Welfare Reform and Work Bill — Committee (1st Day) (Continued)

House of Lords, 7 December 2015.

Baroness Meacher (Crossbench)

My Lords, Amendment 3 seeks to exclude all families with a disabled child from the two-child limit on receipt of the child element of child tax credit and the child addition within universal credit.

I have also tabled Amendment 8, which is more limited in the protection it affords. Amendment 8 would exclude any disabled child from the number of children considered in relation to the child element of universal credit. Thus, if Amendment 8 were accepted by the Government, a family with four children, one of whom is disabled, would still lose the child element for the third non-disabled child. I argue very strongly for Amendment 3, but Amendment 8 would be a great improvement on the Bill as it stands. At this point, I pay tribute to Rob Holland from Mencap for his considerable help with the Bill.

Families with disabled children face financial and other stresses which are not faced where all the children are healthy and able-bodied. These families have extra costs for special aids, adaptations to their homes, and additional clothing and travel costs. The travel costs of medical appointments alone can be very considerable. One family, for example, reported regularly having to get to three appointments a week, and this can rise to as many as seven. The appointments are at four different hospitals, involving additional petrol costs, depreciation of the car and, most particularly, parking fees. Another family talked of their child often breaking bedroom furniture and other items due to the frustration of their disability, which then had to be replaced.

The enormity of the cuts envisaged for families with disabled children is quite extraordinary. While I know that the Government are committed to a much smaller role for the state in future, can it be right to hit the most disadvantaged the hardest? Without these amendments, the two-child limit for claims of child tax credit means that if a two-child family has a third child who is disabled, the family will be £2,780 per year, or an average of £50 or so per week, worse off than they would be under the current provision. This loss must be considered alongside the substantial fall in the level of the disability element of child credit under universal credit. The current value of that benefit is £57 per week, whereas the disability addition in a family’s universal credit entitlement will be worth only £28 a week—a loss of £29 per week. I understand that, in all, a new claimant family with three children, one of whom is disabled, will be about £79 per week worse off when these two changes come into effect than a family currently claiming equivalent benefits. Will the Minister confirm whether or not he agrees with these figures?

Research conducted by the Children’s Society and Citizens Advice in 2012 into the two-child limit for child tax credit found that the impact could be disastrous for the health and well-being of the children. Two-thirds said that they would have to cut back on food, more than half said that it would lead them into debt and more than one in 10 feared that they would have to give up their home.

Have the Government assessed the impact of these cuts on the number of children placed in residential care? There seems little doubt that all parents will be less able to cope with a disabled child at home if money is as tight as highlighted by the Children’s Society and Citizens Advice. What would be the net savings to the Exchequer, having taken into account residential care costs of a proportion of the children involved, as well as other costs of health and social care? I would be grateful if the Minister could clarify whether work has been done to clarify the net savings from the two-child limit in the context of the other planned benefit cuts, and taking account of increased government spending on other services. If this analysis has not been done, does the Minister agree that these changes should not go ahead until the Government have a clear understanding of these points? As one parent put it, “We would face the choice of increased debt or the eventual institutionalisation of our child”.

The Government may be assuming that local authorities will take over the burden of these family costs. I understand that this simply will not happen. In fact, among the families already receiving additional support from local authorities, about 60% said that that support had been cut over the past year, and there will be more cuts to local authority services in the coming years.

A big concern is lone parents with disabled children. Many years ago when I was training to be a social worker, which I did for a few years, I spent six months working in a school for severely handicapped and disabled children. I found myself running a group for the parents of those children. The group comprised about 14 parents, every single one of whom was a single mother. The fathers had apparently walked out some time after the disabled child was born. If these mothers had also abandoned their disabled children, the state would have had to take care of the children and pay the bill. The impact of the two-child limit will be greatest for these parents.

In a meeting with Ministers about tax credits, I was told that the Government expected claimants to work extra hours to make up for their losses. However, these lone parents with disabled children are not able to make up the shortfall by working extra hours. The simple fact is that the disabled children and their healthy siblings will suffer if this measure goes ahead. I understand that the Government recognise that some groups—I think it is two groups—should be exempted from the two-child limit for the child elements of child tax credit and universal credit. I hope very much that the Minister will today assure the Committee that he will give serious consideration to exempting families with disabled children from this particularly savage cut. I beg to move.

Baroness Pitkeathley (Labour)

My Lords, I support these amendments. It is very important to remember that being the parent of a disabled child is not the same as being a parent. It is sometimes very difficult to get that point over. I remember that when we discussed the Children and Families Bill, officials and even Ministers said, “I am a parent and I do not need any extra support”. However, this is not the same as being a parent of a normal child, if I can put it that way. We all expect to care for our children until they are 18, and many of us for much longer than that but, for a parent who is caring for a disabled child, that caring is likely to be a lifelong commitment— your life or their life. That is the point we have to remember. That lifetime commitment means that these parents face huge problems. They face practical problems, particularly when services are being cut and there is not enough support. They also face very severe emotional problems. As the noble Baroness reminded us, marriage breakdown is very common where there is a child, or more than one, with disabilities. These parents also face financial problems, which is what we are concerned with here. I suggest that most households with a disabled child already face financial hardship, even without these changes. More than half—53%—of parent carers answering the State of Caring survey in 2015 said that they were struggling to make ends meet.

Research shows that it is three times more costly to bring up a disabled child than a non-disabled child, as we have been reminded. Some 34% of sick or disabled children live in households where there is no adult in paid work compared with 18% of children who are not sick or disabled. Four in 10 disabled children live in relative income poverty once the additional cost of their disability is accounted for. Last year, the Carers UK Caring and Family Finances Inquiry found that parent carers of disabled children were one of the groups least likely to be in employment. As one carer said, “I gave up work thinking I would be able to return within a year or two once I got my daughter the support she needed. Little did I know how poor local services were and I am still caring years later”. That carer will probably be caring all her life and certainly for all the life of that disabled child. Surely we are not thinking of making hard lives even harder by these pernicious changes. I support the amendment.

Baroness Sherlock (Labour)

My Lords, I wish to speak to Amendment 19, standing in my name and that of my noble friend Lord McKenzie of Luton, and to the other amendments in this group, which I support.

The case has already been so well made by the noble Baroness, Lady Meacher, and my noble friend Lady Pitkeathley that I will not add much more. However, I want to get a sense of scale. Contact a Family reports that there are 770,000 disabled children under the age of 16 in the UK. That equates to one child in 20. Most struggle on alone with only 8% of families getting services from their local social services. As we have heard, it costs up to three times as much to raise a disabled child as it does to raise a child without disabilities. We have heard the figures from official statistics showing the much higher rate of poverty among families with a disabled member and the high proportion of children with a disability who live in households in poverty

Families are already struggling. It is very good that we will retain the disability element, which covers some of the additional costs of disability, but the child will still have to be fed and clothed and cared for. The reality is that not only do disabled children cost much more but it is much harder for parents to increase their income, a point made by the noble Baroness, Lady Meacher. Suitable childcare for disabled children is much harder to find, more expensive when it is found and for some children the nature of their disability makes it very hard for anyone other than the parent to be able to take care of them.

As the Children’s Society pointed out in its briefing, the child disability element for children other than those on the high-rate care component of DLA has already been effectively halved within universal credit. Currently a family with a disabled third child would receive a maximum child tax credit entitlement of £5,920. Following the reduction of the disability component and the two-child limit, they get a maximum of just £1,513, little more than a quarter of their entitlement in the current tax credit system.

The Minister has said repeatedly today that this is about choice and that we want to enable families who are on tax credits and universal credit to make the same choices as other families. Will he acknowledge that having a disabled child is not a choice a family makes? Often the family will not know that the child is going to be disabled when the child is conceived. Either the disability may not be known, or the child may develop a disability or an illness which causes a disability after birth. The family are therefore not in a position to know the additional costs they are going to be taking on. I have problems in general with this policy, as I will explain in a later stand part debate, but one of the reasons for having so many exemptions is to try to get the Government to explain the rationale of exempting certain categories of person and not others. The Minister needs to be consistent. If his intention is all about clear-eyed choice, then can he explain how that applies in this case?

Lord Kirkwood of Kirkhope (Liberal Democrat)

My Lords, I put my name to Amendment 3, and I support the powerful speech made by the noble Baroness, Lady Meacher, and other contributions that we have had in this short debate. I want to make a simple point about disability. I had the distinct impression that, although the Government were determined to force through their

£12,000 million savings, health and disability were going to be a priority for Ministers over the next five years. There are signs that that is true. Some of the attempts that we are watching unfold to bridge the disability employment gap and issues of that kind are welcome, as far as they go. That should give the Minister some cover to go back to the Treasury and say that there should be some identified exemptions for working families in particular. We are trying to encourage people to sustain employment in the future. Some families have young members with different levels of disability as well as mental health issues and disabilities. There is a little more emphasis on this, thanks to the excellent work that was done during the coalition Government days. There is a real peg on which the Minister can hang an approach to these tragedies which says that something needs to be said and some provision made for disability in the context of Clauses 11 and 12.

I say again to the Minister, and I mean it, that the Committee will weigh carefully what he says in terms of the exemptions or otherwise. So far he has been playing a pretty straight bat and holding the line on behalf of the Government, by which I think he means the Treasury. I understand all that, but he has to be very careful. I have said this before, and I will say it again in the clause stand part debate, that he risks losing some of these clauses, if he is not careful, if he does not appeal to good moderates such as the noble Lord, Lord McKenzie, and me. No, I take that back—it will damage his political career in the new Labour Administration.

There is an opportunity in the context of Ministers rightly focusing again on work and health. If that is applied to the amendments that have been so ably moved, I think there is some room for compromise. If there is not some give and take, I think that the Minister is going to have trouble carrying some of this Bill through the rest of its proceedings.

Baroness Hollis of Heigham (Labour)

I was not going to add to the very powerful opening speech by the noble Baroness, Lady Meacher, but I will just say to the Minister that, when he faced a similar problem of housing and the cut in benefit to those with a so-called spare bedroom—I refer to the bedroom tax—the Minister understood the degree of disquiet around the House and invested in discretionary housing payments, which he increased and increased. In other words, there was a recognition that there needed to be some head space in the system for dealing with difficult issues, many of which we have discussed today. I suggest to him that we have had so many of those in the previous amendments and most powerfully again on the issue of disabled children that he should seek a similar discretion which then the Government can come back with in proposed draft regulations which the House can discuss before they then become part of the legislative process by the time we get to Report.

Earl of Listowel (Crossbench)

My Lords, I support my noble friend Lady Meacher in her amendment, which she so eloquently expressed. A couple of years ago a woman called Stacie visited Parliament to talk to your Lordships in preparation for a childcare Bill. She talked about her difficulty, as a mother of a disabled child, in finding appropriate childcare. I think she went through more than 20 childcare providers who just said, “Look, we cannot deal with the needs of your child”. Eventually she found a very good provider that was prepared to go the extra mile. I know that this is an issue we have to take seriously and are looking to improve in terms of making childcare more easily accessible. It continues to be a problem. So there is that additional issue that I would highlight to your Lordships.

My noble friend also highlighted the fact that so many of these women are bringing up disabled children on their own. I invite your Lordships, women and men, to think about trying to bring up a child on your own when that child has a disability. The risks of isolation, of being overwhelmed—all those things must be exacerbated.

The Minister, in the early discussion about popular feeling with regard to taxation, made his response. It made me reflect a little that perhaps part of the way the public sees these issues is mediated by how the Government present them. I encourage the Government to be very careful, and I hope that this will not be taken the wrong way. On Saturday morning I was speaking to a mother with a two week-old baby, and she was speaking with another mother. The other mother, perhaps a little unkindly, because this two week-old baby had an elder sister, who was three, said, “Has the older sister started trying to kill her yet?” What this highlighted for me is that it is such a basic element of human nature to be envious, to resent something that somebody else has, that one has to think through very carefully how one presents sharing resources with somebody else, giving resources to somebody else and not giving it to another person. I am afraid that that may not come across very well. I say to the Government that I hope they are being very careful about how they present these things.

Baroness Manzoor (Liberal Democrat)

My Lords, we on these Benches support this amendments, too—Amendment 3 in particular. The House needs some assurances from the Government that the disability premium for each disabled child in both tax credits and universal credits will be protected, regardless of the number of children in the family. However, the child element in tax credits and universal credit will be paid only in respect of two children in a family, even when the third child is disabled. That is the point. We need to look at those exemptions, so if the Government have already said that there is some protection, surely that same protection should be afforded to the third child who is disabled.

Baroness Lister of Burtersett (Labour)

My Lords, I want to make a brief point in support of the powerful case that has already been made. I believe that the latest HBAI statistics showed an increase in poverty among disabled children. Can the Minister tell us his assessment of the impact of these clauses on the number of disabled children living in poverty?

Baroness Tyler of Enfield (Liberal Democrat)

My Lords, very briefly, I lend my support to these very important amendments. We have heard some extremely powerful arguments. I want to draw attention to one point in Amendment 3, which refers to child tax credits and says that the limit should not apply,

“where one or more of the children or qualifying young persons are disabled”.

I remember vividly a meeting that I attended during the course of what became the Children and Families Act, organised by the noble Baroness, Lady Pitkeathley. The very point which she was talking about was the impact on parent carers trying to bring up disabled children. One of the mothers was bringing up three disabled children. I remember that vividly because I think it brought tears to most of our eyes, including those of the Minister. Can the Minister say what the Government’s thinking is about households which have more than one child who has a disability?

Lord Freud (Conservative)

I thank noble Lords for this debate and, particularly, I heard the point made by the noble Baroness, Lady Meacher, about how the lone parent—the mother—is so often left on her own with a disabled child. That is a very moving point and clearly rings true.

Perhaps I may look at the technical position. Amendment 3 would exempt those families who have at least one disabled child from the policy which limits support to two children. The intention of this amendment is to allow families with a disabled child to claim the child element of child tax credit for an unlimited number of children. Under Amendment 19, that intention would apply to both tax credit and universal credit. I should point out, as a matter of information, that the difference in having the child element allowed for a third child is not actually that great, if you look at the statistics. That is because the number of parents who go on to have more children is actually very few, as the noble Baroness, Lady Meacher, will probably know, so there is not a lot of difference in the cost. I know that she will appreciate the thinking behind that point. If I look at Amendment 8, meanwhile, which goes on to the point about paying the child element, it is technically a bit misdrafted, but I know that the intention of the amendment is to allow that child element to be paid.

The noble Baroness, Lady Sherlock, drew on the issue of whether a choice has been made. Clearly, we have considered the issue of disabled children carefully and looked at the challenges which these families face. We are committed to supporting those families with disabled children by paying the disability element of child tax credit and the equivalent in universal credit. That is true for all disabled children, although there are in practice rather few—I mean that there will be some, but relatively few—so, however many there are, it will be for not just the first disabled child but all of them. From what I am hearing, I think that the debate is now around the child element as well as the disability element and that that is where the differences lie in practical terms.

