On 26th March 2018 the Bishop of Durham, the Rt Revd Paul Butler, asked a question he had tabled to Government on the two-child limit policy for tax credit and universal credit. His follow-up question and those of other members is reproduced below:
The Bishop of Durham: To ask Her Majesty’s Government what specific measures they are taking to monitor the impact of the two-child limit policy in the child element of Child Tax Credit and Universal Credit on the well-being of children.
The Minister for State, Department for International Development, Lord Bates: My Lords, the Government are committed to supporting child well-being, and keep all our child welfare policies under review. We provide a range of support for children, including child benefit, that continues to be paid for each child in a household. Since 2010 there are 1 million fewer people in absolute poverty, including 300,000 fewer children.
The Bishop of Durham: I thank the Minister for that reply. Given that the Government’s impact assessment argues that the two-child limit would have a positive impact on overall family stability, and that the policy would increase financial resilience and support improved life chances for children, what current evidence does the Minister have to support the claims that the policy will have a positive impact on overall family stability and improve life chances for children?
Lord Bates: I pay tribute to the work that the right reverend Prelate does as an advocate for children among the Bishops and his consistent interest in this. The change in policy that he is referring to in effect came in at the beginning of April last year. We have said we will look at the statistics as they are gathered over a period of time and keep them under close review, particularly in relation to the exemptions, and will publish information on that. Ultimately, in the short term, the key message that we want to send is that the heart of the policy was built on the principle that work should always pay and that people should always be better off if they are working. The fact that we have near-record levels of people in employment, which is continuing to happen, is some evidence that the policy is working, but we need to keep the specific effect of this particular change under review, and we will.
Baroness Lister of Burtersett (Lab): The policy is affecting those in work in particular. The Government claim that their policy-making gives primary consideration to the best interests of the child, in line with the UN Convention on the Rights of the Child. Can the Minister explain how the policy fulfils that principle, when all the independent analysis indicates that it will worsen child poverty significantly in addition to the increase in relative child poverty among larger families, particularly among certain ethnic minority groups and those in paid work?
Lord Bates: The benefit applies to those in work and those who are not. However, we were also seeking to introduce an element of fairness. People on very low incomes, in the low £20,000s , who may not have any children are forced to make very difficult decisions that impact upon themselves financially when they are about to have a child, and they will do so without any support—certainly child benefit, but also in terms of any additional support from the state. We feel it is only fair to them that other people ought to be in similar positions when considering whether to have a third or subsequent child.
Baroness Thomas of Winchester (LD): My Lords, what is the effect of this policy on families with a disabled child? It is estimated by the Government themselves that around 100,000 disabled children could be affected, meaning that a family could lose around £1,400 a year, with transitional protection protecting only those already on universal credit, not new claimants.
Lord Bates: The noble Baroness is absolutely right to say that there are elements for disability and for severe disability regarding children, and those need to be protected. We maintain the assessment of the effectiveness through a number of different means, such as the households below average income survey, the universal credit data that we collect and the data on the benefits cap. As I said in answer to the right reverend Prelate, some very vulnerable people are impacted by this change, and we want to monitor it very carefully to make sure that they are protected.
Baroness Hayman (CB): My Lords, the Minister mentioned exemptions in one of his answers. Many of us all around this House thought an exemption had been made and an assurance given in the case of kinship carers. We were therefore very surprised and distressed to learn of the case of a young woman who became a carer for her bereaved siblings and then later had a child herself, and became a victim of this policy. In the House on 11 December, the noble Baroness, Lady Buscombe, said this case,
“and this policy is being considered as we speak”.—[Official Report, 11/12/17; col. 1374.]
Could the Minister give us an update on that consideration?
Lord Bates: In respect of the kinship carers, that was a decision of your Lordships’ House when the legislation was going through, and of course we uphold that principle. However, here we are talking about cases where there is a third or subsequent child and the initial two places have been taken by either their own children or other children. The noble Baroness is shaking her head and obviously I respect the approach that she is taking. If we could talk about the specifics of the case afterwards, I will certainly make sure that it is taken up with colleagues.
Lord Skelmersdale (Con): My Lords, I remember when the replacement ratio—the number of children per couple to maintain a stable population—was 2.7. What is it now, and has this had any bearing on the decision that we are discussing?
Lord Bates: The Office for National Statistics says that the average family size in the UK is 85% with two or fewer children and 87% for lone parents. Those are the statistics that we are currently working to.
Baroness Sherlock (Lab): The right reverend Prelate’s Question asked how the policy will improve family stability, mentioned in the Government’s impact assessment, which stated:
“Encouraging parents to reflect carefully on their readiness to support an additional child”,
could help family stability. The Government argued strongly when the Bill was going through that in the case of tax credits, it would not apply the two-child limit to children who had been born before last April, because parents did not know that the policy was coming in when they had those children. However, they are applying it precisely that way to universal credit. From next February, when universal credit opens out to big families, if you make a new claim and have children born before this policy was ever dreamed of, you will not get support for the third and subsequent children. Can the Minister explain how that is fair?
Lord Bates: That is the provision under the legislation, but it needs to be placed in the context of what we are doing to ensure that families are protected. There are 3 million more people in work and 4 million people are paying less tax as a result of our tax changes. The national living wage has meant an extra £2,000 for families over the past two years alone. We have doubled the amount of free childcare available to three and four year-olds. This Government are doing a lot for families, but we need to be cognisant of those who may be caught by particular rule changes and ensure that they are helped as they should be.