Child Tax Credits

Peter Grant Excerpts

Wednesday 12th October 2016 Westminster Hall

[Caroline Nokes]

The hon. Lady shakes her head, but I extend to her an invitation, which I am sure she has already received from others, to visit a local jobcentre, to see for herself how our reforms are working in action.

We also recognise that some claimants are not able to make the same choices about the number of children in their family as others. The Government have been clear that there will be exemptions for certain groups, and it is worth outlining these groups in some detail. Exemptions apply to third or subsequent children who are part of a multiple birth, where there were previously fewer than two children in the household; to children living long-term with friends or family and who are at risk of entering the care system; or to those children born as a result of rape.

[Peter Grant (Glenrothes) (SNP)]

Will the Minister give way on that point?

[Caroline Nokes]

I would give way to the hon. Gentleman but there are many really important points that I would like to get through in the time allocated to me, and I have already taken a number of interventions from the hon. Member for Glasgow Central and one intervention from the hon. Member for Barnsley Central (Dan Jarvis).

Today, I am pleased to be able to inform hon. Members that, as part of the Children and Social Work Bill, the Government have given further consideration to the position of children who are being adopted from local authority care, and we will extend the announced exemption to all third or subsequent children in these circumstances. This change will support families who care for our most vulnerable children, and they will be provided for, along with the other exemptions, in regulations.

Of course, we are aware that these exemptions are sensitive and complicated, and we want to make sure that we get this process right. That is why we are consulting with a number of stakeholders from charities, women’s representative organisations and indeed religious groups.

The Government recognise that women who have a child born as a result of rape face extremely difficult circumstances. That is why we are considering very carefully the best possible way to deliver this exemption. I want to be very clear that we are not looking to rely on or to pre-empt decisions within the criminal justice system. Instead, we are looking to ensure that claimants receive the help they need at the time they need it, using criteria that are straightforward to apply and not overly intrusive, while providing the right assurance to Government that the additional support is going to those for whom it is intended.

Our current thinking is that a third-party evidence model offers the most promising approach to strike the balance we need to achieve. This is a model where a woman can request the exemption by engaging with a professional third party, such as a healthcare professional or a social worker. This approach would not be new for the benefit system. For example, within universal credit we use a similar model for the relaxation of the requirements to be available for work in cases of domestic violence, where the evidence required is the reporting of abuse to a third party acting in an official capacity, and that model was developed with input from stakeholders. We recognise the sensitivity of this exemption and the need to get advice from experts, so we have sought views from stakeholder groups involved in supporting victims of rape to help us to develop this exemption.

The hon. Member for Glasgow Central raised a large number of issues, and I will set out the Government’s vision for a sustainable welfare system that supports working families and encourages them to make similar decisions to those made by people who support themselves fully through work. I will also respond to the intervention from the hon. Member for Barnsley Central regarding the impacts of the policy of limiting support to two children in tax credit and universal credit, while meeting our obligations as set out in the public sector equality duty. The Government have set out our assessments of the impacts of the policy as part of the Welfare Reform and Work Act 2016, on 20 July 2015, in a published impact assessment.

The Government are cutting income tax for more than 30 million people this year and we took 4 million of the lowest paid out of income tax completely during the last Parliament. By 2018, a typical basic-rate taxpayer will pay more than £1,000 less in income tax than they did in 2010. Universal credit now provides for 85% of childcare costs for families with two children; this could be worth £13,000 a year.

The number of people in work is at a record high. With the national living wage, we have given a pay rise to 1 million of the lowest paid, and we have overhauled the welfare system so that it pays to work rather than to claim benefits. The number of workless households has fallen by nearly 200,000 in the past year and now stands at 3.1 million, which is the lowest figure since records began. The number of children living in workless households has fallen by 557,000 since 2010, and there are now 100,000 fewer children in relative low income compared to the number in 2010. In the hon. Lady’s own constituency of Glasgow Central, the employment rate has increased by 2.9 percentage points since 2010, to 62.9% in March 2016. This reflects the fact that there are now 2,000 more people in work in her constituency than there were in 2010. The Government are committed to ensuring that those in work are paid a fair wage and have opportunities to progress and to achieve their potential.

The Smith Commission agreement was very clear that universal credit should remain a reserved UK Government benefit, so that there is a clear and consistent offer of vital support to people in England, Scotland and Wales. Where the UK Government decide to make changes to reserved benefits, such as eligibility criteria, or to how payments for dependent children are calculated, those changes will apply equally across England, Scotland and Wales.

However, the Scotland Act 2016 gives the Scottish Parliament and Scottish Ministers significant new welfare powers. Not only can they now work with us to change certain defined elements of universal credit, such as the way that the housing cost calculation is made, but they will also get responsibility for a range of existing UK Government benefits, which were worth £2.7 billion in Scotland in 2014-15.

Crucially, the Scottish Government also now have new, wide-ranging powers to pay cash top-ups to anyone receiving a reserved benefit, or to introduce brand new benefits in devolved areas. This means that the Scottish Government can tailor the welfare system in Scotland, to meet both their own political aims and local needs.

In conclusion, I would like to reassure hon. Members that the Government are committed to achieving these welfare reforms. Putting welfare spending on a sustainable footing, and in a way that protects the most vulnerable, is vital as we progress to a society that will give working families more control over their lives. It will also ensures fairness for all families—both those who are paying for, and those who are receiving support from, the welfare system.

The hon. Member for Glasgow Central is right to raise the issue about the rape exemption; she has made her point and she has made it repeatedly to different Ministers. However, the Department for Work and Pensions is determined to address this issue with fairness and sensitivity, to make sure that women have the opportunity to report in a safe environment to trusted professionals. It is critically important that we extend that opportunity to them and that we do not remove the exemption, because I think that would be a very dangerous and unfair thing to do.

However, it is important that we instil within the benefits system a fairness for all families, for those who make choices about how many children they can afford to have, and that will apply to those who are working and supporting themselves solely through work, as well as to those who are in receipt of tax credit. Our priority remains to help working parents by providing them with the support they need to get on in life, and in doing so we will make life easier for all families.

Question put and agreed to.