Clause 11 - Changes to child tax credit

Welfare Reform and Work Bill – in a Public Bill Committee at 9:25 am on 13th October 2015.

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Photo of Hannah Bardell Hannah Bardell Shadow SNP Westminster Group Leader (Fair Work and Employment) 9:25 am, 13th October 2015

I beg to move amendment 44, in clause 11, page 12, line 39, leave out “2017” and insert “2022”.

This amendment would see current arrangements for child tax credit remaining in place for children born before 6 April 2022.

I hope Committee members have all had an enjoyable recess and a successful conference. Unfortunately, the Scottish National party has to juggle a week of Bill Committees and conference, so the week will no doubt be a busy one for us.

From the outset I want to make it clear that the SNP wholeheartedly condemns the intentions behind the clause, which will exclude many of the poorest children in society from the support of our social security system, against the very principles on which that system was set up. The two-child policy, which has been much discussed, will affect more than 872,000 families who receive support for third and subsequent children. I cannot understand how anyone in Committee could say that that was fair, just or necessary.

The stark reality is that the Government’s national child poverty strategy recognises that the risk of poverty is much more significant in larger families than in smaller ones. A third of the children living in poverty live in families with three or more children. Perhaps it is for that reason that the Government are seeking to airbrush child poverty from the statute books. It is easy  for the Government to come in with a clean page, to spout theories without evidence and to claim that reducing financial support to only two children will make poorer families rethink their financial choices, but that is based on the falsehood that all children are planned and that it is possible to plan financially for children. As I am sure we all know, that is not possible.

What if someone’s second pregnancy turns out to be twins, or even triplets? We still have no real clarity on how multiple births will be treated. Will the Minister concede that such eventualities simply cannot be planned for? Perhaps he needs a biology lesson. Are we telling families to stop having children just in case? The scenarios are not that simple.

I have raised many times in Committee and on the Floor of the House, as have my SNP colleagues, the very sensitive issue of children resulting from rape and the even more insensitive plan of the Minister and the Government to make women justify their children in front of a caseworker from the Department for Work and Pensions. Many organisations have stated clearly that their staff have to train for a considerable amount of time to support women who have been raped, so I cannot understand how the Government’s proposed system and policy will work.

I therefore ask, clearly and specifically, for the Minister to keep in place the existing arrangements for children born before 2022 and to tell the Committee, before we vote on the amendment, exactly what his Department’s plans are for that. We all have to deal with constituency cases, but I am interested to know how any Government Members would deal with a woman coming to them who cannot seek benefit because she has been raped and therefore has to justify herself to the DWP. Even in evidence to the Committee, stakeholders described the policy as “unpalatable”. Does it simply show, at the height of Tory insensitivity, how out of touch the party is with reality? My view and that of my colleagues is that the Government have simply not thought things through.

When the Minister responds, will he tell me just how a woman would prove that her child was a result of rape? We all know the difficulties involved in securing a criminal conviction in that respect, as well as the high burden of proof, never mind the devastating emotional impact on the victim. What exactly will be the Government’s standard? Why did the Minister, and the Conservatives generally, think it appropriate to include the issue? The policy will ultimately result in a complete abuse of rape victims’ privacy, leading to serious emotional damage of the child should he or she become aware through the social security system that they are the result of rape. Imagine someone finding that out purely because their parents seek benefits.

Let me be clear: discussing this matter is not something I do lightly, but the SNP feels, as I hope others on the Opposition side of the Committee feel, that we must speak up. Amendment 44 would kick the policy into the long grass. Even campaigners Women Against Rape have called the policy “disgusting”, saying it will have “appalling consequences”. The SNP stands firm with that position and urges the Government to remove the two-child policy from child tax credit and universal credit provisions to ensure that no victim or child should go through the torment associated with justifying a third child, given the horrific crime inflicted on them.

Given the current economic climate, families simply cannot plan for a third child, or subsequent children. What if their first or second child was the result of rape, and they went on to have further children, but their economic circumstances changed? The Government’s failure to secure a strong, thriving economy with stable employment opportunities means that, although the members of a family may have stable and reliable jobs, there is, as we have seen, no guarantee that someone who decides to have a child will be employed for the next 18 years. To deny assistance to families who fall on hard times completely flies in the face of what the welfare system was built for.

Working people will ask why they pay their taxes when they can no longer receive support in our social security system. Will they be made to feel that their third child was a bad choice because the company they worked for made them redundant? Does the Minister have an answer for the parents of twins or other children? Could he, or any Government member of the Committee, look into a constituent’s eyes and say with a clear conscience that that constituent’s bad financial planning means they deserve no support from the Government?

The provisions in the Bill are nothing more than a move to socially engineer society into a form the Tory Government have dreamt up—one where the right to have a third child is a luxury reserved for the rich. That is not a society that I, any of my colleagues or, I believe, anybody in this country wants to live in. That is why the SNP are standing up for the poor, for hard-working folk and for children. We want to protect them when they fall on challenging times.

Child Poverty Action Group research shows that many families in receipt of tax credits are already struggling to meet their children’s most basic needs. Current levels of entitlement cover only between 73% and 85% of the cost of raising a child. Removing tax credit entitlements will only widen that gap further. Ultimately, the provision in the Bill could sink more families below the breadline, leaving children at risk of ill health and lower educational attainment.

From the heart, and using my head, I can only urge all Members to unite with the SNP today and to think of the constituents who will come to them—those with three or more children and those struggling to get more hours at work to make ends meet. Members should think of what rejecting the policy will do for those people: they will be able to look their constituents in the eye and say they did everything they could to stop the policy. If we, as parliamentarians, are here to legislate for those we represent, let us legislate properly and with our consciences. The provisions in the Bill do not make good law, so I ask Members to please think again and vote with us.

Photo of Emily Thornberry Emily Thornberry Shadow Minister (Work and Pensions)

It is a pleasure to return to the Committee, Mr Streeter.

The two-child policy—there is a list of political regimes that begins with the Vietnamese communists and the Iranian theocrats—is not going to end well. We are debating a proposal that would see the current Administration join that inauspicious rank of people who at one time or other have imposed state-sanctioned limits on the number of children a family can have. Even the ayatollahs backed away from it in recent years.

Of course, there is a caveat in the Bill that adds a layer of unpleasantness to the proceedings. The Government will impose a limit on family size that applies only to poor families. At least the other countries tried to stop all families from having more children. This Government seem to focus only on the poor. They seem to be trying to limit the number of children that the poor have.

We are not all poor always. Some of us might begin life by being quite well off and comfortable and able to make decisions. We would know we could be completely confident that we could be independent, but then things happen. That is what the social security system has always been about. I speak from personal experience. My parents were allegedly, supposedly happily married. They had three children and then one day, when I was seven and my younger brother was five and my other brother was three, my father left—he left the country and abandoned us. I remember the bailiffs came round. They were wearing bowler hats—this was the ’60s—and they threw us out of our house. We had nowhere to go and we had no money and the welfare state picked us up and gave us accommodation. They gave us a house. Nobody said, “How many children have you got? You’ve been very reckless, Mrs Thornberry, I’m sorry we can’t give you any money for the third child. Young Ben Thornberry is going to have to starve.” There was none of that thinking. It was tough, but we were looked after. Nobody looked down on my mother for having made a decision with my father to have three children. That was a long time ago, but I feel that that is the sort of Britain we ought to want to be involved in.

We ought to be able to have a Britain where we have a safety net that looks after people when they find themselves in difficult circumstances. We do not want to have a Government that tells people, “Now listen here, you look a bit rough round the edges. We don’t want you to have any more than two children. Lord knows what they will be like and you won’t even be able to look after them. Sorry, but no, that’s it.” Where will it end?

Frankly, this is an extraordinary piece of legislation. It is shockingly bad and it flies in the face of a British value of which I have always been very proud—that we look after the weakest and poorest and have a safety net. If things happen, people will not starve. We should not say, “I’m sorry, we are now in a world where people must make choices.” The third or fourth child does not make a choice to live. The third, fourth or fifth child is not to be blamed for their existence. The sixth child is not to have no shoes because of a reckless mother who cannot keep her legs crossed. It is not the sixth child’s fault that he is the sixth child. Why should he starve? How will it make a difference? What is the evidence that the Government want to put before us that will tell us that a change to the benefits system in that way will stop people having more children?

