security system is not supporting their whole family as they expected where they are a larger family. People are discovering that not every child is of equal value. The third child is ignored and thus the whole family suffers. This policy punishes children. Further, it does not even live up to the terms on which it was initially defended. I feel for the Minister in her difficult task today.

The original terms were, in the Government’s own words, that

“families on benefits will have to make the same financial decisions as families supporting themselves through work.”

This line has been repeated often. Although the Government have denied that the intention of this policy is to influence the fertility rates of those claiming universal credit, it is acknowledged in their own impact report. The IFS report cited by the impact assessment, Does Welfare Reform Affect Fertility?, demonstrated a significant increase in fertility rates of people whose benefits were increased.

So when academics looked at the trends resulting from this policy, they were surprised to find the very small decrease in fertility rates in the relevant group. This is bad news for the effectiveness of the policy. Following its logic, a successful outcome would be adults, in full knowledge of the consequences of the two-child limit, making different decisions than they otherwise would about having children. They may be more financially stable as a result, more likely to progress into work and less likely to need the social security system to stay afloat. This would, in addition to the money saved solely restricting support to two children per household, save the Government money in the long term. The money-saving factor of this policy is another term on which it was presented.

However, if there is not a significant trend to say that adults’ decisions to have a child are being affected, how is the two-child limit influencing anything at all? I pay tribute to the Benefit Changes and Larger Families project, which has been an invaluable resource on this subject. Its recent conclusion to this question is that

“the two-child limit’s main outcome is to drive financial hardship and often destitution.”

This is unacceptable. It is enough reason for the policy to be scrapped.

But, following the Government’s logic again, the cost to the public purse of such high levels of poverty in early childhood is likely to be far greater than the money saved through withholding support. Professor Donald Hirsch’s ground-breaking research on this subject highlights that children who have experienced poverty are less likely to pay tax, less likely to have high-paid jobs and more likely to need support from public services. More important are the unquantifiable impacts: the suffering of living in an overcrowded home, or not being able to join in with costly school activities and the shame that sometimes accompanies that. The truth is that this policy, designed in part to save public money, will likely increase the long-term cost to the public purse.

Why has this policy failed to level out the financial decision-making playing field? The Benefit Changes and Larger Families project, the CPAG and others agree that the policy works on the assumption that everyone is aware of it and its consequences and, further, that everyone has the tools to make a decision in this way about having a child. The director of the North East Child Poverty Commission recently sent me some relevant stories of clients from Citizens Advice Newcastle. “Stephanie” is a full-time carer for her three children, aged six, four and 11 months. She was unaware of the limit and was informed only when she claimed support for her youngest. She had no savings. The Government’s response to the Work and Pensions Committee in 2020 that claimants are free to have

“as many children as they choose, in the knowledge of the support available”

shows a lack of understanding about people’s lives and the way this policy actually works.

This policy also assumes that those claiming benefits and those who do not are divided along employment lines. Actually, the majority of those subject to the limit are in work. I quote again from the impact assessment: the limit is about

“ensuring those on benefits face the same financial choices around the number of children they can afford as those supporting themselves through work.”

In more recent times the reasoning has changed to those supporting themselves “solely” through work, but that does not change the intention of the policy and is indicative of its outworking. It is simply not always possible for people in either group to increase their incomes. The social security system is designed to be a safety net for any of us who unexpectedly fall into financial difficulty through loss of work, sickness or disability.

I pay tribute to the Member for Glasgow Central, with whom I have worked on the resistance to this policy. It is very unusual for the Church of England and the Scottish nationalists to work quite so closely together. In her recent Westminster Hall debate, she laid out the stunning inconsistencies with which exemptions to the policy are applied. Although the exemptions are designed to mitigate the assumptions made, they do not account for the disproportional impact on people of ethnic-minority and faith backgrounds, who are more likely to have larger families. Some faith groups are penalised because, for them, contraception and termination are simply not valid options.

Another result of the policy lies within a survey taken by the British Pregnancy Advisory Service during the pandemic. It spoke to women who were aware of the two-child limit and likely to be affected, 57% of whom said that the policy was

“important in their decision-making around whether or not to continue the pregnancy.”

The fact that some women could feel pressured by a government policy to terminate a pregnancy that they may have otherwise wanted seems abhorrent.

I would like to correct the Minister in the other place who, when taking part in the recent Westminster Hall debate, argued that the lack of significant change in fertility rates refutes the impacts of the policy that we have heard through the BPAS survey about women’s experiences. These experiences cannot be refuted, and we must recognise both impacts.

It is clear to me that this policy is ineffective, devastating in impact and essentially immoral in character. The Minister has encouraged me to keep presenting evidence on the impact of the policy. With the wonderful help of the groups I have mentioned and many others, I have done so, and I pay tribute to the Minister for the fact that she regularly meets me when we are looking at this.

Rather than taking this evidence seriously, the defence of the policy has remained unaltered. It is a policy which is defended on terms that do not add up. It should be embarrassing that the price paid for its fallacies are our children. I pay tribute to those working constantly to try to ameliorate the entrenched, long-lasting poverty that is affecting families, but they can only ease the pain, not heal the wound. The Resolution Foundation’s Living Standards Outlook 2022 concluded that even in the context of the pandemic recovery and the war with Ukraine,

“the level of absolute and relative poverty in the UK each year is to a large extent a policy choice.”

If the Minister cannot commit to supporting this Bill today, will she commit to carrying out an impact report of the policy by the end of this year? Will she further commit to speaking with the Minister in the other place—I think it is still the same person— the department and the Cabinet about this debate and the evidence we have put forward? We could keep debating this for years, but ultimately it is a choice; a choice for this Government and, today, a choice for this House. I beg to move.

--- Later in debate ---

[The Lord Bishop of Durham]

I thank the Minister for her full response, for giving us an answer and for repeating some of the stuff around the exemptions and so forth. However, she is right: I am disappointed, and I know that others will be. I am very grateful to those who have spoken; I thank the noble Baroness, Lady Bennett, for her tireless support in this, and I thought her point about there not being a single Conservative Back-Bencher here to speak for the policy did say something.

I thank the noble Lord, Lord Desai, for his reminder about economics and even going back all the way to Reverend Malthus, who I remember reading when I was doing my degree. The noble Baroness, Lady Brinton, highlighted—as did others—the increase in child poverty, and that is really one of the reasons I am disappointed. We are seeing an increase in child poverty, yet there seems to be a lack of willingness to address that where it is growing. I accept that some action is being taken, but it is not stopping some getting poorer and poorer and some becoming in danger of falling into destitution. The noble Baroness, Lady Sherlock, made a point about the funding balance and tax cuts, which I thought was very well made and very helpful.

I look forward to the letter around how the number of two children was arrived at. I remember sitting with Iain Duncan Smith and having that conversation with him where he gave me a convoluted explanation which I still do not think makes any sense. But I am grateful; the Minister is right that we will not stop having this debate. Simply, I am not going to stop until this policy is scrapped.

Bill read a second time and committed to a Committee of the Whole House.