Two-child Benefit Cap: Foreign-born Children

Question

Asked by

To ask His Majesty’s Government what proportion of increased spending on the two-child benefit cap will be for foreign-born children.

My Lords, children should not grow up in poverty. It is bad for them, bad for their aspirations and, ultimately, bad for the country. Experts agree that the most cost-effective way to reduce child poverty is to end the two-child limit, and that is what we are doing. There are strict rules that govern who can access benefits. Parents who are foreign nationals can access universal credit only with a valid immigration status of a kind that gives them the right to access public funds.

My Lords, I thank the Minister for that Answer. I agree that the public do support the safety net of welfare, provided that it is targeted and fair, and goes to British people rather than migrants to the country. However, the Government’s own data shows that fewer than 1% of those who will benefit from the uplift in universal credit have both parents working, and 41% of families have no one working. This does not seem fair to a lot of working families, who have to make very hard choices about the size of their own family. So how many exactly of the “most people” the Minister refers to are British and how many are not?

My Lords, removing the two-child limit is very well targeted: it is targeted on children. Over half—some 59%—of households affected by the two-child limit are in work, and almost half of households affected by this policy did not have any of their children while they were receiving universal credit. The reality is that our immigration system in this country is tough, and our benefit system is tough.

I cannot give the noble Baroness the figures that she wants, because the category “foreign born” is not a category in our benefits system. DWP needs to know what someone’s immigration status is rather than where they were born or what their background is, because that is what determines it. Most foreign nationals must live in the UK for at least five years on a temporary visa before they can apply for settlement and, therefore, even be eligible for public funds, and the Home Office has announced plans to double that.

This Government are going to lift children out of poverty and give them the best start in life, but, for those kids whose families are eligible, it is not right to limit support because of their background or where they were born. No child should feel the effects of this policy.

This somewhat xenophobic Question concerns increased spending as a result of abolishing the two-child limit, which even the noble Lord, Lord Freud, who introduced it, described as “vicious”. Could my noble friend the Minister perhaps remind us of the cost of not abolishing the cap, in respect of how child poverty has a knock-on effect on health, education and public services, including children’s social care services?

My noble friend is so right. The cost of failing to tackle poverty is too high—for those children but also for our country. Hungry children do not arrive at school ready to learn. Poorer children are more likely to have mental health difficulties by the age of 11. They are more likely to have poorer employment outcomes and earn less. She is absolutely right: the rise in child poverty in England between 2015 and 2020 is estimated to have led to 10,000 more children entering our care system, with all the consequences for those children, as well as for the country and for the Exchequer. A child’s health opportunities and prospects should not be determined by how many siblings they have or by the accident of their circumstances. We will lift children out of poverty and this country will benefit from that.

My Lords, I thank the Minister for that answer. To follow on from that—to get to the crux of the matter—could she tell us what assessment has been made of the cap’s overall effect on child poverty? Can she clarify and put on the record what the actual effect was and how we can benefit by the removal of the cap?

My Lords, the noble Lord is absolutely right about the effects of this. The Labour Party in government pledged to tackle child poverty. What this Government have brought forward is a child poverty strategy which, including removing the two-child limit, will bring another 550,000 children out of poverty by the end of this Parliament. That is what we are here to do; that is what we are shooting for.

I stress that this is about fairness. Of course, our benefit system is there to support those for whom this is their home; those who contribute. Of course it is there to be fair, but it is also there as a safety net, and our job is to get that balance right. In the case of children, it surely has to be right to tackle child poverty, to give them the opportunity and for the country to benefit from that.

My Lords, given the scale of additional public expenditure involved, and while recognising that welfare policy will not be the primary driver of migration, what steps are the Government taking to ensure that lifting the two-child limit does not inadvertently act as a pull factor for economic migrants to present initially as asylum-seeking families, and how will this be monitored?

My Lords, I have seen no evidence that anything as specific as this has any impact on asylum. I am sure the noble Lord is aware that our system is so strict that, for somebody to be able to come to this country, they need to meet the requirements. If someone is in the country illegally, they are not entitled to access public funds. If they are entitled to universal credit, they are expected to work. Our system is designed to support people into work but also to require that they work. This year the DWP will consult on making sure that we look at the relationship between residence requirements and our benefits system and prioritise resources for those who are making an economic contribution—but nothing in that says that we do not want to tackle child poverty. I am sure the whole House agrees with that.

My Lords, can my noble friend say a little more about how this progressive policy relates to the wider child poverty strategy, in particular the wider rollout this week of breakfast clubs in schools and, going forward, perhaps incremental universal free school meals, as some of us would aspire to, for all school-age children?

I am grateful to my noble friend. We have another question in a moment about the child poverty strategy, so I get to spend 20 minutes talking about child poverty. Tackling child poverty has to be done on so many fronts and our strategy looks at people’s incomes, the costs they are facing and how we can give them opportunities. I am so proud that the Government have decided to do things such as extending free school meals to those on universal credit. Children need to arrive at school ready to learn, and you cannot be ready to learn if you are hungry. It is also a way of tackling the cost of living for so many families who are struggling. I am proud that we are making childcare more available and getting more support to those who are on universal credit who want to do the right thing and work but face barriers in their way. And I am proud that we are rolling out Best Start family hubs and all kinds of measures. Our children are not just our present; they are the future of our country. If we invest in them, we invest in Britain. It is the right thing to do.

My Lords, let me highlight some more statistics. The Government’s own impact assessment states that the addition to the benefits bill will be £13.6 billion over five years. Families with five children will gain £10,900 per year and those with six children will gain £16,600 per year, and almost half the households involved have no one in work. This is extremely worrying. This policy is surely rewarding worklessness. How are the Government intending to prevent the lifting of the two-child limit weakening work incentives or increasing long-term benefit dependency among larger families?

My Lords, I am sure the noble Viscount knows that, although we are lifting the two-child limit, the Government are not lifting the benefit cap on the total amount that any household can get. The benefit cap encourages parents to take responsibility and work towards financial independence. There is, for example, an exemption from the benefit cap if somebody is in work and earning at least the minimum wage for the requisite number of hours. The challenge for us is to make sure that parents want to work, that we support them to work and that we take away the barriers that are in their way, for example on childcare or being able to get the jobs and the support they need. These things have to be separate. We should be supporting our children, but children benefit from their parents being in work wherever possible, so we should be doing both of these. If we were just doing one, the noble Viscount would have a point. This is part of our strategy to invest in support for parents, to invest in employment support, and to make sure that whole families benefit from our policies.

My Lords, the Minister said in a reply to an earlier question that, by giving support to these families, we are investing in the future. These children will grow up to be productive members of society, hopefully working and paying their taxes. Along with many in this House, I come from a family of immigrants and migrants and I am proud that many of my family members now have become businesspeople, teachers, and lawyers. Even Tracey Emin is a cousin. We have contributed to this country, paying back what the country gave to us. Does she agree with me that these comments that somehow we are wasting money by investing in children are an absolute disgrace?

My Lords, I am sure the House is every bit as proud of the noble Baroness as they are of Tracey Emin or any other eminent member of her family, whether they are a lawyer or a doctor, or whatever they may have done. But she makes a good point. We are investing in our children in this country because we want them to have happy, thriving childhoods, but also because, by doing that, we give them every chance of achieving what they can in life. That increases productivity and the wealth of this country. I say again that our job is to be balanced. The benefits system is here to support those for whom this is their home. Migrants have to tackle very high barriers to get them, but we should not be singling out individual children on the basis of where they were born. Let us get all kids out of poverty.