[Relevant documents: The Third Report of the Scottish Affairs Committee, Session 2007-08, on Child Poverty in Scotland, HC 277 and the Government’s response thereto, HC 525.]
I beg to move,
That this House has considered the matter of child poverty in Scotland.
I am grateful to have the opportunity to address this issue, and I start by thanking my hon. Friend the Member for Glasgow, Central (Mr. Sarwar) and his colleagues on the Select Committee on Scottish Affairs for their report. I look forward to hearing my hon. Friend’s speech, should he catch your eye, Madam Deputy Speaker.
Let me say at the outset that for members of the Government and Labour Members, a number of issues go to the heart of our involvement in politics. Poverty—crucially, child poverty—is one such issue. The Governments of the 1980s and 1990s were reluctant to talk about poverty and unwilling to accept that it even existed. They presided over the view that unemployment was inevitable and that the economic consequences on workless families and children were unavoidable. As unemployment grew and matters such as schools, hospitals and housing failed to get the investment that they needed, poverty also grew. In particular—in a telling comment on the policies of the previous Government and, dare I say it, to their shame—child poverty not only grew, but doubled. In Scotland, we saw communities devastated by unemployment and the once aspirant working man and woman worn down as they were abandoned by an uncaring and apparently unconcerned Government into an existence based on worklessness and benefits.
When the Government came to power in 1997, they inherited some of the highest rates of child poverty among the industrialised nations. One in four children lived in poverty. Child poverty had doubled between 1979 and 1997 and 3.4 million children were living in poverty across the country. The UK topped the European league for the number of children living in poverty, and the trend was getting worse instead of better.
That inexorable rise in child poverty was the backdrop to what has become one of the boldest and most historic commitments of any new Government coming into power. In 1999, this Government committed to halving child poverty by 2010 and to abolishing it by 2020.
The Minister will know of the widespread concern among the relevant non-governmental organisations that we are probably not going to meet the 2010 target. Since the report was published, we have seen a remarkable rise in the cost of many staple foodstuffs and, indeed, in the price of fuel. What impact have those significant increases had on the Government’s ability to meet the 2010 target, and what assessment has her Department made of that impact?
If the hon. Gentleman will forgive me, I will come on to deal with those issues later. We must recognise the fluctuations in costs and it is quite difficult to carry out an analysis over such a short period. I will deal with the heart of these questions a little later in my speech.
In 1999, the Government committed themselves to halving child poverty by 2010 and abolishing it by 2020. We not only committed to halt the upward trend in child poverty and bring it down but set ourselves on a path to abolish it altogether. I hope that all hon. Members, regardless of their political background, will recognise that our commitment was bold as well as ambitious. I would like to put on record the fact that we made such a powerful commitment because we understood the damage that poverty does to individuals and communities. Poverty not only erodes a person’s self-confidence; it limits their ambition and puts them at a long-term disadvantage.
In childhood, poverty is especially corrosive. During a time of life that should be full of hope and opportunity, a child living and growing up in poverty, is especially vulnerable.
Does my hon. Friend agree that linked with poverty is the issue of education, which provides the way out of poverty? The Government have done an excellent job in that respect, as did the previous Administration in Scotland. What should we say, however, about a party that would deny young people their right to education, particularly at the pre-school under-five level?
That is obviously a question for another Administration of a different political party to answer, so I hope that during this afternoon’s debate we will be able to hear some defence of the more eccentric decisions taken by the new Administration in Holyrood. Although they are good at talking warm words, they are not very good at alerting us to their delivery mechanisms. My hon. Friend thus makes a very good point, and I know that the importance of education is recognised in many parts of his constituency as the key to liberating young people and enabling them to have a career that will give them both fulfilment and finance.
Labour Members—I will be generous and say that this might also apply to some other Members—well know that children who grow up in poverty are likely to see their educational aspirations crushed and their health and development stymied by it. That is why this Government acted and have continued to act on poverty every year since 1999. We want nobody to be left behind, no child’s life blighted before their potential is realised.
I am especially pleased to report that things have improved markedly. Compared with 1997, there are now nearly 3 million more people in employment across the UK and 600,000 fewer children living in poverty. In Scotland, there are more people in work and 90,000 fewer children living in poverty. Since 1997, unemployment in Scotland has fallen by 82,000—nearly 39 per cent.
The hon. Gentleman’s party lacked the commitment to stay up and vote for any of our policies to alleviate poverty. Let me remind him of the national minimum wage, for example—[Interruption.] I will address the issue in general terms, and the hon. Gentleman will be aware that both the Prime Minister and the Chancellor have said that they will do more to help single and older people affected by the abolition of the 10p rate. If he has a fair mind, and I am open to persuasion on that—[Interruption.] The Minister of State says that he has already made up his mind about that. If the hon. Gentleman has a fair mind, he will recognise that over a 10-year period, we have invested in families and children in Scotland. I am coming on to deal with some of the more specific issues.
I am delighted that my hon. Friend has pinpointed the inconsistencies—we have to be careful about the words we use in this Chamber—in the views of SNP Members. [Interruption.] Let me make a little progress, particularly in view of the heckling by the hon. Member for Na h-Eileanan an Iar (Mr. MacNeil).
I was saying that progress has been made on child poverty in Scotland. Thanks to a co-operative and sustained partnership between the UK Government and the previous Scottish Executive, child poverty in Scotland is now lower than the UK average. Between 1998-99 and 2005-06, the proportion of children in relative low income in Scotland fell from 28 per cent. to 21 per cent.—a fall of 90,000—and is now lower than the UK average, as was identified by the recently published Scottish Government discussion paper on tackling poverty.
Those statistics mean that Scotland met the 2004-05 child poverty target to reduce relative child poverty in Great Britain by one quarter and it is no coincidence that, as employment rises and unemployment decreases, we see this marked reduction in child poverty. The Government continue to believe that employment—a job—is the key route out of poverty and that work for those who can remains the most sustainable route in tackling poverty. So, achieving our goals on child poverty will be realised only by making real progress in achieving our goal of employment opportunities for all.
Of course, work must be made to pay, which is why the Government introduced the tax credit system and the national minimum wage in spite of the siren voices on the official Opposition Benches who told us it would cost millions of jobs and in spite of the sleepy heads on the SNP Benches who could not even stay up to vote for it. We know, too, that children living in workless families are much more likely to be poor. [Interruption.] I do not think that the hon. Member for Na h-Eileanan an Iar would have stayed up all night, but perhaps he should comment on whether his colleagues were capable of staying up to vote on an important issue that meant a lot to many low-paid families in Scotland. Worklessness disadvantages not only parents, but their children, so to secure progress on employment is to secure progress on child poverty. A Government can do few better things than help a parent to get a job, which will not only help them, but help provide for their children. In lone parent households, or families in which an adult is disabled, employment support is particularly needed. That is why the new deal programme has been so important and successful, helping thousands of people in Scotland into work.
Does my hon. Friend agree that one of the best qualities of the Scottish people is that regardless of their poverty problems at home, they still recognise that people in other parts of the world are worse off than they are? Will she therefore join me in recognising the good work of the previous First Minister, and the previous Scottish Executive, in Malawi?
Obviously, I take your advice, Madam Deputy Speaker, but solidarity in recognising poverty can have a resonance for many people in Scotland. I promise that I will not stray much beyond the terms of today’s Order Paper.
The new deal in Scotland has supported many disabled people into employment. For example, the Department for Work and Pensions manages a number of employment schemes in Scotland aimed at helping disabled people to start and retain work. Those include pathways to work, the new deal for disabled people, work preparation and access to work programmes.
My hon. Friend is an outstanding Minister for the rights of disabled people. Keeping within the remit of our debate, may I refer to paragraph 42 of the Scottish Affairs Committee’s report, which is specific about the need to focus on disabled people, including disabled children, not least because, sadly, they experience more poverty than most other groups? I know that my hon. Friend will wish to address that matter.
I understand my right hon. Friend’s point. As a result of his parliamentary hearings into the lives of disabled children and their parents, he and many organisations in Scotland have expressed grave concern that some of the resources allocated at UK level, and Barnetted into Scotland—[Interruption.] Do not worry, it is a new word; it will appear in a dictionary in 10 years’ time. The worry expressed was that those resources will not be as focused on disabled children and their families as my right hon. Friend and his Committee identified during those hearings, and as many of the parents from Scotland who addressed that Committee and spoke to its members had hoped. However, that is a matter for the Scottish Executive under the devolution settlement.
Surely the Minister realises that the money is part of the settlement, or concordat, with local authorities. Does she not trust local authorities, particularly Labour local authorities, to use the money for the correct purpose? Even the Scottish Affairs Committee recognises the need to end ring-fencing.
Perhaps the hon. Gentleman should listen to my words rather than anticipate them. I said that my right hon. Friend the Member for Coatbridge, Chryston and Bellshill (Mr. Clarke) and many organisations had expressed concern that the money might not be as focused, but that it was a matter for the Scottish Executive—the Scottish Government—to determine. As the party that led the campaign in Scotland for a Scottish Parliament with devolved powers, we have a confidence in the devolved settlement that is not shown by the hon. Member for Angus (Mr. Weir).
The hon. Gentleman is missing the point, which my right hon. Friend the Member for Coatbridge, Chryston and Bellshill has made time and again. Notwithstanding the fact that the matter is within the remit of the Scottish Executive and their relationship with local authorities, the concern about that money came out of a UK parliamentary consultation, which included parents from Scotland—[Interruption.]
I am not making this up—ordinary people in Scotland, and members of organisations representing disabled people in Scotland, have addressed the issue and are deeply concerned about it. It is a matter for the Scottish Executive to answer. The hon. Member for Angus and his party cannot wash their hands of responsibility in this respect. For them, as my hon. Friend the Minister of State says from a sedentary position, it is always somebody else’s fault.
Let me return to the issue of employment in Scotland. I am clear that there is a connection between employment and the alleviation of poverty. Scotland used to have a lower employment rate, but Scotland now has a higher employment rate—1.8 per cent. higher than the UK average. I am not sure whether representatives of the Scottish National party want to accept that statistic, but it is true. Across the UK, the number of lone parents on benefit has fallen by 19 per cent., yet in Scotland it has fallen by 27.7 per cent. That advantage in Scotland has arisen from the strong partnership within the United Kingdom.
Having a job brings self-respect, financial autonomy, wider social relationships and better health prospects. Those benefits are not only for parents; they feed directly into the lives of children. The DWP will continue to be committed in Scotland to helping parents to find work and to balance work with their caring responsibilities. We recognise that work must help to build a sustainable future for them, their families and communities.
It is one thing to ask a parent to consider work, and quite another to expect them to take up such opportunities when barriers are in their way. The DWP must therefore work in partnership with the devolved Administrations to break down those barriers, and we do so. Undoubtedly, one of those barriers is the lack of accessible child care, and significant investment in Scotland and other parts of the UK has helped thousands of parents, especially lone parents, to get back into work. Funding for the then Scottish Executive’s child care strategy rose from £29.75 million in 2004-05 to more than £43 million in 2005-06, to continue to provide affordable, accessible, quality child care places for children from zero to 14 years of age in all neighbourhoods.
Part of the package of child care is the previous Scottish Executive’s commitment to nursery places for all three and four-year-olds, as well as for two-year-olds in vulnerable groups. In Aberdeen, that provision has been wiped completely off the map by the SNP-Liberal Administration’s budget cuts last month.
It is perfectly legitimate for those of us who hold part of the partnership in delivering jobs and a better future for parents and their children to ask why that has happened in my hon. Friend’s local authority. If such questions need to be directed to the Scottish Executive—the Scottish Government—then so be it, albeit within the rules of debate and order in this House.
We are in partnership with the devolved Administrations in Scotland and other parts of the United Kingdom to work in the best interests of the people of Scotland and the people of the United Kingdom. [Interruption.] If the hon. Member for Na h-Eileanan an Iar finds that funny, then I am sorry, but I do not agree when I hear stories such as those of my hon. Friends about child care packages in some parts of Scotland being cut. That funding is necessary because it provides affordable, accessible child care places, giving parents in deprived areas access to education, training or employment.
Much of the support for child care that the Minister’s Department has provided in recent years for people wanting to go back to work has been contingent on the availability of registered child minders. In many communities, such as the small islands that I represent, there are no registered child minders, so people do not have the same access to help from her Department. Will she consider that?
We are not in total control of the agenda, obviously, but as I will say later in my speech, if I ever get there, we are working with the Scottish Government to examine ways in which we can co-operate to ensure that we meet what is, in fairness, a shared objective on the abolition of child poverty by 2020.
My next comment may help the hon. Member for Perth and North Perthshire (Pete Wishart). In successive Budgets, we have used the tax and benefits system to work in ways that support the most vulnerable but retain incentives to work. We have targeted our financial resources to ensure that work pays, as well as to help families who, for whatever reason, cannot work. Those tax and benefit initiatives have also been key to alleviating child poverty and directly supporting needy families. I am therefore delighted to be able to advise the House that from April 2010, when the latest changes come into effect, the average Scottish household with children will be £2,000 better off in real terms since 1997—and low-paid families have benefited disproportionately. Scottish households with children in the poorest fifth of the population will be £4,100 better off.
I also ask the House to note that take-up of tax credits for families with children is higher than under any previous system of income-related financial support for in-work families. In 2004-05, take-up of child tax credit in Scotland rose to 82 per cent., with 94 per cent. of the money claimed. Take-up among those with incomes of less than £10,000 is now 97 per cent.
All those reforms have been key to alleviating child poverty. Had the Government done nothing other than merely to uprate the 1997 tax and benefits system, the number of children in poverty might be 1.7 million higher than it is today.
The result of all these reforms, from employment support to child care to the tax and benefits system, has been significant. We can be proud that, while progress in tackling child poverty has been successful across the UK, greater progress has been made in Scotland, as my hon. Friends and the Select Committee have identified.
However, there is still a long way to go, and we are certainly not complacent about the need to do more to meet our targets for 2010 and 2020. With 2.8 million children still living in poverty in the UK, including 210,000 in Scotland, we cannot afford to relax. There are particular challenges ahead, including reaching more effectively children in large families, with disabled parents, or from black and minority ethnic backgrounds. Poverty still has too great an impact on the life chances of children for us to relax our efforts, and Labour Members have no intention of doing so. Child poverty is neither acceptable nor inevitable. We must therefore remain completely committed to the targets that we have set—targets, not the aspirations that the Conservatives talk about. They have aspirations, or empty words in documents and speeches, while we have targets that we aim to achieve.
How does the Minister reconcile the fact that poverty rates for working-age adults without dependent children—tomorrow’s parents—have risen to the highest level since records began in 1961 and now stand at 800,000 more than in 1998 with her optimism on her child poverty targets?
As the hon. Gentleman would recognise if he had listened to what I have said about the work that we are undertaking and to the statements made in the Budget by the Chancellor—not just the current Chancellor but the previous one—we know that we still have a long way to go. Let me throw this back at him. Given that he comes from a party that did not even recognise that there was an issue with child poverty and now uses warm words in a document published only a few days ago, which is still light on what it is going to do about tackling the problem, there are more questions for him than there are for us.
In spite of the tight fiscal climate in the 2008 Budget, we demonstrated our ongoing commitment, with £950 million of additional spending to tackle child poverty. The Budget set out the next steps, with measures that will make significant further progress towards the target of halving child poverty by 2010. Those included a further £50 increase to the child element of child tax credit from April 2009, an increase in the first child rate of child benefit to £20 from April 2009, and the introduction of a child benefit disregard for housing benefit and council tax benefit purposes. Those measures alone will lift up to a further 250,000 children out of poverty and towards our final goal of abolishing it altogether.
We recognise, however, that abolishing child poverty can be achieved only by working in partnership. That was recognised in the title of our 2008 Budget document, “Ending child poverty: everybody’s business”, which sets out the next steps that we will take, including new pilots and further areas of work to achieve the 2020 target. One expression of that partnership is the joint child poverty unit, supported by the Department for Work and Pensions and the Department for Children, Schools and Families. That unit brings together child poverty policy officials and analysts in the two Departments, along with a secondee from Barnardo’s, to provide a co-ordinated and focused approach. The unit will regularly meet its counterparts in the devolved Administrations through the four countries policy forum. The aim of the meetings is to share understanding, data and good practice and to drive forward the UK child poverty strategy. The forum had its first meeting on 22 January 2008. Beyond that partnership, the UK Government are open to further practical suggestions in working with all our Scottish partners, including the Scottish Executive, local authorities, charities and businesses.
As I said, we welcome the second and third reports of the Scottish Affairs Committee, Session 2007-08, on poverty in Scotland and child poverty in Scotland. The Committee identified a number of issues that it believes need to be addressed, and we want to respond by being part of the coalition within and outside Government that will continue to work together to build on the progress already made.
