Welfare Reform and Work Bill

Lord Kirkwood of Kirkhope Excerpts

Monday 7th December 2015 Lords Chamber

[Baroness Drake (Lab)]

My Lords, I support the amendments in this group, because Clause 11 removes eligibility for the child element of child tax credits for the third and subsequent children and Clause 12 introduces the two-child limit for receipt of the child element of universal credit for families making a new claim. Families with three or more children could lose up to £2,780 per year for each additional child, and may also face the loss of the family element of tax credits—currently £540 per year per family.

Like other noble Lords, I am deeply concerned about the impact of these changes on the families of friends and kinship carers. Some 22% have three or more children in their household—about 29,000 families. That is why these amendments seek to exempt kinship carers from the two-child limit. Otherwise, future carers voluntarily taking on vulnerable children will hit a financial barrier to support, even where the third child is disabled. Yet these carers will still incur significant costs and may face financial distress from taking on these children. Kinship carers provide vital support for some 200,000 children when parents are unable to care for them, often because of urgent circumstances. The children frequently have emotional difficulties, often because they have been living with parents who are drug-dependent or who have abused or neglected them.

The Family Rights Group estimates that exempting carers from the two-child limit would cost £30 million. Yet these carers already save taxpayers the cost of placing the children in care. To restate the figures referred to by the right reverend Prelate the Bishop of Portsmouth, the cost of keeping a child in care for a year is £40,000. The cost of care proceedings is £25,000. The savings that the 132,000 kinship families deliver by voluntarily caring for these 200,000 children run into billions. The disincentive effect of the two-child limit needs to deter only 200 kinship carers from caring in the future for three or more children, and the £30 million saving would be wiped out. That is without counting the human cost to the children.

This disincentive effect on kinship carers is compounded by the benefit cap, which will be set at an increasingly lower level. Kinship carers are not entitled to paid leave while children are settled; they care for the children at their own cost. Some 49% have to give up work when the children move in, or reduce their earnings, because they need to take time to settle a distressed child—often a requirement imposed by the social worker, for good reason. Children can arrive with no notice, after a late evening call from the social worker asking the carer to take the children. The impact of the two-child limit on the kinship carer is deeply unfair, and could act as a disincentive to care for the children. It will impact on future carers, whether working with modest incomes or not working. It will impact harshly on carers who already have their own children, or who are young themselves and want to have their own children—such as the family that Grandparents Plus is in touch with, a sibling carer and his partner who are raising four brothers and sisters since their father’s death as well as their own baby.

Let us look at the reasoning for withdrawing support for any child beyond the first two. The impact assessment advises that the Government expect the limiting of the child element of child tax credit and universal credit to the first two children to,

“encourage parents to reflect carefully on their readiness to support an additional child”.

Of course, such a statement is a nonsense—in fact, contrary to common sense—in the context of kinship carers. The need is not to get such carers to reflect carefully on their readiness to care for the vulnerable child. To the contrary, public policy needs to support such carers in their readiness to care for an additional vulnerable child. That is better for the children and secures savings for the state by not placing them in the care system. Kinship carers are not the birth parents of the children, but voluntarily embrace their care. The Government stress that the limits on benefits beyond the first two children is a behaviour-related measure, because,

“encouraging parents to reflect carefully on their readiness to support an additional child could have a positive effect on overall family stability”.

However, such reasoning is incoherent when applied to kinship carers. Encouraging carers to pause and reflect on the disincentives in the Bill on taking responsibility for a vulnerable child could, perversely, have a negative effect on the family stability available to the child. Kinship carers should not be disincentivised; they should be supported.

During the passage of the Children and Families Bill, I listened to a BBC radio programme examining the experiences of kinship carers and interviewing a lady who recounted the night—she remembered the date, having celebrated her birthday with her own two children—when her doorbell rang around midnight. She opened the door to see a police officer, a social worker and two distressed children, her sister’s children, at risk of domestic violence. She told movingly of how she had raised those children along with her own two, and had struggled, with little support from the local authority services, and of how proud she was of the recent graduation of the little girl on her doorstep that night. That alone was a powerful story but she went on to recall how, a few years after that night, the doorbell rang, again late at night. This time, the policeman and the social worker were holding her sister’s baby. The interviewer asked if she was tempted to decline to take the baby in view of the lack of support that she had received previously. I remember the incredulity in the woman’s voice at the question, and the power of her answer to the effect of: “How could I abandon a little baby just because I had been poorly treated?”. She brought up five children, two that she gave birth two and three that she embraced. I ask the Minister: if someone like that lady were faced with a similar scenario in future, under this Bill, what behavioural response would the Government be seeking to achieve from them with the two-child limit on benefits?