It is interesting that there is not going to be an equality impact assessment. The Government have learned their lesson. The last welfare Bill had 20 equality impact assessments, which the Opposition revelled in, as did all the people opposing that previous piece of pernicious legislation, because the assessments showed what the effect of welfare legislation would be. I may be quoting roughly—I will be corrected if I am wrong—but one of the equality impact statements produced for the previous Bill, which the Government have unfortunately not produced for this one, said that black and Asian families  were three times as likely to have more than two children. It is interesting that the Government decided not to have an equality impact assessment on clause 11. Perhaps nobody will notice that the legislation affects black and Asian families that much more.

We all know whom the Bill will affect: women—black, Asian, white or whatever. Women will be adversely affected by the Bill and will struggle to work out how they are going to afford a pair of shoes that winter for the fourth child. Mr Streeter, you may be surprised to hear this, but yes, we are against this particularly nasty piece of legislation. I do not know at this point if you wish me to speak to new clauses 5 and 6.

Photo of Damian Hinds Damian Hinds The Exchequer Secretary

The amendment seeks to delay the Government’s proposed changes to the family element of child tax credit until April 2022. The Government were elected on a mandate to reduce the deficit and restore order to our public finances. As part of the plan to get us into surplus and to continue the progress made in the previous Parliament, the Government have committed to making a further £12 billion of welfare savings.

To set the scene, the most recent statistics show that, in 2011, the level of UK expenditure on family benefits was the second highest out of the 34 countries in the OECD and almost double the average. Child tax credits are there, of course, to provide support to low-income families to help them with the costs of raising children.

Photo of Debbie Abrahams Debbie Abrahams Shadow Minister (Work and Pensions)

Will the Minister clarify those figures? Are they in terms of percentage of spend to GDP or absolute figures?

Photo of Damian Hinds Damian Hinds The Exchequer Secretary

The OECD has done a survey based on percentage of spend to GDP. The hon. Lady has not asked this question but let me clarify further: it takes together family benefits, cash benefits, tax breaks and childcare. Of course, the mix is different in different countries. Nordic countries tend to spend more on direct childcare and Anglophone countries tend to spend less on that but put more into tax breaks. Our country has tended to spend a little bit more on cash benefits and on childcare.

As I said, child tax credits are there to provide support to low-income families to help them with the cost of raising children, but the system has grown unsustainably—a family with three children that earns up to almost £40,000 could still be eligible for some support. The previous Labour Government let public spending on tax credits rocket out of control so that, in 2010, nine out of 10 families with children were eligible for tax credits. That was not targeted support for low-income families.

Photo of Emily Thornberry Emily Thornberry Shadow Minister (Work and Pensions)

Does the Minister agree that we have in this country a unique system that in fact helped us to weather the international storm caused, not by Gordon Brown being at Lehman Brothers throwing dollar bills out the back window, but by an international  financial crisis, and that we did not have higher levels of unemployment because measures such as in-work benefits meant that people could continue to work and employers did not feel the need to continue put up wages because they felt that it was easier to continue to employ people? Does he agree that in-work benefits have resulted in people remaining in work?

Photo of Damian Hinds Damian Hinds The Exchequer Secretary

The hon. Lady tempts me into a wider debate about the deficit, which would be interesting to get into, particularly with some of the news this morning about her own party’s interesting deliberations on how the deficit should be dealt with. I do not think that anybody denies that there was an international financial crisis in 2007-08, but it is also true—I doubt that many people will deny it, though she may be one who does—that it came on top of a structural budget deficit that was out of control because we had spent too much and borrowed too much, even in the good years.

Photo of Damian Hinds Damian Hinds The Exchequer Secretary

It is interesting that the hon. Lady says “nonsense”.

Photo of Gary Streeter Gary Streeter Conservative, South West Devon

It is interesting, but it is not strictly to do with amendment 44. I am sure the Minister is about to return directly to it.

Photo of Damian Hinds Damian Hinds The Exchequer Secretary

I fell into the temptation of the wider debate, but I will now get away from it. However, the existence of the structural deficit and the continuing problems that we find ourselves in post 2007-08 are why we need to get our public finances back into order.

Nobody would deny the existence of automatic stabilisers, as the hon. Lady mentioned, but we need a welfare system, a benefits system and general public finances that are sustainable and fair to all people—those who pay in and those who are beneficiaries. Despite reforms in the previous Parliament reducing the number of families eligible for tax credits to six out of 10, the current level of spending on tax credits is unsustainable.

Photo of Damian Hinds Damian Hinds The Exchequer Secretary

I think I ought to make some progress. [Interruption.] Oh, go on then.

Photo of Neil Coyle Neil Coyle Labour, Bermondsey and Old Southwark 9:45 am, 13th October 2015

I am glad that my disappointed face worked on this occasion.

Although the suggestion that the change is about balancing the books is fine on one level, the Minister has had specific requests for information about families who will not feel that they are personally responsible for the national economic position. We heard from the hon. Member for Livingston about incidents of rape, and we have heard a discussion about the equality impact assessment. I would like the Minister to address the concerns of people of faith who do not believe in contraception. Will they be subject to the cap?

We know that the Chancellor of the Exchequer is a big fan of China, but even in China, with its single child policy, there is flexibility within the system to allow people from minority ethnic communities to have more than one child, to allow people from farming and rural communities to have more than one child—

Photo of Gary Streeter Gary Streeter Conservative, South West Devon

Order. Interventions should be brief. I sounds like the hon. Gentleman perhaps missed his opportunity to make a speech in this debate. He has made his point, and I am sure that the Minister will give way for a further intervention if he wishes.

Photo of Damian Hinds Damian Hinds The Exchequer Secretary

Thank you, Mr Streeter.

Let me be clear, lest there be any doubt, that this is not about limiting the number of children that people have. It is about financial support in the form of child tax credit. Child benefit, for example, will continue to go up in line with the number of children. The hon. Gentleman says, and he is right, that individual families are not responsible for the financial mess that our country found itself in as a result of the unholy combination of the financial crisis and the previous Labour Government. That is correct, but we do have a shared future, and it is the responsibility of a Government, on behalf of all their citizens, particularly the most disadvantaged and vulnerable, to make sure that we have sound finances, that we can continue to afford to pay for our public services, that we can continue to afford to invest in our national health service and that we can give people the support that they need.

Photo of Damian Hinds Damian Hinds The Exchequer Secretary

I think I will have to move on a little.

Last year the Government spent almost £30 billion on tax credits—more than three and a half times what we spent on military personnel. That level of spending on tax credits is unfair on those who foot the bill, who are, of course, other taxpayers. That is why the Government took steps in the summer Budget to put tax credit spending on a more—[Interruption.] Does the hon. Member for Birmingham, Yardley want to intervene?

Photo of Jess Phillips Jess Phillips Labour, Birmingham, Yardley

Yes, I do; I just want to point out that people who are on tax credits are in work. They are taxpayers, and they are therefore paying that bill. The Minister should not pitch two sets of people against each other. He should recognise that people who get tax credits work.

Photo of Damian Hinds Damian Hinds The Exchequer Secretary

I do not know whether the hon. Lady deliberately did not hear me say that. I did say that people who pay the tax credit uplift are other taxpayers. That is true. That is not pitching one person against another, it is just a statement of the reality, a statement of how the system works. That is why the Government took steps—[Interruption.] Does the hon. Lady want to intervene again? She keeps on speaking.

Photo of Jess Phillips Jess Phillips Labour, Birmingham, Yardley

I am more than happy to do so. The Minister is being extremely divisive. What he actually said was that the person footing the bill was basically someone else. The Government are basically trying to make some people feel that they are being robbed for the sake of the poor. When I lived on tax credits, I worked probably about a 14-hour day. I will not have it said of people such as me and my hon. Friends that we were beholden to someone else. We were taxpayers.

Photo of Damian Hinds Damian Hinds The Exchequer Secretary

I do not recall referring to the hon. Lady’s specific case or the case of anybody else on the Opposition Benches. Nor did I say that anybody should feel bad for supporting others, but there is a case for  balance. It is just a statement of fact that, in any tax and benefits system, benefits paid to one group or person have to be paid for by others, and we have to make sure that that system is fair.

As the hon. Lady will recall, we had a great reforming Budget with a set of measures to move us from a low-wage, high-tax, high-welfare society to a lower-tax, higher-wage, less welfare-reliant society, including measures such as the national living wage, with which we seek permanently to reform the structure of the economy and the way the system works.

Photo of Damian Hinds Damian Hinds The Exchequer Secretary

I will give way one last time to the hon. Lady, and then I must progress.

