Working Tax Credit and Universal Credit: Two-Child Limit Debate
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Steve McCabe
Main Page: Steve McCabe (Labour - Birmingham, Selly Oak)Department Debates - View all Steve McCabe's debates with the Department for Work and Pensions
Working Tax Credit and Universal Credit: Two-Child Limit
Steve McCabe Excerpts(2 years, 8 months ago)
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Steve McCabe (in the Chair)
Despite what might be happening elsewhere, we have a very important debate here. I call Alison Thewliss to move the motion.
Alison Thewliss (Glasgow Central) (SNP)
I beg to move,
That this House has considered the two child limit of working tax credits and universal credit.
It is a pleasure to see you in the Chair, Mr McCabe. You are quite right to point out that, while other debates might be happening, this debate is actually quite important. It has been six years, nine months and 13 days since the Budget in 2015, when the two-child limit appeared in the Red Book, and just over five years since it came into force. Some might be wondering why I am bothering to come here today to complain about this policy; it is because, for me, it is a fundamental injustice and deserves to be looked at seriously.
The Child Poverty Action Group and the Church of England estimate that 1.4 million children in 400,000 families are now affected by the two-child-limit policy. Unless it is abolished, the number of children affected will reach 3 million, as more children are born under the rules.
The two-child limit for child tax credits and universal credits broke the long-standing link between need and entitlement, on the basis that families in receipt of state support ought to face the same choices as those supporting themselves solely through work. This is a false narrative; it is the myth of the benefit queen. This policy has never been about fairness.
The majority of families affected by the policy are in work—low-paid jobs, working to support their families. In mentioning that fact, I do not seek to stigmatise those not able to work—many have caring responsibilities, disabilities or other reasons that prevent them from working. They ought to have the protection of the social security system, too.
In many cases, it is all but impossible for those who are working to take on more hours to make up the drop in income created by the two-child limit. The Work and Pensions Committee pointed out that the cost of childcare can also mean that families will not be able to make up the loss by working more hours. The two-child limit is a poverty trap.
Many people are just not aware of the policy, which is a significant issue. They do not know that it will apply to them. The Government intended to influence people’s choices to have children, but they have certainly not been influenced in any meaningful way by a piece of Department for Work and Pensions legislation.
The latest research by Mary Reader, Jonathan Portes and Ruth Patrick on whether cutting child benefits reduces fertility in larger families establishes that the two-child limit is not leading to any major reductions in fertility among those likely to claim benefits. All the policy does is punish people for their circumstances and drive up child poverty rates.