Welfare Benefits: Women

Lord Freud Excerpts

Thursday 10th January 2013 Lords Chamber

[Baroness Royall of Blaisdon]

To ask Her Majesty’s Government what assessment they have made of the differential impact on women of changes to welfare benefits.

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud)]

My Lords, the Government are supporting women and families, for example by changing childcare support through universal credit and by lifting 2 million of the lowest-paid workers, six out of 10 of whom are women, out of income tax altogether.

[Baroness Royall of Blaisdon]

My Lords, I am grateful for that Answer. The noble Lord says that the Government are supporting women and their families; however the House of Commons Library analysis suggests that 81% of the £1.065 billion raised from the new direct tax credit and benefit changes will come from women. When the Government decided to make these changes, were they really aware of the specific impact on women? If they were not aware of this, it is a disgrace. If they were aware of this, it is an even greater disgrace.

[Lord Freud]

My Lords, the impact on women of the uprating changes, in a Bill that will come to this House shortly, is greater; 33% of women are affected, against only 29% of men. The redistribution under universal credit switches slightly and, in proportion, households with women do slightly better in numbers than households with men—40% of households with women are gainers, compared with 39% of households with men.

[Lord Forsyth of Drumlean]

My Lords, can my noble friend explain how it can be fair that, because of the changes in child benefit, in households with three children where only one partner is working and has a student loan, if their salary goes up from £50,000 to £60,000, they will face an effective marginal tax of 75%? In contrast, households with incomes of £100,000, where both partners are working, will face a marginal tax of 45%. How is that consistent with a fairer tax system?

[Lord Freud]

My Lords, the reason for the reduction in child benefit for those on higher incomes is so that it could be implemented in this way. As my noble friend will know, it has been adjusted to provide a taper at £50,000 to £60,000 to smooth that transition.

[Baroness Hollis of Heigham]

My Lords, the noble Lord’s right honourable friends in the other place, the Chancellor of the Exchequer and the Secretary of State for Work and Pensions, are waging war on so-called shirkers, in part by cutting their benefits. However, as my noble friend has said, two-thirds of those benefit cuts are falling on women. If you take into account changes in pensions, pay and taxes, more than 80% of the cuts are falling on women who are bringing up children, caring for the elderly and holding down a part-time job at minimum wage. Does the Minister agree with his right honourable friends that apparently the face of a shirker is now that of a mother, a carer and a woman?

[Lord Freud]

My Lords, as regards the reduction, or potentially below-inflation increase, in benefits, a lot is happening in the economy in relative terms. Today’s article in the Financial Times is one of the best analyses of that that I have seen. I am sure that others have seen that article, which shows how squeezed people are in the middle and upper-middle tiers of income distribution. They have fallen right back to the level of earnings in 2002-03, while real incomes in the bottom 30% were 3% to 4% higher than they were. That is the context in which we are looking at the adjustments to the benefit levels.

[Lord Winston]

My Lords, is the Minister aware that the average woman of child-bearing age loses about two eggs per hour, unlike the Minister who is making 50,000 sperm per hour? The consequence is that women’s fertility falls rapidly. Does he want to see equality of women in the workplace by trying to support them rather better during their child-bearing years?

[Lord Freud]

My Lords, I will not go into the detailed figures that the noble Lord mentioned. There is very substantial support for women of child-bearing age as, over the past decade, statutory maternity pay and maternity allowance have moved up from being payable for 18 weeks to being payable for 39 weeks. That is the context in which that support should be looked at.