Oral answer (Lords) on Benefit Reforms - Jan 10

To ask Her Majesty’s Government what assessment they have made of the impact of benefit reforms on families with children.

My Lords, this Government support families. Our welfare system supports those who are vulnerable and helps people into work. These reforms are working, with 3.3 million more people in work and 300,000 fewer children in absolute poverty than in 2010, a record low. Once fully rolled out, universal credit will result in an extra 200,000 people moving into work and will empower people to work an extra 113 million hours a year to support their families.

I thank the Minister for her Answer and I am grateful for recent engagement with faith and other groups on this issue, but the Government’s own statistics show that child poverty is rising among families with more than two children, even when those families have an adult in work. One of the principal drivers of this increase is the Government’s two-child limit, which makes it harder for parents of more than two children to work their way out of poverty, contrary to the aims of universal credit. In light of this evidence, will the Government reconsider that two-child policy?

My Lords, I welcome this question from the right reverend Prelate. First, I want to say that we now spend more in this country than any other developed nation on family benefits.

That does not answer the question.

I said I would begin by saying that we now spend more in this country than any other developed nation on family benefits. The aim of the two-child policy is an important one: to strike the appropriate balance between support for claimants with children, and fairness to taxpayers and families who support themselves solely through work. Parents who support themselves solely through work would not expect to see their wages increase simply because of the addition of a new child to their family. However, we are looking at the policy with regard to its extension, which is due to take place next month.

My Lords, the Resolution Foundation recently estimated that the four-year benefit freeze implemented in the Welfare Reform and Work Act 2016 will result in a net cumulative saving by the Exchequer in 2020 of £4 billion. Is it not now time to think about redeploying some of those savings to provide much-needed assistance to hard-pressed low-income families with children?

My Lords, let us look quickly at what we offered in the Budget. The Budget has made an enormous difference in the amount of money that we have put into the system following concerns. We announced a £4.5 billion cash boost to universal credit in the 2018 Budget; that was voted against by the party opposite. The reality is that we are doing a lot to reduce the number of children in workless households because we believe that that makes an enormous difference to the possibilities for children: we know that they are five times less likely to be in poverty where both parents work. Children need role models, and parents need dignity and a sense of self-worth to believe that they can achieve their potential and support their children. The principles of UC entirely support this truth.

My Lords, will the Minister accept my evidence from shopping at a supermarket in a small town in South Gloucestershire, an area not noted for poverty? At the beginning of the school holidays last July there was a note at the Trussell Trust food bank to the effect that it wanted more donations, because there were 34 children—in a relatively prosperous town—who were no longer having school dinners and were in families that could not afford to give them a lunch? If I were sitting on that side of the House I would be ashamed.

My Lords, I am not ashamed. There are many and varied reasons why people use food banks and it is misleading to automatically link this to any single cause, as the party opposite chooses to do. Let me give noble Lords an example of the kind of support that we are giving children and families, in addition to free school meals and Healthy Start vouchers—

Oh!

It is not to use up time, it is to set out our case. A working couple on universal credit with three children aged four, six and eight, for example, could be eligible for childcare support alone of up to £18,000 per annum from this Government. That is a long way from where we were when, under the last Labour Government, nearly 20% of all households were entirely workless: one-fifth of the entire household population of the United Kingdom. That is down to 13.9%. We are not complacent. We are making real progress to support families.

My Lords, I have spent time in food banks. I have seen working parents embarrassed and ashamed at having to go there to bring home food for their children. I do not think that anyone goes to a food bank unless they are desperate. 

The Minister mentioned working parents getting childcare support. Parents of very young children are now required to take a job when their youngest child is three. They can be sanctioned if they do not. Yet the way in which universal credit pays out childcare help is that the parent has to pay the money up front and then claim it back. A lot of parents just cannot afford to do this. How can it be right for parents to risk being sanctioned when they are faced with a choice between taking a job and getting into debt, or not taking it and being sanctioned?

The noble Baroness will have heard that we are doing a lot through cash injection for childcare support, but I accept that it is important to look at the process of how and when it is paid. We are doing this at the moment. We know that 30 hours is already making a real difference to families. The independent evaluations of our early delivery found that 78% of parents reported greater flexibility in their working lives. Nearly a quarter of mothers reported being able to increase their working hours as a result. In particular, we want women in households to be liberated and empowered, just like every noble Baroness sitting in this House. I note that the noble Lord, Lord West of Spithead, is in his place. One of the things in which I am particularly interested is flexibility of spousal employment for those women in the Armed Forces who support their husbands or partners. We are doing everything we can, working holistically across government, to achieve more to enable both parties to work and support their family.