If I may go on, I can acknowledge broadly the figures to which the noble Baroness, Lady Meacher, was drawing attention in regard to the reduction without the child element. Although when that is in UC as a unified benefit, it will be only one part of the total payment. On the amount that the family gets, the reduction will be much less than the “down to a quarter” figure to which she was referring. On top of the disability element that we are exempting, we are exempting from the benefit freeze all those benefits which relate to the additional costs of disability, including PIP and DLA.

On Amendment 19, which would create a duty for an appeals process, I repeat the point that I made earlier: we already have comprehensive appeal arrangements and therefore do not need this amendment.

The noble Baroness, Lady Lister, made a point about what happens to HBAI figures. As we have found out year after year, it is impossible to predict with accuracy future HBAI figures. As is customary, the noble Baroness, Lady Hollis, has a solution to it all, but I am not convinced that the discretionary approach would be the optimum one in this area. Whatever happens, I do not think that any kind of solution would come from that.

Baroness Hollis of Heigham (Labour)

Given the amendments that we have debated so far—in the first group, the second group and now this one—what proportion of the estimated £1.3 billion in savings that I think the Government were expecting to make from this would therefore be lost to the Government?

Lord Freud (Conservative)

I am simply not in a position to deal with what are entirely hypothetical issues. I am not in a position today to offer very much satisfaction in these areas, as noble Lords know.

Baroness Hollis of Heigham (Labour)

Can I push the Minister on this? In earlier debates, he was saying that the two main drivers for these proposals on the two-child policy were, first, the need to get financial control—he quoted very large figures that he expressed great concern about—and, secondly, to produce a level playing field between working families and non-working families. He must know the cost of all these amendments, because he will have had the briefing from the Box about them, but I have not heard him tell us that. How much would the cost be of the previous exemptions and, in addition, the exemptions referred to so powerfully by my noble friend Lady Pitkeathley and the noble Baroness, Lady Meacher? How much of those savings would the Government lose if they were to meet the exceptions that all the Committee has, so far, argued for today?

Lord Freud (Conservative)

I am not in a position to answer those questions because I have had all kinds of amendments tabled—including that from the noble Baroness, which would remove the policy and lose all of the £1.3 billion. I am not in a position to go through the exemptions at this stage like that.

Baroness Hollis of Heigham (Labour)

So are the Government really saying, “We are opposing amendments because we can’t afford them”, but do not know what they will cost?

Lord Freud (Conservative)

I have given out as much information as I can on the questions at this stage and indicated what the relative positions are. On this amendment in particular, I was careful to make it clear that there is not a huge difference in cost terms—and I will double-check this—between allowing a child element for the disabled and exempting the family which has a disabled child. That is the main cost implication which I have been able to provide today.

Baroness Pitkeathley (Labour)

If the Minister is not in a position tonight to answer those questions, can he give an indication of when he might be?

Baroness Sherlock (Labour)

My Lords, before the Minister answers that, can I just say that I have found his responses today a little surprising. Many noble Lords have experience of being in Committee with him and having careful, detailed and well-informed debates. We are used to the Minister regularly getting up and telling us how much things cost and I find it almost impossible to believe that his department does not know how much these elements will cost. They have been proposed a long time. The department has had every opportunity and there are very good statisticians and modellers in the DWP. I can conclude only one of two things—either they know and have not told him or he knows and is saving it up for Report to launch it at us from the Box when we try and press a vote. Which is it?

Lord Freud (Conservative)

I would never launch something at noble Lords on Report in that way. Let me go and think about how I might present some useful figures in a reasonably timely way. That is not a promise to produce anything more than I have but I will look and see whether I can be more helpful, given that I clearly have not been now.

Earl of Listowel (Crossbench)

My Lords, will the Minister consider writing me a letter about improving access to childcare for disabled families?

Lord Freud (Conservative)

Can I look at it? I am not sure quite how much of this is in my own purview. If I can, I will.

Baroness Hollis of Heigham (Labour)

I am amazed this information was not available at the Commons stage of this Bill, given it has been discussed in Parliament for several months—certainly I think it was back in July the Second Reading took place—and to still not to know these figures surprises me enormously. While the Minister is being helpful in producing information, given that we know that 85% of the welfare cuts proposed by the Chancellor will fall on women and given we know that nearly all the “victims”—the recipients of concern in the exempted groups that we were talking about in previous amendments—are women, will he also do us a gender breakdown? He is absolutely right, as other noble Lords have also said, that it is usually the mother who is left caring for disabled children. I remember meeting vaccine-damaged children—part of the Minister’s responsibility, I think—and every parent there with a disabled child was a woman. Can I ask the Minister if he will add a gender analysis to the financial analysis of where some of these cuts fall and who the exemptions, therefore, would help to protect?

Lord Freud (Conservative)

I think I have to fall back on the position that we have produced an analysis that is published and is available to noble Lords. I just make the point that often these statistics refer to households with both a man and a woman in them and it depends on who the recipient is. It is a household payment, not a payment to women specifically. One has to be rather careful of that when one looks at those statistics in the way that the noble Baroness has.

Baroness Lister of Burtersett (Labour)

The noble Lord is correct but women still tend to bear the main responsibility for the care of children, so the impact on a household is borne particularly by the mother.

Lord Freud (Conservative)

We are getting way off but our evidence is that the vast bulk of households share financial resources, so although someone in a household may receive a particular amount of money it does not necessarily mean that they do not share the burdens evenly. One can make a lot of false assumptions out of some of these data if one is not careful. I urge noble Lords not to press these amendments.

Baroness Meacher (Crossbench)

My Lords, I thank the many noble Lords who have spoken in this relatively short but very powerful debate. The Minister certainly got a clear message that this is a matter of considerable concern to Members in most parts of the House. Perhaps I can say again that one-nation Tories of the past have always supported families with disabled children. I still hope that this Government too can show that they will follow the traditions of their party and not leave these families bereft and in severe straits. That is what these provisions will do in the absence of any amendments to them. I thank the Minister for his thoughtful responses as always. I think he always gives us a pretty good innings, but I hope that before Report he will feel able to clarify the relative costs of these various amendments, and then we can perhaps sit down and really think where the need is the greatest. If we are all in the dark it really is quite difficult to make sense out of things, unless the Government have implacably decided they will not change anything in this Bill at all. I hope that is not the view of the Government and of the Minister. I thank all noble Lords and the Minister and beg leave to withdraw the amendment.

Amendment 3 withdrawn.

Amendments 4 to 7 not moved.

Debate on whether Clause 11 should stand part of the Bill.

Baroness Sherlock (Labour)

My Lords, I propose that Clauses 11 and 12 do not stand part of the Bill. We have heard during the debate today that this measure will have all sorts of, presumably, unintended consequences disincentivising kinship care and private fostering, disincentivising adoption, separating sibling groups, incentivising the break-up of larger families and acting as a deterrent to the formation of stepfamilies. It could require intrusive inquires of women who have been raped and, of course, will take large amounts of money from families with children. Another problem with the policy is the lack of any mitigation. Impact assessments often have a section that explains how the policy will be mitigated but here there is nothing. Of course that is because, once a child is conceived, there is no mitigating action that parents can take other than to have an abortion or to give up the child for adoption. I presume that nobody is advocating that. However, the Government are offering no help to families to mitigate the impact of these losses except where a woman has been raped or in the case of multiple births.

The Minister still has not explained the rationale for the exemptions. I am not satisfied with the question of choice. We also are left with the question of domestic violence and the 16% of pregnancies that are unplanned. Ministers sometimes talk as though conception were simply a matter of choice. The NHS website says very clearly that no contraceptive is 100% reliable. Where contraception has failed a woman has not exercised a choice to have a third child, unless the Minister is suggesting that a refusal to have an abortion constitutes a choice to have a baby, which it clearly does not. So why is that family penalised for having a third child? As we have discussed and will discuss again in a moment, it will affect some children who are already alive, as people making fresh claims for universal credit will get no money for their third child.

Given those effects and the lack of mitigation, the Government need a pretty compelling case for this policy. Have they made their case? The impact assessment says:

“The objective of these policies is to reform tax credits and Universal Credit to make them fairer and more affordable. They will ensure that the benefits system is fair to those who pay for it, as well as those who benefit from it, ensuring those on benefits face the same financial choices around the number of children they can afford as those supporting themselves through work. Encouraging parents to reflect carefully on their readiness to support an additional child could have a positive effect on overall family stability”.

That is what it is meant to do, so does it? Let us deconstruct it. The first objective is to make the system,

“fair to those who pay for it, as well as those who benefit from it”.

This contains an implied fallacy from the start, suggesting that there are two categories of person—those who pay for benefits and those who receive them, and ne’er the twain shall meet. We know that this is not true. As my noble friend Lady Hollis pointed out in a compelling Second Reading speech,

“over the course of 18 years, half the population has needed and received a means-tested benefit”.—[ Official Report , 17/11/15; col. 57.].

People move in and out of entitlement to benefits and tax credits and the amount of tax they pay, and the degree to which they are a net recipient or contributor to the system changes over their lifetime and as things happen to them.

What about the second part, namely,

“ensuring those on benefits face the same financial choices around the number of children they can afford as those supporting themselves through work”?

Again, that paints a picture of people who are not working and having lots of children that hard-working families, who pay the taxes that fund the benefits and tax credits, could never afford to have. Let us test that.

First, are those affected unemployed? The IFS figures show that, at the moment, 872,000 families receive an average of £3,670 for three-plus children. Of these families with three-plus children, 548,000 have parents in work, so approximately 63% of those getting benefits at the moment are in work—the typical victim of this policy is not the unemployed mother of a large family.

Of course, if the benefit cap is reduced, as the Bill proposes, to £23,000 in London and £20,000 elsewhere, then any family out of work with three-plus children is unlikely to get to enjoy the benefit of the child tax credit in any case. Shelter has pointed out that a typical couple with two kids renting a house in somewhere like Plymouth or Leeds—so not Mayfair—will be hit by the cap. Most of those affected are working, which means that tax credits are only part of their household income and top up their earnings, with the exact amount they get at any point depending on how much they earn. They are already funding much of the cost of raising their children in any case from their own resources and their own earnings. In that case, is there evidence that those in receipt of tax credits are having lots of children in a way that other people are not? No. We began a debate on this earlier. I have looked quite carefully at a study based on ONS statistical information which looked specifically not just at very large families but at what proportion of families had three or more children. It put it very starkly:

“These data show that socio-economic class, perhaps contrary to popular belief, does not affect family size”.

The third policy aim was:

“Encouraging parents to reflect carefully on their readiness to support an additional child”.

That raises two questions. First, do the Government believe that cutting funding will reduce the number of children born to poorer families? Although it mentions in passing a study on working tax credit, the impact assessment acknowledges there is “no evidence” on the strength of any such effect. My reading of the global evidence is, frankly, that it is inconclusive. Secondly, to what extent is this about choice and, more specifically, economic choice? Ministers—to be fair those of more than one Government—have in my view a surprisingly touching faith in the rational-actor model of humanity. In fact, the evidence shows that plenty of us make economically irrational decisions, or rational non-economic decisions, all the time. People may have cultural or religious reasons for wanting larger families, or be unwilling to take steps that might limit family size because of ethnical views on contraception or abortion. If people had children only when they were sure they could support them, that would mean conceiving only if they knew for sure their household income would be secure for the next 18 years. How many people can be confident of that? Who would have children if that were the case? Eighteen years ago, people might have thought working in steel factories could be a job for life, but factories close and economies falter; even MPs can lose their jobs. Things happen to people and working patterns change.

I then began to wonder whether this could be a way of managing population change. Ministers have not claimed that, but maybe it is a secret option which is so politically sensitive that they cannot mention it.

But that does not make sense either, because again the latest ONS population studies, published in 2013 using 2011 census data, showed the fertility rate. They focus on women born in 1968 because they assume that when you reach 45 you are past your child-bearing years—many of us certainly hope we are. The assumption at that point is that you can assume that the child-bearing period has finished. Women born in 1968 had an average of 1.92 children—it is worth noting, as Naomi Finch and others do, that a replacement rate, which would maintain the population, would be a fertility rate of 2.1. The studies also show that fertility rates are remarkably constant. The ONS notes that for over 70 years the two-child family has been the norm, while the numbers for families with three children and no children are also broadly consistent for women born in 1968. Interestingly for those worried about large families, one in 10 women born in 1968 had four-plus children, down from one in five for women born in 1941. That is clearly going in a direction that need not worry the Minister.

I have the following questions for the Minister. If the policy were to result in families on benefits and tax credits having fewer children, would the Government regard that as a good thing or a bad thing, or would they be indifferent to it? Secondly, what will the Government do to mitigate the effects on children of the hardship and damage to life chances that must result from increasing poverty in large families? If this policy succeeds in persuading poorer families to have fewer children, our society will suffer. As my noble friend Lady Hollis mentioned, since our birth-rate is below replacement rate, if the Government are serious about wanting to clamp down on immigration as our population ages, who is going to be around of working age to pay our pensions, fund our health service and care for us when we get old?

However, in fact there is little evidence that that will happen. If this policy does not change the number of children being born, then it must increase child poverty—it can do nothing else. One or the other must happen. It will take money away from larger families when child poverty is already 35% higher in those families, so the real losers from these policies will be the children who happen to be born into larger families, especially as younger siblings.

The policy also undermines the fundamental point of our welfare state, which is to protect the vulnerable and insure citizens against the hazards of life such as illness, disability, unemployment and bereavement. Given all that, the onus is very much on the Government to provide the evidence that this policy is necessary and proportionate. I look forward to hearing the Minister do just that.

Baroness Lister of Burtersett (Labour)

My Lords, I was so disappointed with the Minister’s responses to the olive branch that the noble Lord, Lord Kirkwood of Kirkhope, held out and the inflexibility in response to all the suggestions of how these clauses could be mitigated. In support of the contention that these clauses should not stand part of the Bill, I want to address two main issues: one is the mentality underlying the clauses, and the other is the equality and human rights implications.

My noble friend Lady Hollis referred back to the 19th century in her earlier speech. I will go back just one century. The mentality of the Bill was summed up rather well in a letter to the Scotsman in 1931 which was quoted in The People by Selina Todd, which I just happened to read on holiday—it is a very good book. The letter complained that:

“Many of the workless marry and breed families while in receipt of the dole”,

adding to the taxpayers’ “heavy burden”. Nearly a century on, perhaps we are a bit more subtle, but that sums up the mentality. We have this constant false division, referred to by my noble friend Lady Sherlock, between taxpayers who fund the tax credits system and those who benefit from it and references to how families supporting themselves solely through work do not see their incomes increase when they have another child. Who are these families? Apart from the very wealthiest, those families will be in receipt of child benefit, so they are not supporting themselves solely through work. If they have another child, they will get extra child benefit, and rightly so.

The main difference between now and the situation referred to in the letter to the Scotsman is that the Government do not want those in work and on low incomes to breed too many children either, given that, as we have heard, the majority affected will indeed be in paid work. Incidentally, could the Minister tell us what the rationale is for the abolition of the family element and its universal credit equivalent, which I think perhaps we have rather overlooked in focusing—rightly—on the two-child limit? Is that to discourage people in poverty from breeding altogether?