Photo of Hannah Bardell Hannah Bardell Shadow SNP Westminster Group Leader (Fair Work and Employment)

On the point that the hon. Member for Islington South and Finsbury made about families in work who are on tax credits, the Institute for Fiscal Studies—which the Government have quoted on a number of occasions—has said that the increase in the minimum wage, which is not a true living wage, will not compensate for the cuts that are coming to tax credits, which will hit the poorest hardest and is a regressive policy. What does the Minister say to the IFS?

Photo of Damian Hinds Damian Hinds The Exchequer Secretary

I say that these are major structural changes. I think you would admonish me, Mr Streeter, if I went too far down this road, because we had this debate on the Floor of the House and there will be other opportunities to discuss the matter.

We are talking about helping people through the national living wage and increases in the income tax personal allowance, but also through measures such as childcare support and, most important of all, the general strength of the economy. We see real wages rising very strongly at the moment, and we have very low inflation and very strong economic growth. Those are the things that most help families with their budgets and living standards.

In the summer Budget, the Government took steps to put tax credit spending on a more sustainable path, including by limiting the individual element of child tax credit to two children and by removing the family element of child tax credit for those who are not responsible for a child or qualifying young person before 6 April 2017. The average family size in this country has decreased over recent decades. The average number of dependent children in families in the UK in 2012 was 1.7.

Photo of Damian Hinds Damian Hinds The Exchequer Secretary

I will not, if the hon. Lady will forgive me.

The Government believe that it is fair and proportionate to limit support through tax credits and universal credit to two children per family. The measures in clause 11 will ensure that there is greater fairness between those receiving benefits and those paying for them, and will ensure that, in the future, families in receipt of benefits face the same sorts of financial decisions when they consider having children as those supporting themselves solely through work. The Government decided to implement the measures from April 2017 to give families  time to make decisions about having more children. That provides sufficient time for those considering whether to have more children to make plans, while at the same time putting tax credits on a more sustainable footing.

The hon. Member for Livingston quite rightly raised some of the difficult issues. We have already been clear about multiple births, and there will be more detail forthcoming on that. We will also have a chance discuss that in debates on further amendments. The Government have been absolutely clear that if parents have twins or triplets and previously there were fewer than two children in the household, that will be treated as a single birth. In the most difficult circumstance—a child conceived as a result of rape—it is right that the Government take a careful and sensitive approach to working out how best to deal with those circumstances and support women through that situation in relation to the tax credit system. There will be more detail in due course.

Photo of Hannah Bardell Hannah Bardell Shadow SNP Westminster Group Leader (Fair Work and Employment)

Should the Government not have thought that through before they put the policy in place?

Photo of Damian Hinds Damian Hinds The Exchequer Secretary

It is not at all uncommon for a Government to say that particular aspects of the implementation of a policy are delicate and sensitive and require careful thought with external stakeholders who are experts in the field. That is what will happen in this case. I do not feel the need to defend that. It is the right thing to do because there are people who have expertise, and it is absolutely right that they should have the opportunity to be consulted.

Photo of Damian Hinds Damian Hinds The Exchequer Secretary

I will not, if the hon. Gentleman will forgive me.

The Government will continue to support larger families through child benefit, which is paid for all qualifying children in a household. There are 15 hours of childcare available to the 40% least advantaged families. Families will continue to receive 15 hours a week of free childcare for all three and four-year-olds, and the Government have announced that from September 2017 that will be extended to 30 hours for parents who are in work. I therefore urge the hon. Member for Livingston to withdraw the amendment.

Photo of Hannah Bardell Hannah Bardell Shadow SNP Westminster Group Leader (Fair Work and Employment)

I will be brief, because I and my colleagues covered the points in our initial remarks. From what the Minister has said, it is clear that there was no consultation and consideration on the most serious parts of the Bill, including the issue of the third child and the matter of rape. We have no details, and many organisations have said that those provisions were a great surprise to them.

I cannot believe that a Government would be so insensitive as to put a clause such as this one in a Bill. On the day of the Budget, when the policy was announced and we saw it in black and white, it seemed like an afterthought. To treat people as an afterthought—particularly women who are vulnerable and who have been raped—is nothing short of a disgrace.

The IFS has been very clear that the Budget and these policies will hit the poorest in society hardest. In Scotland, the Daily Record recently reported that the

“poorest households could be more than £500 a year worse off in 2020 as a result of changes made in Chancellor George Osborne’s budget...800,000 households north of the border will have less cash as a result”,

and that the

IPPR Scotland think-tank found there would be more winners than losers, with some 1.3 million households expected to be better off. But while the richest 20 per cent of households will gain £110 a year by...2020/21, the impact of tax and benefit changes on the poorest 20 per cent of households will see them lose an average of £520 a year.”

Getting our finances into a surplus cannot come at the cost of people’s lives, including children’s lives, and at the cost of making the poorest even poorer.

Question put, That the amendment be made.

The Committee divided: Ayes 9, Noes 11.

Division number 26 Decision Time — Clause 11 - Changes to child tax credit

Aye: 9 MPs

No: 11 MPs

Ayes: A-Z by last name

Nos: A-Z by last name

Question accordingly negatived.

Photo of Corri Wilson Corri Wilson Scottish National Party, Ayr, Carrick and Cumnock

I beg to move amendment 45, in clause 11, page 13, line 10, leave out “one other child” and insert “two other children”.

This amendment would retain entitlement to child tax credit for families with three children.

Photo of Gary Streeter Gary Streeter Conservative, South West Devon

With this it will be convenient to discuss the following:

Amendment 46, in clause 11, page 13, line 10, leave out “one other child” and insert “three other children”.

This amendment would retain entitlement to child tax credit for families with four children.

Amendment 47, in clause 11, page 13, line 10, leave out “one other child” and insert “four other children”.

This amendment would retain entitlement to child tax credit for families with five children.

Amendment 48, in clause 11, page 13, line 10, leave out “one other child” and insert “five other children”.

This amendment would retain entitlement to child tax credit for families with six children.

Amendment 50, in clause 12, page 13, line 18, leave out subsections (1) to (4).

This amendment would retain entitlement to the child element of universal credit for families with more than two children.

Amendment 51, in clause 12, page 13, line 22, leave out “two” and insert “three”.

This amendment would retain entitlement to the child element of universal credit for families with three children.

Amendment 52, in clause 12, page 13, line 22, leave out “two” and insert “four”.

This amendment would retain entitlement to the child element of universal credit for families with four children.

Amendment 53, in clause 12, page 13, line 22, leave out “two” and insert “five”.

This amendment would retain entitlement to the child element of universal credit for families with five children.

Amendment 54, in clause 12, page 13, line 22, leave out “two” and insert “six”.

This amendment would retain entitlement to the child element of universal credit for families with six children.

New clause 5—Entitlement to housing benefit—

‘(1) Section 130A of the Social Security Contributions and Benefits Act 1992 (Appropriate maximum housing benefit), is amended as follows.

(2) After subsection (2) insert—

“(2A) Entitlement to housing benefit shall not be restricted in respect of a maximum number of children or qualifying young persons for whom a claimant is responsible.”’

To prevent the Secretary of State from limiting entitlement to housing benefit by taking into account only a certain number of children in a family.

New clause 6—Entitlement to housing costs under Universal Credit—

‘(1) Section 11 of the Welfare Reform Act 2012 (Housing costs), is amended as follows.

(2) After subsection (5) insert—

“(6) Entitlement to an amount under this section shall not be restricted in respect of a maximum number of children or qualifying young persons for whom a claimant is responsible.”’

To prevent the Secretary of State from limiting entitlement to housing costs under Universal Credit by taking into account only a certain number of children in a family.

I will allow a wide-ranging discussion on this group of amendments.

Photo of Corri Wilson Corri Wilson Scottish National Party, Ayr, Carrick and Cumnock

It is a pleasure to serve under your chairmanship once again, Mr Streeter, on another full day of scrutiny on a Bill that is about neither welfare nor work. It serves only to make some of the most vulnerable in society worse off. As I speak to amendment 45 and the other amendments in this group, I am going to raise some of the issues that I find most absurd about the Bill.

I was, as may be expected, disheartened to see the Committee reject amendment 44. It was, however, not a surprise that Government Members would oppose the plan to keep the family element of child tax credit for at least another five years. For that reason, the Scottish National party is looking to protect larger families through this series of amendments. We tabled each of the amendments because protection needs to be afforded to all families, large or small. Families include children, and the policies in the Bill will affect young children. That is why my party opposes the Bill in its entirety.

