Clause 12 - Changes to child element of universal credit

Welfare Reform and Work Bill – in a Public Bill Committee at 11:00 am on 13th October 2015.

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Amendment proposed: 50, in clause 12, page 13, line 18, leave out subsections (1) to (4).—(Corri Wilson.)

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

Question put, That the amendment be made.

The Committee divided: Ayes 9, Noes 11.

Division number 30 Decision Time — Clause 12 - Changes to child element of universal credit

Aye: 9 MPs

No: 11 MPs

Ayes: A-Z by last name

Nos: A-Z by last name

Question accordingly negatived.

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

I beg to move amendment 18, in clause 12, page 13, line 23, at end insert—

“unless this would result in an amount no longer being paid in respect of a child or young person who was born before 6 April 2017, in which case a payment shall still be made in respect of this child or young person.”

To ensure that the reduction of the child element of Universal Credit to two children only affect children born after 6 April 2017.

The point of the amendment, which largely echoes points made earlier, is that it is unrealistic and unfair to expect families to make long-term decisions based on  the proposals in the Bill. Even if it were not, it would still be unfair to include families with children born before the policy was even announced, which is what the clause does. As far as I understand the clause—I would love to stand corrected if I have misinterpreted it—proposed new subsection (1A) in clause 12(2) makes it clear that, regardless of when a child was born, when universal credit is brought in people will be penalised. It is as if the policy is being sold as, “Let’s get people to make responsible decisions” and “This policy will make all the difference in terms of the decisions that people make”, but when universal credit finally comes over the sunlit mountains and changes our world it will not matter at what stage people have decided to have their children—“We will penalise you anyway.”

I do not want to reiterate the points that have already been made about the assumption that people will make decisions about their next 18 years based on Tory party policy, or how likely they are to know whether their partner is going to die or be abusive towards them in later years, but a particularly troublesome area of the Bill is that it would force women to stay with abusive partners. On the other hand, there is an equally perverse couples penalty that will provide a strong financial incentive for couples with more than two children to separate. The clause is particularly vicious in that it goes in the opposite direction from the Conservative party rhetoric that is used to justify this unfair piece of legislation, so that is why we tabled the amendment.

Photo of Damian Hinds Damian Hinds The Exchequer Secretary

The amendment would see the policy that limits support to two children applied only to children born after April 2017, rather than also applying to entirely new claims for universal credit. The part of clause 12 that the amendment would change is primarily about fairness to the taxpayer and ensuring that where people can provide for themselves, they do so. We estimate that the amendment would increase universal credit expenditure by £245 million in 2019-20. We have committed to protecting universal credit claimants at the point of change and new claimants who have been in receipt of universal credit or tax credits in the previous six months. The policy will therefore apply only to claimants who have been supporting themselves entirely outside the benefits and tax credits system for more than six months and who will therefore not see a cash loss.

We also need to remember that child benefit will remain in payment for all eligible children, continuing to provide support beyond the child element of universal credit.

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

Can I just rewind a little? New claims for universal credit will be affected by the two-child policy. When universal credit comes in, people will need to make a claim for it. If someone is on benefits or tax credits when universal credit is brought in, will there be a seamless transition whereby they will not be seen as a new claimant and not be adversely affected?

Photo of Damian Hinds Damian Hinds The Exchequer Secretary

It is an untold pleasure to put the hon. Lady’s mind at rest. We are referring to entirely new claims and not to an existing recipient of tax credits for a third or subsequent child under either universal credit or the predecessor tax credits system. There is also the six-month window, so the Bill strikes the right balance between those needing support and the taxpayer.

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

Why, then, is there a discrepancy between clause proposed new subsection (3A) in clause 11(4) and proposed new subsection (1A) in clause 12(2)? Clause 11(4) spells out that a qualifying young person is born on or after 6 April 2017, but clause 12 does not state a date of birth. That is the reason for the misunderstanding. I am glad to hear what the Minister says here in Committee, because that has some legal standing, but it would have been easier if it had been in the Bill.

Photo of Damian Hinds Damian Hinds The Exchequer Secretary

I will have to ask for the hon. Lady’s forbearance and forgiveness for my lack of photographic memory of proposed new subsection (3A). However, I can reassure her that the point is about new claims or those with a gap of more than six months since receipt of either universal credit or the predecessor tax credits system. The Bill strikes the right balance between the support that people need and the taxpayer. I therefore urge the hon. Lady to withdraw the amendment.

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

In those circumstances, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

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

The Committee divided: Ayes 11, Noes 9.

Division number 31 Decision Time — Clause 12 - Changes to child element of universal credit

Aye: 11 MPs

No: 9 MPs

Ayes: A-Z by last name

Nos: A-Z by last name

Question accordingly agreed to.

Clause 12 ordered to stand part of the Bill.

Ordered, That further consideration be now adjourned. —(Guy Opperman.)

Adjourned till this day at Two o’clock.