Back in 1999, this Government had the courage and vision to set targets to halve child poverty by 2010 and eradicate it by 2020. Today, almost a decade on, we are as determined as ever to meet those challenging goals. However, Westminster and Whitehall cannot achieve those objectives alone. Ending child poverty requires a sustained national, regional and local effort that involves the devolved Administrations and all agencies, service providers and professionals, including communities and businesses. We set out the beginnings of a contract in “Ending child poverty: everybody’s business”. It was a pledge that all parts of society would do their bit to tackle this blight on children, communities and future prosperity.
The Government will work closely with all stakeholders, including through a series of workshops and debates this summer, to develop the UK’s longer-term strategy to eradicate child poverty by 2020. The UK Government want to continue to work with the Scottish Government. That working relationship is vital if we are to make progress on our shared goal to eradicate child poverty in Scotland, but it needs to be based on a mature partnership. We cannot allow this vital issue to become a political football on the constitutional pitch.
We have to increase the pace of change, but the political will is there to do exactly that. That is something that we will see coming through clearly in the months ahead.
I am surprised at what the Minister has said. The Scottish Government are very keen to make progress on child poverty, but I remind her that all the briefings and reports that we got for this debate point out that the benefits system for which this House is responsible plays a huge part in causing child poverty in Scotland. This Government have to take action on putting in the £4 billion needed to tackle child poverty in the UK. That amount needs to be compared with what is being spent on the Olympics.
There is sometimes political amnesia. I regret offering the hon. Gentleman the opportunity to intervene, but I thought that he was going to say that the Scottish National party MPs in this House would do all that they could to ensure that we have a mature and robust relationship with the Scottish Government. Interestingly, question No. 10 in the consultation document recently sent out by the Scottish Government asks whether there should be extra powers under devolution. What on earth has that got to do with the task in hand? I hope that we do not get bogged down in a political football game on an issue that is too important for that. We have to increase the pace of change and we need the political will to make something happen.
We are committed to building an inclusive, cohesive and prosperous society, with fairness and social justice for all. Ending child poverty will not be an easy task, but it is the right thing to do. It is not just about fulfilling an historic mission; it is about building a future in which every child can grow to fulfil their true potential and where no child grows up blighted by poverty.
Given the Government’s commitment on this matter, and the commitment of people and organisations in Scotland, I believe that we can—and must—end child poverty once and for all.
I very much welcome having a debate on the Floor of the House that focuses on Scotland. Perhaps such debates should take place more often, and not only when elections are being held in England. Ironically, the most recent debate here to focus on Scotland was held when the debacle that was the Scottish elections took place nearly a year ago. I hope that, like me, Ministers will use what influence they have to bring matters affecting Scotland to the Floor of the House.
I welcome the report from the Scottish Affairs Committee, and want to take this opportunity to pay my respects to our Chairman, the hon. Member for Glasgow, Central (Mr. Sarwar). He has provided wise chairmanship, and shown a willingness to allow members of all parties and with all points of view to make those views known during our sittings. I found the Committee’s various visits and evidence-taking sessions to be extremely useful. I am a little surprised that the hon. Member for Dundee, West (Mr. McGovern) is not present today, as I expected him to use this opportunity to campaign, as he always does, for a new railway station in Dundee.
I was disappointed that the Committee was not able to visit my constituency. I know that that was not deliberate, but we did not focus as much as perhaps we should have done on communities such as Rigside and Kelloholm. They are essentially urban communities in a rural location, and suffer from some very specific difficulties that are not the traditional and often discussed problems associated with rural poverty.
I have noted the response from the Scotland Office and the Scottish Government to the Scottish Affairs Committee report. On this occasion, I agree with the Minister that it is essential that the UK and Scottish Governments work together on these matters. We should not focus on our political and constitutional differences, as our key objective is to reduce child poverty.
I also noted what the Minister said about local government. It is very important that the Department for Work and Pensions works closely and directly with local government in Scotland. Representatives of Scottish local government made it clear to the Committee that, since the devolved settlement and for no particular reason, the relationship between the DWP and Scottish local government was not as direct as it had been. I hope that that matter will be addressed.
The Minister also referred to an important document—“Making British Poverty History”—that has been published and launched by my right hon. Friend the. Member for Witney (Mr. Cameron). I shall be referring to it, as it is relevant to this debate, and I shall also say more about the report on Glasgow by my right hon. Friend the Member for Chingford and Woodford Green (Mr. Duncan Smith) that was part of his “Breakthrough Britain” series for the Centre for Social Justice. I was very pleased that the Glasgow report was well received, especially by the leader of Glasgow city council.
Obviously, I am not about to agree with the Minister’s interpretation of the past but, given that today’s debate is to focus on the future, I will agree with her that it is not acceptable for the latest figures to show that 23 per cent. of children in Scotland—or some 250,000 children—are living in poverty. Those children have a low standard of living and are unable to access many of the leisure, sports and cultural opportunities available to others, and they are also at increased risk of educational failure, ill health and being unable to move into work when the time comes.
They in turn are likely to bring up their children in poverty. Indeed, the most probable explanation for an adult being in poverty is that he or she was born in poverty, rather than their having suffered a mid-life catastrophe.
It is clearly agreed throughout the House that addressing child poverty in Scotland should be a priority for any Government, but although I recognise that the Minister feels passionately about the subject, and that by and large the United Kingdom Government are expending a great deal of effort, I believe that the Government’s approach is flawed. They have placed too much faith in what simply spending more money on a problem can do. The cocktail of mega-money and micro-management has been characteristic of Labour’s approach in most areas of social policy, and in child poverty as in other areas the results have been mixed.
I believe that three changes are required. First, the tax and benefits system should be simplified, and the disincentives to work that are built into it should be removed. Secondly, Government action should focus more on addressing the root causes of poverty, such as educational failure, family breakdown, indebtedness, drug abuse and crime, rather than merely addressing its symptoms. Thirdly, the Government have trusted communities and people too little. I should like to see central, devolved and local government supporting voluntary and community groups in their efforts to end poverty, even if that means giving up some control.
As the hon. Lady said, the Government’s flagship policy was their tax credit system. That system, designed by the current Prime Minister and his boffins at the Treasury, is one of byzantine complexity. It is so complicated that even Her Majesty’s Revenue and Customs, the Government body responsible for administering the system, does not understand it. In the last year for which we have data, HMRC managed to get more tax credit payments wrong than right. Make no mistake: this is not just a situation that ties up civil servants in recalculating payments. It is not even just a situation that has led to the loss of £5 billion in public funds through overpayment, fraud and error, although it has certainly done that. Most gravely, it is a situation that has seen many of Britain’s poorest families facing the prospect of repayment demands, and many others scared off even applying for tax credits, in case they receive such demands further down the line. That should alarm the Government.
It is very clear how the system could be made to work more effectively. It is about giving people the right amount of money to which they are entitled. It is about dealing with bureaucracy. It is about not clawing back money from people who can ill afford it. It is all very well for Labour Members to jest about the topic, but they have had 10 years to get the system right, and they have failed to do so.
If the hon. Gentleman had been listening to my speech, he would have heard that it is our party’s policy to get people’s tax credits right the first time.
I said that many people had been discouraged from applying for tax credits because of errors in administration, but, as the House must know by now, many more people who were eligible were deterred from going near the scheme in the first place, for the reasons that we have just been discussing. The same complexity that makes the scheme difficult to administer also makes it difficult to access.
Take-up of working tax credit by people without children is only 22 per cent. I remind the House that as well as being one of the principal weapons in the Government’s anti-poverty armoury, tax credit is likely to be one of the key routes through which the Government attempt to provide compensation—or so they say—for their abolition of the 10p tax rate. Given such a low take-up, it is hardly surprising that the report on child poverty by the Scottish Affairs Committee features the constant refrain that the tax and benefits system needs to be simplified. That is what the Conservatives have said almost since the moment that the Prime Minister, as Chancellor, took control of it, and I hope that we are now beginning to see a consensus.
Before the hon. Gentleman moves on from tax credits, I would be interested to hear him clarify the point he is making about bureaucracy. One of the reasons why tax credits are often overpaid is the way in which the system works to ensure that people do not constantly have to give information about income changes; the system contains an element of rationalisation. Is it the Conservative party’s position that such reconciliation should take place monthly? That would be even more bureaucratic, which is why the Government did not go down that route.
As I have made clear to the House, we believe that the tax credits system should be sorted out. The hon. Gentleman’s party has had the time to sort out the system, but it has failed to do so: a Conservative Government will do it.
Given the number of times that the words “simplify”, “simplification” and “simpler” appear in the Red Book, I do not think that the Government are listening to what is said about the tax and benefits system. I was going to say that “simple” appears to be the new buzzword, replacing “prudence”—although I admit that it would be grossly unfair to use that term to describe the Prime Minister. I suppose people now realise that it was equally inaccurate to describe him as prudent. At its most serious, the complexity of the system has allowed all the Government’s initiatives to pass many of the most seriously impoverished families completely by. There is real concern that many are unaware that they might be eligible for some of the plethora of different types of benefit on offer, or may not have the confidence to complete a complicated means-testing process.
It has been stated that
“Current policies are having no effect on the very poorest children and their families”.
Those are not my words; they are those of Save the Children’s severe child poverty report of last year. The sad state of affairs even led the Scottish Affairs Committee to ponder whether increasing the level of the old-fashioned universal child benefit might be the only way in which the Government would be capable of getting help to those who need it most. What is the point of having such a complex and expensive system of targeting support as the tax credit system if the bullseye of that target is left untouched?
Surely the hon. Gentleman must appreciate that during the 18 years in which his party was in power between 1979 and 1997, this country’s child poverty doubled and became the highest in Europe, and that since Labour came into power in 1997, some 600,000 children have been taken out of poverty? Does he not think he is in a very difficult position to give anybody advice about how to end child poverty in this country?
I do not accept the hon. Lady’s proposition at all. In fact, her contribution typifies the approach of Labour Members, who wish to focus entirely on the past, and not on the future or on their inability to meet the targets that they set for themselves.
It is unfortunate that Labour’s policies were all calculated on the basis of a very narrow measure of poverty: having less than 60 per cent. of average median income, adjusting for family size. On that basis, the Government set a target of halving child poverty by 2010 and eliminating it by 2020. Although I share that aspiration, I would point out that progress to date has been largely achieved by moving hundreds of people who were receiving a few pounds a week less than the poverty line to a position in which they receive a few pounds more. In other words, the Government have been able to present themselves in a favourable light to the media without letting on that the problems of very severe poverty have largely been left untouched.
So, if we accept that the system is unnecessarily complex, we must consider why it has been constructed in such a way. While I do not dispute that the current Prime Minister—the previous Chancellor—may be attracted to complexity for its own sake, a far more likely explanation is that the Government were determined to micro-manage the incomes of millions of Britons. Some have speculated that this was for ideological reasons. Others have said that it was to make people think that they were in some way dependent on the Government’s staying in power. The most innocent explanation is that the Government wished to create a system that did not waste money and targeted help where it was needed, even if that has not been achieved in practice. This is not the place to speculate on which motive was most likely, as more important issues are at stake.
The most important issue is that this very heavy means testing has imposed high marginal rates of taxation on many low-income families and has therefore undermined the incentive for parents to take on a job, work more hours or move up the career ladder. The Treasury itself says that
“worklessness and low pay are the biggest direct causes of poverty...a child’s risk of being in poverty falls from 58 per cent. to 14 per cent. when one or both their parents is working”.
An illustration of how many people suffer such disincentives is the fact that more than 2 million working people in the UK stand to lose, in a vicious combination of increased taxes and cuts in their benefits, more than half of any increase in earnings that they make. The abolition of the 10p tax rate will exacerbate this situation even further. Notwithstanding the compensation package that has been forced out of the Government, the number will rise to more than 2.25 million.
If we take the problem of high marginal taxation at its most extreme, some 160,000 people in Britain would keep less than 10p of each extra £1 that they earned. To put that into perspective, that is three times the entire population of Inverness. For working an extra hour, often in hard jobs, those people would earn only a few more pennies.
The high rates of marginal taxation have led the Institute of Fiscal Studies to conclude that although the Government’s over-reliance on means-tested benefits may reduce measured child poverty in the short term,
“its indirect effect may be to increase poverty through weakening incentives for parents to work”.
In short, I very much accept that tax credits are an essential part of modern welfare policy, but I want to see them simplified, and the disincentives to work that are the unintended consequence of the system reduced.
I also want to see much better support for people looking to get back into work, with effective practices adapted from other countries and an expectation that the unemployed, if able to do so, will take part in welfare-to-work programmes.
The hon. Lady has chosen to characterise the Wisconsin scheme in a way that meets her political objectives rather than according to the facts. We will bring forward comprehensive policies to encourage people to move from welfare to work.
Tax credits may be an essential part of a modern welfare policy, but they are not the only approach, and the Government have rather neglected the others. Particularly, they have failed to see that correcting the symptoms of poverty, such as low wages, has to be complemented by attacking the root causes of poverty, including educational failure, family breakdown, indebtedness, drug abuse and crime. How the Government and Scottish Government can do that will form the second part of my contribution.
Of course, the education system in Scotland is the responsibility of the Scottish Parliament and the Scottish Government. I shall therefore not dwell too long on the subject save to mention its importance in the context of this debate and to give a short synopsis of what my colleagues in the Scottish Parliament have said on the issues.
The education system is important to this debate because its products are the parents of tomorrow. If they can get themselves established in a skilled job when they leave education, when they go on to have children those children are unlikely to grow up in poverty. As poverty is a generational issue, their children’s children, too, will have their risk of growing up in poverty dramatically reduced.
Unfortunately, the Scottish schools system fails to set many children on the path towards a skilled job or further study. Indeed, a higher proportion of young people are not in education, employment or training in Scotland than in any region of England, or any other country in the OECD. This represents an enormous waste of human potential, and has been estimated by the Scottish Government to cost as much as £1 billion per annum.
I believe that that is the legacy of decisions stretching back many years over how our education system should operate. Those decisions were often made to satisfy left-wing ideology or notions of political correctness, rather than being based on pragmatic consideration of what worked best for the children. The one-size-fits-all approach must be left in the past. Ironically, the efforts of the left to help the poor have often been counterproductive. It is time that vocational education in particular was opened up to those in their early teens who are not interested in, or not suited to, the current curriculum.
As for family breakdown, what we say and do in Westminster has a great effect in Scotland. Scotland has one of the highest rates of family breakdown in Europe, yet the Prime Minister’s tax credit system penalises couples for staying together. Couples with children can receive more money by living apart, or claiming to live apart. The cost of the so-called couple penalty can reach into the thousands. The Government’s policies discriminate so heavily against families with two parents that it is harder for couple families to escape poverty. As a result, the risk of poverty has hardly changed for children in two-parent families since 1997, and rose last year from 21 to 23 per cent. across the UK. In addition, 60 per cent. of poor children live in couple families.
Based on the experience of similar schemes abroad, the Conservatives are confident that our radical welfare reform programme will return at least 600,000 people to work—enough to pay the cost of ending the couple penalty. That will mean that 1.8 million of the poorest couples with children will gain on average £32 a week and 300,000 children in two-parent families will be lifted out of poverty. The long-term effects will be greater still, as it is the first truly significant proposal to reduce family breakdown in a generation.
On debt, I welcome the forthcoming inquiry by the Select Committee on Scottish Affairs into the credit union system, as it can make a significant contribution. Debt is a serious problem for millions. Furthermore, it could easily become a problem in the future for even more people. An energy crisis, a recession in the US, global terrorism or a substantial fall in house prices could change the economic climate, plunging many more people into a severe debt crisis.
Debt is a particular problem for people on low incomes. With few savings to fall back on and still little or no access to mainstream banking facilities, they are more vulnerable than other income groups to unexpected changes. As the report by my right hon. Friend the Member for Chingford and Woodford Green entitled “Breakthrough Britain” said, possible solutions to the debt crisis include improving financial literacy, providing more information and more accessibility to savings for low-income families, strengthening the role of credit unions and increasing competition in the home credit market. This could be matched by more transparency of interest rates and charges, better regulation of the advertising of credit, data sharing among lenders and greater care in lending practices, particularly for low-income families.
Finally, drug abuse and crime are issues for the Scottish Government, but I point out, particularly to Members from the Scottish National party, that the Conservative group in the Scottish Parliament forced the minority SNP Administration into developing a drug strategy for Scotland and putting a real 500 extra police on the beat, by making that a precondition for supporting the Administration’s Budget.