I turn to the human rights and equality implications. The Equality and Human Rights Commission has raised concerned under a number of articles of the UN Convention on the Rights of the Child, the International Covenant on Economic, Social and Cultural Rights and the Convention on the Rights of Persons with Disabilities. The impact assessment and the Government’s human rights memorandum do not adequately address these issues at all, although I commend the department for providing the latter.

Relating back to the point made by my noble friend Lady Hollis about the gender impact, the legal officer of the Child Poverty Action Group—I declare an interest as honorary president—refers to Article 14 of the ECHR and the disproportionate impact on women as mothers. Indeed, the impact assessment notes that women are more likely to be affected than men. Article 16.1(e) of CEDAW guarantees that women have the right,

“to decide freely and responsibly on the number and spacing of their children and to have access to the information, education and means to enable them to exercise”,

that right. The International Conference on Human Rights proclaimed:

“Parents have a basic … right to determine freely and responsibly the number and the spacing of their children”.

With regard to families and children, as the Government acknowledge in their human rights memorandum, it may be argued that the clauses discriminate against large families and that large families have status for the purposes of Article 14. They discriminate against religious groups with a conscientious objection to contraception and abortion, which is contrary to Article 14, read with Article 9, of the ECHR. We have heard a lot from different faith groups about their very real concerns about the impact of these clauses.

It is difficult to see how these clauses are in the best interests of children affected, in line with Article 3 of the UNCRC. The Government’s justification in their human rights memorandum is that the articles are,

“justified, proportionate and not manifestly without reasonable foundation”.

That is based partly on all the usual guff about fairness and the encouragement,

“to make the same financial decisions as families supporting themselves solely through work”.

However, we have already heard that the majority of the families affected will be in paid work anyway. The overwhelming response, from a wide range of organisations, suggests that the clauses are not justified, are not proportionate and are without reasonable foundation.

Article 3 of the UNCRC is addressed with what I would call unconvincing arguments in the human rights memorandum, which says:

“The best interests of children … is to have parents in work”—

as we have already heard, the majority of these parents will be in work—

“and work remains the surest way out of poverty”.

These clauses will mean that it is a less sure way out of poverty than it is at present, and that is saying something.

The memorandum says that the savings,

“will allow the Government to protect expenditure on education, childcare and health and the improvements to the overall economic situation will have a positive impact on children and their best interests”.

I draw attention to the arguments of the noble and learned Baroness, Lady Hale, in the recent judgment on the benefit cap. She said that,

“article 3(1) … requires that first consideration be given to the best interests, not only of children in general, but also of the particular child or children directly affected by the decision in question”.

I suspect that the noble and learned Baroness, Lady Hale, would give the arguments in the human rights memorandum pretty short shrift. She will probably have the opportunity to do so quickly, if this Bill becomes law. I look forward to hearing her judgment on it.

The EHRC is also concerned about the disproportionately negative impact on particular black and minority ethnic groups, which are more likely to have large families. It says that this could be at risk of breaching Articles 2 and 5 of the International Convention on the Elimination of All Forms of Racial Discrimination. The statistics bear this out—of course, those statistics are not provided in the impact assessment, as it would be asking too much to have statistics in the impact assessment. For example, an analysis of the HBAI statistics, pooled for 2010-13 by Professor Lucinda Platt for the Women’s Budget Group, shows that just under two-thirds of children in Pakistani and Bangladeshi families with three or more children are already in poverty. Two-thirds is a staggering figure, and I dread to think what that figure is going to be like if these clauses go ahead.

Lord Kirkwood of Kirkhope (Liberal Democrat)

My Lords, I will make just two points. First, although it makes me sound old-fashioned, I am in favour of using the social security uprating rules, established over years, for looking at the total spend of the department and what proportion of the national wealth goes to social protection. I am always frustrated and angry when Chancellors of the Exchequer stand at the Dispatch Box. The Treasury knows the square root of nothing at all about social protection. In the run-up to the Budget, we have purdah, so nobody knows what is going to issue forth from the Chancellor’s Budget briefcase. We get things landed upon us that we all have to live with as a consequence.

I want to try to persuade Governments in the future to stick to the established rules, because there are very clear ways of changing rates and benefits. In the annual uprating, Parliament has a chance to look at trends and how things are changing, make decisions and support the Government or make suggestions otherwise. That is a sensible, well-established way of doing business.

My objection to clause stand part, absent any further exemptions, is that we now have a two-child rule. It is a precedent that I believe is very dangerous, because Chancellors of the Exchequer in future could start importing it to other parts of the social security system without let or hindrance. We might start asking ourselves: what are the intrinsic differences between the child element of tax credits and child benefit itself? They are semantic and subtle; we could be entirely wrong. My point is that a clause such as Clause 11, interfering with child tax credits, and the way in which it has been done, leaves the House with some really serious thinking to do about whether this is supportable.

My view is an olive branch, and I will probably be off the Christmas card list of the noble Baroness, Lady Lister, as a result of taking this weak-kneed position. But if the Government do not come up with serious responses to the powerful speeches that have been made this evening, it will condition how I will approach any future support for Clauses 11 and 12. Of course, it is technically true that clause stand part is not necessarily available to us on Report or at Third Reading, but there will be ways of trying to address this in other ways. I was put right on that by a stern note from the noble Baroness, Lady Hollis, a moment ago. She is of course right, as she always is.

I am quite clear about this: it is dodgy procedure and a dangerous precedent. The Minister might be able to sell it to people like me if there is serious consideration of the powerful speeches that have been made. I understand the constitutional context; we are not in easy territory. I am not looking for trouble or to pull the Government down, defeat manifestos or any nonsense of that kind, but I have a conscience to deploy in deciding how to vote on some of these really important things and I will follow my conscience. I am not frightened of constitutional rows, if that is what it comes to. However, we do not need to get into that territory if the Minister carefully reflects, as he has done in the past, on what he has heard this evening and comes back with further and better particulars in terms of exemptions.

Earl of Listowel (Crossbench)

My Lords, in listening to this debate, a few things have become clearer to me. One is how important it is that the Government have been so successful in securing employment for so many of our people. In the debate that the noble Baroness, Lady Hollis, had and the noble Baroness, Lady Stroud, spoke to, both agreed that getting work is the most important way out of poverty. I pay tribute to the Government again for being so successful in that.

The Minister opened by saying that we are in an atmosphere of austerity and may need to make some tough choices. But it seemed to me that the language changed later on, to say that this is not just about austerity but is the right thing to be doing. I challenge that sincerely. It does not seem at all right to put these burdens on people. Just think: at the moment there is a storm in the north of England—Storm Desmond—flooding many families’ homes. A family in poverty, who may be working but on a very low income, may think to themselves, “We won’t take out insurance on this, that and the other, and we will hope for the best. We hope that there won’t be a storm”. Then this storm comes along and they have not insured their home, and they are already borrowing money anyway for various things because that is the only way that they can afford them, so they already have that debt and now they have lost more. The point I am making is that we are dealing here with some of the more vulnerable families in our society, and we are reducing their resilience.

Every family is challenged, maybe by bereavement, ill health or a flood, and we are challenging them further by taking money out of their pockets by doing this. I challenge the Government to think more about this. I encourage their Back-Benchers particularly to do so; I hope that, having listened to what has been said today, they might go away with some concerns that they want to sleep on, think about and take up with the Minister, because whatever they say will be particularly important and, I am sure, helpful. Maybe I am mistaken in my concerns, though, and maybe they will wish to put the other position.

I will give another example. I have spoken with homeless parents in the past. Barnardo’s used to run a project called Families in Temporary Accommodation. Something that came out of speaking with the mothers there was the importance for them of contact with others—being able to visit their family, friends and community. One of the issues of living in temporary accommodation is that when one is shunted around the place, one loses contact with all those human connections. Things such as bus fares are important, for instance, as is being able to use a mobile phone and having the money to pay for it. Again, if you impoverish these families and take money out of their pockets, where are they going to find the money to pay bus fares, which seems very basic, to go to see their friends and families, and for their children to see their friends and so on?

To my mind, this is a very harsh way of treating some of our poorest, often working families. I very much regret that the Government are taking this step. I hope that we can reduce the harm in the way that the noble Lord, Lord Kirkwood, referred to. Having listened to this debate with its very well-informed contributions, though, I feel more concerned than I did when it began.

Baroness Hollis of Heigham (Labour)

My Lords, this is a Bill that my noble friend Lord McKenzie has gone on record as saying—and I certainly support him in this—is one of the most wretched that he has known in this House. Most of it deals with cuts that many of us find objectionable because they fall on the poorest and most vulnerable in our society. We will oppose those, and on Report we will try to persuade the Minister to make some mitigation if that is possible.

However, the two-child policy is of a different order from the issue of cuts, primarily because it is saying to those families who have a third child, “We are hugely increasing the odds that you as a family will descend into poverty, that your poverty will be persistent, that you will not be able to get out of it and that your children will carry that poverty into the next generation”. We know this to be the case, yet the Government, and the Minister on their behalf—I cannot believe that his heart is in this—are actually willing to go down a policy route that knowingly sends poor children into longer, deeper and more persistent poverty, not only for their childhood but for a substantial chunk of their adulthood as well. We know that the children of poor parents are twice as likely to be poor at the age of 30 as others of the same age, yet the Government are going down a route that, to me, is deeply morally offensive. As opposed to the cuts, over which we have argued and will continue to argue, this seems to be a knowing castigation of poor children into permanent poverty for sums of money that we do not even have any evidence for. I say to the Government that they really should not go down this path: it is a damned path to go down.

Bishop of Portsmouth (Bishop)

My Lords, I express my strong concern about these clauses remaining part of the Bill. I offer three straightforward and, I hope, succinct comments: first, about the implications of these clauses; secondly, about the motivation of parents that is implied; and, thirdly, about where responsibility lies.

First, the Government place great emphasis on choice and personal responsibility for family size. I have to say that that assumes a remarkable assumption about the fail-safe effectiveness of contraception—or, if not, an apparent willingness for abortion to be appropriate as a sort of emergency contraception to keep family size to two children. I doubt the assumption, and would deeply regret driving people to seek termination on economic grounds. Is that really what the Government wish?

Secondly, over 35 years now I have played some part alongside others in preparing engaged couples for marriage and have often heard myself saying, “If you wait until you are sure you can afford children, you will never have them”. Religious traditions other than my own go further and specifically enjoin the blessing of children and family life. Are the Government aware of how these clauses will be received?

Thirdly, as I mentioned earlier in Committee, we—that is, a number of faith groups and organisations—made clear, in a letter circulated to all Members of the House prior to Second Reading, our belief that children are a blessing and not burdensome, a problem or a difficulty. To consign a child to being a financial problem over which the child himself or herself has had, and has, no control is indeed a singular responsibility—a responsibility for the mother and father indeed but, if these clauses go forward, it is a responsibility in which we shall all share. How sad it will be that a child growing up, becoming increasingly aware, will one day hear or discover that he or she is responsible in part for the family’s level of income simply by having been born. Although the Government seem to place that responsibility wholly on parents, I fear that the responsibility for this change would rest with us all. Is that what the Government want, and are we all prepared to accept that responsibility?

Lord Freud (Conservative)

My Lords, Clauses 11 and 12 introduce the Government’s reform to the child element of child tax credit and universal credit, which was announced by the then Chancellor in the Summer Budget of 2005. The purpose of child tax credit is to provide support to low-income families to help them with the cost of raising children, while universal credit, which replaces the child tax credit, is a unified benefit that provides support to low-income families both in and out of work. As it is being rolled out across the country it is providing a clearer and simpler system of support for families and provides real incentives for work. However, it is important that universal credit is kept on a sustainable basis and encourages families to make similar decisions to those who support themselves fully through work. The Government believe that child tax credit has become unsustainable, with expenditure trebling in real terms between 1999 and 2010, and going up the income scale to a level where a family with three children earning up to £40,000 will still be eligible for support. Last year the Government spent almost £30 billion on tax credits.

I will deal with the issue raised by the noble Baroness, Lady Sherlock, on the dependency ratio. In recent decades Britain has had a higher total fertility rate than the average of the older EU member states. Most families will not be affected by this measure. The mean number of dependent children per family is 1.7, and 86% of families have one or two dependent children. In fact, those families with two or fewer children are remarkably stable, whether they are lone parents, at 88%; opposite-sex cohabiting couples, at 87%; or married couples, at 84%.

Baroness Hollis of Heigham (Labour)

My Lords, the point my noble friend was making was not just about replacement fertility rates. Given the time all of us hope to live longer, one of the responses of government has been to say that unless we can improve the worker-to-pensioner ratio we have to defer the age at which people begin to draw their state pensions, even if they have had hard lives previously. We do not have the resources to pay for it from existing workers as we do not have enough of them to sustain that pensioner support in the future. Nothing the Minister has said has challenged that.

Lord Freud (Conservative)

We are going way off the core issues by looking at the times people retire. A lot of things are changing, and it is almost impossible to fine-tune for that.

I will address the challenge set by the noble Baroness, Lady Sherlock, on what our rationale for this is. It is very simple: the Government want to ensure that the system is fair to those who pay for it as well as those who benefit from it. That is the government position. I should add that the Bill should not be taken in isolation. We are introducing a number of measures to support households in work by reducing income tax through increasing personal allowances, increasing wages and increasing free childcare.

The right reverend Prelate the Bishop of Portsmouth and the noble Baroness, Lady Sherlock, raised the issue of those areas where there is a cultural disposition for larger families. To that, we make the point that all families need to think carefully and ensure that they can afford to provide for a new child in their household.

I make it clear that these changes will not mean a reduction in entitlement for those families already receiving child tax credit for children born before the 6 April 2017. In universal credit, for families already receiving the child element of universal credit, the changes will apply only to children joining the household on or after that date. I think that we have another amendment on which we can go into that in more detail.

Families moving to universal credit from child tax credit and receiving child tax credit for more than two children, and families claiming universal credit within six months of a previous universal credit or child tax credit claim that included the child element, will continue to be able to receive the child element for those children.

On the point raised by the noble Baroness, Lady Lister, on the EHRC, as she knows, the Government set out their assessment of the impacts of the policies in the Bill on 20 July, and the memorandum to the Joint Committee on Human Rights was published on 8 September. Ministers have considered impacts with regard to all the relevant legal obligations when formulating the welfare policies announced in the Bill. The intended impact of these reforms is to incentivise work and ensure that work always pays.

Baroness Lister of Burtersett (Labour)

Subsequent to that, the Equality and Human Rights Commission has produced its own assessment, which says very clearly that it believes that the human rights statement from the Government was inadequate. I welcome the fact that the DWP produced such a statement but given its inadequacy, will the Minister now respond to what the EHRC is saying?

Lord Freud (Conservative)

I believe there has been correspondence with it, which I think is public.

Baroness Lister of Burtersett (Labour)

That is not an answer.