If the Government disincentivise kinship carers, the people they will hurt are vulnerable children. I doubt that that would pass the public litmus test. The Minister has previously demonstrated his understanding of the importance of kinship carers to vulnerable children, so I ask him to commit to considering that kinship carers be exempted from the two-child limit on benefits. It does not make sense, either for the interests of the child or in terms of public expenditure.

[Lord Kirkwood of Kirkhope (LD)]

My Lords, it is a pleasure to follow the noble Baroness, Lady Drake. The House owes her a debt because of the exemplary work that she has done over many months and years on the subject of kinship caring. Her speech will repay careful study, and I shall look forward to doing that when the Official Report is printed.

This is going to be a harder Committee stage in social security terms than some that we have had in the past. This is basically a Bill that reduces money but does little else of interest. However, it is a very important one. I noticed that the very mild-mannered noble Lord, Lord McKenzie of Luton, characterised it as the most wretched Bill that he had ever seen in his life. That is a considered view from a moderate man, so we need to be careful about how we take our proceedings forward.

The Bill dramatically changes the money and resources available to the social security system. I am sure that everyone understands that there is a case in periods of austerity for making special arrangements to deal with immediate and urgent circumstances. However, we need to be careful that we are not making changes that, as if by magic, get woven into the social security fabric in perpetuity. What I am most worried about—this is really a discussion for clause stand part on Clauses 11 and 12—is that the two-child limit is going into universal credit. That is a matter of great concern to me. I say in passing that the noble Earl, Lord Listowel, was contrite earlier about having been too nice to the Government. Indeed he was, but I am pleased that he has put the record straight.

The department has certainly done a very good job, because the universal credit situation could have been a whole lot worse, which would have overshadowed all these proceedings in Committee. The way we contrive to support people is important, particularly those with larger families; it is mainly ethnic minority communities which have that culture, which we know predisposes them to risk of poverty, and we need to take that into account along with everything else as we go forward.

The Minister needs to listen carefully to the case for exemptions. The Committee will be faced, certainly at the later stages of proceedings on the Bill, with deciding to what extent what the Government are trying to do is reasonable in the long term as well as in the short term. As far as I am concerned—I put it bluntly on the record and cannot make it any clearer than this—I am willing to work with the Government to mitigate some of the sharp edges of the Bill as regards the savings that they hope to make. If the Government are willing to make concessions and think carefully, which the Minister in the past has demonstrated he can successfully do, and if he is willing to go away and look at some of these exemptions we are talking about today, I would be much more disposed to decline to support attempts on the Marshalled List to vote against Clauses 11 and 12 standing part. I will approach the Bill in that way. I will not be unreasonable; I perfectly well understand the financial exigencies that we must face and the continuous battle the department has with the Treasury—it would be unrealistic not to accept that. However, the onus is on the department to look at ways of mitigating some of the changes in the Bill, because it needs to be changed.

I said at Second Reading that I wanted to pursue preventive spending. After the cases that have been made, by the right reverend Prelate and others, I find it hard to believe that a saving of £30 million would not risk a much greater public cost in other silos within Treasury spend across central government as a whole. Therefore the question asked by the noble Baroness, Lady Sherlock, on whether the Government have done any work about what it would cost if we reduced the support to kinship carers in this way is important.

The situation we face as a Committee will be difficult to reconcile unless the Government are able to answer some of these questions, certainly about spending money and investing to save in future. I certainly hope that the Government will think very carefully about some of the powerful speeches that have been made, in particular on kinship carers.

[Baroness Massey of Darwen (Lab)]

My Lords, I will say a few words about kinship care. I remember the Minister speaking twice on this topic at previous Committee stages. I think that he knows the issues and is sympathetic to them—he certainly was the last time we met to discuss the issue of kinship carers. My noble friend Lady Armstrong has tabled a debate on this topic tomorrow, when I shall say much more, but this issue of adding complexity to the lives of kinship carers is important. Kinship carers deserve all the help they can get not to be landed with some other complex issue of how many children they can care for.

I recall being chair of the National Treatment Agency some years ago, where I came across quite a few grandparents who were carers—I think grandparents make up some 40% of kinship carers. The grandparents called themselves the midnight grannies, because they were often landed with children. But I am talking about complexity because they do not have the support they need. I met people who were getting no support—neither advice nor financial support from the local authority; it seemed to me to be hit or miss as to how local authorities behaved. Some grandparents had court battles about the children they were caring for. These are people in distress, as are the children. The grandparents have lost a daughter or son—they may be in prison, be dead or be using drugs and alcohol—and the children have lost their parents. So there is a lot of distress in the family, and yet these kinship carers are coping with that. One of them said to me, “I’m tired of filling in these forms when I should be reading to my grandson”. That is how it works: they have to fill in forms and go to court, rather than being able to spend time caring for the children as they would want to.

It is a complex issue and I think that we ought to be aware of that—I am sure the Minister is aware of that. Therefore, we do not want to heap complexity on these people who, after all, save the state a huge amount of money a year for each child they care for.