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

Lord Desai Excerpts

2nd reading
Friday 8th July 2022 Lords Chamber

[Lord Desai (Non-Afl)]

My Lords, I support the right reverend Prelate’s nice, short Bill. In my five minutes, I shall talk about the history of why welfare states are always cruel to their claimants. That is a long tradition. I have a book coming out very soon, which I wrote during the pandemic, on why sound economics are always against the poor. Tax cuts are meant for the rich and are always good for the rich and for the economy, while benefit cuts are good for the poor and are somehow always good for the economy.

This all started in the late 18th century. Until then, we had rates collected by the Church and the poor were looked after at the level of the parish. Then of course the Reverend Malthus decided that this was too much. The rates were raised by Speenhamland magistrates in the late 18th century, but the reverend decided that he could not possibly afford to pay the extra rates so he wrote a book, An Essay on the Principle of Population, in which he made up the “fact” that populations grow geometrically while subsistence grows arithmetically—which I have shown to be a complete falsity.

The idea is that if you pay the poor money then they will breed children, and there is no limit to what they will do. Under universal credit, if you get a job then there is a taper and your income will be taken back. It is not called “income tax”; indeed, it is higher than the income tax rate. The poorest people pay more for getting a job under universal credit than anyone else. There are lots of anomalies like that, and the anomaly that you cannot have more than two children is exactly of that sort. The modern welfare state, established by rational political economy since the early 19th century, constantly goes after and attacks the poor because it has been centralised and modernised, and because sound economics tells you that you should not waste your money on the poor; it should all go to the rich. Unfortunately, we have waited a great many years to improve this.

Universal credit has been shown by a report of your Lordships’ Economic Affairs Committee to be full of anomalies and not actually fit for purpose. I do not think we will get comprehensive reform of the universal credit system, but even this morning we have seen people trying to improve it by bits and pieces in different Bills so that the universal credit system becomes slightly more humane than it is.

I strongly support the right reverend Prelate’s Bill and will do anything that I can to improve it or make it more acceptable. As an economist, though, I plead guilty that it is my science that has made the poor miserable. We ought to do something better than this.