Lord Freud (Conservative)

That is the best I can do at this stage. However, I accept that that is a bit tentative as an answer, so I will look to get the noble Baroness a better answer, or as full an answer as I can provide after talking this through with colleagues.

The Government believe that these changes strike the right balance between protecting the vulnerable—we have discussed the extra support for families with disabled children—while encouraging families which receive both child tax credit and universal credit to make the same financial decisions about the number of children they can afford as are made by those families who support themselves solely through work. They help to make the welfare system sustainable and the move towards a high-wage, lower-tax and lower-welfare country. Clauses 11 and 12 should therefore stand part of the Bill.

Earl of Listowel (Crossbench)

Before the noble Baroness responds—and I do not wish to keep the Committee from its dinner—while I thank the Minister for reminding us about the very welcome new higher minimum wage that the Government are introducing, looking at figures from the Institute for Fiscal Studies on projections for the difference that that will make, it has been clear to me that the complex way in which the tapers work will often mean that, for instance, lone working parents will not benefit that much more from this new, very welcome offer. Therefore I encourage your Lordships to keep that in mind. It is a very welcome offer but it may not make that much difference to the families that we are concerned about today.

Lord Freud (Conservative)

I will just deal with that. In universal credit we are producing something very clearly tapered, without the trap at the 16-hour point, which is in the current legacy welfare system. Therefore we have a pathway. One of the things we are doing, particularly for lone parents, is that once you are freed from that tyranny of the 16-hour rule, it is interesting how firms in the north-west, where that is already happening, are able to work with those people and start moving them up the earnings progression—not just as regards the number of hours but earnings progression—and we are beginning to see signs of a transformation. That is behind some of these changes—we want to make people independent of the state as much as we can.

Baroness Sherlock (Labour)

My Lords, I have debated a lot of subjects with the Minister over the last few years, and I am not sure I have ever been as disappointed in a Dispatch Box performance as I have been today. I know that the Minister knows these issues very well, and that he normally comes back. When noble Lords take a lot of care to mount arguments, take apart his arguments and engage, as many have done today, he normally does us all the courtesy of taking them on and responding to them carefully. He simply has not been doing that today.

I asked him only two questions and he did not answer either of them. I deconstructed the argument, and all he did was repeat it. He did not even engage with it. This is only a suspicion, and I am sure I am wrong, but it may just be that the Minister does not have any more enthusiasm for these provisions than I do. However, I am sure that that cannot be the case, and we will find that he comes back from supper enthused with zeal to take on and defend these proposals—which, frankly, has been sadly lacking so far.

I will say a couple of things. One is to reassure the noble Lord, Lord Kirkwood. He mentioned worrying about constitutional implications. He need not worry, of course, as he will well know, being much longer-serving than I am. Since this is primary legislation there is absolutely no reason why we should not send matters back to the House of Commons. The Companion makes this very clear at paragraph 8.181, where it says that,

“with regard to Commons financial privilege, the Lords may properly make amendments to Commons bills (other than supply bills) which, when they come to be considered by the Commons, are deemed by them to infringe their financial privileges. It also follows that the Lords need not anticipate what view the Commons may take of any Lords amendments with respect to”,

that. I hope that as a result he will sleep more easily tonight and will feel able to pursue this at a later stage.

I will make just one final point. I agree with the point made by many noble Lords that this two-child policy is qualitatively different from all the other measures. What we have traditionally done in support is to recognise in social security that children are a public and a private good and therefore that the costs of raising them should properly be shared between the taxpayer and the family. Traditionally, in the case of child benefit, we have said that we should all contribute something to the raising of all children; that where there are particular needs—for example, for disabled children—we should all contribute more; and that where people’s needs are greater, we should contribute more through means-tested benefits. This is a very dangerous day indeed if we move away from that and I hope very much that we will return to it at a later stage in the Bill. But I beg leave to withdraw my opposition.

Clause 11 agreed.

Clause 12: Changes to child element of universal credit

Amendments 8 to 10 not moved.

House resumed. Committee to begin again not before 8.50 pm.

Baroness Sherlock (Labour)

My Lords, I rise—albeit a little slowly—to move Amendment 11 in my name and that of my noble friend Lord McKenzie of Luton. This is a very simple amendment which would ensure that the two-child limit applies only to children born after 6 April 2017. The impact assessment for this measure states:

“Entitlement will remain at the level for two children for households who make the choice to have more children in the knowledge of the policy”.

That simply is not true. If someone has more than two children and needs to make a claim for universal credit after 6 April 2017, and if they are not getting tax credits or UC and they have not in the past six months, this measure will apply to them. Entitlement will remain at the level of two children for those households, even though they quite clearly have not made the choice to have more children in the knowledge of the policy.

I suppose that it is just about possible that there will be those who manage to conceive and deliver a child between the passing of the Bill and April 2017, though they would have to get a move on, but most of the children affected by this will be living, breathing, existing children, conceived and born when this policy was just a glint in the eye of a cost-cutting Chancellor.

I know that various attempts have been made to get the Government to explain their rationale for this. I understand that it was indicated to Peers during a briefing session that the reason was that, if someone had not needed to claim benefit or tax credits during the past six months, they clearly have enough money to protect themselves against unforeseen events, so should not have access to the full support of the welfare state. I may be mistaken, but if I am the Minister can correct me. If that is right, however, surely that is precisely what the welfare state is for—to protect all of us against unforeseen circumstances.

Let us suppose that a couple have two primary-school children, and then they have two year-old twins. One day the husband dies or disappears or is paralysed in an accident and cannot work, and they turn to the welfare state. Those twins will be invisible for the purposes of universal credit, so you can see that the dream scheme that Ministers have boasted would swing seamlessly into action as soon as someone’s circumstances changed will not help that family feed, clothe and house the twins.

The family will potentially lose £5,560 a year every year until the twins are adults. We are talking about the best part of £90,000. How should the family have provided for that when they did not know they had to? What should they have done? Saved that much when they are raising toddlers? Maybe they should have bought a PPI policy, the cause of the biggest mis-selling scandal in modern financial history—and I should know, since I am the senior independent director of the Financial Ombudsman Service. But even if that were a good idea, why would they do it? They thought the welfare state was there to help them at such times. That was what they had been led to believe when they had those children.

As I indicated in the previous debate, I think that this whole measure is a terrible idea. But perhaps I can pass on some advice to the Minister from the greatest Cabinet Secretary of modern times, the legendary Sir Humphrey Appleby. Sir Humphrey once said to his Minister: “If you’re going to do this damn silly thing, don’t do it in this damn silly way”. If the Minister is going to reduce support for larger families on the grounds that families on universal credit will have to make the same choices as those who are not, he should at least not apply it to people who have already made their choices because their children are already here. I beg to move.

Baroness Lister of Burtersett (Labour)

My Lords, I support my noble friend, who made a very powerful case. The joint briefing from the churches and faith groups that was circulated to all Peers made a very good point. It said:

“A policy designed to incentivise families to make responsible choices, becomes an unavoidable financial penalty for anyone confronted by relatively common life events”.

This amendment in particular puts that quotation into relief. The Office of the Children’s Commissioner has raised similar concerns.

I made the point at Second Reading that this provision sits oddly with the Government’s own emphasis in this and earlier legislation on the importance of a dynamic perspective on family behaviour. Indeed, in a letter of 13 October to the EHRC about impact assessments for the current Bill, the Secretary of State made as his main point the need,

“to take fully into account the dynamic nature of people’s lives”.

So why are the Government refusing to do so now, especially, as my noble friend said, in relation to existing third or subsequent children where there is a new universal credit claim? What is the justification?

As my noble friend said, when this was explained to us I think the way it was put was that there would be an unfair advantage to richer families if they were able to claim universal credit for third and subsequent children. Perhaps these families were not claiming tax credits or universal credit before, but they could still be on a low income and simply not have claimed. We know that take-up is far from perfect. I know that the Government expect take-up to be higher for universal credit, but that remains to be seen. I have been around this game for quite a long time with the expectation that take-up would be improved by various benefits and so forth. However, it remains stubbornly at less than 100% for means-tested benefits. Even if they were better off—my noble friend made a powerful point here—financial circumstances can change very quickly in the event of life events or shocks. So where is the fairness in refusing support to, say, an early teenage child who is the third in the family and who was born many years ago?

Lord Freud (Conservative)

I thank the noble Baroness, Lady Sherlock, and the noble Lord, Lord McKenzie, for bringing forward this amendment and I thank the noble Baronesses for making their points so succinctly, but effectively.

This amendment would change our approach to applying the two-child limit in universal credit so that it would apply only to children born on or after 6 April 2017. That effect would apply in existing and completely new claims for universal credit. This reform, which sees support for children in universal credit limited to two children, is primarily about fairness to the taxpayer. The tax credits system has grown unsustainably, and spending on tax credits for the 870,000 households which have three or more children is around £9.4 billion. To accept this amendment would, we estimate, increase projected universal credit expenditure by around £250 million in 2019-20. I am pleased that at least on this amendment I am able to provide the Committee with some costings.

The Government were elected on a manifesto commitment to reduce welfare expenditure by a further £12 billion during the lifetime of this Parliament, as part of the plan to eliminate the deficit and eliminate burdening the next generation with additional debt. There is no strong justification for the taxpayer to provide more generous financial support for completely new claims in respect of children born before 2017 than in respect of those born after that date.

Families already claiming universal credit or child tax credit, whether in or out of work, will not be affected in relation to children or qualifying young persons in their households before the key date while they remain entitled to benefit. Similarly, any household that has claimed universal credit or child tax credit in the past six months will be protected if their previous award included a child element for more than two children or qualifying young persons and they continue to have responsibility for them. I urge the noble Baroness to withdraw this amendment.

Baroness Sherlock (Labour)

My Lords, I congratulate the noble Lord on being able to cost one of tonight’s amendments. I find his defence genuinely impossible to understand. I think he actually said that there is no stronger justification for exempting existing children than children who have yet to be born. I simply cannot understand how he can say that with a straight face because he has spent much of this evening telling us that this was all about choice and that parents who are on tax credits should make the same choices before having additional children as parents who are not. These are parents who already have children. These children already exist. They are not making a choice at all. The only reason they are making a claim for tax credits, or universal credit in this case, is because something has happened which means they have then had to fall back on the support of the welfare state. I do not understand how that is a justification and I invite him to think about it and maybe come back before I sit down and give me a choice.

The Government need to think very carefully. They keep giving justifications about choice until they do not hold, in which case they suddenly go, “Oh, look over there. Look at fairness”. This is either about choice or it is not. It cannot be about choice and when that breaks down a different defence is pulled out. It surely has to be one or the other. If it is about choice, how can it apply to people who have not made a choice? If it is not about choice, will the Minister please stop telling us that it is. Can I tempt the Minister to explain to me again why there is not a stronger justification for existing children than new claimants because I think I may have misheard? Is that what he meant?

Lord Freud (Conservative)

No, that is exactly what I meant.

Baroness Sherlock (Labour)

At least my hearing is better than my understanding. I find that a profoundly disappointing response, even by the standards of tonight. But given that we are in Committee, I beg leave to withdraw this amendment.

Amendment 11 withdrawn.

Amendments 12 to 14 not moved.

Clause 12 agreed.

Amendments 15 to 20 not moved.

Amendment 21

Moved by The Lord Bishop of Portsmouth

21: After Clause 12, insert the following new Clause—

“Limiting the child element of child tax credit and universal credit to two children: reporting obligation

Within six months of the day on which this Act is passed the Secretary of State must consult and lay a report before Parliament, assessing the social and economic impact of sections 11 and 12 of this Act, including—

(a) the potential impact on family relationships and functioning, with reference to “The Family Test: Guidance for Government Departments” produced by the Department for Work and Pensions, and

(b) the potential economic and social impact on different faith communities.”

Bishop of Portsmouth (Bishop)

My Lords, I tabled Amendment 21 to highlight the impact of this measure on different faith communities who share our concerns with this part of the Bill in particular. Noble Lords who attended the special briefing we organised two weeks ago will have heard Chaya Spitz, chief executive of the Interlink Foundation, speak passionately about the implications for the Orthodox Jewish community that she represents and is a member of. For her community, larger families are the norm and the central pivot around which everything else revolves. There is a positive, faith-based imperative to have children, to create the next generation in service of God. There is also a commonly held conscientious objection to the use of artificial contraception, except in prescribed circumstances, and to abortion, except in rare circumstances. By limiting financial support to the first two children, this policy is making a judgment that touches on deeply personal and strongly held religious and cultural beliefs about the family, and that threatens the viability of whole faith communities.

According to the 2011 census, 52% of Jewish children lived in families with three or more children, compared with a national average of 31%. In Muslim families, the proportion is even higher—60% live in larger families. This measure will have a hugely disproportionate impact on these particular faith communities. Although it is difficult to see how this could be framed as an exemption, the effects will be profound, and I do not believe they have received the consideration they deserve.

A recent report by the Child Poverty Action Group highlighted serious human rights concerns relating to this and other parts of the Bill and argued that the regulations would need to include “extensive exceptions” protecting women,

“family integrity and religious freedom”.

One of the issues it raises is the potential discrimination against members of religious groups who have a conscientious objection to the use of contraception or abortion contrary to Article 14, read with Article 9, of the European Convention on Human Rights. There are other hard cases as well, including situations where women in abusive relationships are pressured into having more children or where a woman uses contraception in good faith but it fails. In all these cases, the assumption that women have a free choice about whether or not to have a child is called into question.

For these reasons, I have tabled this amendment calling on the Government to consult and report on the economic and social impacts, focusing in particular on the implications for family life and for different faith communities. The Government’s own impact assessment is inadequate in this respect, offering only a superficial assessment of the likely effects. To argue, without supporting evidence, that substantially reducing the level of support for larger families will somehow increase their financial resilience and support improved life chances for their children seems wishful thinking at best and requires further investigation. As part of a more rigorous assessment, will the Minister agree to seeing the Government apply their own family test to this policy, using the guidance published by the DWP in October last year?

In an earlier intervention in Committee, the noble Lord, Lord Lawson of Blaby, spoke about perceptions of fairness in legislation, citing the example of family allowances. Would the Minister agree that the perceived fairness of these policies will be judged not only by their overall popularity but by the respect they give to deeply held convictions of faith communities that enrich our common life? I seek not an exemption but a clear analysis of the impact.

Baroness Lister of Burtersett (Labour)

My Lords, in speaking in support of this amendment, I will pick up what the right reverend Prelate said about the inadequacy of the impact assessment. This point was also made by the Equality and Human Rights Commission from the perspective of equality and human rights. It argued that it does not “enable proper scrutiny” or meet the requirements of the public sector equality duty; nor is there an assessment of the “aggregate effect” of the changes on people.

In fact, the impact assessment is inadequate from any perspective. In particular, there is no assessment of the impact on child poverty, despite the Joint Committee on Human Rights recommending that the Government should assess the impact on child poverty of any new law, as child poverty is a human rights issue—I declare an interest as I was a member of the committee at that point. I asked a Written Question about the impact, only to be told to look at the impact assessment—the implication being that I had not read it, which I found rather insulting.

