Working Tax Credit and Universal Credit: Two-Child Limit

Debate between Carol Monaghan and Alan Brown

Thursday 21st April 2022 Westminster Hall

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

It is a pleasure to serve under your chairmanship, Mr McCabe, and I commend my hon. Friend the Member for Glasgow Central (Alison Thewliss) for having secured this debate. More importantly, I thank her for the tireless campaigning she has done on this two-child policy, which victimises and stigmatises families and children. It is worth putting on the record that my hon. Friend was the first Member to identify the pernicious rape clause, on Budget day in July 2015, and her speech shows just how much she has immersed herself in highlighting the unfairness of this policy and the ludicrous exemptions that go with it. As she has said, it is a poverty trap. The fact that children born beyond the midnight deadline are not deemed worthy of support, and that we now have two tiers of families—two families might be the same size, but by virtue of when one child was born, one family gets more support than the other—is absurd.

I also pay tribute to all other hon. Members who have contributed or made interventions. As the hon. Member for Cynon Valley (Beth Winter) said, this is about the need to support all children and ensure basic fairness; why do this UK Tory Government find it all too easy to breach human rights? The hon. Member for Arfon (Hywel Williams) made a powerful speech, talking about his own circumstances and how political attitudes have changed. The example he gave about the moral condemnation in the past of people stuck in mental institutions, and how we are returning to moral judgments of people having children, should make the Minister sit up, because it certainly made me sit up.

Then, of course, we had a fantastic contribution from the hon. Member for Strangford (Jim Shannon). It did start with his “better together” comparison, but apart from that, I agreed with every word he said. When the hon. Member for Strangford uses such strong language and condemns a policy so much—I genuinely think that was the best speech I have heard from the hon. Gentleman; that says a lot, but it was a really powerful speech—if the Minister does not take note, something is far wrong. The hon. Gentleman gave the example of the Chinese limit, and how it would have impacted families and people here had such a policy been implemented, but he also spoke about the dark perspective of this policy. It is morally wrong, and not just that: it has been an abject failure in its aims. That really summed it up, so I pay tribute to the hon. Gentleman for his speech.

It is disappointing that there are no Tory Back Benchers here to back up the policy. Maybe that says how bad the policy is, or maybe they are just choosing to back the corrupt Prime Minister in the “other place.” The point is that agreeing to provide welfare support for only two children is a horrible policy, backed up by dog-whistle politics. The concept clearly was that people should be able to afford children, just like those who rely solely on work for their income and therefore do not need additional welfare support. That is language designed to imply that anyone on benefits is a scrounger, and that people have children just to screw the welfare system. It is truly awful, and it actually puts a price on children.

As we have heard, in affected families, who suffers the most? The children. Hungry kids cannot learn in school. They will be disadvantaged and less likely to have a positive outcome, so whatever circle the Tories think they are breaking, they might be condemning more people to underachieve and have a higher chance of unemployment, and to be less likely to participate in higher and further education and more likely to end up in lower-paid, semi-skilled work. As the hon. Member for Strangford said, if some children suffer, others do. It is not just the ones directly affected.

Worst of all, the entire concept is based on politics and prejudice and not evidence. What we now have, clear as day, is evidence of how the policy works for those affected by the two-child policy. The Library briefing confirmed that of the 317,500 families affected in April 2021, 56% had somebody in the household working. The majority, also 56%, were in dual-parent households, so the majority of families affected are dual-parent households with somebody in employment. That is proof that the policy is based on falsehoods and proof that the bigger issue is that too many people are in low-paid, insecure jobs, and that is the issue that should be tackled.

What about the people who have lost jobs or faced reduced income due to covid? They now find that the so-called safety net of the welfare state is a lot smaller than they would have anticipated. The Tory Brexit has also impacted jobs, too. The Tories deny that, but I have a meeting tomorrow with somebody who runs a haulage company, and he is close to going under, which will take other jobs with him, because of the ludicrous cabotage rules that the Tory Government signed up to.

Covid unfortunately gave us fire and rehire—another policy that the Tories have done nothing to eliminate, but a policy that is vastly reducing the incomes of thousands of workers or seeing them sacked. Workers that the Tories might otherwise have seen as model families who were able to afford their children without welfare support will now need that support, and it might not be there for them. Families and people who have lost jobs are now having to readjust their outgoings accordingly, and now find that they have been categorised as scroungers by the Tory Government.