I have already mentioned the “Breakthrough Britain” report produced by the Centre for Social Justice, but I am sure that many Members are aware that a specific study on Glasgow was undertaken by the centre. Greater Glasgow is an area that impacts significantly on the poverty statistics for Scotland, and it is right that it was chosen for such a study. As I said in my opening remarks, I was particularly pleased that Glasgow city council and others who are usually described as “stakeholders” gave this important report such a warm welcome. The report praised at some length the burgeoning number of voluntary projects and workers who were
“battling largely unsung in their efforts to rebuild the lives of the many people left behind by Glasgow’s economic rebirth”.
It is all too easy to look at just what the Government are doing, but we should never forget the impact of charities, faith-based organisations and even individual acts of kindness in the fight against poverty. They can be more responsive to local needs than central Government. Third-sector groups often achieve excellent value for money.
Community groups are especially valuable, as they are well placed to put people with experience of poverty into the front line of action against it. I was struck recently when the Church and Society Council of the Church of Scotland said on its annual visit to Westminster that, just as the civil rights struggle in America could not have been won if it had been led by white people, and the feminist movement could not have achieved its aims if it had been led by men, so action against poverty will be truly effective only if it is led by those who have first-hand experience of poverty.
Tax credits are an essential part of modern welfare policy, but as I have said, I want to see them simplified, and the disincentives to work, which are the unintended consequence of the system, cut back. I also want to see much better support for people looking to get back into work, with effective practices adapted from other countries and an expectation that the unemployed are to take part in welfare-to-work programmes.
Most important, much more focus should be put on preventing the root causes of poverty. This means tackling educational failure, family breakdown, indebtedness, drug abuse and crime. I also want to see the UK’s devolved and local government support voluntary and community groups in their efforts against poverty, even if that means giving up some control.
Sir Winston Churchill, who is always worth a mention, summed up welfare policy in two images when he talked about a ladder—
“We are for the ladder. Let all try their best to climb”—
and a net below which none should fall. It is time to reinterpret those images for the 21st century, and I hope that this debate will contribute something towards doing that.
I thank the Government for initiating this important debate, and for their positive response to the Scottish Affairs Committee report on child poverty in Scotland. Tackling child poverty is the key to creating a fairer society. We have a responsibility to help children who are living without the essentials that so many of us take for granted. We must take the opportunity to break the cycle of deprivation, in which poverty is handed down from parents to children. That will help not only today’s children, but generations to come.
The Scottish Affairs Committee’s recent inquiry on child poverty in Scotland discovered that there are 250,000 children living in poverty in Scotland today. In such a rich country, it is unacceptable for any children to grow up deprived of the opportunity to have a rich and full childhood. That is why the UK Government have committed themselves to halving child poverty by 2010, and to eliminating child poverty entirely by 2020. Those are ambitious targets, but good progress has been made over the past 10 years. In 1997, child poverty rates were at record levels. Since then, child poverty in Scotland has been reduced by a quarter, meaning that more than 100,000 Scottish children are no longer living in poverty. That has been achieved by raising family incomes through the introduction of the national minimum wage, as well as through targeted programmes such as the child tax credit programme.
Our witnesses were unanimous in welcoming the reduction in child poverty in Scotland, which many of them attributed to Government policies and a significant increase in resources. It is estimated that state financial support for children in the UK has grown by 52 per cent. in real terms since 1999. Written evidence submitted by the Joseph Rowntree Foundation stated:
“There can be no doubt that government policy has played a major part in the reductions in child poverty in Scotland”.
Giving oral evidence to the Committee, the head of the Child Poverty Action Group in Scotland, Mr. John Dickie, said that
“the progress in child poverty has reflected the political will and investment that has gone into tackling it.”
It now appears that all parties, including the Conservative party, agree that there is a need to tackle child poverty. That is a welcome development. In our report, the Scottish Affairs Committee stressed the importance of co-ordination to the fight against child poverty. The UK Government and the Scottish Government must continue to work together on that. Scottish local government also has a vital role to play, providing key services such as education and child care.
To make the most of the resources dedicated to fighting poverty, a joined-up approach is needed, integrating the services provided by the UK Government, the Scottish Executive and local authorities. In fact, my Committee’s inquiry found that Scotland has done better at reducing child poverty than the UK as a whole. Some of that success may be due to the productive way in which the UK Government have worked in partnership with the Scottish Executive since 1999.
That has allowed anti-poverty strategies to be tailored to local needs. Such co-operation needs to continue in future. I am glad that the Minister has expressed her desire to work in co-operation with the Scottish Government, and I hope Scottish national party Members in the House will urge the Scottish Government to recognise that co-operation, not confrontation, will help to resolve the vital issues that our communities face in Scotland. Of course, we would like to spread Scotland’s success more widely. We hope that the UK Government can learn lessons from the strategies that have been successful in Scotland and use them to benefit children throughout the UK.
Although much has been done, a lot remains to be achieved. The Committee report found that the reduction of child poverty was in danger of slowing down. In order to reach the target of halving child poverty by 2010, we found that the Government would need to match, if not surpass, the level of resources and of commitment of the past decade. I am pleased by the recent announcement in the Budget of an additional £1 billion per year to families through additional tax credits and child benefit. These measures renew the fight against poverty and will lift up to 250,000 more children out of poverty across the UK.
That has rightly been welcomed by many organisations that take a keen interest in child poverty in Scotland, including Barnardo’s Scotland and the Child Poverty Action Group in Scotland. However, we should not underestimate the scale of the task that faces us in eradicating child poverty. The very poorest children are living in families with less than 30 per cent. of the national average income or about £130 per week. The Committee was concerned to hear evidence that up to 80,000 children living in the severest poverty in Scotland may have been left behind by the recent reduction in child poverty rates. Those are the children in greatest need. We must make sure that their welfare is our first priority.
Child poverty is a result of the family circumstances in which children live. Financial measures such as tax credits and child benefit go some way towards raising family incomes, but there are other considerations. As the Government have recognised, getting more people into work and making work pay is the best way to raise income levels, but child care is a barrier to work for many parents. Our inquiry found that parents may be prevented from taking a job because they cannot find affordable or suitable local child care. That is an even greater challenge for parents of disabled children.
The hon. Gentleman is right when he states that the objective is to get people back into work in order to alleviate poverty. Has he any views or comments about the abolition of the 10p rate of income tax? If that is taken away, people who find their way back into employment could find themselves in further and worse poverty.
I am sure the hon. Gentleman is well aware that since 1997 the Government, through their positive approach, have taken millions of people, including children, out of poverty. Three million more people are employed. I know that hon. Members on the Opposition Benches—the Conservatives and the Scottish national party—are obsessed with the 10p tax rate, but in his letter to the Chairman of the Treasury Committee, the Chancellor confirmed that all those who will be disadvantaged because of the abolition of the 10p tax rate will be compensated.
Our inquiry found that parents can be prevented from taking a job because they cannot find affordable or suitable local child care. The challenge is even greater for parents of disabled children. It also found that 80 per cent. of mothers with a disabled child are unemployed, and that disabled children are twice as likely to be in poverty as non-disabled children. Disabled people experience poverty of income, choice and opportunity. The Scottish Government should do more to ensure that resources reach disabled families, who are disproportionately affected by poverty. That is a massive issue, which I hope the Scottish nationalists will pass on to the Scottish Government so that the money allocated for families of the disabled reaches the most needy in our communities.
Does the hon. Gentleman not accept that the concordat into which the Scottish Government and local authorities entered is aimed at allowing those authorities to use the money in the best way possible for their areas? It is not a question of taking money away; the ring-fencing is being taken away, and that is a different matter.
I accept entirely that it is for the Scottish Government to decide how they want to spend the money. However, our inquiry found that disabled people suffer worst from child poverty. That is why our report urges the Scottish Government to do more to help the families of the disabled in Scotland.
Will my hon. Friend, along with me, invite our Scottish National party colleagues to accept not only that he, I and others consider that our Government got it wrong on the 10p rate and are putting it right, but that the Edinburgh Executive got it wrong on disabled children? Will they help us to put that right?
I agree with my right hon. Friend. I am sure that the Executive will do the right thing—apologise and allocate the resources to the disabled people and their families in Scotland.
Work can provide a route out of poverty, but only if there are good-quality jobs with decent career paths and reliable incomes above the poverty line. Many children living in poverty in Scotland come from households in which at least one parent is working. To continue to reduce child poverty, we must tackle the problem of low pay, promote job retention and create advancement. The tax and benefit system is an important safety net. As a minimum, we must make sure that no one in full-time work is living in poverty; that applies not only to parents, but to young single adults, who are the parents of tomorrow.
Our report on child poverty in Scotland emphasised the importance of simplifying the welfare system, which is still too complicated. Child tax credits have been a key factor in reducing child poverty, but the process of claiming them is complex, and we know that many people do not claim the money to which they are entitled. The tax and benefit system must be flexible enough to respond to the changing needs of families and must make it easy for people to move into work, when they find a job, without losing out.
During its inquiry, my Committee had difficulty in obtaining disaggregated poverty statistics for Scotland. In some cases, only UK-wide figures were available. We urge the Government and others to publish a breakdown of statistics whenever possible. My Committee was concerned by the evidence that we received that children living in the severest poverty in Scotland may not have fully benefited from the recent reductions in child poverty rates. The poorest children are not helped if the Government meet their targets by reaching only those just below the poverty line—a strategy that would also endanger the Government’s longer-term targets for the total eradication of child poverty. That view is shared by Save the Children and many other organisations.
Major progress has been made in reducing child poverty in Scotland during the past 10 years, and my Committee wants to see that progress continue in the next 10 years. We intend to ensure that child poverty remains high on the political agenda in Scotland and throughout the UK. During our inquiry, it was brought to our attention that debt is a major contributory factor to poverty in Scotland and in the United Kingdom. We were astonished to learn that our financial institutions, moneylenders, and building societies charge interest rates of up to 100 per cent., and impose very high penalty and service charges. I passionately believe that there should be a cap placed on the banks and financial institutions, and that the courts should be given powers to decide whether banks and building societies are charging fairly those who are most vulnerable, needy and poor in our communities. It is sad to note that financial institutions are exploiting the most vulnerable in our society. I hope and wish that the Government will seriously concentrate on tackling that problem. We are not talking about loan sharks, but about legal moneylenders that are exploiting poor people in our society.
It is nice to see many members of my Committee here today. I am grateful for the kind words of the hon. Member for Dumfriesshire, Clydesdale and Tweeddale (David Mundell); I am not sure whether they were good for my political career. The hon. Gentleman is a very important member of my Committee. As you will know, Mr. Deputy Speaker, the Conservative party spent more than £1 million on Scotland in the general election, which produced one Conservative Member. The hon. Gentleman is therefore the most expensive member of my Committee, and the most expensive Member of the House, so I am grateful for his kind words. Once again, thank you for giving me the opportunity to speak, Mr. Deputy Speaker.
It is a pleasure to follow the hon. Member for Glasgow, Central (Mr. Sarwar), and I congratulate him and his Select Committee on producing its excellent and well-researched reports on poverty in Scotland and on child poverty in Scotland. I also welcome the Government’s allocation of this afternoon for this debate.
The extent of child poverty in Scotland has reduced in recent years—there is no doubt about that—but despite that reduction, the level is still high by international standards. One in four children, or 250,000, live in poverty, 90 per cent. of them in severe poverty. The statistics also deliver the disappointing news that the good rate of progress achieved in recent years is slowing and, with the UK economy facing a slowdown with poor growth forecasts, concerted action is needed at all levels of government to lift children out of poverty.
Poverty is neither a reserved matter nor a devolved one. To tackle it we need co-operation between all levels of government—the UK and Scottish Governments, local authorities, community groups, and charities, and we must work with those who find themselves on low incomes. Action to tackle child poverty necessarily targets parents, attempting to lift children out of poverty by raising family incomes. We also need to increase the incomes of young single adults because they are the parents of the future.
Concerted action must be taken by all levels of government. However, today I want to concentrate on the reserved powers—mainly the tax and benefit system. In the Budget, the Chancellor announced an extra £1 billion throughout the UK to tackle child poverty, but that is £2.5 billion less than what most independent estimates believe is required to meet the Government target of eradicating child poverty by 2020. More needs to be done.
Specific measures that need to be taken include increasing child benefit and reforming the tax credit system by making the overpayment rules fairer and taking higher earners out of it altogether. We would increase child benefit by £5 for the first child, thus making all families £250 a year better off. That would take about 15,000 Scottish children out of poverty. It would also reach all families, including those who do not claim tax credits. The take-up rate of tax credits is only about 80 per cent., whereas that of child benefit is nearly 100 per cent.
The tax credit system needs to be reformed to increase stability and reduce overpayments. We need to return to fixed, six-monthly awards so that people keep the money that is given to them. We should also reverse the burden of proof when overpayments are caused by official errors, introduce a right of appeal to an independent tribunal and simplify the complicated awards notices.
We have all met constituents who say that they will never apply for tax credits again because of the debt into which they were forced by being overpaid through no fault of their own. The system must be reformed to give everyone confidence in it instead of causing debt and stress to many on low incomes. Tax credits should also be focused more on those on low incomes by increasing the taper rate and removing the right of high earners to them.
Doubling the 10p rate of income tax has obviously hit those on low incomes. We hear about a compensation package but many are not aware of their entitlement to tax credits and I hope that the Government will explain how the promised compensation scheme will take into account those who are entitled to tax credits but do not claim them. The 10p tax hits them, too.
It is significant that a high proportion of parents with a disabled child are unemployed, and disabled children are twice as likely to live in poverty as children without disabilities. The parents of disabled children often find it harder to get child care and more needs to be done to help those families find it.
More effort must go into improving the take-up of tax credits and benefits and helping people find work.
I hope that the hon. Gentleman will accept my genuine thanks to members of the Liberal Democrat party who took part in the review on disabled children. He must be as disappointed as I am about the implications so far in Scotland. However, I thank those Liberal Democrats.
I am grateful for the right hon. Gentleman’s intervention. Yes, we are disappointed and urge the Scottish National party Government to review that part of their policy.
To assist the take-up of credits and benefits and help people find work, we would replace Jobcentre Plus with a new first steps agency—a single, one-stop shop for all benefit and tax credit claims. The front-line staff should be equipped with basic knowledge of the tax credits and benefits system so that they can assess whether a household is claiming its full entitlement and give advice. The new agency would also engage with the private and voluntary sectors to provide high quality, tailored, back-to-work support.
Jobcentres have an important role, but they must be located in local communities, where the staff understand local circumstances, not in large call centres. In the past four years, the number of staff in jobcentres in my constituency has almost halved as jobs have been transferred to call centres. The pattern has been repeated throughout Scotland. That is a double blow to jobs in rural areas. First, it removes Government jobs and, secondly, it takes away valuable local knowledge, which could help local people find jobs. To many jobseekers, a phone call to a call centre is no substitute for a face-to-face discussion with someone with local knowledge. That is particularly true in constituencies such as mine, where the islands create special circumstances that those in call centres often simply cannot understand. The Government should reverse their misguided policy. They should transfer Government jobs to rural areas, not take them away.
I would be grateful if the hon. Gentleman provided the House with a rough estimate of how much it would cost to give every community in Scotland a new super jobcentre that combined work on tax credits and assessments.
We would utilise the jobcentres and buildings that are already there, but the Government are taking staff away. Almost half the jobcentre staff in my constituency have been lost in recent years, owing to transfers to the call centre at Clydebank.
I want to talk about the problems caused by the world energy crisis that people on low incomes face. Paying their fuel bills, both to keep their homes warm and to travel, is a serious problem for people on low incomes. To help tackle the problems that people on low incomes face in keeping their homes warm, the energy companies should be forced to use some of their huge windfall profits to ensure that all poor and vulnerable people have access to cheap social tariffs. The higher utility pre-payment charges should be abolished. It is a scandal that people with pre-payment meters should pay more for their fuel than those who have access to direct debits. We should work for the swift roll-out of smart meters in every home, so that people can have more control over their energy consumption.
I very much agree with the hon. Gentleman. Like me, he represents a rural area, so does he recognise another aspect of fuel poverty, which is that many people in our rural areas rely on oil-fired heating, which has rocketed in price? That is causing problems for people in rural areas. Although there is perhaps less help for those with electricity and gas problems than there should be, there is currently no help at all for people with oil-fired heating.
I am grateful for the hon. Gentleman’s intervention. He raises a serious problem.
The charging regime for meters should be reversed, so that the first units of energy consumed are the cheapest, unlike under the current system, where people who use small amounts of electricity and gas often pay a higher unit cost. The availability of low-cost energy conservation measures should be extended and the winter fuel allowance should be extended to those on higher-rate disability benefits.
Another respect in which the rising price of fuel causes tremendous problems for people on low incomes is through rapidly rising transport costs for those who live in our remote communities. The Scottish Affairs Committee was absolutely correct when it said:
“It is too easy to assume that poverty in Scotland is limited to deprived urban areas, made visible by problems such as poor housing or graffiti.”