Not only is there no assessment of the impact on child poverty, but this is the quality of distribution analysis:

“The policy has the impact of redistributing income from Universal Credit/tax credit recipients to the Exchequer (i.e. society as a whole)”.

Actually it is not society as a whole, because when I last thought about it, universal and tax credit recipients were themselves members of society. The assessment continues:

“The policy therefore has distributional impacts”.

That is the distribution analysis—and the impact assessment on life chances is similarly risible.

I remind the Minister of what it says in the Companion—that Ministers should be as open as possible in answering questions, because this is inherent in ministerial accountability to Parliament. I therefore ask him again now: what is the department’s assessment of the impact of these clauses on the number of children living in poverty? I simply do not accept that it is not possible to make an assessment. I accept that there might have to be a fairly wide margin of error—we cannot just say that it will be exactly x thousand—but I do not accept that there is no assessment. It is not possible.

The right reverend Prelate also mentioned the family test. That is drawn up by the Department for Work and Pensions itself. It is supposed to be equivalent to the public sector equality duty. According to the DWP, its application should be documented and the relevant department should consider publishing it. Given that this clearly has a family impact, why did the department decide not to publish the family test? As part of its equality statement for reforming asylum support, the Home Office set out very clearly each of the questions that the family test is supposed to answer and gave its answer. I might not agree with those answers, but that was a model of how a department should deal with it.

Will the Minister undertake to provide noble Lords with the documentation of the application of the family test before Report? There must be documentation, according to the DWP’s own guidance. Given that the measure has a clear family focus, can he tell us what additional analysis was undertaken involving stakeholders, as is recommended in the DWP’s own guidance on the test? Finally, will the Minister tell us which other countries restrict payment of benefits for children to smaller families in this way? I am reliably informed that there is no other country, but I accept that I may be wrong. When I last looked at this, I found that countries that cared about family policy and child poverty tended to pay more to larger families, rather than less, but I would welcome elucidation on that.

Baroness Sherlock (Labour)

My Lords, I rise to support Amendment 21 in the name of the right reverend Prelate the Bishop of Portsmouth. I fully support the requirement in the amendment to report on the impact on family relationships and functioning, for the reasons that have been articulated in the debates we have been having this evening. Until now we have not discussed in any detail the impact on faith communities, so I am going to concentrate on that.

As we have heard, larger families are strongly prevalent within some faith traditions and cultures, which leads to legitimate concerns about the differential ways this policy will be felt throughout society. There is an issue of equality for children born into families of faith. This measure will disproportionately affect families where, perhaps because of the parents’ faith, there is a devout desire to avoid contraception and abortion. As we have heard and discussed this evening, family planning is not infallible and many people of faith and other like-minded people are concerned that unexpected pregnancies could lead to a rise in the number of abortions. This point was made by the right reverend Prelate the Bishop of Portsmouth earlier.

As my noble friend Lady Lister pointed out, the most damning evidence about the differential impact of this measure on equality grounds comes from the Equality and Human Rights Commission. I declare an interest, in that I am a former commissioner of EHRC. It says:

“The proposed changes may have a disproportionate negative impact on people from particular ethnic or religious groups … The impact assessments and human rights memorandum which accompany the Bill do not assess the effect of the Bill on equality and human rights in sufficient detail to enable proper scrutiny of the legislation”.

It is not kidding.

Disgracefully, the Government have resisted all pressures to conduct cumulative impact assessments of these measures, giving impact assessments only for individual measures. Even within that, however, I was staggered to find that there had been no attempt to conduct an equality impact assessment on the two-child policy. The short section in the IA on the impact on protected groups mentions gender and disability in passing, acknowledges that ethnic minority households may be more likely to be impacted, though offers no detail, but makes no reference at all to the protected characteristic of religion and belief. Can the Minister explain why there is no such reference, when even a cursory glance at the data suggests the possibility for significantly differential impacts on the grounds of some protected characteristics, particularly religion and belief?

Since the impact assessment did not tell us, we can look at the 2011 census data, which indicate that Muslim and Jewish families are the religious groups with the largest number of families with three-plus children. On average, the figure is 31%; among Jewish families it is 52%; among Muslims 60%; and among Christians 28%. The EHRC points out that this may put the Government at risk of breaching Articles 2 and 5(e)(iv) of the International Convention on the Elimination of All Forms of Racial Discrimination.

The commission goes on to note the point made by my noble friend Lady Lister that Section 149 of the Equality Act 2010 imposes a public sector equality duty requiring government departments and Ministers to have due regard to the need to eliminate unlawful discrimination, advance equality of opportunity and foster good relations—the three aims of the PSED. This is an ongoing duty that applies throughout the policy-making process, from the development of options and draft proposals through to legislation and implementation.

The EHRC wrote to the Secretary of State for Work and Pensions asking him how the DWP planned to improve its analysis, and offering its help. In his response, the Secretary of State simply said that the Government had used,

“the most robust analysis available to give a good assessment of … the impacts of the reforms”,

contained in the Welfare Reform and Work Bill. As the EHRC points out, though, the DWP analysis fails to demonstrate proper consideration of the effect of Clauses 11 and 12 on any of the three aims of the public sector duty. Nor is it clear how the impact of the proposals will be monitored and tackled if adverse impact is identified during implementation. This point was behind the amendment tabled by the right reverend Prelate the Bishop of Portsmouth.

The EHRC analysis suggests that this policy,

“could have an adverse impact on some religious groups, in particular those for whom family planning may be against their religious teachings. This may mean that children in some religious communities are more likely to be brought up in poverty”.

The commission’s conclusion is stark:

“Until the Government shows that it has properly considered the potential impact of these proposals on equality, and how any adverse effects can be mitigated, as required by section 149 of the Equality Act 2010, we recommend that Parliamentarians vote to oppose the Question that Clauses 11 and 12 stand part of the Bill”.

That is a very serious position to be taken by a statutory body such as the EHRC.

I have two simple questions for the Minister. First, why did the Government make no attempt to analyse the impact on the grounds of religion and belief, as they are required to do—or, if they did, why was it not published, as my noble friend asked? Secondly, why did the Secretary of State fail to respond to the EHRC when it pointed out the deficiencies of his department’s analysis and offered to help?

Given the above, I hope that at the very least the Minister will accept the amendment and show good faith, at this late stage, so that at least the Government can monitor the impact on faith communities.

Earl of Listowel (Crossbench)

Briefly, my Lords, I welcome the introduction by the previous Government of the family test. It was good to see in a recent Bill—it might have been the Education and Adoption Bill—that, just as the European Convention on Human Rights is written down, it was stipulated on the Bill itself that the family test had been gone through as the Bill had passed. I am sorry to hear that the results of the family test have not been published, because that test is very welcome.

The right honourable Iain Duncan Smith, the Secretary of State, did good work with Graham Allen MP in looking at early years interventions to begin thinking in this country about how important it is to support families so that their children do well from the very start of their lives, because more and more evidence shows that supportive families, good relationships and bonding early in life have huge and beneficial impacts on society, and that is hugely important. That was really wonderful work but I am afraid that it may be getting lost somehow. I would like to be reassured that that focus has not been lost and that the Secretary of State is still worried about “broken Britain” and broken families, and is still putting that right at the top of his priorities. I wonder if the Minister can say whether it is intended in future, as I gather has been the case in the past, for the Bill to say that it has passed the family test.

Baroness Hollis of Heigham (Labour)

Can the Minister help me? I was just checking, and as far as I can see from handbooks, we continue to support various partners in polygamous marriages and we do not say, “After two partners you won’t get any more support for your third, fourth or fifth member of a polygamous marriage”. Why is it okay to have several spouses who are financed by benefit, but if you have more than two children they are not?

Lord Freud (Conservative)

I thank the right reverend Prelate the Bishop of Portsmouth and the noble Earl, Lord Listowel, for this amendment. On the ECHR point, the Government set out their assessment of the impacts of the policies in the Bill on 20 July, as I think I have already said. It is important to ensure that the dynamic behavioural effects of the changes are considered within that.

Many of these analyses suffer from the fact that they are too static when considering gains and losses and too focused on notional changes.

On the question posed by the noble Baroness, Lady Lister, on child poverty impacts, I say that the intended impact of our reforms is to incentivise work, ensure that it always pays, and to allow people to keep more of what they earn. That is why, as we will go on to discuss, we are moving towards a life-chances analysis of poverty as our approach.

Baroness Lister of Burtersett (Labour)

I am sorry to intervene, but that is no answer, my Lords. I asked a very clear, factual question. At present, the Child Poverty Act still holds; therefore this House deserves the respect of being given an analysis of the impact of the increase in the numbers of children in child poverty on the measures, which are still the law, and which will still be measured under the HBAI statistics, as the Minister has said. I do not expect to have it now, but I hope that the Minister will give us those figures before Report.

Lord Freud (Conservative)

As I said, projections on the HBAI are difficult, and everyone gets them wrong because they are done on a static basis.

I pick up the point from the noble Baroness, Lady Hollis: she will be pleased to know that universal credit does not recognise polygamous marriage.

On the family test raised by the right reverend Prelate, the noble Baroness, Lady Lister, and the noble Earl, it is not a tick-box, pass-or-fail test but is about looking at how policies support or potentially undermine family relationships, and about trade-offs. The family test ensures that family considerations are explicitly considered and recognised when making those trade-offs. These measures will ensure fairness for all families, both encouraging parents into work and giving a fair deal for the taxpayer.

Baroness Lister of Burtersett (Labour)

I am very sorry to intervene again. As I said, the Home Office, which is not the author of the original family test—the DWP was—published the questions in the family test and how its policy met those questions. Of course the department must have carried that out not on a tick-box basis—I am not saying yes or no—but by carrying out a considered analysis around these questions. I simply ask why, therefore, the Department for Work and Pensions is not prepared to make available to this House the documentation of how the family test was applied to this clause?

Lord Freud (Conservative)

As I said, the documentation that we have published is the documentation that we need to publish to comply with our public sector equality duties. We have done that, even though the noble Baroness may feel that it is inadequate.

Baroness Sherlock (Labour)

I do not presume to know any more than others about this subject—no one knows more than my noble friend Lady Lister. But on a number of occasions this evening, Peers from different Benches have asked the Minister very specific questions and he has simply got up and said, “What we have published, we have published”. The question he was asked just now was: “The Government must have conducted this test, because they are required to do it, so why won’t they publish it?”. “We have published what we have published” is not an answer. I am getting increasingly anxious about the quality of the responses this evening.

Take the example of dynamic benefits. Could the Minister explain that to me again? If he does not think that static analysis is good then he needs to find another way of analysing it. He simply cannot come to this House and say, “I cannot tell you the impacts of this because it is all dynamic”, because otherwise we will never be able to assess anything that the Government are going to do before they do it. That cannot be reasonable, surely.

Lord Freud (Conservative)

This amendment is asking us to do an analysis over the next six months. In practice, that is what will be happening on a dynamic basis, because we have introduced as part of universal credit a test-and-learn approach in which we are able to assess what happens to families and learn the lessons in order to roll out universal credit. That is a pretty public process and we publish what we learn. So, in practice, we have a process that incorporates the dynamic effect of these changes in its overall impact, rather than taking individual bits and pieces of the policy. That is the best answer that I can give to the question. On that basis, I urge the right reverend Prelate to withdraw this amendment.

Baroness Hollis of Heigham (Labour)

I want to come back at the Minister. I was not trying to make a cheap jibe but, unless I am misreading a handbook that I have used over the years, if you are in a polygamous marriage and your spouse is married to someone else, you may claim as a single person within it, which is an allowance for you, including if the other person still lives in the same household with you. In other words, under UC—this is on page 154—there is continued financial support for other partners in a polygamous marriage. If that is so, why is it acceptable to apply that to adults but not to children?

Lord Freud (Conservative)

The noble Baroness has a long memory. Polygamous marriages were recognised in JSA, income support and ESA. We took a decision not to recognise those marriages in UC. Only the first marriage is recognised for universal credit purposes.

Baroness Hollis of Heigham (Labour)

Except that financial support will, presumably, continue to be given to the other women who are in a polygamous marriage by virtue of their polygamous status.

Lord Freud (Conservative)

No. If there is a third person in that household they would be treated as a single person.

Baroness Hollis of Heigham (Labour)

The point I am making is that they may be treated as a single person but they are getting financial support by virtue of that polygamous marriage, whereas the third or fourth child will get nothing.

Lord Freud (Conservative)

This is really becoming arcane. We have said that we do not recognise polygamous marriage in universal credit. But clearly there is an individual there, and we will treat them as a single person. It is actually, ironically, a little more expensive than treating them as a wife.

Bishop of Portsmouth (Bishop)

Can I make what I hope is not an arcane point? I invite the Minister, in responding to my amendment, which relates quite specifically to faith communities, to add something about that. He has not mentioned the word “faith” in his response, unless I have misheard.

Lord Freud (Conservative)

No, I have not; the right reverend Prelate is correct. In this policy we have looked through that to people’s choices, whether they are those in the benefits system or the people supporting those on the benefits system. I have not made an explicit comment on race or religion.

Bishop of Portsmouth (Bishop)

My Lords, I am grateful for the Minister’s response, but I think he will understand that I am disappointed that he cannot respond more positively to my amendment, which seeks some specific analysis of how these proposals would affect the lives of those with deeply held religious convictions who feel actual anxieties about what is proposed. In the course of the coming weeks, I am sure that these matters will be raised again and I hope that we can begin to have conversations about the specific issues that I have tried to raise. We could do that sympathetically and generously, recognising the respect in which these communities, in my judgment, should be held. I beg leave to withdraw the amendment.

Amendment 21 withdrawn.

Clause 4: Workless households and educational attainment: reporting obligations

Amendment 22

Moved by Lord Ramsbotham

22: Clause 4, page 4, line 32, at end insert—

“( ) the progress of children living in England at age 5 in the following developmental areas—

(i) cognitive;

(ii) personal, social and emotional; and

(iii) physical;

( ) the progress of disadvantaged children living in England at age 5 in the following developmental areas—

(i) cognitive;

(ii) personal, social and emotional; and

(iii) physical;”

Lord Ramsbotham (Crossbench)

My Lords, in speaking to the two amendments in my name, I regret that I was unable to raise at Second Reading the issues that they contain. I also regret that, yet again, I find myself tabling amendments to legislation produced by one department in silo, which does not appear to have taken into account that achievement depends on co-ordination with the activities of several other departments. My amendments, and others in the next groups, are intended both to point out and, hopefully, to rectify what will no doubt be claimed as the unintended consequences of not appreciating the impact of factors for which the DWP is not responsible.

The Minister will no doubt remember a seminar during the passage of the Welfare Reform Act 2012 focusing on the Wednesbury principles. Afterwards, he told the House:

“The department strives to ensure that no decision is influenced by irrelevant factors and that decision-makers act in a rational and fair manner”.—[Official Report, 25/01/12; col. 1061.]

