Latest Public Sector News

20.07.15

First welfare reform debate will define fate of child poverty

MPs will be debating the highly controversial Welfare Reform and Work Bill today (20 July) in the House of Commons for the first time.

Generally accepted provisions of the Bill include a duty to report annually on progress made towards full employment as well as made against the target creation of three million apprenticeships. It will also demand that the secretary of state for communities and local government, Greg Clark MP, updates Parliament on the progress of the Troubled Families Programme.

More divisive points include reducing the benefit cap to £20,000 for couples and lone parents and £13,400 for single claimants outside Greater London, where it would be set at £23,000 and £15,410 respectively. This is justified by the government with a need to encourage more claimants to “move into work” and “promote further fairness with working households”. The cap would be flexible at the discretion of the government if it considers changes appropriate, without consulting Parliament – and caps would no longer be set in reference to average earnings.

The government also intends to freeze the main rates of most working age benefits, certain elements of tax credits and child benefit for four years. An amendment would modify the way child tax credit is calculated by limiting the number of qualifying children to just two per family. The family element of child tax credit would be abolished entirely, though it is currently a mandatory payment. Yet perhaps most importantly, the Bill also seeks to turn the Social Mobility & Child Poverty Commission into the Social Mobility Commission – effectively dismantling the Child Poverty Act 2010, which aimed to end child poverty by 2020.

Critics argue that despite its potentially useful provisions on apprenticeships and full employment, the Bill would ultimately ignore the plight of children in low income working households, removing the concept of child poverty and consequently increasing the number of children living in poverty. Most MPs agree that the Child Poverty Act also provides important measures and accountability of policy related to impoverished children.

Many also claim that work incentives for people with low incomes would take a hit, particularly those in the bottom third of the income scale. The Bill would also change support allowances that would ultimately impact sick and disabled people by ignoring additional costs they may face.

Labour leader Harriet Harman ordered her party’s MPs to abstain on the Bill (assuming that rival amendments proposed by her team and by Helen Goodman MP do not pass), though opposition amongst Labour MPs is significant. Most are expected to defy her instructions, which were praised by George Osborne as a “step forward”.

Osborne also said it’s fair that families should “think hard about whether they can afford to have more than two children”.

Labour figureheads changed their mind after their original decision to support the benefit changes, with leadership candidates Andy Burnham, Yvette Cooper and Jeremy Corbyn strongly criticising the plan.

If the programme is agreed today the Bill will be considered in a Public Bill Committee, scheduled to conclude by 15 October.

Tell us what you think – have your say below, or email us directly at opinion@publicsectorexecutive.com

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