Universal Credit and Child Tax Credit: Two-child Limit

Rushanara Ali Excerpts

Tuesday 27th November 2018 Westminster Hall

[Rushanara Ali (Bethnal Green and Bow) (Lab)]

It is always a pleasure to serve under your chairmanship, Mr Streeter. I congratulate the hon. Member for Glasgow Central (Alison Thewliss) on her tireless campaign on this very important subject and on securing today’s debate.

The issue sits in the context of the wider debate about universal credit, which will affect 1 million homeowners, slightly fewer than 750,000 households on disability benefits and 600,000 single parents. On universal credit, two in five households will lose about £52 a week in payments, and across many constituencies entire families will be severely affected—if they are not already. In areas where universal credit has already been rolled out, food bank use has increased by 52%. As the hon. Lady said, as part of the 2015 package, from April 2017 low-income families with a third or subsequent child lost their entitlement to additional support through child tax credits.

[Kate Green]

Does my hon. Friend agree that contrary to what the hon. Member for Glasgow Central (Alison Thewliss) suggested, Labour did not support the two-child limit? We abstained on the Second Reading of the Welfare Reform and Work Bill but voted against Third Reading. Does she agree that we should place that on the record?

[Rushanara Ali]

I concur. It is really important that the Scottish National party, the Labour party and other parties that oppose the policy continue to work together, so that we can protect families. More families will be affected from February next year, as universal credit is rolled out, and the retrospective element, which the hon. Member for Glasgow Central mentioned, will be devastating. No family could have prepared for a policy that was to be applied retrospectively; nor is it right that children should be retrospectively punished in that way. This, in short, is a punishment of children, and it is totally inhumane. No Government should be standing up for such a policy. Given that the Minister has recently taken on his role and the policy was not his idea, I urge him to reflect carefully on what is being said and on the representation being made to him, to ensure that the policy is reviewed and reformed.

If the Government are concerned about family size and think that families should not be as large as they are, just as with teenage pregnancy, public education exercises can be more successful than punitive measures that punish children. In developing countries, where there is a case for encouraging smaller families because families cannot provide, family sizes have been brought down through education and women’s empowerment, but that is a different debate from what is happening here.

Philip Alston the UN’s special rapporteur on extreme poverty and human rights recently said of the two-child limit that it is “in the same ballpark” as China’s one-child policy, because it punishes people with more than two children. Reports also state:

“The UK government has inflicted ‘great misery’ on its people with ‘punitive, mean-spirited, and often callous’ austerity policies driven by a political desire to undertake social re-engineering rather than economic necessity, the United Nations poverty envoy has found”.

It cannot be right that in one of the wealthiest economies of the world, our children face hunger and punishment.

[Mr Gregory Campbell (East Londonderry) (DUP)]

In encouraging the Minister to reconsider, does the hon. Lady agree that it is important that he understand that most people—most of those I meet, anyway—are in favour of reform, because of the complexity of what preceded universal credit, and are in favour of encouraging people into work, but are most definitely not in favour of stigmatising or of ensuring that the very vulnerable in society are punished as a result of the first two?

[Rushanara Ali]

I agree. I do not think that policies that punish vulnerable people are ultimately likely to succeed, which is why the Minister needs to rethink both this aspect of the universal credit policy and the policy more generally. In their attempt to simplify, the Government have found ways to cut funding. People will be worse off under universal credit.

Since implementation, the policy has already affected 400,000 children, and some 3 million children are likely to be affected. That is why I echo the points the hon. Member for Glasgow Central made, calling on the Minister to review the policy and put a stop to it, certainly until the extension of the policy next February, which will be devastating for families.

In my constituency, a large number of children and families will be affected by the policy. We have a large Muslim population and, as has been mentioned, people of other faiths are also affected. I call on the Minister to take into account the unequal impact the policy will have and the fact that the equality impact assessment is flawed.

[Dr Huq]

rose—

[Rushanara Ali]

I will have to conclude, to give others the opportunity to speak. The equality impact assessment does not recognise the negative consequences for certain groups. More than 100 MPs wrote a letter to the Prime Minister, copying in the then Work and Pensions Secretary and the Chancellor, and we have still not had a response, which is really unfortunate. I encourage the Minister to go back to his Secretary of State and ensure that she responds to it and seriously rethinks the policy so that children in our country are protected.

[Several hon. Members rose—]

--- Later in debate ---

[The Minister for Employment (Alok Sharma)]

It is a pleasure to serve under your chairmanship, Mr Streeter. I thank the hon. Member for Glasgow Central (Alison Thewliss) for securing this debate. I know she has a long-standing interest in the subject, and earlier this year we met at the Department for Work and Pensions to discuss issues relating to this particular policy. Yesterday, as the shadow Minister just pointed out, there was a cross-party roundtable led by the Bishop of Durham to discuss these issues and I took part for some of the time, as did the hon. Lady. I thank all Members who have contributed to today’s debate.

My style is generally not to feed rancour in a debate, because I think it is important that we have a civilised discussion and colleagues have an opportunity to raise issues that are important to them, but the hon. Member for High Peak (Ruth George) talked about the fact that an economic mess has been created over the past eight years. I respectfully say to her that she was not in this House in 2010. A number of us were, and I would say that the economic mess we inherited was from the previous Labour Government. I must point out that 3.3 million jobs have been created since 2010—I see hon. Members shaking their heads in disbelief, but that is a fact—and wages are now outpacing inflation. The vast majority of those jobs are full-time and permanent, at a high level of education. That is not an economic mess.

[Rushanara Ali]

Will the Minister address the social mess that his Government have created? That includes not only this policy, but welfare and policing—the list goes on. Will he respond to the serious concerns that hon. Members have raised today? That is what we are after: not looking backwards, but addressing the problem at hand.

[Alok Sharma]

Of course I will address the issues, but it is important to look back and see where we have come from to reach the policies that we are now putting in place.

Several hon. Members mentioned universal credit. I know that this debate is not about universal credit, but I am afraid I must point out that the legacy benefits system is not really fit for purpose. It is incredibly complicated, and as a result 700,000 households are not claiming—or are not able to get hold of—the full amount owed to them. Under universal credit, those households will be £285 better off on average per month. Likewise, 1.4 million people spent the best part of a decade on unemployment benefits under the last Labour Government, but that is changing.

I accept there has been discussion about finances, but I must say to SNP colleagues that, as Labour Members have pointed out, the Scottish Government have the power to create new benefits in devolved areas. They are able to provide assistance to meet short-term risk and they have the ability to top up reserved benefits from their own resources.