Poverty exists in rural communities as well as urban ones, often in homes off the beaten track and not noticed by those who come to look at the marvellous scenery. The Committee was right to state that
“poverty in rural areas is exacerbated by specific factors including the availability and quality of employment opportunities, transport costs and a dispersed population.”
High fuel prices deliver a triple whammy to people living in remote areas. First, petrol and diesel cost more than in urban areas. Secondly, people have further to drive to get to work or the shops. Thirdly, there is a lack of public transport alternatives. The rising cost of transport makes it more difficult to sustain businesses and can sometimes mean that a low-paid job is not worth taking, owing to the cost of travel to and from work.
As well as removing opportunities for parents to earn money, the high cost of transport can lead to social exclusion for many children living in poverty. Children living in remote communities need to travel to meet other children of their age and engage in social pursuits such as sport, playing in bands and singing in choirs. The highlands and islands have a rich heritage of music and songs. Bands and choirs have to travel great distances to take part in concerts and competitions, but the rapidly rising cost of fuel makes fundraising for the pipe band, the Gaelic choir and the football or shinty team much more daunting.
If the hon. Gentleman bears with me, I shall come to that issue shortly.
There is a risk that children from the poorest homes will miss out when it comes to teams, choirs and bands because of the higher cost of fuel. They might therefore miss out on an important part of growing up.
I was delighted that the Committee urged
“the UK Government, the Scottish Executive and local authorities to consider ways in which the high costs of transport in rural areas can be alleviated.”
It is urgently necessary that that recommendation be taken on board. Those of us who represent Scotland’s remote communities tabled amendments to the previous two Finance Bills, on Report, for a lower rate of fuel duty in remote communities. We will table similar amendments this year. The Government would not accept our amendments to the previous two Bills, and the Conservative party sat on its hands, but the situation is now critical. I hope that, this year, both the Government and the Conservative party will take the Committee’s recommendations on board and support amendments that would allow fuel duty to be charged at a reduced rate in remote communities.
I have been focusing on powers reserved to the UK Government, but I now want to draw the House’s attention to two disastrous SNP policies that will increase poverty in many parts of the highlands and islands. First, the SNP reversed the plans of the previous Labour-Liberal Democrat coalition at Holyrood for a 40 per cent. ferry fare discount for passengers who live on many of our islands and peninsulas. That is a complete scandal, as those discounts were targeted at passengers, not cars, and would have helped the poorest islanders with their travel costs.
I certainly welcome its extension to Coll and Tiree. Originally, it was meant only for the Western Isles, and I have campaigned for its extension to the whole of my constituency. However, cheap ferry fares are needed to all the Scottish islands and peninsulas, not just those that the hon. Gentleman represents.
On that point, I fully appreciate why the hon. Member for Na h-Eileanan an Iar (Mr. MacNeil) might be very grateful for the scheme that the Scottish Government have brought in, but my constituents who use the lifeline services to Arran and Cumbrae are seeing significant increases in ferry prices. There seems to be discrimination in the way in which the measures are being applied. We are seeing ferry price increases of about 29 per cent. A great deal of party politics seem to be being played on this issue. Does the hon. Gentleman agree that whatever measures are introduced should be fair to all communities in Scotland?
Perhaps a more pertinent question would be: why did the hon. Gentleman’s party wait for eight years? The Liberal Democrats, who were in power with the Labour party for eight years, did absolutely nothing for the good people of Colonsay. We now have a pilot scheme going in the Western Isles that will, in turn, I hope, help the good people of Colonsay. That has come from the SNP, but the Liberal Democrats sat on their hands—[Interruption.]
Thank you for your guidance, Mr. Deputy Speaker. I will move on. If the hon. Member for Na h-Eileanan an Iar wants to find the answer, he should read my letter in this week’s Oban Times.
Another example of where the Scottish National party is contributing to poverty in the highlands and islands is by cutting the budget of Highlands and Islands Enterprise—the local agency that helps businesses, particularly those just getting off the ground, in the highlands and islands. The SNP cuts mean that fewer jobs are available, a grim prospect when the forecast is for an economic showdown—I mean slowdown.
Or even showdown, who knows? The hon. Gentleman began his speech by saying that issues of poverty are neither devolved nor reserved and that we need to work together. He will know that an initiative for these areas that was begun by Lord Forsyth was the Convention of the Highlands and Islands. Since its inception and particularly since devolution, it has looked at which issues should be devolved and which reserved; many of the decisions on issues affecting the highlands and islands are still taken here. Does the hon. Gentleman have any explanation, other than sheer spite, of why the new SNP Administration have cut Westminster out of the Convention of the Highlands and Islands, depriving people in the highlands and islands of the opportunity to put to Westminster Ministers many of the issues that he has rightly highlighted?
I am grateful to the Minister for that intervention. Like him, I can think of no good reason, and I wonder whether any SNP Members want to answer.
Travel costs are very important in rural areas and they must be reduced. Valuable services such as jobcentres and post offices must also be retained in our more remote communities so that sources of help and advice are available to be accessed close at hand. All policies should be rural-proofed to ensure that the level of poverty in rural communities is not increased. All levels of government have to co-operate with the right policies to eradicate poverty from both urban and rural communities by 2020. It is a difficult task, but a vital one. With the policies I outlined earlier, I believe that that important goal can be achieved.
I begin by congratulating the Scottish Affairs Committee on its valuable work on poverty. It is some years since I was a member of that Select Committee and a great deal of work has been done subsequently. We all know that the life chances of too many Scots have been strangled at birth, so it is timely to take a look at how far we have come, what progress has been made and where there is room for improvement.
It was Labour in opposition that led the assault on the scourge of poverty under the Tories; it was Labour that provided a detailed analysis of the root causes of poverty under the Tories; and only Labour had the underlying values and ideology to address poverty in government and to make real progress in tackling poverty in Scotland and in the UK more widely.
Child poverty is of the utmost importance because in eradicating it we are paving the way for a society in which for the first time every child has a chance in life—a chance that will not lead to a dead end. Childhood poverty leads, for the most part, to lifelong poverty. Even those who escape financial poverty are left with the scars, which is why we hear so many Scots from working-class communities saying that they will never forget where they came from.
As we have heard from many hon. Members today, poverty needs to be addressed in all its aspects, because they are all interlinked. Unemployment, low pay, pensioner poverty, family poverty, women in poverty, the disabled, poor housing, deprivation, education, class and inequality, poverty and ill health are all connected and must all be addressed. Labour has recognised for decades how important all those issues are, but only when in power has it been able to start to do something about them. Therein lies a lesson for us all on the Labour side.
We have heard the statistics that show how well the Government are doing in tackling child poverty. We have heard about the record rises in child benefit, with 600,000 taken out of poverty—impacting even more in Scotland, which started out with higher poverty levels. As we have heard, that has received a warm welcome from many organisations in civil society in Scotland, including Barnardo’s, the Child Poverty Action Group, Citizens Advice Scotland, the Church of Scotland and Save the Children. Statistics can be boring, but they matter to the individuals whom they affect: the person who has seen his or her income rise substantially thanks to the minimum wage, or the lone parent who now has a living wage thanks to the working tax credit and affordable child care. The Government’s approach has been, and as we have heard from the Minister will continue to be, targeted support for those who need it most, work for those who can, breaking the cycle of deprivation, and delivering high-quality public services. That is a long-term approach that will bring about long-term change, to offer every individual and every generation the opportunity and support to raise and fulfil their aspirations.
Where I grew up, we had few aspirations and even less chance of realising them. Then the Tories came along, and we were completely scuppered. It is a positive fact that the aspirations of most young people now are entirely different from the hopelessness of the 1980s. Scotland has moved on, but still too many are left behind. We are making a difference, as the Select Committee’s report acknowledges. When the Government are criticised, it is usually for not doing enough, and not doing it quickly enough, not for doing nothing, as was the case with previous Tory Governments.
The Committee’s report and the many organisations that have briefed us for this debate all make the point that progress has stalled, so that must be our main focus. Nevertheless, it never does any harm to highlight, as a starting point, what has been achieved and can be built on. It seems that there is a consensus now that it is not a question of if, but how and when. What a change that is from the days in poverty under the Conservative party, which seems to have a new-found concern for the issue. As other hon. Members have said, that is certainly welcome, but will they put their money where their mouth is and commit to public spending on the issue? In Scotland, will the Scottish Government make the hard decisions needed to protect the most vulnerable in our country, who are not always popular causes, or will they play to the gallery?
I can remember standing outside jobcentres in the ’80s, gathering information on jobs advertised at 80p an hour, in the fight against low pay. In 1997, my predecessor Phil Gallie said that it was okay for someone to be paid £1.50 an hour if that is what the market dictates. That is why it was no imposition for me—unlike some other hon. Members—to stay up all night to see the national minimum wage passed through the House. But I also say to the Government that that is why there is unfinished business such as the Temporary and Agency Workers (Equal Treatment) Bill, which practically all Labour Back Benchers were here on a Friday to support. We all look forward to its being passed, because it is part of the jigsaw—it is about not just fairness but tackling child poverty. As the Committee says in its report, where work is of poor quality, low- paid, short-term or seasonal, in-work poverty is a real prospect.
I remember when, as a young mother, a pre-school nursery place in Scotland could not be got for love or money. There was not one recognition from the then Government that child care or nursery provision had anything to do with them. The Tory Government thought that it was all down to the family—of course, they could all afford nannies. It is a proud achievement that pre-school education is now a statutory obligation; it is just as well, because otherwise it would be likely to be cut, as happened in the past.
I was disappointed to read the comments yesterday of my Labour colleague, Scottish MSP Rhona Brankin, that the Scottish Government look set to water down a commitment to the provision of more nursery teachers. As my hon. Friend the Member for Aberdeen, South (Miss Begg) has said, the money for nursery places for vulnerable two-year-olds will not now be found.
We all know that poverty is also gender-specific. While we support lone parents back into work, we should also remember that women and men are still paid on an unequal basis. It has been shown that equal pay will not happen on a voluntary basis, and we now need statutory equal pay audits. Equal pay would go a long way towards helping with child poverty.
As the Committee said, there is more to do, and its report outlines several recommendations that are well worthy of consideration if the target to halve child poverty by 2010 is to be met. I agree with its finding that we should consider the equalisation of child benefit for all children and families, as suggested by the hon. Member for Argyll and Bute (Mr. Reid), especially given the impact that that would have in lifting a further 30,000 children out of poverty. However, that prompts the eternal question of targeted benefits versus universal benefits. As we are all aware, everybody gets child benefit but it does not necessarily target resources in the best way. Contrary to what I have heard in this House several times recently, take-up of tax credits for families with children is higher than under any previous system of income-related support for in-work families, with take-up among those with incomes of less than £10,000 now at 97 per cent. in the UK, according to the Government’s figures. It may be that increasing tax credits would be the best way to tackle poverty by releasing resources to those who need them most.
Last week, the church and society council of the Church of Scotland met us in the House. The council has made proposals on tackling debt, focusing on the need to find alternatives to the high-interest doorstep lenders who often target families with young children. It calls for an effective, flexible alternative through the social fund and supports the Committee’s recommendation of empowering courts to fix a reasonable cap on interest rates, as in many other European countries. I know of other areas where such help has been extended through the voluntary sector by a crisis loan facility for priority debts paid through the local credit union. That has proved to be a very effective mechanism, and I would like the Government to give consideration to how it can be promoted.
We need to heed the Save the Children report, which shows that the poorest families pay £1,000 per year more for services because they do not have access to low-cost credit, fair banking or direct debit; and we are only too well aware of the extra costs of prepayment meters for fuel. I welcome the fact that Ofgem is considering that, and we all hope that this unfairness will be ended. We also need the restoration and expansion of free-to-use ATMs, not just the offers made in recent times by the very banks who removed them in the first place.
We must take seriously evidence from the Joseph Rowntree Foundation that the present system of uprating tax credits, benefits and allowances lags behind average incomes every year. That is reinforced by the Child Poverty Action Group’s view that the minimum wage, in-work tax credit and benefit support must be raised so that no child in a working family is left in poverty. Most of the charities have endorsed the Committee’s view that the tax and benefits system must, at a minimum, ensure that no one in full-time work is living in poverty. Almost half the children in poverty are in families in paid work. I welcome the pilots that will start in the autumn of the better off in work credit to ensure that everyone who has been claiming benefits for at least six months sees a gain from working of at least £25 per week. That is a modest measure, but it is a recognition that work, as the best route out of poverty, will be of benefit only if it is worth while working in the first place.
The Government have laid the foundation for the eradication of child poverty, and the direction of travel is now well established. However, I would like to raise with the Minister a couple of issues that have arisen in my constituency and are pertinent to the debate as well as to those living on a fixed income throughout the country.
First, I am grateful to Dr. Calum McCabe, one of our local GPs, who has brought to my attention a problem experienced by some of his patients in accessing benefits by phone. As we all know, many people on fixed incomes do not have landlines and instead use pay-as-you-go mobile phones. They may be more expensive in the long term but, like prepayment meters, they are used because they mean that people on fixed incomes do not run up bills. Many Government-run helplines—such as the ones for tax credits, benefits inquiries and the social fund—use numbers with the 0845 prefix that are assumed to be free or local-rate numbers. However, mobile network operators connect customers to the services at premium rates, with the result that low-income users who have no access to a landline incur disproportionate costs in accessing taxpayer-funded services.
I draw the Minister’s attention to early-day motion 1285, which has been signed by 65 hon. Members of all parties. It calls on the Government to bring in legislation so that the numbers are genuinely free to all users. It also asks the Government to look into providing free of charge at the point of use all essential Government-run helplines for which no alternative face-to-face service is provided.
Secondly, I want to refer to a constituent who lost her partner of 24 years in a tragic accident. They had two children, who are now aged seven and two. Although they were not married, they had been together since schooldays and their relationship outlasted many marriages. She sought financial help from the Government through the bereavement payment and the widow’s parent’s allowance. In a very blunt telephone call, she was informed that she had a very slim chance of success, as 99.6 per cent. of claims fail. She was told that, if she wished to proceed with the claim, she would be interviewed by two assessors. She would also have to furnish them with cards that showed that she and her partner had been related as husband and wife. Finally, three witnesses would be questioned about their belief that the couple were married.
It beggars belief that anyone should be subjected to such an insensitive, intrusive and discriminatory process at such a vulnerable time in her life.
A constituent of mine has been in exactly the same position and has experienced exactly the same treatment. The test that is applied was used in the past to establish whether a marriage under Scottish common law—that is, marriage
“by cohabitation, with habit and repute”.
It is nonsensical to use that as a test for a benefit. Will the hon. Lady join me in encouraging the Under-Secretary of State for Work and Pensions, the hon. Member for Stirling (Mrs. McGuire), to take an urgent look at that test? It is out of date, and it causes severe anguish and embarrassment to many constituents.
I agree with the hon. Gentleman. I was going to say that I am aware that only people in Scotland can apply for those benefits, thanks to the provisions of Scottish law. People in England cannot do so.
My constituent feels that a mockery has been made of her family, even though she and her partner worked all their lives and had no recourse to public funds. It is all very well to talk about marriage, but we all know that many couples live together. There are many different family forms in society today, and this debate is about addressing child poverty; it is not about making moral judgments about whether people are married or not. The problem that I have described has lasted a long time, and I do not expect the Minister to solve it today, although I hope that it can be addressed urgently. However, I shall seek the support of colleagues on all sides of the House to try to get the system changed.
The problem faced by my constituent illustrates how poverty affects people in different ways. It can happen to anyone at any time. People struck by poverty are treated differently, and their children suddenly become vulnerable. Their right to live as they choose can be undermined or taken away. That may seem a small matter in the grand scheme, but life is not all about money—it is also about dignity and respect. Those two qualities deserve more attention from the Government, as in different ways the lack of either can make vulnerable people poorer, whether they are adults or children.
Generally speaking, however, I believe that the Government have laid the right foundations for tackling poverty, both in this country and, thanks to the work carried out by the Department for International Development, around the world. Part of our core belief is that poverty is an enemy to be taken on and defeated wherever it can be found. I had intended to elaborate on that point, but as a colleague was pulled up earlier for straying too far from the subject, I shall not do so.
In the past five years, Scotland’s health spending has increased by 50 per cent. under Labour. Waiting times are down from 18 months to 18 weeks, and the number of deaths from heart disease has fallen by 30 per cent. With a new emphasis on prevention and a focus on community services, Scots are just as likely to be kept alive and healthy by the paramedic’s emergency treatment, the primary care worker who identifies high cholesterol, the teacher who gives a child the basics of a healthy diet, or Government legislation such as the smoking ban as they are by the skilled work of a surgeon.
