Welfare Reform and Work Bill

Debate between Baroness Howarth of Breckland and Lord Freud

Monday 7th December 2015 Lords Chamber

[Baroness Howarth of Breckland (CB)]

My Lords, I want to speak extremely briefly because the speech I might have made has already been made by other noble Lords in terms of detail.

Having listened to the Minister talk in various venues about wanting to ensure that there are no unintended consequences from this legislation, I want him to think carefully on the speeches that have been made and about what basis of philosophy or principle the Government have underlying this legislation. I know the basic tenet is that they want to make sure that parents can work and that all children are able to achieve the best educational outcomes—those are the Government’s own words. But some of these measures will undermine that and take families into greater financial hardship. I am particularly interested in the children, because taking those families into greater financial hardship will reduce the life chances of those children. Those of us who have worked with children down the years have seen the consequences of that, not only the emotional consequences but the financial consequences.

All the arguments around larger families, kinship care, adoption and the very many informal arrangements that families make to ensure that their children are emotionally cared for have been made. Again, I hope that the Minister will reflect on that in the context of his own Government’s policy and objectives.

We are a nation that should care. Indeed, the Minister’s party described itself as a “caring party”. I also admire the Government’s objective of ensuring that children make their own way and are not left in poverty because of parental behaviour. However, we know that you can affect that behaviour, as the noble Baroness, Lady Sherlock, and others have said, by the kind of care that they receive themselves and are able to reflect with their children. Therefore, will the Minister tell us how he intends to ensure that the Government’s philosophy and principles are reflected in the way that they deal with large families, particularly those from disadvantaged groups?

[The Minister of State, Department for Work and Pensions (Lord Freud) (Con)]

I thank noble Lords for some very good speeches. To pick up the point made by the noble Lord, Lord Kirkwood, I have listened to those speeches very carefully, although I am not in a position today to provide much satisfaction as I stand here. Let me begin by setting the context for the policy.

[Lord Freud]

No, it means that I am not in a position to provide any satisfaction and, by definition, that position does not change.

Let me begin by setting the context for the policy, which will remain relevant for the other amendments on these clauses. At the 2015 summer Budget, the Government announced their plans to move from a low-wage, high-tax and high-welfare economy to a higher-wage, lower-tax and lower-welfare society. This is part of the Government’s plan to deliver a new deal for working families, which also includes incentives to ensure that those who are in work are rewarded fairly. As part of this, we announced reforms to child tax credit and universal credit to help put welfare spending back on to a sustainable footing.

The tax credits system has become too generous. As introduced by the last Labour Government, it was originally forecast to cost £11 billion in its first year. In fact, tax credit expenditure more than trebled in real terms between 1999 and 2010; and increased by £9.6 billion in real terms between 2004-05 and 2014-15. Currently, the benefit system adjusts automatically to family size, while many families supporting themselves solely through work do not see their budgets rise in the same way when they have more children. The average number of dependent children in families in the UK in 2012 was 1.7, so the Government feel that it is fair and proportionate to limit additional support provided by the taxpayer through child tax credit and the child element of universal credit to two children.

[Baroness Howarth of Breckland]

My Lords, I am sorry to interrupt the Minister, but may I ask him about the difference between those families who choose to have more children—which I understand, in relation to the policy—and those who find themselves with more children, which saves the state money because of circumstances that have been described today?