Amendment 45 would retain entitlement to child tax credits for families with three children, amendment 46 for families with four children, amendment 47 for families with five children and amendment 48 for families with six children. Our amendments come with  a sense of fairness. As my hon. Friend the Member for Livingston has pointed out, we in the SNP believe in fairness, and we are seeking to lessen the hardship inflicted on families.

It is important to put these proposals into context. Some 21% of families in receipt of child tax credit have three or more children. The report by the Child Poverty Action Group makes it clear that one third of children living in poverty live in larger families, and the amendments can only be seen as protecting larger families from poverty.

A lot of evidence against the Government’s proposals has been submitted to the Committee in writing, and I urge the Minister to look at it carefully before Report. I want to look at some of the specific statistics that prove that the policy will plunge larger families into more poverty. The debt charity StepChange has shown that at present, 17% of families with three or more children have a budget deficit. Should the proposals to scrap support for the third and subsequent children go through, it predicts that to increase to 90%. Some 90% of families with three or more children will then be working to a deficit. I do not understand how the Minister can continue to support the policy, but I guess that his Government are quite used to increasing a deficit. Some 69% of StepChange clients who are in receipt of child tax credit and who have budget deficits also have arrears on their rent or mortgage payments, gas and electricity bills or council tax.

It is quite obvious to me—I do not understand how it cannot be obvious to the Minister—that the removal of the child and family element for larger families would place families in a position where they simply could not cope. Problem debt would spiral out of control, and more barriers to work would be created than opportunities. Amendments 53 and 54 are intended to retain the same protection as the amendments I have already discussed, but this time in clause 12 for those seeking to claim the child tax element of universal credit. While we are talking about universal credit, I can only hope that that the Minister has had the chance to consider the annual report of the Adjudicator’s Office, and will confirm that the Department will work to ensure that families do not face disruption during the move to universal credit.

I would like to touch on new clauses 5 and 6, in the name of my Labour colleagues. I believe that they are aimed at restricting the Secretary of State’s ability to reduce access to housing benefit and housing costs under universal credit based on the number of children in a family. We in the Scottish National party will of course support any amendment that looks to restrict the Secretary of State’s powers that can be used without full scrutiny by the House of Commons. We agree with our Labour party colleagues that larger families should not be penalised.

Finally, the increase in the national minimum wage is not the panacea of change that Minister will claim. The Joseph Rowntree Foundation has said that the only households that will benefit from the increase will be low-paid working couples. Only 2% of StepChange clients who receive child tax credits are families with both parents in full-time employment. I urge all hon. Members to support the amendments. We will press amendment 45 to a vote, in order to protect larger families from poverty and problem debt.

Photo of Emily Thornberry Emily Thornberry Shadow Minister (Work and Pensions) 10:00 am, 13th October 2015

I should like to speak to new clauses 5 and 6 in particular, which are grouped with the amendments. New clause 5 would prevent the Secretary of State from limiting entitlement to housing benefit based on family size, and new clause 6 would do a similar job with universal credit. There is no mention in the Bill of limiting housing benefit on the basis of family size. That is odd. It is a radical proposal, it is pernicious, it needs scrutinising and it is not there, but we are told that it is coming. The Red Book mentions that there will be a limit on tax credits to a maximum of two children and then states, on page 38:

“An equivalent change will be made in Housing Benefit to ensure consistency between both benefits.”

It is coming—it is linked with the limits on tax credits—but the Government have not yet told us about it. We therefore want to pre-empt that and have a discussion now, putting in our new clauses.

Another removal of money from poor families is the getting rid of what is called the family premium. The premium is an acceptance that families are expensive and that a working family ought to have more of its income disregarded when assessing entitlement to housing benefit. On getting rid of the family premium, Shelter has said:

“Exploiting the complexity of housing benefit and tinkering with means tests and tapers is a clever ruse to extract savings from housing benefit in a technical way that doesn’t attract attention in the way that big, visible cuts like the bedroom tax did.”

Well, we have noticed.

If the Government get their way, they will be abolishing the family premium for housing benefit. That means that families—working families—will have £17.45 a week in earnings held against them when a decision is being made on whether they can get help with their housing costs. I do not know what the Government intend. Do they think that families are not expensive these days? Do they believe that the contribution of working families to the Osborne economic miracle by way of the cuts to tax credits is not enough, so the family premium ought to be cut as well? I would be grateful if the Minister enlightened us.

May I go back to limiting housing benefit to two children and how that will work? As I have said, the Government have stated their intention. I have a few questions because I do not understand it. Perhaps no such provision is included in the Bill because the policy has not been thought through yet. We might be being helpful to the Government if we raise some of the likely problems if they place a two-child limit on housing benefit. For example, will local authorities presented with a homeless family with four children be obliged to house them in housing that means that they are not statutorily overcrowded? If so, and the family is not working and the property is a local authority one, will anyone pay the rent? Will the Government pay rent only for two bedrooms and the other two bedrooms will not be paid? Or will the family be expected to pay the rent out of the child benefit?

The Minister repeated today that child benefit is not affected by the reforms, because the Government want to ensure a fair start in life for children in all families. That is certainly part of the Tory script at the moment, but it is not true—we have a script alert here for my hon. Friends. The irony is that there is an enormous difference between the level of support provided through child benefit, which is subject to a four-year freeze, and  that provided by tax credits. For a third child, a family can claim £712.40 a year, compared with £2,780 in tax credits.

The Government say of such families, “Don’t worry, they are still getting child benefit. They’ll be fine.” They will not be fine. In particular, families will not be fine if there are no tax credits for the third child and housing benefit is being taken away. The Government are therefore presumably expecting parents to pay for their rent out of—I do not know—jobseeker’s allowance, child benefit or something. How will that work? Will people simply have to end up living in cars, because that must be what the Government’s policy is about?

How will the Government assess whether they are giving housing benefit to a family with only two children, as opposed to three? Would they expect families possibly to split up, so that two children live with a parent at one address and two with another parent at another address? Housing benefit for four children could be paid in that way. Or would that be wrong? Given that there is a housing crisis in London, I cannot see how that would work because there is not enough accommodation for all the families as it is. In my constituency, I have 19,000 families waiting for accommodation. If the Government are to restrict housing benefit for larger families, where will they go? I would be interested to hear from the Minister as to what might happen.

The Government have not put that measure in the Bill, which may be because they have not really worked out what they mean, how it will work and what the impact will be on homelessness and the number of people living in cars. If they have not worked that out, perhaps that is a good reason for them not putting it in the Bill yet. I applaud them for that. Of course, there is another possibility: they want to slip the provision into a statutory instrument. If they put it into a statutory instrument, they do not need to have any impact assessment—heaven forbid they have an equality impact assessment! We know they will not have an assessment, so we will not know how much money, if any, will be saved, who will be affected, how much more homelessness or how much more child poverty it will cause. That is why we want to have a debate now, so that the Government are given the opportunity to tell us their thoughts and enlighten us, and so that we can explain to them why that is one of the more horrible aspects of their so-called welfare reform and something that will have a devastating effect.

I should bring up another point—I forgot to raise it earlier and I apologise for the illogical order, but it is important. The Government have said that they will abolish the family premium a full year before the introduction of restrictions to child tax credit. I wonder why. Will the Minister say why they are doing that? They will restrict child tax credit but will take away the family premium a year early. The Government say that the measure will apply to new claims but have not made clear what it will mean in practice. For example, would a family moving into a new area, perhaps as a result of the Government’s welfare reforms, be treated as making a new claim if an existing housing benefit was simply transferred from one local authority to another? Will the Minister help us with that? The proposals to restrict entitlement to housing benefit are not included in the Bill and, as I have said, we have not had any details on how the restriction will work in practice. The Minister has quite a lot of explaining to do.

Entitlement to housing benefit is currently calculated on the basis of the number of rooms a family needs, as we know. Children under 10 are expected to share a room, for example, with a single mother. A single mother with four young children would be entitled to claim housing benefit for a three-bedroom property. Are the Government proposing that she should be entitled only to a two-bedroom property? Indeed, are the Government expecting to change the law on overcrowding in order to accommodate those larger families who do not have the money to pay rent on a decent-sized property? It would be very helpful to hear from the Government on those points.

Photo of Damian Hinds Damian Hinds The Exchequer Secretary

The amendments serve a similar purpose: to increase, or indeed remove, the limit on the number of children or qualifying young people in respect of which a person is entitled to the individual element of child tax credit or the child element of universal credit, and to prevent limits being placed on the number of children for the purposes of calculating housing benefit or the housing costs element of universal credit.

