Amber Rudd spares 15,000 families from child credit cut in U-turn

Amber Rudd will announce a major U-turn in the roll-out of the government's controversial benefits policy so it will not affect families applying for Universal Credit who had their children before a two-child cap was announced.

Britain's work and pensions secretary Amber Rudd. Picture: Niklas Halle'n/Getty Images

The cap had been due to be applied to all families from next month, and would have cut payments made to about 15,000 families.

The Work and Pensions Secretary will admit in a speech this morning that the move was “not right”.

It is the second major U-turn over Universal Credit in as many weeks, after Ms Rudd earlier announced a dramatic scaling back in the overall roll-out of the scheme.

Abandoning the retrospective application of the two-child cap follows intense criticism of the policy, including the so-called “rape clause” which exempted families with more than two children as long as the mother could prove she conceived following a sexual assault.

An interim report published today by the Commons work and pensions committee demanded the retrospective roll-out be scrapped, claiming: “You could not design a policy better to increase child poverty than this one.”

In a speech in London this morning, Ms Rudd is expected to say: “As it stands, from February 2019 the two-child limit will be applied to families applying for Universal Credit who had their children before the cap was even announced. That is not right. These parents made decisions about the size of the family when the previous system was the only system in place.”

Ms Rudd is also expected to confirm a delay to plans to migrate existing benefits claimants on to Universal Credit where their circumstances have not changed. The government will scale back legal powers it was seeking in order to migrate just 10,000 benefits claimants in a pilot scheme.

Ms Rudd will insist the full roll-out of Universal Credit will be completed by 2023 as currently planned, but that the outcome of the pilot will inform future steps.

“Universal Credit is working for the vast majority of people, but to be a system that truly works for everyone, Universal Credit has to offer enough flexibility to adapt to personal circumstances – and particularly recognise the needs of the most vulnerable,” she will say today.

Labour’s shadow work and pensions spokeswoman Margaret Greenwood said the move “does not go far enough”.

That was echoed by SNP MP Alison Thewliss, who led opposition to the rape clause. “The two child cap and rape clause is still set to push hundreds of thousands of children into poverty and must be scrapped,” she said.

“This disgraceful UK government policy has been condemned by the UN rapporteur on extreme poverty and a multitude of charities and welfare advice professionals. It is discriminatory at its core, and hits women and BAME families hardest - which the DWP is well aware of.

“Amber Rudd’s announcement is a welcome admission that this cruel Tory policy is deeply flawed - but merely tinkering at the edges with minor changes will not help the majority of families who are still set to suffer.”