CPAG statement on Prime Minister's speech and plans to remove benefits from rioters

August 15, 2011

Commenting on the Welfare Reform Bill, which receives its Third Reading in the House of Commons today, the Chief Executive of Child Poverty Action Group, Alison Garnham, said:

“This bill means too many vulnerable people are set to be losers, and too many people will find the promise to make work pay is not being kept.

“MPs should not send this bill on to the Lords until Minsters are able to explain crucial detail on how the new Universal Credit will work. The introduction of tax credits brought chaos, but this could be far worse. It’s time to slow down and get things right.

“There’s a lot of unfairness in the bill too. It’s not right for lots of disabled children to have their support cut by over 50% in the Universal Credit. It’s not right for parents who want to work longer hours or full time to have childcare support cut right back. We need to make sure this bill helps the Government towards their child poverty targets, but there’s too much currently in the plans that works in the opposite direction.”

Commenting on the cut back to just 12 months of support through contribution based Employment and Support Allowance, Alison Garnham said:

“We’re talking about people suffering from serious illness or disability, many of whom have families to look after. They’ve already paid into the scheme to protect themselves if they get ill, so it’s right to question whether it is fair for Minsters to take that away after just 12 months, regardless of how long an illness lasts.”

Notes for editors
  • Crucial details of how the Universal Credit will work have not been explained, such as calculation of housing support, the mechanism for childcare support, the Claimant Commitment, Council Tax local replacement schemes and local schemes to cover for the scrapping of the discretionary social fund.
  • While severely disabled children will receive a very slight increase from current rates, many other disabled children will receive less than half of their current rates under Universal Credit, through replacement of the disability element of child tax credit with a “disability addition” for a child.  Changes could cost some families up to £1,366 per year for each disabled child.
  • Clause 11 of the Bill deals with housing costs as part of Universal Credit, and will determine the calculation of housing costs over the lifetime of UC.  The clause is drafted in terms which permit the Secretary of State to determine by regulations the basis of the amount to be paid in respect of housing costs. It does not provide for benefit entitlement to be related to actual rents in the locality, as does the existing legislation governing housing benefit. The actual process that will be used to calculate entitlement is still not known.
  • Options currently being presented by the Government for childcare support costs in Universal Credit involve substantially reducing the cap on maximum eligible childcare costs compared to current caps of £175 (for one child) and £300 (two or more children) in tax credits. The new caps could be as low as £100 for one child and £150 for two or more children. When their childcare costs are in excess of the cap, families could find that it actually costs them more on balance to work longer and full time hours because of their childcare costs. This clearly undermines the principle that work will always pay.
  • CPAG is the leading charity campaigning for the abolition of child poverty in the UK and for a better deal for low-income families and children.
  • CPAG is the host organisation for the Campaign to End Child Poverty, which has over 150 member organisations and is campaigning for public and political commitment to ensure the goal of ending child poverty by 2020 is met.
For further information please contact:

Tim Nichols
CPAG Press Officer
Tel. 020 7812 5216 or 07816 909302 
tnichols@cpag.org.uk