Universal Credit (Children)

Debate between Margaret Ferrier and Neil Gray

Tuesday 10th May 2016 Commons Chamber

[Neil Gray (Airdrie and Shotts) (SNP)]

Thank you very much for calling me, Madam Deputy Speaker. I appreciate the flexibility that you have shown this afternoon.

I congratulate the right hon. Member for East Ham (Stephen Timms) and the Backbench Business Committee on securing this debate. The right hon. Gentleman made some powerful points in his measured, brilliant and very well-researched speech.

The new Secretary of State has been keen to push the line that his Department needs to look at people, not just at statistics. I completely agree, but where is the evidence that that is happening? Where is the compassion being brought to social security policy? In the context of this debate, the Secretary of State will no doubt wish to be reminded of a quotation from Dr Seuss:

“A person’s a person, no matter how small!”

He needs to start thinking about the impact that his Department’s policies are having on children. Now, while he is relatively new to the job, we can call them inherited policies, but as he begins his tenure by marching to the defence of everything that went before him, those policies will become his own, and he will be responsible for what unfolds. He has an opportunity to make his mark on the Department and to embark on a genuine departure from what went before—as was touted when he was appointed—and that needs to start with the cuts in universal credit. As the shadow Secretary of State rightly said yesterday, if he does not make those cuts, how will he be any different from his predecessor? Perhaps the Minister could relay that, and other issues raised in the debate, to the absent Secretary of State.

The cuts that are being deferred from tax credits and lumped on to universal credit will have a very real impact on the quality of children’s lives and their long-term life chances. The cut in the work allowance—slashing the only work incentive in universal credit—will hit families and lone parents the hardest. Lone parents without housing costs will experience the largest reduction in their work allowance, from £8,800 last year to £4,764 this year—a cut of £4,000, according to the House of Commons Library. These are working families. The children of single parents are already twice as likely to risk living in poverty as those in couple families, and, according to the Child Poverty Action Group, cuts in work allowances will only exacerbate that disadvantage.

Last week the Resolution Foundation published a devastating report for the Government, which stated that under universal credit, half a million working families would be significantly worse off, even given the changes in tax allowances and the increase in the minimum wage for over-25s. According to analysis published by the Institute for Fiscal Studies in February this year, absolute child poverty is projected to increase from 15.1% in 2015-16 to 18.3% by the end of this Parliament in 2020.

[Margaret Ferrier (Rutherglen and Hamilton West) (SNP)]

Families who care for disabled children and are prevented from working for that reason are set to be particularly badly affected by the Government’s changes. Contact a Family estimates that those families will be at least £1,600 a year worse off. Does my hon. Friend agree that this change directly discriminates against such families, and that the Government should go back to the drawing board?

[Neil Gray]

I completely agree with my hon. Friend, and later in my speech I will touch on what is being done in Scotland to address some of those issues.

The Institute for Fiscal Studies says that the projected increase in child poverty is driven entirely by a sharp rise in poverty among families with three or more children, which is itself the result of planned tax and benefit reforms. Those figures are UK-wide. My constituency already has a shocking child poverty rate of 21.7%. If the rise in child poverty projected by the IFS is universally applied, Airdrie and Shotts will have a quarter, rather than a fifth, of its children living in poverty by the end of this Parliament because of this Government’s tax and social security changes. Surely it is time for the Secretary of State to see these statistics and the children behind them. One child in every four in my constituency will be in poverty if he accepts the tax and benefit changes that he has inherited.

The Child Poverty Action Group agrees that to lift families out of poverty and disadvantage, the relationship between universal credit and work must be right. It is calling for: the restoration of work allowances, particularly for single parents; a second earner allowance for couples, to support second earners to get into work without facing an immediate withdrawal of universal credit; and investment in high-quality employment support that recognises people’s individual circumstances, so that universal credit can meet its aspiration to promote in-work progression through the provision of high-quality advice, rather than through the threat of sanctions. Those proposals certainly provide food for thought.

Universal credit was supposed to involve the streamlining of a complicated system to improve work incentives, tackle poverty and reduce the scope for error and fraud. Instead, we have massive delays, huge overspends on implementation, and fundamental changes and cuts to awards that will drive more children and families into poverty. This is not what was intended, but because of this Government’s obsession with austerity at any cost, it is the reality. Universal credit has been watered down and completely undermined, especially by cutting the work allowance to ribbons.

Under the latest Scotland Bill, the newly re-elected Scottish National party Government will have power over 15% of our social security spending. [Interruption.] I hear some chuntering from across the Chamber. Although 15% will be determined in Scotland, the vast majority of social security issues will still be determined here in Westminster, which is why it is so important that we on these Benches challenge this Government whenever we can. I would prefer it if my colleagues up the road had control over all social security decisions, but the SNP is determined to use the powers that it will get to transform the service that people receive. One area of change will come when we scrap the rule that results in the removal of income for families of disabled children if their child is in hospital for 84 days. We will also increase carer’s allowance to the same level as jobseeker’s allowance, giving carers an extra £600 a year. We will put dignity and respect at the heart of the new Scottish social security agency, supported by a £200 million investment. We will also scrap the bedroom tax.

One of the key elements of today’s motion is the call for a proper impact assessment to take account of the significant cuts to the work allowance. My call to the new Secretary of State is to reassess what has gone before him, to assess the impact these cuts will have on children up and down these isles, and to set his own path of supporting people into work rather than threatening them with poverty.