Scotland has seen improved services for all, but with a focus on those who need them most. Underpinning all our policies on health is a clear understanding that good health needs good housing, good health needs good education, good health needs full employment and shared prosperity, and good health needs people to be lifted out of poverty. The good health of our children depends on the progress that we make on all those fronts. Year on year, we have invested in health. In fact, Scotland has been ahead of the United Kingdom in terms of health spend. But now, in the short time during which the Scottish National party has been in charge in Scotland, we are falling behind. The SNP’s increase in health spend is half that of Labour.
An issue that concerns me at present is the impact of the new report on national health service resource allocation in Scotland, which was produced by the NHSScotland resource allocation committee and is now with the Scottish Government. It proposes replacing the Arbuthnott index, which takes deprivation and poverty factors into account when determining resources, with a new formula that will not take unemployment rates into account as an indicator for the additional-needs element, with the result that in my area, Ayrshire and Arran, the NHS stands to lose £5 million in its annual allocation. That was challenged in evidence given to the committee by the Scottish directors of public health, who argued that unemployment rates were a relevant factor in themselves in the assessment of health needs in an area—not just for those who are unemployed, but as an indicator of additional need throughout the geographical area. They have been ignored.
The link between health and poverty cannot be taken for granted. Many of us remember how hard we had to fight for it to be recognised in the first place. We should not accept anything that dilutes that link when we still have a Scotland where twice as many children in poorer areas die in infancy or fall ill as do so in more affluent areas. There is already plenty of evidence that the SNP will talk a good game about the priority of health, but ultimately constitutional wrangling will always be their chief end. Good health, better housing and better care services are pawns in their game of picking fights with Westminster. In Scotland, Labour will have to take up again the role that it played in the Thatcher years, and be there for the NHS. We cannot assume that it will be safe in the hands of the SNP.
As many have said today, tackling poverty in Scotland requires a partnership between the United Kingdom Government, the Scottish Government, local authorities and the voluntary sector.
I do, but unfortunately they were saved at the expense of a new cancer care unit and two community health facilities which were supposed to bring health care much closer to the community. I certainly do not welcome that loss incurred by my constituents.
As was acknowledged in the Committee’s report, under a Labour leadership we have been able to make real advances in recent years, but with an SNP-led Scottish Government, that has already been put at risk and is starting to unravel in many places. Making a cut in business rates and giving nothing in return may appeal to the Tories as a sensible flagship policy, but it has not given me the sense of an SNP Government prioritising social justice and committed to eradicating poverty. Twinning that with proposals to freeze the council tax without a proper and serious strategy to ensure ongoing support for groups who rely on local government funding may also seem perfectly sensible to the Scottish Tories, but it puts at risk a very successful partnership between national and local government and the voluntary sector to tackle poverty.
Order. I hope that the hon. Lady will not go down that road. I have not heard too much on the specific subject of child poverty in the past few minutes of her speech. I hope that she will bear in mind the fact that other colleagues are anxious to participate in the debate.
I take your point, Mr. Deputy Speaker, and I shall try to be as quick as possible, so that other hon. Members may speak.
Councils in Scotland are already having to make cuts in budgets and services to balance the books, and such problems are worse for councils whose areas have high levels of poverty and population decline. They receive the lowest increase in core grant funding. I am talking about authorities such as East Ayrshire council.
I understand why councils have welcomed aspects of the concordat, for instance the reduction in ring-fencing, for which many of us have argued over the years. However, a settlement that cuts finance year on year and is some £400 million less than the Convention of Scottish Local Authorities estimated it required will inevitably mean that councils will have to preserve statutory services at the expense of other priority services that are not statutory—services such as welfare rights and debt advice, and services commissioned from the voluntary sector. Such services together provide vital anti-poverty work that complements the UK’s anti-poverty measures. Many of the most innovative projects are in that field—for example, providing support to credit unions, financial literacy activity and providing families with extra form-filling support.
Parts of my constituency need a major expansion of basic welfare rights and advice services, rather than for those services to be put under threat. For example, South Ayrshire’s welfare rights service have been cut, and what is left is under threat. That is hardly the way to ensure income maximisation.
My hon. Friend is listing some of the cuts that are occurring and will affect the most impoverished. Does she realise that just this week I have been contacted by the adult learning partnership in Scotland, which has been told that it is not going to be funded—
In conclusion, may I cite the introduction to “Scotland the Real Divide”, which was published 25 years ago? It states:
“Scotland’s poor are therefore not poor because they are Scottish; they are poor because, if they are not unemployed, they are in the wrong job, generation, sex or class”.
That publication was of course edited by the Prime Minister and the late Robin Cook. Our strength in achieving what we have already achieved in tackling child poverty and our confidence in our ability to achieve much more—ideally, our target of eliminating child poverty by 2020—is rooted in our values and our analysis. We do not tackle poverty, be it at home in Scotland, in the UK or on the world stage, as a by-product; we tackle it as a priority.
Order. The average length of Back-Bench speeches is running at 22 minutes. There is a limit on our time, and I believe that seven hon. Members are still seeking to catch my eye. If we go on at that rate, clearly many people will be disappointed. I hope, therefore, that hon. Members will hold to the forefront of their minds the fact that this debate is about child poverty.
I hear your words clearly, Mr. Deputy Speaker: this debate is about child poverty. I hope that my contribution will be brief, succinct and to the point.
We serve on a friendly Committee, under the good chairmanship of the hon. Member for Glasgow, Central (Mr. Sarwar), to whose work I would like to pay tribute. He does a good job, his approach is very inclusive and he is most kind to all Members, regardless of party or political persuasion. That is important to note.
I would like to say that it is a pleasure to be taking part in this debate—but I would much rather not be taking part in such a debate. Such a debate should no longer be necessary, just as debates about children sweeping chimneys need no longer occur. Those are things of the past, and I wish that child poverty, too, was a thing of the past.
Child poverty in Scotland, or in any European or first-world state, should be a thing of the past. Perhaps if international prestige were measured by the equity of society, or by low levels of child poverty, the nations that currently vie for influence on the world stage might be higher in the UNICEF table covering the well-being of children in rich countries. I refer, of course, to the United States of America and the United Kingdom, which prop up that table, just below some former eastern European bloc states. The Netherlands, Sweden and Denmark lead the table, incidentally.
The conclusions of the report by the Scottish Affairs Committee might be a good place to start. Progress has been made since 1997, and we all recognise and welcome that. Progress continues to be made, although its pace may be slowing. The report states, on page 29, that the 2010 target of lifting 50 per cent. of children out of poverty will be missed, even if the uptake of tax credits improves. We all know about the difficulty of ensuring that targeted benefits hit their target.
The first recommendation of the report shows concern because there is a slowdown in poverty reduction in the UK, but it should be noted that Scotland is doing a little better. However, much of that apparent success may well be attributable to the poorer baseline from which Scotland started. It is still notable that the rate of child poverty in Scotland is still higher than the average for the UK.
It is also clear that the main levers to address child poverty are held by the UK Government. That was emphasised by numerous witnesses to the Committee, who said that the UK Government held all the cards. Among those witnesses was Guy Palmer from the Joseph Rowntree Foundation, who said:
“The big policy levers are the non-devolved levers to do with tax and benefits.”
That was echoed by Joe Connolly from NCH, who said:
“It is not for the Scottish Executive, as it was known, but a UK issue.”
Nevertheless, the Government of Scotland, not content to wait for the adjustments of a lumbering ship of state to deal with the matter, have their own plans to tackle poverty, inequality and deprivation. To be fair to the previous two-party Government in Scotland, they did much the same—or at least tried to. Governments everywhere are united in efforts to reduce child poverty, which is a blight on any society, especially Scottish society. That more than 20 per cent., and perhaps even 25 per cent., of children live in poverty is surely a challenge for us all, regardless of political persuasion and regardless of where we live. This is a problem for nations throughout western Europe.
Perhaps if we all believed in reincarnation, so that we would have a one in four chance of being caught up in poverty in the next life, we might make more urgent and pressing efforts to address it. I shall leave that for others to ponder—
That is true.
The Scottish Government’s aim, as part of their economic strategy, is to raise the proportion of income earned by the bottom 30 per cent. by 2017. That is a radical step and would put Scotland at the forefront of efforts to tackle poverty and inequality.
The UNICEF table might provide some help to the hon. Gentleman. Ireland, which has become independent from the United Kingdom, is in the top 10, whereas the United Kingdom is in 21st place out of 21. Perhaps independence would be a useful and successful tool in fighting child poverty.
As I was saying, the aim is to increase the proportion of income earned by the bottom 30 per cent. We could glibly say that one of the most important factors in fighting poverty is wealth. The relationship between the two came up in a book that was given to me by a lecturer in public health at Aberdeen university, “The Health of Nations: Why Inequality is Harmful to Your Health” by Ichiro Kawachi and Bruce P. Kennedy. The book demonstrates what we all instinctively know: generally, the greater the income inequalities in any country, the worse the health expectancy and life expectancy are in that country. Those problems are, of course, results of poverty.
While the Scottish Government are aware of the need to increase GDP per capita to that of other countries similar to Scotland, we are also aware that the creation and sharing of wealth need to go hand in hand. If we are to have a society at peace with itself, with optimal health outcomes and the lowest possible poverty rates, that is a laudable aim.
In my view, we will need powers additional to those that Scotland independently controls. That means that more powers would need to be devolved from Westminster to Holyrood. I am sure that the national conversation and the Calman commission will both be useful to that end. Perhaps a laudable aim for those two bodies might be to identify what new powers would help Scotland to tackle its terrible levels of child poverty, which, we have to remember, are above the UK average, while the UK is bottom of 21 nations in the UNICEF table.
We need to look, at course, at the devolved levers. I think that the Scottish Government are using those. These are the slow-burn issues: health, education, skills and housing. Many of the witnesses who appeared before the Committee told us that the levers controlled by the Department for Work and Pensions were the most instrumental in tackling levels of child poverty.
Before my hon. Friend moves on to the subject of the DWP, does he agree that the decision by the new Scottish Government to start a council house building programme will go a long way to tackling the housing problem that is at the root of such poverty, as there is a severe shortage of affordable housing, especially for rent, in Scotland?
My hon. Friend is correct. When I taught on the Isle of Mull in the mid-1990s, housing was a particular problem. Children oscillated between various abodes during the year, spending six months in a winter let and then, when the summer season came, moving to a caravan for the summer. I hope that that situation will now come to an end. This subject hits all parties. We can easily throw insults around and say that this lot or that lot are to blame, but such things happen, and we have to do something about them.
Poverty is a big issue. In this speech, I can only throw a few shafts of light on it, when it requires floodlights—[Interruption.] Cruelly, the Minister of State, Scotland Office, tells me that I am not even doing that. I strive to do it. Charities, PhDs and professors are working on the subject, but the Scottish Affairs Committee has played its part. It has made at least 20 recommendations, which have been welcomed by many bodies. Barnado’s Scotland estimates that 250,000 children live in poverty and 100,000 live in fuel poverty in Scotland. I shall return to that point. The Child Poverty Action Group in Scotland, like many other groups, has provided an excellent brief for MPs that draws attention to some of the 20 recommendations in the Committee’s report.
Recommendation 6 says that
“the tax and benefits system must, at a minimum, ensure that no-one in full time work is living in poverty”.
A quarter of children living in poverty have an adult in the family who is in full-time work. The Committee suggested that the minimum wage and tax credits should be raised to address that problem.
That reminds me of the evidence given to the Committee on 16 January 2007, 15 months ago, by Professor John Veit-Wilson of Newcastle university, who talked about the working poor. He said that, unfortunately, the UK leads Europe in the average percentage of people leaving low-quality jobs to go back into other low-quality jobs. The working poor remain the working poor. However, he also pointed out—this may help the hon. Member for Paisley and Renfrewshire, North (Jim Sheridan) with his question about independence—that Ireland is at the opposite end of the table. It is in the very fortunate position of having the highest proportion of people moving from low-quality jobs into high-quality jobs. It is important that we recognise the failures in our society and accept that there are better ways of dealing with the problem. Ireland clearly has some ability to improve things that Scotland does not have.
The next recommendation in the report is that we should be careful about forcing people into work. Recommendation 10 highlights the fact that the parents pushed into work could be entering low-paid work. They could go from low-paid job to low-paid job to low-paid job. Although work is of course an important route out of poverty, we must ensure that people do not leave socially valuable work. The report points out that much of the work that many people do in the home is not recognised. The work of carers and those who look after children is not fully recognised, and we should be careful about forcing people into work of low economic value.
Recommendation 12 calls for more resources. The Child Poverty Action Group in Scotland welcomes the £1 billion extra from the Chancellor, but it points out that this is only a quarter of what is needed. If we consider that we are fighting £1 billion a year wars in Iraq and in Afghanistan, perhaps we should take another look at our priorities.
Recommendation 15 is important, and offers a step that the Government can manage relatively easily. The hon. Member for Ayr, Carrick and Cumnock (Sandra Osborne) picked up on this point, too. The equalisation of child benefit would remove the discrimination against larger families and would make sure that the state values all children the same. Child benefit should be £18.80 for all children, not £18.80 for the oldest child and £12.55 for subsequent children.
As I said, I want to touch on fuel poverty and how it impacts on one in 10 children. The memorandum submitted by the Highland council to the Committee in October 2006 marked out the low wages in rural economies and, as the Member representing Na h-Eileanan an Iar, I particularly recognise the higher costs of rural living. The current Scottish Government are trying to help with transport costs on the islands in my constituency through the road equivalent tariff, and a pilot project extended this to Coll and Tiree. However, as Edinburgh gives with one hand, London takes away with the other: the price of diesel was £1.34 a litre only a couple of days ago, and it could be higher now. The proportion of tax paid on fuel is higher in my constituency than in probably any other in the land.
The hon. Member for Orkney and Shetland (Mr. Carmichael) touched on an important point when he said that the cost of central heating oil was rocketing for his constituents. The position is the same for my constituents, and the percentage of household income spent on fuel oil and other fuels, and the distances that people have to travel, must mean that far more people are being plunged into poverty. As has been said, it is sometimes not worth while for people to take a job if they have to travel 20 or 30 miles in what may well be a poor third-hand car, and face the costs associated with that travel.
Perhaps we could throw party arguments to one side and aim to get child well-being higher on the agenda; our position in the UNICEF table should be a lot higher. Interestingly, in “The Health of Nations”, the authors point out a fact that surprised me. The Swedish Government face the most unequal income distribution pre-tax, but the most equal post-tax. As one of the contributors to the Committee’s report pointed out, before the first world war a commentator said that where a thinking rich man might see a problem of poverty, a thinking poor man might see a problem of wealth.
I trust that the hon. Member for Na h-Eileanan an Iar (Mr. MacNeil) will forgive me if I do not follow up on exactly the points that he raised, particularly as I have been encouraged to make a shorter speech than most hon. Members have made so far in the debate.
I sincerely congratulate my hon. Friend the Member for Glasgow, Central (Mr. Sarwar), who chairs the Scottish Affairs Committee, on presenting his report, and on his excellent speech. In order to avoid your strictures, Mr. Deputy Speaker, and to try to keep within the guidelines of our debate, I will base my speech on paragraph 42 of the Committee’s third report, which says:
“Our research, conducted through the unique 1 in 4 poll, shows that social injustice impacts on families living with disability in many ways. They experience poverty of income, poverty of choice and poverty of opportunity.”
It then says, in bold:
“The Scottish Executive should do more to ensure that resources reach disabled families, who are disproportionately affected by poverty.”
I welcome that recommendation, and that is why I want to concentrate exclusively on those views and on the issue of children and disability in Scotland.
The focus on disability is real and necessary. In the Leonard Cheshire report, “Disability Poverty in the UK”, it was confirmed that people who are disabled are twice as likely to live in poverty as those who are not disabled. The extra cost of having a disability can be a huge challenge. Some estimates indicate that disabled families have to pay about 24 to 35 per cent. in addition to their normal spending. Yesterday, when I spoke to representatives of Contact a Family in Edinburgh, they reminded me—my hon. Friend the Member for Glasgow, Central made this point—that debt is a much bigger problem for such families, who are four times more likely than other families to owe in excess of £10,000. Only 16 per cent. of mothers of disabled kids are able to work.
Behind all that is the realisation that in Scotland, as elsewhere in the United Kingdom, the population of disabled people, and therefore disabled children, is growing, so even if we are to keep public services at current standards, it is vital to increase resources. That was one of the reasons why I was delighted to be invited by my right hon. Friend the Secretary of State for Children, Schools and Families to chair a review that dealt exclusively with disabled children and their families, to which all parties contributed, as I have already acknowledged; we acted in an all-party spirit. My colleagues will understand what I mean when I say that what was important was not so much the views of Members of Parliament, but the evidence that people gave in our hearings in the House.