Parts of this Bill—and particularly the proposal to do away with the child poverty targets contained in the Child Poverty Act 2010, which targets Alan Milburn has forecast will be missed by a “country mile”—suggest that, rather than being influenced by irrelevant facts, decision-makers appear to have ignored extremely relevant facts related to the responsibilities of other departments. Rather than acting in a rational and fair manner, they have acted irrationally and unfairly by ignoring what they should have taken into account.

In moving Amendment 22, I must declare an interest as co-chair of the All-Party Group on Speech and Language Difficulties. In 2012, we published a report on the links between social disadvantage and speech, language and communication needs, which included an extremely alarming graph that showed that children with very low IQs from supportive families would overtake children with higher IQs from disadvantaged families at the age of five, unless they were helped. One of our recommendations, discussed with both the Department of Health and the Department for Communities and Local Government, was that every child in the country should be assessed by a health visitor—trained or accompanied by a speech and language therapist—by the age of two so that remedial treatment could be initiated aimed at ensuring that every child could engage with education when starting school. We also recommended regular re-assessments to measure both progress and change of circumstance. This should continue until school-leaving age for those with special educational needs, whose statutory education, health and care plans continue until age 21.

Assessment of a child’s progress at age five provides a critical measure of their cognitive, emotional, social and physical development. In this connection, I should declare two other relevant interests. I am president of the Institute of Food, Brain and Behaviour, which has reported frequently on the vital importance of correct nutrition for brain development, not least before birth, and chairman of the Criminal Justice and Acquired Brain Injury Interest Group, which has campaigned for better understanding of the impact on young people of neuro-disability, which covers a multitude of conditions, including the effects of head injuries. The earlier that you can identify problems, the more likely you are to be able to initiate remedial treatment aimed at ensuring that children achieve the best educational attainment they possibly can and so have the best chance of finding and keeping work, which will help them to break cycles of intergenerational poverty.

What worries me most about the dropping of the targets contained in the Child Poverty Act, inadequate though they are for obtaining a detailed picture of the actual material condition of those in poverty, is that, now, neither central nor local government are to be required to make strategies for reducing child poverty or preparing and publishing assessments of the needs of children living in poverty. Meaningful improvement can be based only on particularised fact, in which regard much of the official data on which judgments will be based are little better than generalised fudge because they hide so many pockets of problems. The same detailed facts are required not only by the DWP for benefit purposes and by the Prime Minister and Chancellor for strategic purposes but by the Department of Health, the Department of Education, the Ministry of Justice and the Department for Communities and Local Government so that they can sing from the same hymn sheet when planning early years provision and the deployment of social and other remedial workers, to name but two responsibilities.

On Amendment 34, having already voiced my concern that the Bill is yet another example of a department legislating in silo, it appears to me that the Treasury and the DWP have not considered the impact on the mental and physical health of United Kingdom citizens when setting the level of statutory minimum incomes or the cost of treating consequent mental and physical ill-health in the NHS. Provision of the minimum income needed for healthy living is a means of preventing mental and physical ill-health and its cost. Currently, and even more so under the provision of the Bill, too many parents are frustrated in their attempts to provide for their children by inadequate statutory minimum incomes. Understanding the extent of this is exacerbated by the lack of up-to-date information, which Amendment 34 seeks to rectify. The amendment also seeks to open up a debate about the link between inadequate incomes, sanctions and the inevitable and unmanageable debt on the one hand and their impact on the mental and physical health of the poorest citizens on the other.

Ever since the national minimum wage was introduced, successive Governments appear to have ignored that the crucial income for health is the minimum wage after housing costs have been deducted. That amount is constantly being reduced by ever-increasing rents in the chaotic British housing market, the enforcement of debt collection—to which court costs and bailiffs have now been added—and the cost of council tax. According to the Office for National Statistics, 14.5 million people are now in absolute poverty after housing costs have been deducted. That is 4.1 million more than before their deduction. In other words, 4.1 billion additional people lack the ability to buy the food, fuel, clothes and other necessities that are essential for physical and mental health and well-being. That must surely concern a Government who pride themselves on their compassion.

The national minimum wage is based on the assumption that £6.70 an hour is paid for a 37.5-hour week. My amendment would also enable the Government to assess the impact of zero-hour contracts and part-time working on the health of employees working less than 37.5 hours a week. The Chancellor has now announced that the national minimum wage is to be replaced by a national living wage of £7.20 per hour from next April, rising to £9 per hour by 2020. In the absence of any known research into the minimum income needed for healthy living, he appears to be using the word “living” without substance. By contrast, I pay tribute to Reverend Paul Nicolson. I am most grateful to him and Taxpayers Against Poverty for telling me, among other useful information, that it was robust research for the Living Wage Foundation carried out by the Joseph Rowntree Foundation that led to the London living wage of £9.40 an hour and £8.25 per hour outside London, which 724 employers, up from 429 last year, are now paying. Boris Johnson, the Mayor of London, has already announced:

“Paying the London living wage is not only morally right, but makes good business sense too”.

More than 2,200 employees working for companies with contracts from the Greater London Authority are now benefiting from the London living wage. In another report, published on 23 November, the Rowntree Foundation showed that 51% of those living below the absolute poverty line lived in households in which at least one adult was in work. My amendment is not so much about the actual amount but to point out that because the Government’s proposed national living wage is so inadequate, it will condemn too many households to absolute poverty, with the inevitable consequences for their mental and physical health.

The DWP cannot claim that this information has not been readily available, or that it has not been brought to the Government’s attention. In addition to the activities of the organisations with which I am associated, the link between debt and mental illness has been highlighted in a report by the Royal College of Psychiatrists, confirmed in a peer-reviewed study by the University of Liverpool. The Institute of Brain Chemistry and Human Nutrition has highlighted the link between poor maternal nutrition, low birth weight and developmental brain disorders in children. The Centre for Mental Health, as vice-president of which I must also declare an interest, has calculated that the economic and social costs of mental health problems in England were £105 billion in 2009-10, taking into account costs of health and social care, loss of output and human costs. Many now consider this to be an underestimate.

Those of us who voted in favour of the amendment proposed by my noble friend Lady Meacher to the tax credits statutory instrument have been accused of acting unconstitutionally. My reason for doing so was to try to persuade the Chancellor to think again. I do not believe that anything in our current parliamentary process is as unsatisfactory, if not unconstitutional, as the Committee system in the other place, where Governments have a built-in majority of nine to seven, meaning that virtually no opposing amendment has a hope of being agreed. There have been numerous examples of admittedly imperfectly scrutinised legislation being sent to this House because the Committee, as composed in the other place, had neither time nor the necessary expertise to complete that process. Having read the Committee proceedings in the other place, I believe that to be true of the Bill.

In putting forward these two amendments, like my noble friend over tax credits, I ask the Minister to think again about this part of the Bill, and particularly the decision to scrap the strategic requirements in the Child Poverty Act 2010 and its proposed renaming. Life chances are being eroded by child poverty, which fact ought always to be in the forefront of government minds. In order to improve life chances, everything possible must be done to alleviate child poverty, and in order to achieve this essential, whichever Government is in power will need the information that my amendments seek to ensure is available on a regular basis.

Again, like the noble Lord, Lord Kirkwood of Kirkhope, on an earlier amendment, and remembering the Minister’s willingness to discuss contentious issues in earlier Bills, I and, I am sure, other colleagues would be very happy to meet him to discuss this. I beg to move.

Baroness Manzoor (Liberal Democrat)

My Lords, I shall speak to Amendments 22, 23, 27, 29, 30 and 34. Given that it is quite late, I will try to be as brief as I can. I support Amendment 22. It has already been said that Clauses 4 and 6 remove any income-based measures of child poverty, the duty on the Government to work towards eradicating child poverty by 2020, and the duty on local authorities to work together towards eradicating child poverty. Instead, under the new heading, “Life chances”, Clause 4 focuses on measuring children in workless families and with poor educational attainment.

As I said, I support the noble Lord, Lord Ramsbotham, in his Amendment 22 as it provides for development measures in the early years, allows for the capture of data for all children at the age of five, and puts disadvantaged children in the same group. My Amendment 23 builds on this, particularly as the latest government figures show that 62% of children in poverty now live in working homes: that is 2.5 million children, according to the End Child Poverty Coalition.

Without question, worklessness and a lack of access to employment are key drivers of child poverty. However, as I said at Second Reading, while work can be a key route out of poverty, it is by no means a guaranteed one. There is much research which shows the significant impact that growing up in poverty has on children. As was said earlier by the noble Baroness, Lady Hollis, children are much more likely to suffer from poor health, do worse at school, be jobless in the future, and die earlier. The changes that the Government plan to make to the support of low-income working families are likely only to make the situation worse.

Clause 4 as it stands proposes a statutory duty to publish an annual report on children in workless households and on the educational attainment of children in England at the end of key stage 4; that is, for children of 16 years of age. That is far too late and there are no baseline comparators. Improving children’s life chances must be more than about teenage educational attainment. I agree with the organisation Action for Children that the Government’s limited measures are a missed opportunity. Educational attainment at 16 does not reflect how far development in the earlier stages of our lives affects our future, from our health to our likelihood of being employed.

Amendment 23 would mean reporting on the educational attainment of children in England, including disadvantaged children, at the end of key stage 1, at the age of five, rather than reporting on educational attainment only at the end of key stage 4, when children are 16 years old. It would also allow a baseline for the Government to measure the progress made by investing in children’s futures. I hope that it will be supported by the Minister, particularly as such data are currently available, so the financial cost would be minimal. If my amendment is not accepted, perhaps the Minister could consider including a measure towards addressing income poverty in the basket of measures in the Bill.

Amendment 27 reinforces the point that “key stage 1” means the first key stage within the meaning of Part 6 of the Education Act 2002. Amendment 29 would allow the Secretary of State to publish and lay before Parliament data which report on children who are homeless or are at risk of homelessness. This is important as the data identified can help to support strategies much more effectively in the Troubled Families programme.

Amendment 30 is concerned with children,

“in families living in problem debt”.

This provision will ensure that data are consistently collected and reported on to enable early intervention by programmes such as the Troubled Families programme. Borrowing figures released on 30 November confirm a significant and prolonged increase in household debt, and the measures in this Bill are likely only to make matters worse.

Amendment 34 is about reporting obligations for:

“Working and workless households and health”.

I have added my name to those of the noble Lord, Lord Ramsbotham, and the noble Baronesses, Lady Meacher and Lady Hollins. As has been said, there is significant evidence that children living in poorer households are much more likely to be born prematurely, have low birth weight, and as adults to die earlier. They are also more likely to be absent from school due to illness, to be hospitalised, have long-standing illnesses, and are three times more likely to suffer from mental health problems.

Data collection on the impact of mental health on workless and in working households with incomes below the national minimum wage is important, particularly as the Government have put an emphasis on improving mental health services. The amendment will enable the link between inadequate incomes and their impact on the mental and physical health of the poorest people compared to others, and will allow better joined-up targeting of services between the NHS and the DWP. I want the Minister to look at this very carefully in terms of data collection.

Earl of Listowel (Crossbench)

I will speak to Amendment 22, moved by my noble friend Lord Ramsbotham and to which my name is attached, simply to say I strongly support the idea of taking measurements earlier in the child’s life. I note what my noble friend said, his reference to a strategy and that the Bill removes a strategy for child poverty. I note in the Government’s general direction of travel that they are quite sceptical of strategies. My sense is that the Government prefer to work from the bottom up, and that in education policy, as in other areas, they are reticent to have overarching plans. I would briefly like to challenge that.

The academy schools seem an example of government trying to build from the bottom up. However, what we see in the education department are real difficulties around teacher recruitment. Visiting an academy school—indeed, the best performing non-selective state school in the country—I saw wonderful results but heard complaints that because of the lack of strategy regarding teacher recruitment, there were real concerns that teachers of various kinds and at various levels would not be easily available and of the excellent quality needed in the future. My sense is the Government are rather opposed to strategies in general and I think in certain areas such as this it is really important, and we will come back to that.

I speak as a Cross-Bencher here: after 15 years in your Lordships’ House, it is rather regrettable that sometimes it seems as if one Government set certain things up and then the next Government set them down. I remember the debates about the Youth Justice Board, which seemed a very effective institution but because it was a quango the Government felt strongly that it had to go. I was pleased that the noble Lord, Lord Ramsbotham, managed to persuade the Government that, in fact, it was worth keeping. Therefore, in the discussion of the old Child Poverty Act and the new Welfare Reform and Work Bill, it is worth challenging the Government a bit. I would like to challenge the Government a bit about whether, in part, their motivation might be to simply undo what others have done in the past, and whether there might be a position to build on the best of the past as well as bringing the Government’s own unique contribution to this area.

I want to be as brief as possible so I will speak now to my amendments in the grouping, the first of which is Amendment 28 on children in care and care leavers. The Bill is a real opportunity to improve the outcomes for young people in care and care leavers. It is an opportunity to gather data, for instance on their educational attainment—yes, that is gathered already—but also on their mental health. Historically, there was recognition by the ONS in 2004 of the mental health needs of looked-after children and great work by people such as Professor Jackson on the educational attainment of looked-after children. The educational side has been well resourced and legislated on since then, with things like virtual school heads, designated teachers in schools, and priority in admissions all really important steps forward, but the mental health needs of looked-after children have not been so successfully addressed.

The Bill is an opportunity to look at various areas of performance with regard to young people in care and care leavers. Gathering them in one place and obliging Parliament to look at them on an annual basis would really keep our focus on making the most effective difference. Of course, in the care system we have the notion of the corporate parent. In each local authority, I suppose the leader would be the corporate parent for the young people in the authority’s care. I suppose that principle extends somewhat to us as well in Parliament. What that means is sometimes difficult. Obviously we do not have relationships with individual young people in care.

In Barnet in the past, when Paul Fallon was the director of children’s services, it was ensured that each senior member of the council was an advocate for a young person in care. They did not meet that young person but their job was to follow the career, as it were, of the young person in care. They would write to people, nobble them and just be a champion for the young person in care. We in Parliament cannot meet and know young people in care but we can do our very best to be champions for them in this place. They are the children of the state. If we had the data at our fingertips we would be better equipped to do that.

A couple of weeks ago I attended the presentation by Dr Mark Kerr of his doctoral thesis. Dr Kerr left care with no educational qualifications. He subsequently has successfully gone through two degrees and it was a tremendously moving experience to hear him making his presentation on young people in care. The system can work well. Young people can do extremely well and it is on us to ensure that we do even better for them.

Amendment 29 is on children and homelessness. It puts a duty on the Secretary of State to lay data before Parliament on children who are homeless and at risk of homelessness. The purpose of bringing this forward is that child homelessness increases year on year. It now stands at about 90,000, and the number of children living in bed-and-breakfast accommodation increases year on year. There is a maximum limit on the time that a local authority is allowed to place children in bed-and-breakfast accommodation with their families. That is more and more often broken. We know about the housing shortages in particular areas, especially in London and the south-east. The purpose of the amendment is to focus our mind on these young people.