Another key issue of the two-child policy is that, as others have said, it disproportionately affects orthodox Jewish and Muslim families who may have religious or ethical views on family size. I agree with the intervention by the hon. Member for Strangford that the religious aspect in terms of discrimination has possible human rights implications as well.

We have heard that some women have considered abortion because they worry about not being able to afford a child. There are debates about how many women have actually undertaken an abortion because of that, but the reality is that women are having to face that choice, and they should not have to. Again, that is something the Minister needs to look at and review.

[Carol Monaghan]

There are debates about that, but the statistics are clear. The National Audit Office numbers show that since 2016, since the policy came into being, there has been a 24% increase in the number of abortions in England and Wales.

[Alan Brown]

I thank my hon. Friend for that. I will not disagree. The hon. Member for Strangford also referred to evidential work done by the LSE. This is evidence that the Government should look at. We are discussing a Government who talk about family values. How can they talk about family values when they are forcing women to consider abortion?

That takes us to other evidence of the impact of this policy. Since 2013-14, child poverty among larger families has risen dramatically; almost half of all children living in families that have more than two children live in poverty. Also, recent research for the report “Benefit changes and larger families” by largerfamilies.study shows that most of the recent rise in child poverty overall has been driven by rising poverty among those larger families.

Sara Ogilvie of the Child Poverty Action Group has said:

“The two child limit is a brutal policy that punishes children simply for having brothers and sisters. It forces families to survive on less than they need, and with soaring living costs the hardship and hunger these families face will only intensify.”

Also, according to CPAG:

“Removing the policy would lift 250,000 children out of poverty”,

doing so immediately. So, surely the Minister must review the evidence, act accordingly and take that action to

“lift…children out of poverty”.

Then, if we look at the rape exemption clause, it is apparent that it was thought up on the hoof at the time. It was probably some loose nod by the Government towards thinking that they were adding a moral, even noble, exemption to support children born after their mother’s traumatic experience of being raped. However, it is no wonder that Ministers at the time could not even explain how the policy would be implemented, because it was so absurd. No thought was given to the traumatic psychological effects of a woman having to relive such an experience and being asked to fill in forms to justify financial support for her child. Also, the bizarre logic of the exemption only applies for subsequent children, beyond the two-child limit, born of rape. So, as if the clause in itself is not abhorrent enough, it is somehow seen as being morally okay to decide which child born from rape is worthy of support, which is truly disgusting.

The other big thing aligned with this policy and other policies at the time was the whole “balancing the books” mantra. This debate made me revisit the 2015 summer Budget Red Book. I looked back at that and honestly it is truly horrifying to see how evil that Budget was. The two-child clause was estimated to save £3.4 billion by 2021; freezing benefits, £11.3 billion; benefit cap reduction, £1.7 billion, clawed back from the poor; and increasing the tax credits taper to 48% while reducing income thresholds for tax credits and work allowance was estimated to save—astonishingly—nearly £20 billion by 2021. So, there was a complete and utter hatchet job on the welfare state, and there were also incoherent policies, given the attack on some of the job-related welfare support—so much for “making work pay”. That was an awful Budget and I have to point out that it was shameful that Labour abstained on it.

However, what about the “balancing the books” mantra? Clearly, as I have just illustrated, it is “balancing the books” on the poorest, the most infirm and the lowest-paid in society. But what it also allowed in subsequent Budgets was tax giveaways to those who the Tories deemed worthy of benefiting from them.

Previously, I had the Library conduct analysis on some of the key Budget decisions that were implemented from 2016 to 2018. The Library extrapolated those figures, which were based on figures that were presented in the Budget books, up to 2025, and it estimated that, up to 2025, the Treasury was giving away £80 billion. Increasing the higher rate threshold was estimated to be a giveaway worth £5 billion; changes to individual savings accounts, or ISAs, £7 billion; inheritance tax changes, a £6 billion giveaway; and the personal allowance increase and further raising of the higher threshold to £50,000 of income was estimated to be an £11 billion giveaway by the Tories. There was also a £50 billion giveaway in corporation tax, although at least they realised the error of their ways on that one. All of that shows that plenty of money was found for giveaways, rather than for continuing to balance the books properly. And those figures show that the Tories could easily afford to reverse this two-child policy, if the political will to do so was there.