If Parliament is to mean anything, no people in the United Kingdom, whether from Scotland, Wales, England or Northern Ireland, should ignore the views of the parents who came to see us—parents who might be dealing with disabled children 24 hours a day, seven days a week—or of the disabled children who came and spoke about the real issues that they have to face daily.
I do not apologise for being passionate about the subject. I have been accused by a list MSP of scaremongering, but I genuinely do not want to make the issue a political football. I think that I am entitled to claim that I have tried to pursue disabled people’s rights for a very long time in this House, and I will not change now. When we had evidence, as we did then, that was overwhelming, extremely moving and touching, about the need for much, much more support than we were giving, we were entitled to listen. When, in the event, we made our recommendations about short breaks, the crucial problem of transition when young people leave the educational system and go—sometimes we know not where—and the need for support to complement what the health service can provide, those issues became very real.
I was therefore delighted when, several months later, the Government issued the document, “Aiming high for disabled children: better support for families” and not only responded to the priorities that we as an all-party group set, based on what we had heard, but announced that they were making an additional allocation of £340 million to deal with most of the suggestions that we made.
I want to be clear. The Government did not accept everything that we wanted. Some of the recommendations —for example, on fuel poverty—have not yet been endorsed, but the vital issue is the £340 million and what happened in Scotland. Because of the Barnett formula, the contribution to Scotland amounted to £34 million. We expected that to be spent on the issues that we identified.
I thank the right hon. Gentleman for giving way. I have great respect for him and his work on disabled people. I have personal knowledge of some of that. I will not accuse him of scaremongering, but he and some of his colleagues give the impression that the money has somehow disappeared, when it has not. Against the backdrop of tight financial settlement, the Scottish Government increased council funding by 12.6 per cent. above the spending review figure to more than the £34 million. That money did go to local authorities. I am sure the right hon. Gentleman would agree that local authorities must have the opportunity of spending the money in the best way possible to help disabled families in their areas.
I am genuinely glad that the hon. Gentleman made that point. I tell him in all candour, and I hope humility, that he is absolutely wrong, and I hope to persuade him.
The £34 million was never allocated exclusively for local authorities, important though many of their services are. In England, Wales and Northern Ireland the money is being spent by local authorities, but also by the NHS and other agencies. How could it be otherwise, in view of what we were told in the review? To say that the money has been given to the local authorities, with no accountability whatever, is entirely inconsistent with the recommendations that we made. [Interruption.]
I shall deal, if hon. Gentlemen allow me, with the response that has come from the First Minister. Following the debate in Westminster Hall—Scottish National party Members would have been welcome to come and participate, but they did not—I wrote to the First Minister. I wrote in the knowledge that Mr. Ingram, the Minister for Children and Early Years in the Scottish Executive, had written to my hon. Friend the Member for Dumfries and Galloway (Mr. Brown).
I have to say that, frankly, that is the conclusion that the Secretary of State for Children, Schools and Families has reached and expressed in the House. [Interruption.] Instead of heckling when they have not done their homework, Scottish National party Members should realise how much damage the issue is doing to their colleagues in Holyrood and to the whole process of devolution.
I want to be fair, as I hope I always am. I thought that something was going awry with the whole issue and knew that the money was not allocated exclusively for local government, but I accepted the argument on ring-fencing. The report that came out under my chairmanship said that if ring-fencing was not acceptable, we would welcome a mechanism for identifying where the money had gone. That is all that we asked for.
On 5 February, following our debate in Westminster Hall, I wrote to the First Minister. I hope that the House will recognise the tone in which I tried to conduct the correspondence. I wrote:
“Obviously I have given this matter a great deal of thought on the basis of my having said on a number of occasions that I have no wish to see such an important issue becoming a game of ‘political football’.
I am writing because I am moving towards the conclusion—encouraged by Mr. Ingram’s letter”—
that is, the letter written to my hon. Friend the Member for Dumfries and Galloway—
“that there is a substantial misunderstanding relating to the Treasury’s intentions as to the impact on disabled children and their families in Scotland.”
Six weeks later, I received a reply from the First Minister, thanking me for my letter. He went on to rehearse the arguments that we have heard this afternoon, and encapsulated them in this sentence:
“Our Concordat with the Convention of Scottish Local Authorities…includes a commitment to make progress towards delivering an extra 10,000 respite weeks per year. This is for all care groups, including disabled children.”
He then declined the opportunity to have a meeting.
Scottish National party Members want poverty to be challenged, especially for children in Scotland. Do they really believe that I was such a threat to the First Minister that we could not have had a meeting? The right hon. Member for Banff and Buchan (Mr. Salmond) talks about money going to local authorities, but we do not know how it will be spent; it could be used for repairing roads. I would have asked him where the answer was to our recommendations about the health service, including about children who suffer from brain damage.
I congratulate the right hon. Gentleman on the tenacious way in which he has gone about dealing with this issue. I do not want to accuse him of scaremongering and giving the wrong impression.
We all accept that the money has not been lost, but passed on to local authorities. Why does the right hon. Gentleman not trust the local authorities to make the right decisions on such vital issues on behalf of their communities? We trust our councillors. Does he not trust his?
I do trust local authorities. As a former provost and former president of the Convention of Scottish Local Authorities, I have every reason to do so. I urge Scottish National party Members to read our report; they clearly have not. It acknowledges that local authorities offered excellent examples of best practice. However, in summary, that money was never meant to go exclusively to local authorities. Why are we not being told about the non-provision of extra funding to the health service? I had representations from Scottish organisations that deal with specific disability needs. There are children who need wheelchairs, provided by the NHS, that are adapted for their purposes. Why are they able to feel that more money is being devoted to such things in every part of the United Kingdom other than Scotland?
On the link between poverty and wheelchair use, the chairman of one of the wheelchair users campaign groups lives in my constituency, and he has a daughter with muscular dystrophy. He wrote to me recently to say that he is deeply concerned that resources are inadequate, because families who need specialist wheelchairs have to find extra money from their own limited budget. I can pass that letter on to my right hon. Friend; it shows that what he is saying is perfectly accurate. Money was intended for such users and it is not going to the health service.
Yes, undoubtedly. Our report said that they happen throughout the United Kingdom, which is why we argued that there had to be additional funding and resources, and in the absence of ring-fencing, there should be accountability about where the money is going. That is happening in places other than Scotland. That is my argument.
I urge hon. Members opposite to think again; I do not think that the First Minister would lose out if he had a meeting with me in which we discussed our report and what we hope to achieve. One of the reasons why we have to argue to ensure that the money is spent where it is meant to be spent—local government, the health service and other agencies—is that more funding is being made available. On 28 April, the Minister of State, Department of Health, my hon. Friend the Member for Exeter (Mr. Bradshaw), announced an additional 5.5 per cent. increase in funding for care trusts, which will be spent on disabled children—palliative care, community equipment, short breaks and wheelchair services for those children.
People everywhere except Scotland realise that the report we produced was sufficient to persuade the Government to give extra funding and to ensure that it went to disabled children and their families—that remains a priority. We find it absolutely unacceptable if people fail to consider the arguments, not just the views of Members of Parliament, while knowing that money is not going where it was meant to go—only to local councils, with no accountability. I urge them not to do that. The challenge of poverty among children will remain, and on these Benches, we shall fight and fight again until we remove it.
It is genuinely a pleasure to follow the right hon. Member for Coatbridge, Chryston and Bellshill (Mr. Clarke), who made a reasoned and knowledgeable contribution. It is fair to say that as long as the right hon. Gentleman remains in this House, people with disabilities will always have a champion.
On the right hon. Gentleman’s latter point, I make only one observation. Ultimately, the issue will be resolved when disabled people see the services with which they are provided in Scotland. However, there is a larger point at issue, which is a classic illustration of the need to revisit the funding formula for the Scottish Parliament and of the need to give the Scottish Parliament greater control over the raising of its own budget. The Government in Westminster control finances and have a deliberate and entirely laudable aim, with a ring-fenced policy, but there is no guarantee of how money will be spent when it goes to Scotland. That is why we need to examine the wider issue, and the right hon. Gentleman has done us a service by giving a good example of the work that needs to be done by the Calman commission.
I am delighted once again to be a member of the Select Committee on Scottish Affairs. I was a member in the first Parliament in which I served and I have just rejoined. I was not a member when the Committee took evidence for the report but I joined it just before the report’s publication and I could hardly have improved on its terms. I congratulate the hon. Member for Glasgow, Central (Mr. Sarwar), who is an excellent Committee Chairman, on focusing the Committee’s work in this Parliament on poverty in Scotland. It is an exemplar of how such a Committee can be made to work post-devolution and I commend him for his efforts.
The hon. Member for Na h-Eileanan an Iar (Mr. MacNeil) cited a couple of statistics on child poverty in Scotland that especially struck me: 250,000 children live in poverty and 100,000 children are in fuel poverty. I do not make a partisan point. Anyone who is a citizen of one of the world’s richest nations should find that a source of profound shame and embarrassment. That is why the work of the Committee, the Government in Westminster, the Government in Edinburgh, local authorities, non-governmental organisations and private business is crucial in tackling that scourge.
I congratulate the Government on their progress since 1997. They have put a focus that previously did not exist on reducing child poverty, and there has been some benefit. Like many who gave evidence to the Committee, I am concerned that progress has stalled. If we approach the subject on a less partisan basis, acknowledging that stalling becomes less difficult.
The danger is that we are left with the very poorest—what might, if one were pessimistic, be perceived as an irreducible core. That is why partnership working, focusing on so many different levels, is supremely important. Let me pick up on a few matters for which special effort is needed.
The hon. Member for Glasgow, North-West (John Robertson), who is not in his place, identified education. He is right that education knows no equal as a driver for social mobility. As the hon. Member for Ayr, Carrick and Cumnock (Sandra Osborne) said, work and training constitute other opportunities for getting out of poverty. As my hon. Friend the Member for Argyll and Bute (Mr. Reid) said, transport is also important. Transport opens up, especially for young people and those in rural communities, a range of opportunities for education, social inclusion and developing talents, which would otherwise be denied them.
I hope that, by the time the Minister responds, he will have had an opportunity to get a reply to the question that I asked the Under-Secretary of State for Work and Pensions, the hon. Member for Stirling (Mrs. McGuire). What assessment has the Department for Work and Pensions made of the impact of the remarkable recent increases in the price of basic foodstuffs and fuel? Many people in rural communities rely on a private car for transport and need fuel for that as well as for heating their homes.
I draw hon. Members’ attention to conclusion 24 of the report. It states:
“We believe that rural poverty presents its own challenges, which will not be solved by an approach tailored to the small pockets of deprivation characteristic of urban poverty. It is vital that the Government’s anti-poverty policies are subject to ‘rural-proofing’. Witnesses have suggested that the establishment of a Commission for Rural Scotland might be a way to give rural communities a stronger, unified voice and we hope that the Government and the Scottish Executive will consider this proposal. Greater investment in outreach is needed to ensure that geographically dispersed communities have equal access to services”.
That is a cause close to my heart and that of my constituents. In many ways, poverty in urban areas is much easier to identify. One can sometimes identify urban areas that have a problem with low income and social deprivation just by walking around the streets. Rural areas often do not have the same critical mass of population and poverty is not so obvious. One might see a bonnie wee cottage with a well-kept front garden, but behind the front door one is still as likely to find two or even three generations living in a house that was built for one family. That is a graphic illustration of the lack of affordable social housing that blights Scotland.
Let me say a few words about tax credits. There is a rural perspective to tax credits, too. The Government place a great deal of reliance on tax credits, but I am sure that every hon. Member has encountered the same problem as I have: the hardship suffered by those who can least afford it that is caused by tax credits being overpaid and the overpayments being reclaimed. Tax credits seem to work best for people who work for a defined 36 or 40 hour week, with little overtime or fluctuations in their family circumstances. As soon as the family unit breaks up because of a separation or somebody gets a lot of overtime and their income increases, problems arise. However, a lot of people in areas such as the one that I represent are self-employed. Their incomes fluctuate throughout the year; indeed, their incomes for the previous financial year are often not known until the next financial year. Tax credits can hardly cope with that, which causes financial hardship for those least able to deal with it.
I am under some time pressure, so I will not take the hon. Gentleman’s intervention.
There is another phenomenon experienced in my constituency, whereby a number of people have two or three part-time jobs to make up one equivalent full-time job or are in seasonal employment, making a lot of money in the summer months but not so much in the rest of the year. They need the help given by the tax credits system, but it does not seem to be able to cope with their situation. The Minister pulls a face—perhaps he does not agree—but that is my experience as a constituency Member of Parliament. We have a higher number of people in self-employment and one of the lowest wage economies in Scotland, but we also have a low level of unemployment. I fully accept that those cases are not easy to deal with. However, because of the highly bureaucratic nature of the tax credits system and the inefficient way in which it has been administered, those people are being hurt most.
If I could jump to the Minister’s aid, I know that her son is a share fisherman in Barra. As you will be aware, share fishermen face particular difficulties with tax credits, because of the seasonal nature of their work and changing catches. Fishermen frequently come to me with the difficulties that the hon. Gentleman is describing.
I am sure that you are indeed acquainted, as I am, with the problems that share fisherman face, Mr. Deputy Speaker.
The Government ought to be focusing on two opportunities: the equalisation of child benefit, which has been referred to, and the introduction of seasonal grants, which, Save the Children UK predicts, would lift an extra 440,000 children out of poverty and would go a long way to ensuring that that irreducible core, as some might see it, can be tackled.
Given the time constraints, I shall simply refer to some of the points that I was going to make, which have been covered by many speakers already. I was going to discuss in detail the Government’s successes in alleviating child poverty. The increase in child benefit has been mentioned, as have the introduction of tax credits and the fact that they have gone up ahead of inflation. We have also heard that we have got more lone parents—indeed, more parents—into work. Those measures are all important for the reduction of child poverty. For most people, work will be the main route out of poverty. If we do not get people of working age into work, the poverty that they and their children experience will continue for generations.
I have been slightly disappointed by some of the comments made by SNP Members. A simplistic view has been taken of the consequences of child poverty and the measures that are needed to alleviate it. Child poverty is not just about benefits, although they are important. The issue is much more complex than that. My hon. Friend the Member for Ayr, Carrick and Cumnock (Sandra Osborne) amply illustrated the interrelationships and complexities that can often gather in a family’s life to make the poverty that they experience long and enduring.
No single policy, whether from Westminster, Holyrood or local government, will alleviate child poverty. It will be a combination of such policies, working together, that will lift people out of poverty. So far, the Government have been very effective in lifting children out of poverty, although we know that those efforts will have to go further. As has been mentioned already, Scotland has done better than the UK, proportionately, in lifting people out of poverty. The figure for the UK is 600,000, whereas for Scotland it is 90,000, which is far better, proportionately, in relation to Scotland’s population.
If the Government’s success is illustrated by any one thing, it is the fact that all political parties now say that they want to end not only child poverty but poverty. Things were not always that way. Poverty was not on the political agenda until the Labour Government put it there. Perhaps it is a mark of their success in engaging with the general population that poverty is now seen as something that needs to be tackled and as a measure of the Government’s success. It is easy to say that we should end poverty and child poverty, but saying it does not wish it away. Warm words are easy to say, and we have heard warm words this afternoon, but whether a political party is able to back up its words will be illustrated by its actions—by their actions shall we know them.
What action have we seen from the SNP in the year since it took power in Holyrood and in Aberdeen city council, both of which have been mentioned this afternoon? Holyrood and local government both have a role to play in reducing poverty. We know, from all the reports that have been done, that early intervention is incredibly important to the alleviation of child poverty. We need to reach children at a young enough age and work with their families. In England, in particular—but, not quite so obviously in Scotland, unfortunately—we have seen from Sure Start that early intervention clearly works. That involves making sure that children have nursery places, which is why I am so disappointed that the nursery places for vulnerable two-year-olds in Aberdeen have been scrapped under the SNP and Liberals.
It is not just a matter of nursery places, but of good local schooling, so I am sure that you, Mr. Deputy Speaker, can imagine my disappointment when only yesterday the SNP and Liberals on Aberdeen city council voted to close Victoria Road primary school which is in the most deprived part of my constituency. That school is a well loved part of the community, and parents and children have mounted a campaign to save it, but it has fallen on the deaf ears of the Scottish National and Liberal councillors who have hard-heartedly said that the school has to close by August. We are trying to tackle child poverty, but that will not help the children in my constituency.
Order. We really do not want a battle of this kind going on if we can help it. We do not want to talk more about education than child poverty either, although I understand that the two are related.
Thank you, Mr. Deputy Speaker.
