Welfare Reform Bill

My Lords, I have to admit that this amendment is not as expensive as the £1.4 billion PIP one, because the noble Baroness is looking to do the research afterwards rather than stopping it all and doing the research first, which would have delayed it. The reason why the PIP amendment was so expensive was the one-year delay, meaning that all those savings would not have accrued. The intention behind this amendment is to allow discussion of the impact of the universal credit on both the accessibility of childcare and work incentives for potential second earners. Working families will be able to receive support in respect of 70 per cent of monthly childcare costs up to £760 for one child or £1,300 for two or more children. These amounts are equivalent to the current arrangements in tax credits. We understand that childcare plays a crucial part in parents’ work decisions and are determined to help those moving into the workplace, which is why we found the extra £300 million to help people below the 16-hour limit of tax credits. The childcare market is very varied and does not always effectively meet the needs of working parents. We are introducing flexibility into the system, such as through introducing monthly limits based on actual paid costs, so that it supports the childcare market better. Local authorities in England and Wales have the duty to secure as far as reasonably practicable sufficient childcare for working parents. The Department for Education is currently consulting on whether a local annual report would be a more effective and meaningful way of enabling parents to hold their local authority to account. Let me move now to the concerns over the work incentives for potential second earners. My views on this are on the record. The costs are high. If couples who were both in work were entitled to an additional disregard of, say, £700 a year, the cost would be £240 million. If the disregard were £1,000, the cost would be £350 million. Those are the sums and we simply do not have them at this stage. Universal credit should mean that most families in which one parent works full-time for 35 hours a week for the minimum wage will not live in poverty. The amendment asks us to confirm in legislation that we will undertake a formal review of both these areas. However, my real response is that these are just two particular areas. We will monitor the effect of universal credit right across aspect after aspect of its impacts. I have also included powers in the Bill to pilot different policy approaches. We will do that by having affirmative regulations to approve particular pilots. Any substantive changes following a pilot will also require regulations and be subject to the usual SSAC, so there are a lot of protections here. It will not be a question of doing a review of something such as the second-earner incentive. I want to see a pilot in which we can pinpoint the value of moving it around. That is a far more useful way of finding out such things. What is the effect of the taper? What is the effect of the second-earner disregard? What is the effect of moving them around? We need to know all these things in a much more coherent way than we would from carrying out a review. We will have econometric analysis of a kind that leaves anything that we have seen in the past in the dust. Therefore, this requirement for a review and a report on specific impacts just creates unnecessary bureaucracy. That is not the way I want to do it. To summarise, I hope it is clear that we are aware of these two issues, which are very important and interesting. I will continue to give them the attention that they deserve, and I therefore urge the noble Baroness to withdraw this amendment.