New Clause 2 — Childcare

Part of Welfare Reform Bill (Programme) (No. 2) – in the House of Commons at 6:00 pm on 13 June 2011.

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Photo of Chris Grayling Chris Grayling The Minister of State, Department for Work and Pensions 6:00, 13 June 2011

As I said to the right hon. Gentleman in Committee, we are looking at the best way of doing this. We cannot have a situation in which people who are receiving an entitlement to the universal credit while generating no income at all over long periods of time still say that they are self-employed. We must ensure that that does not happen, and we are looking for the best way of doing it. If we wrote the rules into primary legislation, we would not be able to take decisions and fine-tune on the basis of experience, as we would have to come back to primary legislation every time. That is why I think it inappropriate to accept the right hon. Gentleman’s amendments.

Let me make some further progress. Amendment 33 seeks to remove the restriction on eligibility for pension credit for couples where one member is below and the other is above the pension credit qualifying age. Suffice it to say that although someone over the retirement age should be able to receive benefits for the household under the pension credit system, someone under the retirement age being able to receive the benefits of a means-tested system without having to go out and look for a job is just plain wrong. I am afraid we disagree on that, and I am comfortable with the changes. They are set out in legislation, which is where one would expect them to be set out. I am disappointed at the right hon. Gentleman’s disappointment that we have not issued a press release on the subject, but I do not think that this is the kind of change that would command the front pages of any newspaper. It seems perfectly reasonable to set out proposed changes in legislation, given that it is legislation that is laid before the House with accompanying explanatory notes that Members can read and discuss and into which they have an input.

Amendment 68 would add additional provisions for carers to paragraph 4(4) of schedule 1. It is not necessary to set a minimum level of payments to carers. The risk is that the incentives for carers to get into work are blurred by the automatic payment of an amount that does not relate to their personal circumstances. We all agree that work, not benefits, is the best route out of poverty, and we must ensure that payment levels are not set so high as to undermine that.

Amendment 61 takes us back to an issue that was extensively debated in Committee in respect of the payment of universal credit. Opposition Members suggest that that default position should be that payments made in respect of children are routinely directed to the carer. The amendment would provide powers to specify other circumstances for paying a portion of the universal credit award to a particular individual.

We have published a policy briefing note setting out our intentions for payments. We have already said that couples will be able to choose which of them receives the award and they could direct it to a joint account for both to access. It is a core principle of our approach that individuals are best placed to make choices about what is best for their own circumstances. There will, of course, be some exceptional circumstances and there are powers within the Bill to amend the Social Security Administration Act 1992 to allow the Secretary of State to pay all or part of an award to another individual. We do not need this amendment to ensure that. However, the default position should be that we make payment to the person chosen by the couple, not by anyone else.

Many of the concerns raised in this debate are, of course, about the possibility that universal credit might be less generous to some people than the current system of benefits and tax credits. We propose a radical reform and a simplification of the welfare system. In that situation, it is not possible to replicate exactly every aspect of the current system. That is why we will introduce a system of transitional protection to ensure that there are no cash losers as a result of the move to universal credit.