Returning to the here and now, another issue with universal tax overall is of course the removal of the uplift, or—more appropriately—a cut of £1,040 a year. As the hon. Member for Cynon Valley said, if the pandemic merited an uplift to allow people a more dignified life, then surely—with inflation running at 7% to 8%, the energy cap up 75% compared to April 2021 and petrol at record prices—there is a clear need for a permanent increase in universal credit.

I cannot finish without comparing this with what is happening in Scotland with the Scottish Government, just as my hon. Friend the Member for Glasgow Central did. The Scottish Government introduced the game-changing child payment, doubling it to £20 a week, and it will increase to £25 a week when the benefit is extended to under-16s at the end of this year. As that has been done on a fixed budget in the Scottish Parliament, it cannot have the positive impact it otherwise would have had because we are still living with the impact of Tory austerity. That is proof that whatever the Scottish Government do is undertaken with one hand behind their back. It is interesting that there was a strong theme earlier in the debate about the Welsh Government needing more powers too, so Tory policies are clearly having an impact on the Union, which should make the Minister take note.

Will the Minister pledge to review the effects of the impact of the Scottish Government’s child payment policy and the support it has received from charitable organisations? The Scottish Government have shown that they are treating all children equally. That should not be too much to ask of any Government, and surely it is time for the UK Government to think again.

Budget Resolutions

Debate between Carol Monaghan and Alan Brown

Tuesday 2nd November 2021 Commons Chamber

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

As politicians, we should always try to understand the argument from the other side. On that basis, at great risk to myself, I will try to look at the Budget and recent announcements through the prism of a Scottish Tory. That means, first, that I have to ignore the 2014 promises on pensions, when it was said that voting no on the referendum was the best way to protect your pension. It means ignoring those promises and then voting for what is now going to be a £6 billion-a-year clawback from pensioners. As the Red Book shows, £30 billion over the next few years is getting taken from the pockets of our pensioners. It seems the Tories are not content with just ignoring the WASPI—Women Against State Pension Inequality Campaign—women but are determined to make what is already one of the worst pensions in the developed world even worse.

If I am a Scottish Tory, I need to ignore that, and I need to ignore the £20-a-week cut to universal credit, but I will take great delight in demanding to know what the Scottish Government will do with the £41 million household support grant Barnett money that came our way after the universal credit cut. Let us put that money in context: each UC claimant is losing over £1,000 a year. The £41 million that comes back to Scotland, if distributed on a per capita basis, equates to a one-off payment of £85 per claimant. Yet we are supposed to be grateful for a £500 million cut being offset with £41 million.

If I am a Scottish Tory, I need to ignore the fact that as a group the Scottish Tories secured absolutely nothing from the Chancellor in the Budget. Instead of asking hard questions about why the Scottish carbon capture and storage cluster was overlooked again, I have to pretend I am really happy that the Scottish cluster is now a reserve. If ever there were a metaphor for the Union, the fact that Scottish Tories are happy for the Scottish cluster to be classed as a reserve is it. That is our place in the Union as it is.

The Scottish Tories have always been silent on the fact that Scotland has the highest grid charges in Europe. They have been silent about the £350 billion of oil and gas revenues that the broad shoulders of the UK have helped to spend without creating a sovereign wealth fund. They are silent about nothing being added to the Budget that matches the Scottish Government’s £500 million low-carbon just transition fund for the north-east of Scotland.

Because of the higher oil and gas prices, the Treasury is getting an unexpected windfall from the oil and gas revenues accrued. The Red Book confirms that, by the end of this financial year alone, the Treasury will have banked an additional £1.1 billion compared with the forecasts from March this year. Why is that extra money not being reinvested where it was generated? Compared with the March 2021 forecasts, the Chancellor now expects an additional £6 billion of oil and gas revenues over the lifetime of this Parliament. That means that, yet again, oil and gas revenues are paying for the Chancellor’s giveaways elsewhere. The reality is that with the extra oil and gas revenues, the extra petrol duties accruing from forecourts and the extra VAT from our soaring energy bills, the Budget was an opportunity to mitigate the cost-of-living crisis—an opportunity that has been ignored.

On the national insurance tax that has been imposed on us, Scottish Tories say, “Don’t worry—Westminster will give you back some money that you’ve already paid to Westminster.” Why are we supposed to be grateful for that?

Another fact about the energy sector in Scotland is that the Treasury has blocked the concept of ringfencing a pot of money for wave and tidal projects in the forth- coming contracts for difference auction. Such a concept would not even need a fiscal Budget line, and not ring- fencing that money could prevent world-leading technologies from scaling up and expanding all around the world. That is yet another matter on which the Scottish Tories and the Scottish Secretary of State are silent.