I thank hon. Members for tabling the amendments. Despite the progress we have made towards reducing the deficit since 2010, we still ran a budget deficit of 4.9% last year and are expected to have the second highest deficit in the G7 in 2015. That is why it is important, indeed imperative, to get welfare spending under control, to help us get into surplus so that we can continue to increase our investment in our NHS, schools and pensions. As I have already mentioned, tax credit expenditure more than trebled in real terms between 1999 and 2010 and cost the taxpayer just under £30 billion last year.

Photo of Emily Thornberry Emily Thornberry Shadow Minister (Work and Pensions)

I wondered how much money the Government might save if they did not introduce their changes to inheritance tax?

Photo of Damian Hinds Damian Hinds The Exchequer Secretary

Today’s debate is not about inheritance tax. If the hon. Lady is making a point about fairness in the tax system, that would be a fair question to ask. In fact, if we look at the overall package of what the Government have done in tax and spending since 2010, we see that the distribution of spending between different income groups and society has stayed pretty much the same.

Photo of Damian Hinds Damian Hinds The Exchequer Secretary 10:15 am, 13th October 2015

Yes, indeed it has, and the incidence of taxation has shifted up the income scale so that the top fifth is now paying proportionately more than they were, and the top 1% who were paying 25% of income tax in 2010—[ Interruption.] The Opposition can shake their heads all they like and say it is not proportionate, but it is proportionate. That is exactly the point. The top 1% who were already paying 25% income tax in 2010 are paying—

Photo of Gary Streeter Gary Streeter Conservative, South West Devon

Order. I think this could go on for a while, but I am afraid that it is not directly relevant to the amendment and the Minister’s response to the amendment. I should not have allowed the intervention to take the Minister down a different path. Let us continue with amendment 45.

Photo of Damian Hinds Damian Hinds The Exchequer Secretary

The fault was all mine, Mr Streeter. I do not blame the hon. Lady and I apologise for my part in it. The last thing I was going to say was 27.5%.

The level of spending we have reached on tax credits—£30 billion—is unsustainable and carries a risk to our public services. That is why the Government have taken steps to ensure that the system is fair to those who pay for it as well as those who benefit from it. That is why the Government are limiting support to two children in child tax credit and universal credit from April 2017.

Amendments 45 to 48 and 50 to 54 would increase or remove the limit on the number of children or qualifying young people in respect of whom a person is entitled to the individual element of child tax credit or the child element of universal credit. If that policy were to protect six children in each household in terms of the payments or remove the limit completely, as suggested by SNP Members, there would be negligible savings from the measure and it would undermine our commitment to deficit reduction. It would also continue the unfairness that an out of work family with six children could receive over £17,000 per year in child tax credit in addition to other benefits if they are not subject to the benefit cap, while many working families would not see their budgets rise by anything like that when they have more children.

Photo of Damian Hinds Damian Hinds The Exchequer Secretary

I am going to press on for the moment. The average number of children in families in the UK in 2012 was 1.7. The Government therefore think it is fair and proportionate to limit support through tax credits and universal credit to the payments for two children. To give families time to prepare, the change will not come into effect until April 2017. In child tax credit, the change will affect families who have a third or subsequent child born on or after 6 April 2017 only. In universal credit, the change applies to any third or subsequent children born, or joining the household, on or after 6 April 2017 and to families making a completely new claim to universal credit after that date.

Photo of Jess Phillips Jess Phillips Labour, Birmingham, Yardley

I want some clarity on whether the measure relates to children born after that date or a new claim for a child after that date. What if my children were born in 2005 and 2010 and I do not currently need tax credits—who knows what the future will hold?—but need to claim them later? What if I need to go back on to tax credits after having a third child? Would my children count because they were born before or is it the claim that counts?

Photo of Damian Hinds Damian Hinds The Exchequer Secretary

I believe we will have an opportunity at a subsequent stage to debate that point in detail in relation to a subsequent amendment, but I do not want to keep the hon. Lady waiting. To be clear in simple terms, the tax credit system is for new births after April 2017; universal credit is for new births and for new claims. Of course, universal credit is replacing the tax credit system. When we talk about new claims, that is with a gap of six months. It may apply to someone who has never been in that system before or in the predecessor tax credit system, or who has been out of both systems for a period of six months.

Photo of Damian Hinds Damian Hinds The Exchequer Secretary

I do not want to pre-empt the more interesting discussion we may have later, but on the grounds that the intervention is relevant, as always, I give way.

Photo of Neil Coyle Neil Coyle Labour, Bermondsey and Old Southwark

As universal credit is rolled out, will the Minister provide families with a time machine so that they can go back and not have children?

Photo of Damian Hinds Damian Hinds The Exchequer Secretary

I fear that that is another invitation to err from the path of the rightful debate.

On new clause 5, the intention seems to be to amend section 130A of the Social Security Contributions and Benefits Act 1992 to prevent the Secretary of State from making changes to housing benefit that would restrict the number of children who can be included in the housing benefit assessment. Housing benefit and the housing element in universal credit take into account the number of children for whom the claimant is responsible. There is no maximum number attached to that, and the Bill does not introduce one.

The only related changes to housing benefit, which will follow in regulations, are to ensure that a claimant’s housing benefit award is no higher than it would have been if the tax credit changes were not introduced. Obviously, without those changes, the tax credit change would have the unintended effect of awarding claimants with more than two children a higher amount of housing benefit, which would reduce the savings from the tax credit change.

Let me be absolutely clear, because the hon. Member for Islington South and Finsbury raised some very reasonable questions, which we need to address directly. As she knows, housing benefit is made up of a number of elements. That includes taking into account the number of children in calculating the family’s income. The family premium she mentioned is part of that calculation. The changes will affect the calculation of family income, but not the number of rooms allocated, which is a separate issue.

Photo of Emily Thornberry Emily Thornberry Shadow Minister (Work and Pensions)

I do not think that I have quite understood—it is my being slow, and I know he is trying to be helpful. The number of rooms allocated will be down to whether the local authority has accommodation available or access to private sector accommodation. It will also be a matter of need. However, the local authority will not be able to rent a larger property to a larger family if there is not enough housing benefit to cover that. What I really did not understand—I am so sorry, and I may understand it when it read it—is whether the Government will restrict housing benefit to larger families and say, “You may be a six-person family, but we are not going to give you enough money to rent a four-bedroom property”?

Photo of Damian Hinds Damian Hinds The Exchequer Secretary

The change in the regulations will ensure that, for families with more than two children, housing benefit does not rise to offset the notional loss in tax credit or universal credit, because the amount saved in tax credit would then reappear in housing benefit.

Let me move on to new clause 6, which is related. The housing cost element in universal credit is an additional amount paid to a claimant to cover the costs of the accommodation they occupy as their home. The new clause seeks to amend section 11 of the Welfare Reform Act 2012 by making it clear that the Secretary of State will have no power to make regulations limiting the amount of the housing costs element based on the number of children living in the home.

In calculating the amount of a renter’s housing element under the universal credit regulations, a determination is, as the hon. Member for Islington South and Finsbury said, made as to the category of accommodation it is reasonable for the renter to occupy, having regard to the number of people in the household. Claimants in rented accommodation are currently entitled to one bedroom for each qualifying young person for whom they are responsible; one bedroom for two children who are under 10 years old; one bedroom for two children of the same sex; and one bedroom for any other child. Additional rooms are available in certain other circumstances. The Bill does not make changes to matters such as the number of rooms the claimant’s family is allowed as part of the local housing allowance or removal of the spare room subsidy.

It is right that families on benefits should in future face the same financial considerations when deciding whether to have more children as families who support themselves solely through work. I therefore urge hon. Members not to press the provisions.

Photo of Naseem Shah Naseem Shah Labour, Bradford West

It is a great honour to serve under your chairmanship, Mr Streeter. I might just need the time machine we heard about. I have three children, but if I was not in a job in five years’ time, after the next election, my youngest child would not qualify for a bedroom. Which one would the Minister like me to put into care?

Photo of Damian Hinds Damian Hinds The Exchequer Secretary

In future, a different system will be in operation. It limits the cash support through the tax credit system to two children. It will continue to include child benefit, and it will also include enhanced child care. For example, we will be moving to 30 hours of free childcare for all three and four-year-olds and there will be further improvements in universal credit.

