Welfare Reform Bill

Let me clarify that. There was a decision in the spending review to move down from 80 per cent to 70 per cent. That is the current position, so we are moving from current to current. We have £300 million extra on that. The bulk of that £300 million is effectively being directed at a new audience, the group who could not work for 16 hours, and getting rid of the 16-hour rule allows us to do that. The way that we do it is through looking at people’s earnings rather than at their hours. To pick up the issue raised by the noble Baroness, Lady Hayter, about the interaction of the disregards for housing benefit and council tax benefit, rates will not be driven up into the mid-90 per cent level under universal credit. Universal credit simplifies the benefits system. We therefore expect more parents to take up the support that they are entitled to. Where families receive less support under universal credit, a package of transitional protection is being developed to ensure that they do not lose out in cash terms. We know that childcare plays a crucial part in parents’ work decisions, and are determined that those making the first steps into work are supported to do so. We have ensured that all claimants working even a few hours will be able to claim this support, rather than just those working over 16 hours, as in the current tax credit system. The noble Lord’s new clause would allow us to define work for the purposes of childcare support. We intend that any definition of work would not involve an hours rule, as extending support to parents working fewer than 16 hours will allow about 80,000 families who are currently not eligible to receive help with childcare costs, increasing their financial incentives to take work. I would like to comment on two other aspects raised by the amendments. Although we do not intend to support a higher proportion of costs or use higher limits for disabled children through the childcare element, there will be a child element within universal credit with different rates paid for disabled and severely disabled children, as we have discussed. As we discussed, we have also announced the extension of the higher rate to those who are severely visually impaired. In response to the question of the noble Baroness, Lady Tyler, about differential rates across the country, we do not intend to do that—certainly not at any early stage. Although I acknowledge that costs vary across the country, when we started to look at regional variations we discovered that the childcare market is not so much regional as local. There are significant variations within the regions, and sometimes within very small areas. In practice, getting the flexibility that the noble Baroness is looking for would be very hard. Childcare is not only about the rate. We are working with stakeholders to consider the optimum delivery mechanism for the childcare element. Our key aim is to minimise complexity and confusion that is the mark of the current system, so that claimants and administrators alike can navigate the system more easily. We will provide more information when draft regulations are laid and then debated in the House. To pick up the question from the noble Baroness, Lady Sherlock, about the order of migration: we have made some indications so far as to how we intend to proceed, with our intention to stop accepting new claims for out-of-work benefits from October 2013. Natural migration will take place from that time as claimant circumstances change. New claims for tax credits will probably cease in April 2014. We will then gradually transfer all claimants to the system, and lay out the migration. One thing that we are looking to do as we plan the migration is to make sure that we get the cost, the simplicity and the social impact balanced correctly. That is what we are currently working on.