Much of this afternoon’s discussion has been based on the report of the Scottish Affairs Committee, but I am sure its Chairman will not mind my mentioning that a month later a report was published by the Work and Pensions Committee on which I sit. It was called, “The best start in life? Alleviating deprivation, improving social mobility and eradicating child poverty” and it looked at the issues across the whole of the UK. What came out clearly in our report was the close correlation between poverty and disability. My right hon. Friend the Member for Coatbridge, Chryston and Bellshill (Mr. Clarke) has already mentioned that, and there is indeed such a correlation. People living in households in which there is a disabled adult or disabled child are more likely to be living in poverty than people living in households without disability, so what is done to provide services for adult disabled people will have a direct relationship with the poverty levels experienced by the children of that family.
Once again, Mr. Deputy Speaker, you can imagine how upset I was to discover that £27 million was being cut from the SNP-Lib Dem Aberdeen city council’s budget of 14 February in what is now known in the city as the Valentine’s day massacre. That might have something to do with the disappearance of the money that my right hon. Friend the Member for Coatbridge, Chryston and Bellshill talked about. Included in those £27 million of cuts were services to disabled adults, so they will have an impact on the children in those families and may well make child poverty in Aberdeen worse.
It has turned out to be terribly difficult for us to find out exactly where all the figures came from. Only four weeks after the budget was passed were we able to work out the figures on the various lines in it. Given that the Liberal Democrats—and, indeed, the SNP—did not propose an alternative Budget to the one presently going through the House, it would have been foolhardy indeed if the Labour group on Aberdeen city council had proposed an alternative budget when we could not even find out what the figures were. The figures are so bad that the Accounts Commission is about to hold a public inquiry in Aberdeen in two weeks’ time to find out what has gone so seriously wrong with the council’s finances. [Interruption.] If the Accounts Commission cannot work out exactly what has gone on, it shows that—[Interruption.]
Order. We cannot have all these sedentary remarks being made across the Chamber, as it really hampers the debate.
Thank you, Mr. Deputy Speaker. I suspect that I am getting off the subject as well, so I shall move back to the issue of child poverty.
I was never among those politicians who have said this afternoon that they advocated the removal of ring-fencing. I always thought that ring-fencing was a perfectly legitimate thing for central Government to do when disbursing funds for particular projects or policy areas. I am very disappointed that the SNP Administration in Holyrood have removed ring-fencing, because, as we have seen in Aberdeen, services for the vulnerable and disabled are the first to get cut when there is any kind of budgetary pressure, as there obviously has been.
Order. That is barely related to the topic in question.
Indeed, Mr. Deputy Speaker, and those with children will have been compensated by the child tax credit. If only such people were in work and anywhere near paying the tax rate, they would have an income far in excess of their current one.
I want to touch briefly on another aspect of money from Westminster going into a black hole, and ask the Minister to look into the matter. In Aberdeen, individualised budgets and something called “in control” have been proposed for disabled people. Aberdeen is the only local authority in Scotland going down that route, but the programme has begun to be rolled out across local authorities in England, where half a billion pounds has been made available to local authorities for implementation. The Barnett consequential of half a billion pounds is £55 million; I can only assume that that £55 million has gone into the Scottish block grant—we know that lots of money has, because the Scottish block grant has more than doubled in size from 1999 to 2008.
That £55 million is not being used for the purposes for which it was allocated in England and Wales. Before SNP Members start jumping up and down, I accept that it is up to the Scottish Executive to decide how to disburse the block grant, but that money is specifically geared to helping disabled people to manage their own budgets and perhaps assist with their social care. As Aberdeen is the only Scottish council that has gone down that route, it is interesting that it has not had access to any of that money; if it had, it might help to fill some of its £25 million gap in funding. Perhaps the Minister can look into that new issue.
Although the Labour Government, working in consort with the Labour Executive in Holyrood, made worthwhile strides in reducing child poverty, what has happened in the past year? On the evidence of my local authority and what the SNP has done in Holyrood, if only the warm words were followed by actions, we would not be where we are. Actions to alleviate child poverty have been lacking, and many of the actions and policies pursued by the SNP have been to the detriment of those living in poverty. My fear is that instead of the child poverty figures continuing to come down, they might go into reverse and go up. I hope not, because we are talking about vulnerable individuals who deserve our help.
As always, it is a pleasure to follow the hon. Member for Aberdeen, South (Miss Begg), who turns to consistent and familiar themes. SNP Members are going to start dedicating a song to her, “The Fairy Tale of Aberdeen”. It is a pleasure to take part in the debate.
Given that the hon. Gentleman has made about a million interventions, I am surprised that he does not want to take one. He accuses my hon. Friend the Member for Aberdeen, South (Miss Begg) of telling a fairy tale. In that case, why does he think that the local Aberdeen newspaper, which is no friend to my party, plastered all over its front page on the day that his party put through its budget, “Will the last person to leave Aberdeen please put out the lights”? Is the local newspaper perpetuating a fairy tale too?
I cannot say that I am grateful for the Minister’s intervention, which is the usual pile of rubbish that we have consistently heard on this issue. We have been here again and again. The fairytale of Aberdeen has several choruses and verses, and he has just added a further verse.
It is good to take part in this debate, and particularly good to be able to discuss the report by the Scottish Affairs Committee, chaired by the hon. Member for Glasgow, Central (Mr. Sarwar). When I hear all the references to his fine chairmanship of that Committee, I sometimes wish that I could experience it, but I guess that my hon. Friend the Member for Na h-Eileanan an Iar (Mr. MacNeil) is in that position for us just now.
It would be churlish of me not to say that yes, of course, the situation concerning child poverty has improved since the election of a Labour Government in 1997. There is absolutely no doubt about that, and it would be foolish to try to pretend otherwise. However, we should look at what they inherited—the scorched earth policies of the Conservatives. Even Attila the Hun wearing a red rosette would have had to have improved on the situation that new Labour inherited when it took over from the Tories and their disastrous policies on employment and poverty. We are still in a situation that leaves 18 per cent. of our population in relative poverty and 130,000 Scottish children in absolute poverty. Worse than that, Save the Children reckons that some 90,000 Scottish children are still in what is regarded as severe poverty. After 11 years of a Labour Government, that is not good enough. We have to do much more to tackle this, the most pernicious of our social problems.
I remember those days in 1997. I remember all those warm words—the almost missionary zeal with which the Labour party was going to tackle child poverty. We heard fantastic statements from the former First Minister—the late, great Donald Dewar—about what he was going to do. Child poverty was to be halved by 2010 and major targets were to be taken forward to deal with it.
Unfortunately, all that the SNP Government can do is deal with the symptoms of child poverty—the cure lies in the powers and mechanisms that unfortunately rest with this place. If the hon. Gentleman wants to join me in a campaign to have those powers repatriated, I would welcome him as a new recruit.
I remember all the warm words about how new Labour was going to approach this. If I had not known that shower better, I would almost have been carried away by it myself. I was prepared to be dazzled, knocked out and totally impressed by what they were going to do. It has not quite worked out like that, and now we can see that there has been disappointment about what this Government have achieved. The promise to eradicate child poverty within 20 years will not be met, and the goal to halve it by 2012 has more or less been shelved.
Another key commitment from those early days was to reduce the number of children in poverty by at least a quarter by 2004. That target has not been met. I have seen the figures. There was a reduction in child poverty between 1998 and 1999, and again between 2004 and 2005. However, figures released by the Department for Work and Pensions suggest that there was an increase in child poverty in 2004-05 and 2005-06. This year, there will be progress in dealing with child poverty because in their Budget the Government committed to putting £1 billion of extra spending into areas such as child benefit and tax credit. I welcome that. However, that figure is completely inadequate to meet the targets and goals. It is reckoned that £3 billion-worth of investment—
I can see that the hon. Gentleman cares about child poverty. The reduction in prescription charges from £6 to 80p, which will benefit almost every Scottish Member of Parliament and councillor, will cost almost £100 million. Could a fraction of that have been used for disabled people, making a big difference to their quality of life?
I am very disappointed by the hon. Gentleman’s intervention. I hope that he is not suggesting that there is no place for universal benefits. The scheme has been welcomed by practically everyone in Scotland, and he should do the same.
It will cost £3 billion to get the Government back on course to halve child poverty by 2010, but that figure needs to be put into perspective. It is one third of the £9 billion that the Government will spend on the infrastructure for the Olympic games in London. This week, The Sunday Times published its “Rich List”, and it shows that the wealthiest 1,000 people have seen their income quadruple under new Labour. Even under the brief premiership of the current Prime Minister, their fortunes have soared by a massive 15 per cent.—just when the financial squeeze kicks in for the rest of the community, with faltering house prices and people in poverty being hit especially badly.
The abandonment of the 10p tax rate represents an appalling attack on the poor. Labour Members should be thoroughly ashamed of themselves. The Government have proposed various spurious concessions, but I have no clue as to how they will get around the problem. I have seen a ridiculous suggestion that the winter fuel allowance could be used to compensate for the loss of the 10p starting rate of tax. It is totally ridiculous, and there will be a massive impact on the poorest in our community.
The cost of child poverty to Scotland is absolutely massive. The Scottish Government have estimated it at between £.5 billion and £1.75 billion, but we know that, in terms of its impact on our society, the cost is almost incalculable. It will lead to poor levels of health and educational attainment, and the lost potential of every Scottish child who is in poverty. The Scottish Government produced a well-researched paper on child poverty in Scotland. It concluded:
“The savings from ending child poverty are potentially of a similar order of magnitude as the expenditure required to do so.”
That is the true economics of poverty. It shows that, if we were prepared to apply the resources, we could really start to deal with it.
What are Labour Members of the Scottish Parliament doing while the Scottish Government get on with tackling and challenging child poverty? They had an opportunity to debate the problem in the Communities Committee, but they preferred to talk about golf courses. That shows what their priority for Scotland is. It is an absolute disgrace, and they should be ashamed.
It is a pity that the hon. Member for Lancaster and Wyre (Mr. Wallace) is no longer present, as we could have recruited him to the campaign. We can deal only with the symptoms: it is up to the Government in Westminster to resolve the problem. They have the powers but, if they are not going to use them, they should get out of the way and give them to the Scottish Parliament so that we can get on with dealing with what is a very real problem.
Does the hon. Gentleman accept that, in my speech, I said that child poverty is not a matter for the Westminster Government alone? I said that we had to work in partnership with the devolved Administrations, charities, voluntary organisations and business across Scotland. That is how we will alleviate poverty, and the tone of the hon. Gentleman’s last few words are at odds with that approach.
Of course I accept that we have to work in partnership, but the main powers and responsibilities for tackling child poverty reside with the Government. I maintain that they are not fulfilling their obligations in that regard, and that they should be doing much more.
I want to deal briefly with a couple of recommendations in the report from the Scottish Affairs Committee. Recommendation 6, to which my hon. Friend the Member for Na h-Eileanan an Iar referred, states:
“The tax and benefits system must, at a minimum, ensure that no one in full time work is living in poverty.”
Currently 25 per cent. of children are living in poverty with an adult who is working full time. That suggests to me that there is something not quite right about working family tax credits and child benefits. It is surely a basic assumption that if a child lives with a working parent there is no excuse for that child to be in poverty.
Recommendation 10, to which other Members have referred, states:
“Ministers must be cautious in suggesting that all parents are now expected to enter paid work.”
We must be careful about how we proceed. I am sure that I am not the only Member of Parliament who sees a large number of anxious people making their way to his surgery to express their feelings about being forced back into work and the impact that that will have on their child care arrangements. I am very concerned about the Government’s policy. We must ensure that support is available for lone parents returning to work. Returning people to work should involve more carrots than sticks, and certainly there should be no use of sticks when children are involved.
Above all, we need resources. We now know the cost of failing to fulfil our obligations and to meet the targets and goals set by the Government: it is £3 billion a year. That is what the Government need to invest in order to deal with this problem, and if they were serious about it, that is what they would invest.
I believe that the Government have a good record on tackling child poverty, and poverty in general. It is particularly noticeable in constituencies how much has been achieved. It can be seen on the ground, and in the lives of real people that have been improved. The Government are to be congratulated not only on the amount that they have done, but on changing the political climate by moving this issue up the political agenda. As some of my colleagues have observed, it is discussed much more now than in earlier years, and in that context the Select Committee’s report is very welcome.
However, the Government’s record is not perfect. As I have pointed out in election leaflets in the past, much has been done, and there is still much to do. We need to identify the areas in which we think that more needs to be done. One of them is the national minimum wage. It is a tremendous achievement, but the rate at which it has been set is clearly inadequate. We should press for a substantial increase if we believe that one of the best routes out of poverty is employment. I accept that some companies will find it difficult to pay the increase, but we should not be trying to build an economy on the basis of low wages. The Government should also think more about the level of their commitment to temporary and agency workers. The way in which they have run away from that issue does not fill us with enthusiasm for their record.
Another context in which we should consider how the Government deal with those in employment is tax credit. Much of what I intended to say has already been said today, but I do not think I can avoid repeating the point that people do not comprehend how the tax credit system works. They think of it as an act of God, and that is profoundly disempowering for its recipients. It is undoubtedly far too complex. The experience of falling into debt, and of the debt recovery process, inhibits many people from claiming.
Perhaps the Government will take up the suggestion from my hon. Friend the Member for Paisley and Renfrewshire, North (Jim Sheridan) that there should be an amnesty. I am sorry if I am interrupting the Minister’s private conversations, because I hope that he will respond to that suggestion. Owing to their anxiety about the possibility of falling into debt, many people who would benefit from tax credits do not claim them. The low rate of benefit claims in my constituency is one of the issues that ought to concern us all.
The third area where the Government have a good record is the efforts that they are making to get people into work. The number of people who are unemployed has fallen substantially in my constituency, but there must be a recognition of the fact that we are now getting to those who are the most difficult to place: those who have literacy difficulties—I had to spell that twice before I got it right—those who have numeracy difficulties, and also those who have drink and drugs issues, mental health problems or physical problems. All those people are much more expensive to get into employment than the “normal” unemployed.
In those circumstances, there is a real danger that the Government’s drive to move those on invalidity benefits into work will often be easier and cheaper than tackling that hard core of unemployment. I hope that the people whom I mentioned are not neglected, but there is an indication that the targets of some employment agencies operating in my area, which are funded partly through the Scottish Executive, are zeroing in on the invalidity benefit people rather than on the hard core of unemployed. We want to ensure that they are not left behind.
It is in that context that I have strong opposition to any policy of unlimited immigration, because I see the way in which immigration has affected unemployment in my constituency. When an employer is faced with a choice between a 50-year-old Scot who has perhaps been unemployed for 10 years and has drink problems and a number of other issues to address, and a 25-year-old Pole who is highly skilled, highly motivated and enthusiastic, it is a no-brainer to work out who will be chosen. We must recognise that those at the very bottom of the pile are being adversely affected by the scale of immigration into this country. Although the limits that the Government are seeking to put on third-world immigration are perhaps welcome, we need to keep monitoring the situation to ensure that the effects are genuine.
I believe that my hon. Friend the Member for Aberdeen, South (Miss Begg) intervened on the Opposition spokesman on the question of Wisconsin, community programmes and the like. In approaching the question of how to deal with those who are most difficult to get into employment, we must examine the idea of reinstating things like the community programme, and the idea of sanctions.
There is no doubt that a substantial group of people in my constituency and elsewhere have no intention of going into employment if they can possibly avoid it, and that in some, but not all, circumstances only the use of sanctions will be effective. I recall that there was almost unanimity when we said that there should be no fifth option for youngsters—the fifth option being simply taking benefits, sitting on unemployment and not being prepared to take one of the positive outcomes on offer. If positive outcomes are on offer, we ought to be prepared, taking account of people’s circumstances, to apply sanctions, because the generosity of the benefits system depends on the consent of those who are contributing. Many people in my constituency are turned against the generosity of the benefits system if they believe that it is being abused by people who, in many cases, they believe to be better off on benefits than they themselves are as a result of making a positive effort to look after themselves and their families. The Government have perhaps not faced up to these serious issues as we should.
In dealing with those who are not in work, we must examine how we can revise and review the benefits system. As with tax credits, the vast majority of my constituents do not understand how the system works—they find themselves struggling to comprehend how best to claim their entitlements—which means that they cannot make meaningful decisions about what their choices are. We must accept that rough justice might result from simplification, but that would be better than the current mess.
Any revision of the benefits system ought to take account of the disincentives to work that the enormously high marginal rate of penalty places on people. Depending on their exact circumstances, people who move into employment might gain tax credit, but they would possibly lose all or part of their council tax benefit, their rent rebates, free school meals, free footwear and clothing grants, free dental care and free prescriptions. That is why the vast majority of my constituents who are on that margin do not believe the argument that work always pays. Many of them are prepared to take work, even it costs them money, because they see it as a stepping stone. None the less, for those who are on the margins, there is undoubtedly an enormous disincentive.