Photo of Damian Hinds Damian Hinds The Exchequer Secretary

I think the hon. Lady’s point was about her child. I do not think she meant it as a direct question. [ Interruption. ] I am trying to explain that there will be a limit to the amount of financial support coming through the tax credit system according to the number of children, but there will be other elements still in place, and enhanced elements in relation to childcare. There will also be a further increase in the income tax personal allowance and a major structural reform in the labour market so that the tax credit system does not top up low wages. People will be paid properly for the job that they do via the national living wage, and we estimate that 65% of people who benefit from the national living wage will be women.

Photo of Corri Wilson Corri Wilson Scottish National Party, Ayr, Carrick and Cumnock

In tabling our amendments, the SNP seeks to lessen hardship in families. We want families, no matter how many children they have, to be able to  access the child tax credit and child element of universal credit to allow children to have the best possible start. Life is complex and not quite as black and white as the Bill suggests. When my children were at school, I was a single parent and I worked full time. I wanted to work, but, without the tax credits, I could not have afforded to. Please do not cut this lifeline for people in a similar position today. We will press amendments 45 and 50 to a vote.

Question put, That the amendment be made.

The Committee divided: Ayes 9, Noes 11.

Division number 27 Decision Time — Clause 11 - Changes to child tax credit

Aye: 9 MPs

No: 11 MPs

Ayes: A-Z by last name

Nos: A-Z by last name

Question accordingly negatived.

Photo of Gary Streeter Gary Streeter Conservative, South West Devon

Amendment 50 will be taken later in our proceedings this morning.

Photo of Emily Thornberry Emily Thornberry Shadow Minister (Work and Pensions)

Mr Streeter, may I make it clear that new clauses 5 and 6—I should have said this earlier—were probing amendments?

Photo of Gary Streeter Gary Streeter Conservative, South West Devon

In any event, they would have been considered later, but it is helpful to know that.

Photo of Emily Thornberry Emily Thornberry Shadow Minister (Work and Pensions)

I beg to move amendment 83, in clause 11, page 13, line 12, at end insert—

‘(3C) The limit on the number of children or qualifying young person for whom an individual element of child tax credit can be claimed, as set out in subsection (3B), shall not apply to households where one or more of the child or qualifying young person in that household is disabled. This includes, but is not limited to, those persons in receipt of the disability element of child tax credit.’

The amendment exempts households from the limit on the number of children for whom the individual element of child tax credit can be claimed where one or more child in that household is disabled.

Photo of Gary Streeter Gary Streeter Conservative, South West Devon

With this it will be convenient to discuss the following:

Amendment 84, in clause 12, page 13, line 23, at end insert—

‘(1B) The limit on the number of children or qualifying young person for whom a child element of universal credit can be claimed, as set out in subsection (1B), shall not apply to households where one or more of the child or qualifying young person in that household is disabled. This includes, but is not limited to, those persons in receipt of the disabled child element of universal credit.’

The amendment exempts households from the limit on the number of children for whom the child element of universal credit can be claimed where one or more child in that household is disabled.

New clause 16—Exemptions to changes in child tax credit and child element of universal credit—

‘(1) The limit on the number of children for which child tax credit or the child element of universal credit can be claimed, as provided for clauses 11 and 12 of this Act, do not apply in the following circumstances—

(a) where the number of children exceeds two because the third (or subsequent) child was part of a multiple birth at the same time as the second qualifying child;

(b) where a third (or subsequent) child becomes a member of a household as a result of being fostered or adopted into that household, or enters the household as the result of a kinship care arrangement;

(c) in exceptional circumstances as defined by the Social Security Advisory Committee, including but not limited to—

(i) the claimant becoming unemployed;

(ii) the death of one of the parents in the claimant household; and

(iii) one of the parents in the claimant household leaving the household following a breakdown in relationship.

(2) No limit shall apply to a household where any child or qualifying young person is disabled.

(3) No limit shall apply to couples with dependent children who if living in separate households would not be affected by the limit.

(4) The Secretary of State shall, by regulation, establish an appeals process by which an individual can appeal a decision as to whether an exemption set out in this clause applies in their individual situation.’

Photo of Emily Thornberry Emily Thornberry Shadow Minister (Work and Pensions)

Amendment 83 exempts households from the limit on the number of children for whom the individual element of tax credits can be claimed where one or more of the children in the household is disabled. Amendment 84, which would amend clause 12, would carry the same requirement on to universal credit.

Any legislation that amends our current social security structure must have attached to its leg the aspirational legislation of universal credit, which I know that the Government hope will someday apply across the board. They have rolled it out for some of the simpler cases and they claim they will continue to roll it out, but we have been waiting for several years. However, we are told that it will happen, but we do not know when; it is not clear. We hear lots of stories about extraordinary overspends, computer systems that do not work and the Treasury tearing its hair out. We hear about all kinds of things going on behind the scenes, and we keep hearing that the implementation date has been pushed back. We will wait and see what happens. We appreciate that in the meantime we have to continue to produce two-legged administration with one leg in the current situation, and the second leg being the aspirational universal credit that at some stage in the future will apply to all of us. Good luck with it.

The purpose of the amendments is to ensure that the proposed changes to tax credits also apply to universal credit, and we are concerned about some of the dates. The amendments seek to test further some of the arguments that Ministers have made in their attempt to defend the proposals. Amendments 83 and 84 provide an exemption to the two child limit for any household where one child is disabled. The disability element, which is £3,140 a  year, is paid on top of the £2,780 a year that a family currently receives for a child. The Government claim in their impact assessment:

“In order to protect vulnerable households the support provided to families with disabled children through the disability elements” of child tax credits

“will not be affected by the changes”.

However, that is not correct because a family with a disabled child would see their entitlement reduced by more than half as a result of these changes, even before taking into account other changes such as the reduction of income thresholds, changes to taper rates and the four-year freeze of all-age benefits, which includes tax credits. The disability element is currently paid on top of the individual child element for good reason. It reflects an acknowledgment of the fact that the costs associated with raising a disabled child can be considerably higher. To begin with, childcare costs for working parents are disproportionately high, with 77% of parents saying that childcare is more expensive for disabled children than for non-disabled children, and in some cases three to four times as expensive. In those circumstances, it is our view that it would be wrong to interfere with tax credits and it would be particularly wrong to interfere with the disability element to which I alluded earlier.

Major changes are proposed for families with disabled children—families that find it difficult enough to cope as it is. They do an extraordinary job as parents and, frankly, not just as parents but for the sake of society, for all of us. These children are all our children, and the additional work that those parents put in and the additional support that they provide should be acknowledged and properly supported. The Opposition will not accept any attacks on the income that is necessary for those parents just to make ends make, so that George Osborne—[Hon. Members: “The Chancellor”]—so that the Chancellor can continue to slash taxes such as inheritance tax.

Photo of Jess Phillips Jess Phillips Labour, Birmingham, Yardley 10:30 am, 13th October 2015

Has my hon. Friend read the piece in this morning’s Guardian about kinship carers also being badly affected? Specifically, some people are now not being able to take on the care of disabled children who for a number of reasons cannot be looked after by their parents, because of the changes to their financial assistance.

Photo of Emily Thornberry Emily Thornberry Shadow Minister (Work and Pensions)

Yes, indeed. From speaking to people who have spent many years devoted to this sector and who have tried to make our safety net as good as it possibly can be in difficult times, the attacks are coming from so many different angles, at so many different levels and so fast, that for many of us it is very difficult to know where to start. The changes are fundamental and very frightening. We know that what will happen in two or three years’ time will become manifest, and it will become increasingly obvious that the poor have got much poorer and that people have got much more desperate. That will affect children, and those born now will be disproportionately affected.

I hope that at that point, the Government will finally realise that, because I do not think that many of those on the Government Benches are heartless, but they have not thought this through. The difficulty is that their policy is based entirely on rhetoric. That is clear from some of the lines in their manifesto that are now appearing in proposed legislation. Look at the Childcare Bill, which says very little more than what was in the manifesto.  The difficulty is that if you do not make policy on the basis of evidence but on the basis of rhetoric—what sounds right and what you think will work well with your focus groups—that will not work when it comes to ruling the country.

This is yet another ill-thought-out cut and change to the most vulnerable and most hard-working families, to the families in the most difficulty. Imagine spending time bringing up a child with disabilities and the continued worry of that. Those families have enough worry in terms of their child’s welfare without worrying about why the Government are taking away yet more funding and making life that much more difficult.

Photo of Hannah Bardell Hannah Bardell Shadow SNP Westminster Group Leader (Fair Work and Employment)

It is a pleasure to speak again, Mr Streeter. I will keep my remarks brief and start by saying that we are more than happy to support Labour’s amendments. We offer that hand of friendship across the Benches as a form of compromise.

