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Clause 11 - Changes to child tax credit

Part of Welfare Reform and Work Bill – in a Public Bill Committee at 10:30 am on 13th October 2015.

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Photo of Emily Thornberry Emily Thornberry Shadow Minister (Work and Pensions) 10:30 am, 13th October 2015

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.