[Carol Monaghan]

I hope my hon. Friend is going to point out—maybe he is not, so I will—that the Scottish Tories support the SNP’s position on free tuition. It will be interesting to see how they vote on the Budget resolutions.

[Alan Brown]

I have trimmed my speech and have just trimmed that point out a wee bit, so I thank my hon. Friend for getting that on the record.

Let me return to energy. There is nothing in the Budget on pumped storage hydro—on which, again, the Scottish Tories have been silent—but hurray: tomorrow we get the Nuclear Energy (Financing) Bill. No doubt the Scottish Tories will troop through the Lobby to support that.

Let me turn to the levelling-up fund. Yet again, Scotland gets a cut of that, so let us get the Union Jacks out—“Hurray: we get a cut of the levelling-up fund!” The reality is that our cut is, in effect, based on the Barnett formula. When the Chancellor said last week that in the first round of funding Scotland is getting more than its Barnett share, all that means is that there is less money in the ringfenced pot for Scotland going forward, because it is all based on Barnett anyway. But as a Scottish Tory, I do not care, because I revel in the fact that the Scottish Government are being bypassed and there are small projects that we can put a Union Jack on.

As a Scottish Tory, I never acknowledge that the SNP has been in power for only 14 years. The Union has been in existence for more than 300 years, yet somehow every shortfall has happened only in the past 14 years. We must have quite a talent in reverse. The Budget still does not tell us what the shared prosperity fund will look like. It is supposed to replace the vital European funding streams that all the areas that have been overlooked by Westminster relied on to access vital funds for transport and infrastructure—and the Government talk about levelling up. We are currently losing out on funding and we do not know where the future shortfall is coming from, yet the Chancellor uses the phrase “levelling up”.

In conclusion, the Budget does nothing for Scotland. We have already seen, post Brexit, the damage that has been done to the fishing industry and to our farmers, despite the promises. More and more people can see that Westminster cannot be trusted, and it really is time that Scotland took full control of its own decision-making process.

Petitions

Debate between Carol Monaghan and Alan Brown

Tuesday 20th October 2020 Commons Chamber

[Carol Monaghan (Glasgow North West) (SNP)]

The closure of three TSB branches in my constituency will be devastating for local constituents and for businesses. Both Partick and Anniesland serve vast areas, but owing to good public transport links, they can be accessed by those whose local branches have already closed. In Drumchapel, an area with high digital exclusion and poor transport connectivity, the TSB is the only bank for miles around and there are regularly queues out the door.

The petition states:

To the House of Commons

The petition of residents of Glasgow North West,

Declares that proposed closure of the Anniesland, Drumchapel and Partick branches of the TSB bank in Glasgow will have a detrimental effect on local communities and the local economy.

The petitioners therefore request that the House of Commons urges her Majesty’s Treasury, the Department for Business, Energy and Industrial Strategy and TSB Bank to take in account the concerns of petitioners and take whatever steps they can to halt the planned closure of this branch.

And the petitioners remain, etc.

[P002613]

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

I rise on behalf of, unfortunately, too many of my constituents who rely on universal credit. It is a fact that Tory welfare policies are plunging people into poverty. Child poverty is a scourge on society. Hungry children find it harder to learn. The reality is that their life chances are disadvantaged from the outset.

In Scotland, the Scottish Government have mitigated the worst effects of poverty and we have the lowest child poverty rates in the UK, but more is needed from the UK Government. The £20 universal credit top-up has been a lifeline for some during covid-19.

The petition states:

The petitioners therefore request that the House of Commons urge the Government to immediately bring forward additional measures to permanently increase Universal Credit in response to the long-term impact of Covid-19.

And the petitioners remain, etc.

Following is the full text of the petition:

[The petition of the residents of the constituency of Kilmarnock and Loudoun,

Declares that the economic consequences of the Coronavirus pandemic has led to many more people facing increased levels of poverty and financial hardship; further declares that the Government provided welcome support at the beginning of the pandemic when it topped up Universal Credit payments by £20 per week; further declares that it is regretful that the Government has decided not to make permanent this increase to Universal Credit payments.

The petitioners therefore request that the House of Commons urge the Government to immediately bring forward additional measures to permanently increase Universal Credit in response to the long-term impact of Covid-19.

And the petitioners remain, etc.]

[P002614]