The amendments support the same policy intentions—although not quite as strongly—as our amendments that we have already discussed, so I will not go on too much. We support the intentions of protecting those who are fostering or adopting, households with disabled children and also, as the hon. Member for Birmingham, Yardley mentioned, kinship carers. That is something which the SNP in the Scottish Government have done a lot on in recent years. These are some of the most vulnerable children in society. We must do everything we can to protect them. Please, Minister, you must concede that we need to protect at least some of these children from the cuts. Will you back the advice of the Social Security Advisory Commission which said that there has to be a review? Will you take that into consideration in your closing remarks?

Photo of Gary Streeter Gary Streeter Conservative, South West Devon

Just before I call Debbie Abrahams, a number of colleagues have been using the word “you”, which of course refers to the Chair, when they really mean the hon. Gentleman or the Government. I say that to all my colleagues, both experienced and inexperienced. It is an easy mistake to make.

Photo of Debbie Abrahams Debbie Abrahams Shadow Minister (Work and Pensions)

It is a pleasure to serve under your chairmanship, Mr Streeter. This is the first opportunity I have had to speak as the shadow Minister for Disabled People, so if you will allow me, I would like to start by paying tribute to my predecessor and friend, the hon. Member for Stretford and Urmston (Kate Green). She did a fantastic job, not just in this Bill Committee but in the past in this role and her mantle is going to be hard to take up.

I want to add my voice to what my hon. Friend the Member for Islington South and Finsbury has said. The tax credit provisions in the Bill are pernicious, and these elements are particularly callous and unjust. We are seeking to try to exempt families with disabled children from their impact.

Those who have spoken to parents and carers with disabled children will know that there are additional costs associated with raising disabled children. Contact A Family’s “Counting the Costs” report found that families with disabled children are more likely to be living in poverty than other families and that it costs three times as much to raise a disabled child. Families with disabled children face considerable additional  expenditure on heating, housing, clothing, equipment and other items compared with other families. My youngest daughter was diagnosed with asthma when she was very little. One of the triggers for her was the cold and we had to have our heating on all day and all night when she was little to try and avoid what often happened, which was that she stopped breathing. I have that personal experience and, fortunately, we were able to cope with the financial costs of additional heating, but that is not the case for many families.

Research over many years demonstrates a strong relationship between low income, social exclusion and disability among families who have a disabled child. As the “Every Disabled Child Matters” campaign has said, childhood disability is frequently a trigger event for poverty, as a result of additional costs, family break-up and unemployment following the birth or diagnosis of a disabled child. As I said, disabled children are also at a high risk of poverty as a result of low household incomes. Many parents of disabled children are unable to work because of care responsibilities and the lack of, or the cost of, appropriate childcare. I would be interested in the Minister’s response to the issue of providing appropriate childcare for disabled people because, within the proposed provisions, the Government have not been particularly explicit about how that relates to disabled children.

Photo of Neil Coyle Neil Coyle Labour, Bermondsey and Old Southwark

I welcome my hon. Friend to her new role. The Minister has already mentioned a commitment to providing 30 hours of childcare, but at no point have the Government provided any information on how it will be assessed and whether parents can genuinely access that level of childcare, in particular the parents of disabled children. Would my hon. Friend welcome the Government clarifying whether childcare is genuinely accessible, particularly for parents of disabled children?

Photo of Debbie Abrahams Debbie Abrahams Shadow Minister (Work and Pensions)

My hon. Friend makes a valid point and I would be grateful if the Minister could address it in his response.

Barriers to work are created by the stress of caring, often with no support. I am thinking again in the context of the £3.6 billion of cuts in social care, which also affect disabled people. When people do not have that support enabling them to work, it can build difficulties into family relationship. It is not clear in the impact assessment whether an assessment has been done on the likely increase in poverty of families with disabled children.

For example, what is the increase in NHS admissions predicted to be? I have mentioned my daughter who has asthma. The implication is that there will be other families in similar circumstances. Is there any prediction of an increase in family breakdown? We cannot be in a situation where, potentially, the Government are arguing that the measure will balance the books when it is really about cost-shunting from one Department to another. What assessment has been done on that?

We do not believe that disabled people, their families and their carers should be subject to further cuts and therefore seek to exempt households with one or more disabled children from the provisions on both child tax credit and universal credit. The Government and the social security system rightly recognise the additional costs of raising disabled children but the provisions in clauses 11 and 12 seem to be at odds with that. I oppose  them absolutely and in their entirety. At the very least, the effect of the provisions should be mitigated for households with a disabled child and I urge all members of the Committee to do the right thing and support the amendments.

Photo of Emily Thornberry Emily Thornberry Shadow Minister (Work and Pensions)

Might I rise again? It is entirely my mistake but I realise that I spoke just to amendments 83 and 84 and not to new clause 16. Would it be convenient for me to do so now?

Photo of Emily Thornberry Emily Thornberry Shadow Minister (Work and Pensions)

I am sorry, Mr Streeter.

New clause 16 takes the issue of child tax credits and universal credit face on and raises some of the most difficult aspects of trying to restrict tax credits. It exposes some of the most serious flaws in the Government’s thinking. The Government’s rhetoric is constantly about choices, how people can shape their future by way of choices and how Governments can in some way affect people’s choices by changing tax credits. We say that that is simply not right. If we are wrong, will they show us some evidence? In fact, would they like to show us evidence that anyone has ever made a decision about how many children they are going to have on the basis of benefits? Do people really make a profit out of having a child? Do they have a child and then get more money than they actually need to spend on that child and rake it in thinking, “This is a good career,” or is it possible that that is nonsense and, that, in fact, the changes to tax credits are just about saving money, dressed up as some form of slightly extraordinary social policy?

The impact assessment states that the aim is to ensure that

“those on benefits face the same financial choices around the number of children they can afford as those supporting themselves through work.”

However, that creates a completely false distinction that seems to exist only in the minds of Tory Ministers. The fact is that almost two thirds of families with three or more children who claim tax credits are, as my hon. Friend the Member for Birmingham, Yardley has said, in work. The impact assessment may state that the aim is for financial choices for those who are out of work to be the same as for those who are in work, but let me say one more time to ensure that Ministers get it: people who claim tax credits are in work.

Furthermore, the explicit assumption is that children are always planned, which common sense tells us is not the case. The Government have said that there will be an exemption in cases of rape or other exceptional circumstances. It would be interesting to know who will be assessing whether a woman has been raped; what the other exceptional circumstances might be; who will make a decision on that; who in the Department for Work and Pensions can be qualified to make such an assessment; and who will be volunteering to make those assessments. There has been silence on many questions about how the measure would even begin to be workable in practice.

What is more, the Government have not provided details on what might be considered exceptional circumstances.

Photo of Hannah Bardell Hannah Bardell Shadow SNP Westminster Group Leader (Fair Work and Employment) 10:45 am, 13th October 2015

The hon. Lady’s points are very interesting. Does she agree that we also have to take cognisance of religious groups across the divide? In many cases, such as those of Catholics, who consciously do not use contraception—[ Interruption ]—these policies could well be an infringement of their human rights.

Photo of Emily Thornberry Emily Thornberry Shadow Minister (Work and Pensions)

The Minister says from a sedentary position that, in the 21st century, we should not pay attention to the Catholic view of contraception and decisions made within Catholic families. I am surprised. I say no more.

As I was saying, the Government have not provided details about what might be considered exceptional circumstances, so new clause 16 has suggested a few examples, such as multiple births, adoptions or kinship care arrangements. I recommend to the Minister an article in The Guardian today, written by Patrick Butler, about kinship adoption and related difficulties. One difficulty, among the many difficulties that people who put themselves forward to adopt children face, will be a potential cut in tax credits. If someone adopts a child who has a little brother, and the little brother then needs to go up for adoption, will that person say, “No, I can’t do it, because I can’t get the tax credits”? Are they really going to say that? Is that right? No, it is not, so will the Minister please do something about that, and will Government Members pay attention to our arguments and vote with us on new clause 16? It is entirely sensible and fleshes out the exceptional circumstances, which we think are glaring.

Those exceptional circumstances are: multiple births, adoptions, kinship care arrangements, relationship breakdowns, including, but not limited to, cases of domestic violence, and the death of a partner. The Minister says, “We are doing this in order to make sure that people make the correct choices.” I have spoken from my own personal circumstances. Frankly, my example is out of date, but unfortunately, in the last 40 or 50 years, these things have continued. People die unexpectedly and people leave unexpectedly. It is not as though someone can make a “bad choice”—in the Minister’s words—to have a third child and then take it back because their partner has died. That seems exceptionally harsh to us.