We might get better data. For instance, we could have data on children at risk of becoming homeless, on how effective we are at preventing children and their families from becoming homeless, and on children who are accepted as homeless with their families, in bed-and-breakfast accommodation, and so on. There is already a statutory duty to gather data on homeless children but there are various duties. There is a different duty for 16 and 17 year-olds which local authorities are obliged to have, so it might be helpful to have in one place a more thought-through approach to this.

There is an interdepartmental group looking at homelessness, which I welcome. Perhaps this is a bit far from the Minister’s remit, but I would like to know more about how that is progressing. On this issue, particularly given the fact of ever-increasing immigration there needs to be a senior Minister looking at this, taking forward and championing this matter of family homelessness and having a strategy to really make a difference across the Department of Health, the DWP and the Department for Communities and Local Government. Such a change as this would be helpful in taking that forward.

My final point is on children in families living in problem debt. I am not sure how much time I have taken and I want to take as little time as possible, but this is a very important matter. The Government have decided to replace the child poverty measures with new life-chances indicators, focusing on measuring the number of children in workless households and the number of children with low levels of educational attainment. When the Secretary of State announced this change, he also highlighted the importance of problem debt in understanding child poverty and children’s life chances. The absence of a measure of problem debt has always been a limitation of the current Child Poverty Act. I know, from the families that I have had experience of, that where a family faces problem debt, a large proportion of family income can go on repaying debt every month, substantially reducing the money available for meeting the basic needs of children in the household. As shown in the report

The

Debt

Trap

, families in problem debt owe, on average, £3,437, or an estimated total of £4.8 billion, in arrears to service providers, creditors and government, both national and local. The social cost of problem debt is as high as £8.3 billion.

Problem debt can have a severe effect on family relationships. Of parents currently in arrears on one or more bills, nearly six in 10 said that their financial situation had led to their current or most recent relationship being put under strain, with 7% saying that it led to their most recent relationship breaking up. Problem debt is also closely aligned to the educational attainment of children. Nearly 90% of parents said that schools should do more to teach children about debt and money management. It is coming up to Christmas. The kind of people that we have been talking about, who have often had impoverished, chaotic early family lives themselves, are often not very comfortable with relationships or feel insecure. One way of demonstrating love for one’s child is to get them an expensive present. Getting a 15 year-old a £150 pair of trainers is a way to show one’s love. The risk is that many poorer families will be borrowing a lot of money this Christmas from loan sharks or on payday loans. They will run up debt because they feel they have to buy these things for their children. This matter needs to be addressed. I know that the Government are concerned about it and I look forward to the Minister’s response.

Baroness Massey of Darwen (Labour)

My Lords, I crave three minutes to support the spirit of the amendments in this group, which recognise that progress and life chances for children depend on their physical, social, emotional and cognitive development and on other influences too. I support the view of the noble Lord, Lord Ramsbotham, that a government strategy for children should be drawn up, tracking development from birth to adulthood. As he said, we have the means to do that through government departments such as education, health and welfare working together, with help from the voluntary sector and local authorities. I remember that many years ago the noble Baroness, Lady Williams of Crosby—possibly when she was Secretary of State for Education—spoke about having level playing fields for children. She said that some children begin the race with both feet tied together. Sadly, this is still the case. Feet are tied together through poverty, deprivation, low expectation and lack of care and stimulation in the early years. We know that the gap in attainment between poor children and more affluent ones is large by the age of five and continues to grow. We have recently had strong evidence from research that a holistic approach is necessary and I support the noble Lord, Lord Ramsbotham, in his concerns.

Baroness Meacher (Crossbench)

My Lords, I will speak very briefly to Amendment 34, tabled so comprehensively by my noble friend Lord Ramsbotham. This amendment is of particular importance in view of the enormity of the cuts to welfare spending since the passing of the Child Poverty Act 2010. The Institute for Fiscal Studies reports that this will amount to £123 billion taken from our poorest citizens by 2016-17. The second feature of government policy the effects of which need to be monitored effectively—and would be under Amendment 34—is the conditionality and sanctions regime which undoubtedly increases the stress level of claimants very considerably.

As a panel member, along with Sir Keir Starmer and others, for an inquiry by the Fawcett Society into the impact of the Government’s welfare measures upon women, and by association their children, I found quite appalling the sheer level of errors and abuse in some Jobcentre Plus offices, affecting innocent women who only wanted, if at all possible, to gain their independence from the state. Our inquiry concluded that sanctions applied through no fault of the claimant were affecting claimants’ mental and physical health and the health and well-being of their children to a considerable degree. The Government have a duty to be aware of the consequences of their policies and to respond to the adverse effects.

I am aware that the Minister believes that injustices are limited in number, and that his department is doing its best to lessen them further. However, the inquiry made it clear to us that in fact the quality of service across the country varies very considerably. In some offices the staff were helpful and professional, and claimants certainly reported that. However, in others they were inadequately trained and could be callous and careless, with the most appalling consequences for the families affected. A typical example were mothers who, contrary to the guidelines, were required to travel three hours a day in total to and from work. They could not afford this and believed—rightly, in my opinion—that it was entirely wrong for their very young children to be in childcare for 10, 11 or more hours per day. Despite this entirely unreasonable requirement, such parents were sanctioned and then could not even feed their children. This was not an isolated problem but rather a regular occurrence in offices up and down the country.

Another often repeated story was that of a mother phoning the office to say that she could not attend an interview or required activity due to the sickness of a child, and was told that this information would, indeed, be passed on to the appropriate official. Of course, nothing was done. The mother would arrive at the post office to pick up her benefit only to find that there was nothing there. A sanction had been imposed with no information given to her. I cannot imagine the shock and utter distress of a mother in that situation.

I believe that the Government may have adjusted the sanctions regime to ameliorate that problem and to make sure there is a gap between the imposition of a sanction and it taking place. I would be grateful if the Minister could clarify the position this evening.

The Joseph Rowntree Foundation produced a comprehensive review of international evidence on sanctions within systems in which benefits are conditional on claimant behaviour. It confirmed that sanctions strongly reduce benefit use and increase exit from benefits. However, Rowntree also finds that sanctions are generally less favourable in terms of longer-term outcomes, the well-being of children and crime rates, for example.

Every sanction which is unfairly imposed will cause extreme stress to parents, who suddenly find that they have no food for the children and no money even for the bus fare to reach a food bank, and have more debt and so forth. It should be a matter of great concern to the Government that 28% of sanctions are overturned on appeal and a higher percentage—39%—in the case of lone parents. Successful appeals soar for high-level sanctions. Fully 64% of single parents have high-level sanctions overturned on appeal. These must be just numbers to many of us but the Government have a responsibility in my view to report on the mental and physical health effects of the extraordinary hardship behind those numbers. I look forward to the Minister’s response.

Baroness Hollins (Crossbench)

My Lords, I speak in support of my noble friend’s Amendment 34 and focus on the impact of benefit sanctions on people with mental health problems. Mental health professionals are extremely worried about the impact of this, which is why this amendment asks for a report containing data to be published.

The latest statistics around the number of people with mental health problems being supported into work though the back to work scheme are astonishingly low. Just 9% have been supported into employment since the scheme began. There are two key areas where better evidence is needed. We know that more than half of people receiving ESA in the WRAG have a mental or behavioural disorder as their primary health condition, and many more people in the WRAG will have comorbid physical and mental health problems.

We also know that people with mental health problems are being disproportionately sanctioned. Recent Freedom of Information requests to the department revealed that in 2014, on average 58% of sanctions for people in the ESA WRAG were given to people with mental health problems—20,000 in all.

The mistaken assumption is that people do not want to work, and that the best incentive is to threaten benefit withdrawal. Research shows that people with mental-health problems have a high want-to-work rate. I could say a lot more about that, but in view of the time I will not. What are the barriers? We need much more information—hence the request for a report.

I would like to share an example given to me by Mind, the mental health charity. It told me the story of a man who has been out of work for most of his adult life due to his mental health problems and who is currently in the support group. Under conditionality in the work-related activity group, this man felt so fearful and anxious of the threat of sanctions that he forced himself to attend his appointment a couple of days after being hospitalised following an overdose. This is just one shocking example of the pressure claimants are under, the health conditions that people face and, crucially, the level of anxiety and stress reportedly caused by fear of sanctions.

I urge the Minister to take these concerns and this amendment very seriously.

Lord McKenzie of Luton (Labour)

My Lords, this group of amendments is largely focused on the non-income issues and seeks to add the matters of worklessness and educational attainment to the measures, which the Government say are focused on the causes of poverty rather than its symptoms. These matters are important because it is asserted that what is measured and reported on will drive the focus of government attention, although reliance on this approach is inherently weaker than having strategy obligation and specific targets. There will be more about that in later amendments.

In considering Clause 4 and these amendments, we should set the context by reflecting on the starting positions, and that has been done by the noble Lord, Lord Ramsbotham, and the noble Baroness, Lady Manzoor. The current Child Poverty Act 2010, as amended in 2012, contains targets to be met in 2020 that relate to: relative low income; combined low income and material deprivation; absolute low income; and persistent poverty. There are four targets, not just one. It provides for the Social Mobility and Child Poverty Commission—formerly the Child Poverty Commission, and soon to lose child poverty altogether—to give advice when requested to Ministers on how to measure socioeconomic disadvantage, social mobility and child poverty and to report on progress on improving social mobility, meeting the targets and implementing the required strategies.

The Act also requires the publication of a strategy to comply with the targets and to combat socioeconomic disadvantage. In preparing the strategy, consideration must be given to measures—we referred to them as the building blocks at the time of the legislation—including: parental employment and skills; financial support; promotion of parenting skills; physical and mental health; education, childcare and social services; and housing and social inclusion. The Act imposes a requirement for local authorities to co-operate to reduce child poverty in their areas and prepare local child-poverty needs assessments.

As well as having income measures and associated targets, this required the Government to produce a strategy which would have regard to a range of factors, including the multiplicity of matters which affect child poverty. Apart from for Northern Ireland strategies, this Bill sweeps away all those provisions—the entirety of them. We will seek to reinstate this with subsequent amendments. Instead, the Bill requires the Secretary of State to publish an annual report containing data on children in workless and long-term workless households in England and educational attainment at key stage 4 for children in England and the educational attainment of disadvantaged children. There is no obligation on the Secretary of State to define these terms until the first report is provided for, in the year 2017 and a veiled referenced to developing “other measures” to recognise what is suggested are the root causes of poverty: family breakdown, problem debt and drug and alcohol dependency. There is no statutory obligation to do so.

There is a reference in the briefing notes to a “life chances strategy” in due course, but no commitment on the scope and timing of this. The commission will have a focus on social mobility and no longer on reducing child poverty. Crucially, the Bill removes any income measure and related targets. This is on the basis that income is a symptom, not a cause, of poverty and that the relative income measure can lead to spurious outcomes when medium incomes are falling.

The range of amendments to this clause indicates that poverty is multifaceted in its causes and its persistence. We certainly accept that to break out of poverty—so that children do not enter poverty and do not stay or become poor in adulthood—requires action on a number of fronts. This was the essence of the strategy which the Bill now eschews. We also accept that poverty is not just about income but, like the commission, we believe that income is a key part of child poverty and who it affects, and that,

“household income must be central to any measure of child poverty”.

We agree that poverty is essentially about,

“the inability to achieve a minimum standard of living”,

and is a relative as well as an absolute concept. It is about being able to participate in society.

We note the point that what is measured and reported on may help to focus government to action, but the reality is that worklessness and educational attainment are already capable of being addressed within the building blocks of the strategy required under existing legislation. We agree that improving educational attainment and preventing long-term worklessness in households are important in tackling poverty, but there are other issues as well, some of which are dealt with in the amendments. As well as retaining a focus on income, the commission suggested that an additional multidimensional approach which looked at the causes of poverty could be developed. We will come to these issues in the next group. However, this would be subordinate to the key issue of income. We support that proposition.

I will come to some of the specific amendments in this group shortly, but I have a question for the Minister. What changes in policy will flow from abandoning the existing child poverty measures and targets, and what changes are expected to flow from the reporting of workless households and educational attainment? Even though the Government are turning away from measuring the current reality of poverty—the here and now—what will their focus be on its ongoing alleviation? We do not yet have a definition of disadvantaged children. Perhaps the Minister will say what the current intention is. Will that be defined in any way by income measures?

Amendment 22, in the names of the noble Lord, Lord Ramsbotham, and the noble Baroness, Lady Manzoor, would require reporting on the progress of young people in a range of developmental areas. This would be relevant to considering the risks of poverty and should clearly have a place in a multidimensional analysis.

Similarly for Amendments 23 and 27, to which we have added our name, while it might be argued that attainment at key stage 4 will ultimately have to reflect progress at earlier key stages, particularly key stage 1, if this reporting is to be meaningful in concentrating policy then a start at the earlier stages of schooling must be beneficial. If the key concentration is on key stage 4, that is in danger of being too late.

We are advantaged by having the wisdom of the noble Earl, Lord Listowel, on the position of children in care and care leavers, and the existing challenges that they suffer. The noble Earl made a powerful case on his Amendment 28 as to why they, too, should feature in an assessment of those likely to be at risk of poverty. So far as homelessness and his Amendment 29 are concerned, it is suggested that this is just one aspect of poor housing which should be considered. Others proposed by the commission were decency, overcrowding and stability. These are generally seen as having a clear impact on the experience of poverty rather than its cause.

In Amendment 34, the noble Lord, Lord Ramsbotham, and others would require reporting on the health implications of benefit sanctions on households and on households with working incomes below the minimum wage. We know that the benefits system is pernicious and we have some further amendments later on in the Bill to try to flesh that out and support the comments made earlier.

Amendment 30 would require the Secretary of State to publish and lay before Parliament a report on children in families living in problem debt. As the commission pointed out,

“unmanageable debt is an important part of the experience of poverty”.

It suggested that the Government should consider ways to cover this more effectively in the “current material deprivation measure”. But given that this measure is to be abolished, how else do the Government consider that the matter should be addressed in their consideration of life chances?

Lord Freud (Conservative)

My Lords, by virtue of Clause 4 the Government are committing themselves to reporting annually on their life chances measures of children in workless households, including long-term worklessness in England and the educational attainment of children, including disadvantaged children, in England at the end of key stage 4. The collective purpose of all the amendments in this group, laid by the noble Lord, Lord Ramsbotham, the noble Baroness, Lady Manzoor, and the noble Earl, Lord Listowel, is to place additional duties on the Secretary of State to publish and lay before Parliament further reports, information or data about a range of other areas. The question for us to consider is: what is the most effective way of harnessing primary legislation to achieve these aims?

We want to make a difference by taking action in the areas that will improve the life chances of all children and I think that is the answer to the question from the noble Lord, Lord McKenzie, about the policy.

