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Child Poverty

Volume 455: debated on Monday 8 January 2007

2. What recent progress has been made in reducing relative child poverty; and what additional steps he plans to take to reduce child poverty further. (113148)

On an after-housing-costs basis, 800,000 fewer children are living in relative low-income households in 2004-05 than in 1997, and 2 million children have been lifted out of absolute poverty. Those reductions have been made possible by the introduction of tax credits, the success of the new deal and 10 years of sustained economic growth, all of which have resulted in those on the lowest incomes seeing larger proportional increases than the better-off. We will set out further proposals to reduce child poverty shortly.

I am grateful for that answer. In 2005, we were slightly behind our historic target of eradicating child poverty in a generation. Does the Secretary of State agree with the Joseph Rowntree Foundation’s research that found that we need to spend a slightly higher proportion of our national wealth to get back on track in 2010? Does he accept recommendations such as the Child Poverty Action Group’s suggestion of higher universal benefits such as child benefit, or Save the Children’s suggestion of higher targeted benefits, with seasonal grants for low-income families? What options is he considering to get back on track?

I thank my hon. Friend for parts of his question. Matters relating to child benefit, as my hon. Friend and the House will know, are for the Treasury, not the Department for Work and Pensions. As I said, we are considering a range of new initiatives to allow the Government and our country as a whole to make further progress in reducing child poverty. I want to set those out shortly.

Despite the Government’s policies, two out of every five children in London still live in households in which the adults are not working. Will the Secretary of State take the opportunity today to outline how the Government will change their policies, particularly in relation to children in London, to make them more effective in future?

The hon. Lady is right to draw attention to the particular problems of London, and I agree with her assessment. London is the richest and most productive city in Europe, yet child poverty is unacceptably high in our capital city. As I said, we will set out a range of proposals in the near future to try to address some of those problems, including the problems of London. I would not, however, want any Member to draw the conclusion from these exchanges that child poverty had increased under this Government; it has not. It has fallen significantly, at a time when national income has been rising sharply. That is the complete opposite of what happened during the 18 years of Conservative government.

Does the Secretary of State accept that child poverty and poor housing often go together? Does he agree that had new Labour built as many council houses during its first 10 years in power as the Conservative Government did during their first 10 years in power, fewer children would now be living in poverty?

Obviously, there is a connection. The Government have a strong and proud record on social housing, on which we will seek to build. However—with respect to the hon. Gentleman—these are questions to the Secretary of State for Work and Pensions, not questions to the Secretary of State for Communities and Local Government.

The Secretary of State thanked the hon. Member for Stafford (Mr. Kidney) for “parts of his question”. Which parts were they?

Last November, the Conservative party released figures showing that since 1996-97 there had been a 400,000 increase in the number of people living in severe poverty before housing costs. On 29 November, the Secretary of State responded to that by saying that income after housing costs was the proper measure, and I note that he just used that term again.

Departmental publications are very clear on the point. “Measuring child poverty” states that the Government will use a before-housing-costs measure. “Delivering on Child Poverty”, published only last November, says:

“Relative low-income households are defined as those with income below 60 per cent of … median income before housing costs.”

Will the Secretary of State make it clear whether he is telling us that he has changed his policy on the future measurement of child poverty? Is “after housing costs” now the Government’s preferred and only measure?

No, it is not our preferred and only measure. It is right that we publish both before and after-housing-costs figures; but in the case of the group to whom the hon. Gentleman refers—those on incomes that are less than 40 per cent. of the national average—it is important to look at after-housing-costs figures, because people in those circumstances are likely to be receiving help with housing costs. The hon. Gentleman has arrived at his convoluted and distorted image of poverty in the United Kingdom not by comparing this Government’s performance with that of the last Conservative Government but by citing that Government’s performance, because his figures included the last four years of their record.

With respect to the right hon. Gentleman, what we are trying to do is be clear about how the target is to be measured in future. According to the summary of households below average income consultation document, income before housing costs is the only measure of low income that the Government will use. It sounds as though the Secretary of State is trying to move the goalposts. We know the Chancellor does that when he has a problem with targets, but we did not know that the Secretary of State was on the Chancellor’s team.

Let me ask the Secretary of State about another aspect of Government policy. In a speech last month, he said that he wanted to

“shift the focus of the welfare system towards the family as a whole”.

What discussions he has had with the Chancellor about the tax credit system? According to the Joseph Rowntree Trust, a couple with two children must work for 74 hours for the minimum wage—between them—to clear the poverty line, while a single parent with one child will be comfortably above the poverty line after just 16 hours of work. That is forcing many couples to separate, to the extent that Government statisticians have created a new category—

The Government are not changing the method by which we collect and publish information on poverty, and on child poverty in particular. My comments on after-housing costs were made specifically in the context of those on below 40 per cent. of national income, which I think right and proper.

As for the hon. Gentleman’s wider questions about the tax credit system, I have had a number of discussions with my right hon. Friend the Chancellor, but I am not prepared to share them with the hon. Gentleman today.