The new clause also proposes an exemption for those who become unemployed. The point here is to emphasise that, even if we accept the Government’s suggestion that families should make their family planning decisions based on the Government’s welfare reform legislation—that is a tall order in itself, although I suppose having to sit up and read the Government’s legislation on welfare reform might be some form of contraception—and even if the Government are right that people will realise welfare reform means it will be a bad idea for them to have a third child, people in work will not see that as relevant. They will make decisions because they can afford to have their children, but something may then happen, such as their becoming unemployed, and they will be hit that much harder. Therefore, even if the Government are right, which they are not, that people will make decisions on how big their family should be based on welfare reform, those people who are in work at the moment, making decisions frivolously to have four children, will find themselves in great difficulties if they suddenly become unemployed. That is unfair, as I am sure the Minister will recognise. We need to acknowledge  the realities of life, particularly in the 21st century job market. People work in an insecure market. People can lose their jobs. Hopefully, they will get back into work, but it is unrealistic to expect parents to make decisions about their jobs and income with 100% certainty over an 18-year period. It is just not right. There are also abusive relationships. Women should not be expected to make decisions based on the possibility that they might become victims of domestic violence.

The new clause raises the serious issue of a couple’s penalty. Couples with more than two children will be given an incentive to separate just to continue receiving the support that they need to feed their children. That will happen. It is especially ironic that measures of child poverty are being replaced by measures of family breakdown, among other things. The Government are to measure child poverty on the basis of family breakdown, yet their social policy seems to pressure families into a form of breakdown so that they can continue to receive the benefits and tax credits that they need. The Tory party used to be the party of family and marriage. Why is its social policy dividing people? The irony is especially acute given the Secretary of State’s claim at the Conservative party conference that this Government’s reforms are

“all about making families stronger”.

Clearly, they are not.

Photo of Damian Hinds Damian Hinds The Exchequer Secretary

I welcome the hon. Member for Oldham East and Saddleworth to her place in the Committee and, more broadly, to the Opposition Front Bench. She has a hard act to follow in the shape of the hon. Member for Stretford and Urmston, but I know that she will execute her work absolutely admirably in this Committee and beyond. She and the hon. Member for Islington South and Finsbury have spoken powerfully about the challenges faced by the parents of disabled children. I echo them in acknowledging the invaluable work that such parents and families do in difficult circumstances.

The Government are protecting benefits related to the additional costs of disability and care by exempting them from the freeze and from the cap that we discussed on another day. Those benefits include personal independence payments, disability living allowance and the support group component of employment and support allowance. Additionally, we will continue to increase those benefits by inflation. The Government are committed to supporting disabled children. We have reformed the special needs system to support children continuously from birth to the age of 25 and increased our spend on the main disability benefits by more than £2 billion over the course of the last Parliament. Overall, of course, we continue to spend about £50 billion on disability benefits and services each year.

My understanding is that amendments 83 and 84 would have the effect of removing households with one or more children with a disability from the two-child support limit policy in child tax credit and universal credit respectively. Thus, a family with five children, one of whom is disabled, would continue to receive child tax credit or universal credit in respect of all five children, as well as the appropriate disabled child element in child tax credit and the additional amount in universal credit. The Government think it right that, just as families who support themselves solely through work must weigh up financial considerations when deciding to have more  children, families in receipt of benefits should face the same sorts of financial consideration. That should apply to all families.

In recognition of the costs of supporting disabled children, we will create a separate disability element of child tax credit that will be payable for all disabled children, regardless of whether they are the third or subsequent children or otherwise. We will continue to pay the relevant additional amount for disabled children in universal credit, regardless of whether those children are the third or subsequent children or otherwise.

The hon. Member for Bermondsey and Old Southwark rightly raised the subject of childcare. He will know that, in the tax-free childcare system that we are introducing, there is, quite rightly, a special addition to recognise the additional costs of childcare that pertain for children with a disability. In the overall offer of 15 hours and 30 hours of childcare there is, as he will know, rightly a statutory duty on local authorities to ensure proper provision for children with disabilities in the nurseries that their families trust.

Photo of Neil Coyle Neil Coyle Labour, Bermondsey and Old Southwark

The Minister mentioned universal credit. It sounds like that might be welcome. Will he update us on the roll-out of universal credit and identify where the overlap with the measure will not exist? There is a statutory responsibility on local authorities, but how will the Government ensure that families with disabled children who cannot access appropriate, accessible childcare are not penalised?

Photo of Damian Hinds Damian Hinds The Exchequer Secretary

I do not dispute for a moment what the hon. Gentleman says. I agree with him entirely that we—the Government and Members of Parliament—must be vigilant in ensuring that families, including those with disabled children, have access to good childcare. It is a duty on local authorities but vigilance is always required to ensure that such measures are delivered. The hon. Gentleman asked about the roll-out of universal credit. I am not quite sure of the specific context in relation to the measures—I will just say that it is on track. It will be in every jobcentre by April 2016, with the bulk of migration complete by 2019.

New clause 16 seeks to specify exemptions to our proposals, including a new role for the Social Security Advisory Committee, and to establish an appeals process. The Government have already given a clear commitment that multiple births, for example twins or triplets, will be treated as a single birth with a child element for each sibling where there were previously fewer than two children in the household. We have also set out that there will be protections—we discussed this earlier—for women who have a third child as the result of rape. We will set out exemptions in regulations after discussions with stakeholders and careful consideration. Using regulations to set out exemptions provides the Government with greater flexibility to adjust exemptions in the future without needing to secure primary legislation. That is more appropriate because we may wish to act relatively quickly in the light of operational experience.

The Social Security Advisory Committee, as its name suggests, is a valuable body for advising the Government on our secondary legislation. It does not, however, have the remit to design legislation. That is the proper job of the Government and we consult with the committee as appropriate. Amendments 83 and 84 relate to the proposed  exemption of households where any child or qualifying young person is disabled. I have responded on that issue.

Finally, the new clause requires the Secretary of State to set up an appeals structure. Social security and tax credits already have comprehensive appeals arrangements that will apply to any decisions made under the provisions in the Bill or exceptions set out in regulations. The provision is therefore not required. For the reasons I have set out, the new clause is not appropriate for inclusion in the Bill. We have recognised that there will be a need for some exemptions, for example in relation to multiple births, but those are much better dealt with in a considered way in collaboration with stakeholders through secondary legislation. I urge the hon. Member for Islington South and Finsbury to withdraw the amendment.

Photo of Emily Thornberry Emily Thornberry Shadow Minister (Work and Pensions)

I am very grateful to the Minister for the answers he has given but the reason for our view that the Social Security Advisory Committee should define the exceptional circumstances is that that decision should not be made by politicians. The Social Security Advisory Committee, which is an expert body on the matter, can look at exceptional circumstances. The Government may have come round to the idea of an exemption for multiple births—we are glad to hear that—but they will not necessarily have thought of all the exceptional circumstances, so an expert body, such as the Social Security Advisory Committee, is important.

We are always concerned about dealing with such matters in secondary legislation because the level of democratic accountability in secondary legislation is not the same as that in primary legislation. If the Bill had been thought through properly, it would not be for the Opposition to table such amendments—the Government would have thought through the most difficult effects of their policy and would have done all they could to counter them. It is our duty in Committee to point out such things. I hope the Government come back with amendments to the primary legislation so that it can be scrutinised properly rather than knocked off into the long grass. It is an important aspect. In such circumstances, we will press the amendment to a vote.

Question put, That the amendment be made.

The Committee divided: Ayes 9, Noes 11.

Division number 28 Decision Time — Clause 11 - Changes to child tax credit

Aye: 9 MPs

No: 11 MPs

Ayes: A-Z by last name

Nos: A-Z by last name

Question accordingly negatived.

Photo of Gary Streeter Gary Streeter Conservative, South West Devon

I think that we have had a pretty good canter around the clause, so I do not propose to allow a separate debate on it.

Question put, That the clause stand part of the Bill.

The Committee divided: Ayes 11, Noes 9.

Division number 29 Decision Time — Clause 11 - Changes to child tax credit

Aye: 11 MPs

No: 9 MPs

Ayes: A-Z by last name

Nos: A-Z by last name

Question accordingly agreed to.

Clause 11 ordered to stand part of the Bill.