It will be addressing the life chances of those children, tackling the root causes of poverty, not the symptoms. Our new approach focuses government action on the most important drivers of poverty—worklessness and poor educational attainment—and on reporting progress in those areas annually. We will prioritise action in those areas and follow up our clear commitment to publishing a life chances strategy. As part of this we will develop a wider set of non-statutory measures on the root causes of child poverty, including family stability, problem debt and addiction.

The noble Lord, Lord Ramsbotham, by virtue of Amendment 22 seeks to expand the duty placed on the Secretary of State to include a duty to report on the progress of children living in England at age five, including disadvantaged children, in their cognitive, personal, social and emotional, and physical development. It is vital that all pupils thrive and develop in their early years and I recognise the importance of understanding where pupils are at the start of their school journey. Monitoring a child’s personal development is a core function of every education setting, enabling teachers to tailor their support based on how each individual is progressing. However, there are two key issues at the heart of the life chances reforms—action on work and education. Lives can be transformed through focusing on those two key drivers of poverty.

The end of key stage 4 is a vital point in a young person’s education. It represents the culmination of primary and secondary schooling and provides a consistent point at which to measure attainment across all young people. Pupils who fail to achieve at the end of key stage 4 are at higher risk of not being in employment, education or training. That is why the Secretary of State is making a commitment through the life chances measures in this Bill to report annually to Parliament on educational attainment at key stage 4.

Noble Lords will be reassured to know that the Department for Education already publishes a great deal of data on the progress of pupils—how well they are doing in the earlier stages of their career, including key stage 1 and key stage 2—and the annual reporting at different stages of primary schooling already provides significant detail on the progress and attainment of disadvantaged pupils.

The noble Baroness, Lady Manzoor, by virtue of Amendments 23 and 27 seeks to expand the annual reporting duty placed on the Secretary of State to include data on the educational attainment of children and disadvantaged children at the key stage 1 point. I recognise the importance of understanding and tracking pupils as they make their way through the key stages. It provides a basis for teachers to look at how each child is progressing. I am pleased to reassure noble Lords that the department already publishes a statistical first release each year on the assessment of key stage 1 pupils in reading, writing, maths and the results of phonics screening. That includes disadvantaged pupils.

Baroness Manzoor (Liberal Democrat)

Just on that point, I have heard this evening that various departments do their own thing, but coming new into the House I find that maybe we need a little bit more joined-up thinking. When you look at the Bill it would be nice to have something that says very clearly that key stage 1 is very important and this is what the Government are doing to track from key stage 1 to key stage 4.

Lord Freud (Conservative)

That is a good point but, in essence, if you are not achieving the target in the earlier stages, you will know you are not going to get to the right point at key stage 4, so I think in practice this is built into the process.

Amendment 28, in the name of the noble Earl, Lord Listowel, would place a statutory duty on the Secretary of State to publish and lay before Parliament a report on children in care and care leavers. As I think we indicated earlier this evening, we share the noble Earl’s commitment to improving life chances for this particular group. We publish a wealth of information on both children in care and care leavers. There are two annual statistical publications, the first of which provides data on the numbers of children in care and the numbers entering and leaving care. It also includes data on placements, children who go missing from care and outcomes for care leavers, including their economic activity. The second publication deals with educational attainment at both key stage 2 and key stage 4, so I hope that noble Lords will be reassured that we already have the comprehensive data that the noble Earl is looking for.

We are also taking action. We recognise that children in care often need special attention at school. The Government’s own measure of educational disadvantage includes children who have been in care. Children in care also attract the highest rate of funding through the pupil premium plus and, from December, will be recognised in the education performance tables. At a local level, we have given local authorities £44 million over three years to support all young people to continue living with their foster families after the age of 18, helping to provide a stable setting at the key point of transition.

In Amendment 29, the noble Earl looks to do much the same with children who are “homeless” and “at risk of homelessness” every year—in other words to create a duty to lay an annual report. The noble Earl will be pleased to know that I have been a member of the ministerial homelessness committee now for the last five and a half years, so I am absolutely informed in this area. We agree of course that care and attention are required in the case of children who are at risk in this area, and we publish relevant data. Local authorities collect and publish data on the number of households with children who are eligible as homeless and in priority need and data on the number of children in temporary accommodation, which is published on a quarterly basis. I think that the last figures came out in September. This area is a key priority. Since 2010, we have invested over £500 million to support local authorities and voluntary sector agencies to help the most vulnerable back into society.

On Amendment 30, problem debt clearly is a key factor in trapping families in poverty and adversely impacting on their living standards, mental health, family stability, financial inclusion and well-being. This is a well-chosen issue. We intend to develop a range of non-statutory indicators, which will include that one, as well as family breakdown and drug and alcohol dependency, and set these out in our life chances strategy.

Baroness Lister of Burtersett (Labour)

I have a couple of points, the first on problem debt. Will the Government also be assessing the impact of the Bill on debt? We have had briefings from a number of organisations that give debt advice, such as StepChange, which are very concerned that the Bill, in particular the clauses we have just been debating on the end of financial support for families with three or more children, are going to increase debt significantly.

I also wondered whether the Minister could comment on another point. He has twice referred now to addiction, which the Government talk about as a sort of root cause of poverty. A couple of years ago I put down a Written Question asking what the Government’s estimate was of the proportion of children living in poverty with at least one parent addicted to either drugs or alcohol. The Minister’s answer was that the Government do not have such an assessment. Drug or alcohol use is not recorded on the survey used for UK poverty national statistics. I wonder therefore—how do the Government know that this is a root cause of poverty, when they seem to have no relevant information?

Lord Freud (Conservative)

There have been studies showing the numbers who are addicted to one or the other. I remember producing some figures on that in the debate on the last Welfare Bill. Clearly, one of the points of developing a life chances strategy is to get a better grip both of those areas and, indeed, the figures on debt. As the noble Baroness hinted, the figures are imperfect, and that is one of the reasons we want to get a better grip on it. When we look at the levels of debt, that will tell us about impacts, and we can start to analyse what those impacts are. That would of course include any government measures and the impacts would be revealed.

Lord McKenzie of Luton (Labour)

I am still a little unclear on one fairly key point. When responding to the consultation on the measurement of poverty, the commission recommended almost a two-pronged approach. One was that there should be a multidimensional focus on the causes of poverty, but a clear focus on recording the experience of poverty and dealing with poverty here and now with an income measure. I understand what the Minister has been saying about focusing on the causes. One can see the longer-term impact of that; but what, precisely, are the Government going to do differently in respect of the here and now of people’s actual experience of poverty—people who simply do not have enough income today, and will not tomorrow or the day after, to get by and play their part in society? That is what I find to be missing, so far at least, from the Minister’s response.

Lord Freud (Conservative)

I am not sure that the Government would do much different from what they are doing. They have a safety net and there are various measures to support people. We are building at speed now the universal support system in which we are combining with local authorities to help the most vulnerable, but in a very different way from how people have been helped in the past, which was through crisis loans that they went on and on building in a random way, without anyone looking at the root causes of their problems and trying to help them out of them. This approach accords with that. Clearly, we will be spending our money on the root causes of poverty and on life chances. But there will be income measures published, because we have said that we will go on publishing the HBAI. If people want to see what is happening, that gets a lot of publicity every year. That is the change: the money that we will be spending on life chances. Those are some of the mechanisms by which we will do it. Universal support is one of the key things, but there are a lot of other things. Getting mental health right is something that has evaded Governments for a long time, and we are now spending more money on that than any Government have before.

I urge noble Lords not to press these amendments.

Lord McKenzie of Luton (Labour)

Could we perhaps have one more brief run-through of the issue of income? The Minister says that the Government are not doing anything specific to address income poverty other than the application of their current broad benefit regime, with all the cuts that that is now having to endure. Is that it, in terms of actually tackling current poverty? How does the Minister deal with the point that pretty much every expert out there has concluded—certainly the commission has—that we need to have consistent, robust measures of poverty? What the key driver is, and all the other stuff, is subsidiary to that. There seems to be an overwhelming view coming from the experts on that. Is that not a view that the Government share?

Lord Freud (Conservative)

No. Every year I stand here because there is a forecast that says that child poverty is going up, has gone up or will go up, but when we actually see the figures we find that child poverty has actually gone down; the Government have been impressed and shocked by that. When you transform the economy, change the culture so that work is what has been driving things, and move up the employment rates and the earning rates in the way that we have, you find that the behavioural impacts are very different from the static analysis that many of the external experts tell us about.

Earl of Listowel (Crossbench)

My Lords, it is late so I will ask just two brief questions. I thank the Minister for his response. Can he give an indication of when a homelessness strategy might be produced, or is there already one that I am not aware of? He has mentioned that there are various kinds of homelessness, such as overcrowding and unfit accommodation. The one that is of most concern, though, is housing insecurity, when families just do not know where they will be from one day to the next. What is the strategy to deal with that? Is one forthcoming? How often does the interdepartmental group meet? Perhaps he might like to write to me on that last question.

I have been talking with practitioners working around the troubled families initiative, which I warmly welcome. Their work is much undermined by the fact that they build a relationship with a family, as they must and do very effectively, but then that family is moved somewhere else because the accommodation was private and temporary, and there just is not the security of tenure that there needs to be. Perhaps the Minister could help me with those questions.

Lord Freud (Conservative)

As I said, we will be putting out the life-chances strategy in time. The interministerial meets every quarter, I think.

Earl of Listowel (Crossbench)

Sorry, but I am asking about a homelessness strategy, dealing with the particular issue of housing security for families.

Lord Freud (Conservative)

Is the noble Earl talking about the interministerial meeting, which deals with those issues? Yes, I think it meets quarterly.

Earl of Listowel (Crossbench)

That is very helpful.

Baroness Lister of Burtersett (Labour)

The Minister talked about working with local authorities on child poverty, which obviously is welcome, and I think that he said something about not wanting to do that in a random way—excuse me, it is a bit late so I cannot remember exactly what he said. If that is the case, though, why are the Government removing the duty on local authorities to develop strategies? The letter that the Minister received from the Children’s Commissioners just the other day underlined how valuable that duty has been. I know that local authorities, within the constraints that they are having to work in, have been quite imaginative in trying to think about what they can do as partners of central government in combating child poverty, so I really do not understand why that has been taken away, given what the Minister said about wanting to work with local authorities.

Lord Freud (Conservative)

It is the same answer that I have just given: we want local authorities to focus their time on action to get at the root causes, not at the symptoms.

Baroness Lister of Burtersett (Labour)

But surely the strategy could be a strategy to get at root causes. The Child Poverty Act does not say that local authorities have a duty to deal with symptoms. It says that they have a duty to help to eliminate child poverty, and of course that is about trying to get at root causes.

Lord Freud (Conservative)

What we are doing is working with local authorities to support them in getting at the root causes. That will be our strategy.

Earl of Listowel (Crossbench)

While I am grateful to the Minister for that information about the interdepartmental group and how often it meets, I wonder if he could give an indication of whether it is looking to develop a strategy specifically for housing security for families, or whether he might be prepared to take back to that group a request from this House—at least, from myself—that such a strategy should be developed. This seems a very important area.

Lord Freud (Conservative)

I will be pleased to do that.

Lord McKenzie of Luton (Labour)

I will follow up on the point about local authorities that my noble friend Lady Lister raised. The Minister will be aware that we are in the era of devolution deals, particularly with combined authorities—Manchester was the first, and there are others as well. As part of that process, is the department engaged in inputting into the package with a particular focus on child poverty issues?

Lord Freud (Conservative)

As noble Lords will be aware, the Government’s emphasis is to put authority into the hands of local authorities, which is what devolution is about. Therefore they cannot have devolution on the one hand and then send a whole series of specific requirements down on the other.

Lord Ramsbotham (Crossbench)

My Lords, I thank all noble Lords who have contributed to this group of amendments. I also thank the Minister for his response. However, it contained one of the most disappointing sentences that I have ever heard from a Dispatch Box, when he said that he was not sure whether the Government could do more than they are doing. The Government could do a great deal more than they are doing and more than they have indicated they are willing to do tonight.

Lord Freud (Conservative)

I thank the noble Lord very much, but I do not want to let the noble Lord leave the Chamber tonight so disappointed. When I said the word “do” I meant that our approach to what we are trying to do would not change. That does not mean that we are satisfied with our level of energy and input. I want to make that clear so that the noble Lord does not think that I was making a complacent remark when I was talking about our approach.

Lord Ramsbotham (Crossbench)

I am grateful to the noble Lord for that explanation. He knows perfectly well that on previous occasions he has earned the respect of the House by the way he has responded to questions and has been willing to take part. If I have another disappointment, it is that he has not responded to my suggestion that we should meet and have a discussion about all these issues. I do not feel that I have had an answer, particularly to the problem of mental health which was raised in Amendment 34.

I have always been worried about strategy as far as its production in Whitehall is concerned. I was once berated by a senior civil servant in the Home Office, who said to me, “I wish you’d stop talking about strategy. We don’t need strategy—all we need is strategic direction”. I said to her, “What do you mean?”, to which she replied, “Top down, of course”. I said, “Well, that’s where you’re absolutely up the creek. Just because somebody says something from the top does not make it a strategy”. A strategy is something which unites everyone in the delivery of something, which includes all the ministries that have been mentioned tonight. For example, when it is mentioned that the Department of Health knows about mental health or the Department for Education knows about attainment at key stages 1, 2, 3 and 4, why not get together and have an information-gathering strategy at which each of the ministries is required to produce what is required to have an overall strategy which feeds all the government departments that need to draw on that to process legislation.

I very much hope that we will be able to talk through this. I have listened to what has been said from the Floor of the House throughout today’s proceedings and there is a great deal of expertise that could help the department to produce better legislation, which is surely what we are all about. While I am happy to withdraw the amendment at this stage, I promise the Minister that we will return to it on Report and possibly at Third Reading.

Amendment 22 withdrawn.

Amendment 23 not moved.

Baroness Morris of Bolton (Conservative)

Amendment 24. I call the noble Baroness, Lady Lister.

Baroness Sherlock (Labour)

My Lords, I understood that it had been agreed between the usual channels that this was the point at which we would finish. If that has changed then perhaps somebody might have told the Chief Whip before he left.

Lord Taylor of Holbeach (Conservative)

I do apologise, but I came into the Chamber expecting that we would be going on to the next group. We have fallen short of the target today by three groups. It is up to noble Lords to decide how they deal with this Bill but I do advise that, if we adjourn the Committee at this stage, it will put us under pressure on successive days. The matter is in the hands of the Committee. If the Opposition do not wish to continue, I will note that point and adjourn the Committee.

Baroness Sherlock (Labour)

My Lords, I think that that is deeply unfair. I am well aware of the discussions that were held in the usual channels. I am well aware that representations were made that today was likely to be tight. Things always move slowly on the first day and there were a very large number of amendments with a very large number of Peers attached to them. I think we fully expected to be at this point. I thought that we might make the next group, but since we have not, I presumed that we would go on to the next day. I am sorry to say it, but I am disappointed. I think we should stick to the agreement that has been made.

Lord Taylor of Holbeach (Conservative)

In that case, I suggest that the Committee adjourn.

House resumed.