Poverty is not just about individuals; it is about areas. The old Strathclyde region used to have areas for priority treatment. The jargon has changed over the years, but the recognition that there are whole areas affected by the blight of poverty and unemployment, into which resources should be poured, remains a good one. The average man in my constituency does not reach pension age, but in Eastwood, in the area represented by my hon. Friend the Minister for Europe, the average age at death is some 10 years higher. That is clearly unfair and unreasonable, and should be tackled—and not only on an individual basis. Such collective poverty and misery leads to poverty of ambition and aspiration, as well as poverty of service, because service providers know that they can get away with offering a lower level of service than they do to those who are more prosperous, more educated and more articulate, and can work the system better. Those who need the services least often end up getting the most.
Initiatives such as Greater Pollok Working, under which the jobs created in the Silverburn development went overwhelmingly to local people, are to be welcomed. I hope that the jobs that will be created as a result of the Southern general hospital development will also go mostly to local people. As the Conservatives have pointed out, we need to try to empower local communities more. That is why I regret that the Scottish Government, in both its previous and current incarnations, have created community planning structures that are essentially mechanisms by which the centre can set all the rules and leave little discretion for local people to administer them.
Like many others, I could have spoken for several hours on this subject, because it is one of the main drivers of my involvement in politics, and it motivates many people in our constituencies to speak out. I welcome the report by the Committee, and this debate, and I hope that the Government will return to this issue, not just on a wet Thursday when elections are being held in England, but on a day when we can have a more vigorous exchange about how best to take more of our fellow countrymen out of poverty.
It is a pleasure to have the opportunity to make a contribution in this debate. I thank the Chairman of the Scottish Affairs Committee, my hon. Friend the Member for Glasgow, Central (Mr. Sarwar), for suggesting this topic for consideration by the Committee. The work that we have done has been very helpful for members, and has led to a report that makes some important recommendations and has been well received by the organisations that campaign on poverty issues in Scotland.
Last Friday I was invited by Save the Children Scotland to one of the local primary schools to discuss the issue of child poverty in Scotland with the schoolchildren. That was part of Save the Children’s campaign to end child poverty in Scotland. It was one of the most challenging meetings that I have had to attend as a constituency MP, because the children, having had the opportunity to look at the issue through their young eyes, were outraged that adults seem to accept it as reasonable that some children in our society do not have access to basic human rights or resources. They were outraged that some children do not have the opportunity to go to the cinema or on holiday, never mind access to decent food and fuel.
The school asked to me to read a short statement to the House, and I hope that you will allow me to do so, Mr. Deputy Speaker. It states:
“Gateside Primary School in North Ayrshire think that it is fantastic that the Government is aiming to half child poverty in the UK by 2010 but want to know why you can’t do more now? If the Government could provide extra funding surely child poverty in the UK could be tackled sooner rather than later. Gateside pupils don’t want children in poverty to lose hope and think life is not worth living. Children in poverty need your help now!”
After questions, I told the children that I hoped that they would be as radical in what they said as they grew older. As we get older, we sometimes see things less clearly.
Of course, we live in one of the richest countries in the world. There are disputes about how riches can be counted, but it is said that we live in the fourth richest economy in the world. However, the wealth in our country is unfairly distributed. The Government should be congratulated on the ambitious targets that they have set themselves, both on child poverty and on the eradication of all poverty in this country. It is important that we are having this debate today.
I welcome the fact that an extra £1 billion was put forward by the Government in the recent Budget. Not a huge amount of additional funds were available in the Budget, but the political commitment that was given by putting an extra £1 billion into strategies to ensure that we meet our child poverty targets by 2010 is to be greatly welcomed. However, we need to take on board the comments made by the organisations that are campaigning on the issue, such as the Child Poverty Action Group. That group strongly welcomes what the Government are doing, but says that it believes that an extra £3 billion will be required to ensure that we meet the targets by 2010.
The hon. Member for Perth and North Perthshire (Pete Wishart) said that he thought that we were shelving our targets for 2010 and that the 2020 target would never be met. The reason why the Committee wanted to look at the issue of poverty—all the evidence we received from organisations and academics showed that Scotland is meeting our targets now—was that we wanted to ensure that, politically, we continue to do everything we can to meet those targets.
I want briefly to focus on some of the Committee’s recommendations, and in particular I want to support my hon. Friend the Member for Glasgow, South-West (Mr. Davidson), who highlighted the wish of the Committee—expressed in a clear political statement—that no one in full-time work should live in poverty. Although we welcome the huge amounts of money that have been put into the system through tax credits and the number of children and families that have been lifted out of poverty through that mechanism, it is clear that the introduction of the national minimum wage, and the fact that more than 2.5 million people are in employment who were not in employment in 1997, have been at least as significant in achieving what we have so far achieved.
We need to look again at the national minimum wage. I do not believe that it is the role of the state or of Government to subsidise bad employers. We need to question why so much tax credit money goes to people who work in full-time jobs. Is it reasonable that multinationals, supermarkets such as Asda and other organisations should pay wages that are either at minimum wage levels or just above? I hope that we will reconsider the level of the national minimum wage and significantly increase it.
Another matter related to the national minimum wage which the Committee discussed was the youth rates. Part of the evidence from all the organisations from which we took evidence showed that there were problems with young people and poverty. Young people have not benefited as much as other groups from the Government’s policies. Young people are better off than they were in 1997, but because they are not eligible for tax credits and because the minimum wage rates for them are lower, they have not benefited as much. I therefore welcome the commitment that the Government have made in the past fortnight to reconsider the youth rates for the national minimum wage.
The evidence that the Committee heard was that if young people live in poverty, there is an impact when they become parents, and on their children. We cannot compartmentalise the issue of child poverty. It is a symptom of the fact that we have such a big gap between rich and poor, and that we have accepted high levels of poverty in such a wealthy country.
The Government inherited an horrific situation in 1997. We had the highest levels of child poverty in Europe, despite the fact that we were one of the richest countries in Europe. A huge amount has been done, but we need to go further. We need to take on the comments that have been made about the tax credits system, which has done so much. The system is highly bureaucratic and it does not cope very well with people’s changing circumstances. The problem of overpayment is increasingly a disincentive to apply for tax credits. I hope that, as we go forward, we take those points on board.
We also need to consider the recommendation in the Committee’s report that says:
“Ministers must be cautious in suggesting that all parents are now expected to enter paid work.”
There has been a change of policy recently, whereby people with children aged 12 and over are now expected to work. That may not be appropriate in all circumstances. We must say clearly that there is a strong role for parents to look after their children at home.
We must also consider an issue that all the campaigning organisations have raised with us: we should equalise the rate of child benefit. There have been significant increases in recent years, and we must continue that trend of big increases. However, we also must ensure that large families benefit as much as they can. The evidence that the Committee heard was that families with many children are often the families in the most extreme poverty, and the Government should look into that.
I also ask the Minister to consider something that has been raised with me by Citizens Advice Scotland over the last couple of days. Regulations will be introduced in July to cut the backdating of benefit, particularly housing benefit, council tax benefit and pension credit. If there is any attempt to reduce the backdating of those benefits in October, that could affect some of the poorest families with children who rely on them. I ask the Minister to reconsider.
We need to look at all our policies from the perspective of the impact that they have on child poverty and on meeting our poverty targets. As a Labour MP, I expect the Government to poverty-proof all our policies—whether those policies are on taxation or on other things. We have done a huge amount, and I believe that the political will is there to make sure that we meet the 2010 target. With all-party support from colleagues throughout the House, we will make a real difference to children’s lives.
If we allow children to live in poverty now, we will be living with the social consequences of that in the future. Those consequences include antisocial behaviour, crime and drug abuse—subjects that we have not dwelt on in the debate. The children at Gateside school were concerned about the impact on children of parents abusing drugs. If we do not deal with all those issues, we will live with the problems in the future.
I am grateful to my hon. Friend the Member for Glasgow, Central for instigating the report that has led to this debate. I very much hope that we will be able to come back here in two years’ time to say that we have met our targets.
Today’s debate has been a welcome opportunity to debate child poverty in Scotland, and the UK Government’s policy on child poverty in general. Undoubtedly, in many regards, the Government’s efforts have helped to reduce poverty levels for thousands in Scotland. The questions that we must all continue to ask are whether the Government’s policies are a short-term or long-term solution, and whether the large sums of money being spent are having the desired effect of stemming people’s need for Government assistance and reducing the risk of people entering poverty.
As was said by my hon. Friend the Member for Dumfriesshire, Clydesdale and Tweeddale (David Mundell), the shadow Secretary of State for Scotland, we fully support some of the measures. It is clear that the minimum wage has made a real difference and acts as a strong incentive for people to go out and work—making work pay, so to speak. As we are the originators of the tax credit concept, hon. Members would expect Conservative Members to recognise the role that tax credits play in eradicating poverty and in ensuring that a person who makes the effort to work is rewarded by state support.
However, we worry that the Government have perhaps put too much faith in the tax credit system, instead of spending in other areas to address the underlying causes of poverty. Some have said that in its current state, the tax credit system now at best serves merely as a guaranteed comfort blanket for target groups, increasing benefit dependency and diverting funds away from tackling underlying poverty. In the words of the right hon. Member for Darlington (Mr. Milburn), tax credits
“cushion the blow of poverty rather than help…people to escape it.”
People are perhaps becoming more entrenched in the system, rather than breaking away from it.
Department for Work and Pensions figures from June last year show that although in the UK 1 million children have moved from just below the poverty line to just above it, there are 1 million more children than a decade ago who need support to get above that line. The benefit system is having to run harder and harder just to stand still, and tax credits are perhaps masking the symptoms of poverty, not curing it.
Let me turn to the very poorest in society—those people in our society who earn 40 per cent. less than the median. In our inquiry, the Scottish Affairs Committee heard that Save the Children felt that
“while UK and Scottish Government policies have succeeded in lifting many children out of poverty, current policies are having no effect on the very poorest children and their families”.
The facts speak for themselves: according to the Institute for Fiscal Studies, the number of people living in severe poverty has risen in the UK by 600,000 since 1997.
More than two contributors to the Committee highlighted the different experiences of other groups in the benefit system. Compelling evidence from the Joseph Rowntree Foundation said that although the tax system helped lone parents with children, lifting nearly all of them out of poverty in Scotland, which is of course welcome, it helped to entrench working couples with children in poverty. I was glad to see that the report recommended that the Government look into trying to make sure that couples with children get at least equal treatment. That point was echoed in the evidence from Barnardo’s.
Today’s debate is entitled “Child Poverty in Scotland”, although given the contributions of some Scottish National party Members, one could easily have been confused about that, as we wandered on to fairy tales. However, we must not forget the other people who live in poverty. It is worse than a shame—it is almost a disgrace—that the number of working adults in poverty who do not have children has risen to its highest level since 1961. Some 4 million such people are now in poverty; that is 800,000 more than in 1998. If tomorrow’s parents are in poverty, what chance will their children have?
I believe that we are approaching the time when the tax benefit system in its current form will have run its course. Yes, it has been a success in pump-priming the situation since 1997—there have been some positive results—but if we are to progress, we must address the underlying roots of poverty. I was delighted to see that the Committee focused on and recommended stronger measures on child care. One of the biggest challenges for all of us in Scotland, and not just the low-paid, is finding proper child care so that we can take advantage of economic prosperity, and so that those on low incomes can work themselves out of poverty.
However, it is worrying that some of the contributory factors in Scotland are going in the wrong direction. Many of them are in devolved areas. If education is the solution to poverty, it is worth stating that in 15 per cent. of the most deprived areas in Scotland, pupils’ standard grades are two grades behind the average. When my great-grandfather left being a farm labourer in Fife, it was because his education allowed him to make the leap from farm labourer to railway porter. That is the real future for all of us in this country. We must invest in education as the No. 1 priority to help solve poverty for the long term.
Unfortunately, drug abuse in Scotland is up, drug crime is up and methadone prescription is up. We should not debate child poverty in Scotland without talking about the role of the family. I recognise that families cannot be forced together, but the facts are clear. Where children are brought up in stable homes, they have less chance of growing up in poverty and have better chances in life. The Government can at least try to encourage families and should do nothing to penalise them.
During the debate the hon. Member for Ayr, Carrick and Cumnock (Sandra Osborne) spoke of her fears about the changes to the NHS in Scotland under the SNP Administration. She said that her party would have to go back to being the party of the NHS. Having served as a shadow Health Minister in the Scottish Parliament, I point out that that comes from a member of the party that has increased the role of the private sector in the NHS more than any other party in its history. We will be interested to see whether the hon. Lady supports a reversal of that policy.
The hon. Member for Glasgow, Central (Mr. Sarwar) chairs our Scottish Affairs Committee. I congratulate him on being an excellent, patient and inclusive Chairman. The report does justice to him, and I hope he will be around for the next few years as our Chairman.
The hon. Member for Argyll and Bute (Mr. Reid), not surprisingly for a Liberal Democrat, made many spending commitments, such as cuts in fuel prices and a jobcentre on every island, amounting to a £2.5 billion increase in spending.
I am sorry, I do not have the time.
The hon. Member for Argyll and Bute criticised the Government’s extra £1 billion to eradicate poverty, saying that an extra £2.5 billion was needed. As ever, spend, spend, spend from the Liberal Democrats.
The hon. Member for Aberdeen, South (Miss Begg) made some genuine points, as did the right hon. Member for Coatbridge, Chryston and Bellshill (Mr. Clarke) in relation to local government and money coming from Westminster. I should tell the hon. Member for Aberdeen, South that we might not like the way in which the block grant is spent, but that is devolution. The Treasury could, if it wished, try different mechanisms to ensure that funding was ring-fenced, but hopefully the electorate will make that judgment at the next election. If the local papers carry headlines about that spending, the SNP administration in Aberdeen will not be in office much longer.
The hon. Member for Perth and North Perthshire (Pete Wishart) referred to the fairy tale. I shall merely say that the Scottish National party knows more about fairy tales than Alice in Wonderland, and leave it at that.
As usual, the hon. Member for Glasgow, South-West (Mr. Davidson) made a robust and frank contribution. He would probably be surprised to know how much I agree with him on many of the issues that he raised. He has at heart the real interests of his constituents, and perhaps one day we will see where we agree.
We have had a good debate and a long debate, although many might have predicted that it would not go the full time. We all believe in trying to eradicate poverty, no matter what our party allegiance, and no matter what the party of government would like to portray. I went into politics because the soldiers whom I worked with from the Scots Guards, from Bellshill, Castlemilk, Easterhouse and Govan, grew up in poverty and I felt that they deserved better government.
It is an honour to respond to this debate. I thank all who took part; they made important contributions. I was to have had 15 minutes, then 10 minutes, then eight minutes for my speech. Now it turns out that I am allowed 16 minutes, and I shall try to do justice to and respond to some of the important points that have been made.
Child poverty, the subject of this debate, goes right to the heart of why so many of us came into politics in the first place. It goes right to the heart of why my party came into existence more than 100 years ago and what the Labour Government, elected 11 years ago today, are all about. The struggle against child poverty has consumed generations of campaigners and given birth to countless movements, societies, trade unions and moral crusades. In my party, and in our country, the struggle has been led by titans—people such as John Wheatley, James Maxton, John Smith and, of course, Keir Hardie.
The desire to eradicate the scourge of child poverty from the land has had no stronger champion than the Prime Minister, who has devoted his entire adult life, with energy and unwavering commitment, to ensuring that every person in this country benefits from the opportunities enjoyed for too long by only a few. In the past 11 years, that drive against poverty has been the constant theme of our politics. It is why we introduced tax credits to help the poorest paid, especially those with children. It is why we raised child benefit above and beyond inflation and why we introduced the first ever national minimum wage—in the teeth of opposition from those who claimed that it would cost 1 million jobs and from those who could not be bothered to get out of bed to vote for it. The drive against poverty is also why we set the extraordinarily ambitious target of halving child poverty by 2010 and eradicating it by 2020.
That target is no idle boast or vague aspiration, but a commitment made during our long years as the Opposition, when we stood impotent as child poverty doubled in Scotland between the late 1970s and mid-1990s. The results of all that effort—the tax credits, the new deal, the minimum wage—are there for all to see. Ninety thousand children have been lifted out of poverty in Scotland, a greater rate of decline than in the UK as a whole. More people are in work today than at any time in our nation’s history. Families in the poorest fifth of the population are £4,500 a year better off.
Behind every one of those statistics are real people, whose lives have been changed and aspirations raised. Families and communities now have the prospect that tomorrow can be better than yesterday and that years of decline and decay can be reversed. That is why so many of my hon. Friends who spoke this afternoon took the opportunity to remind the House of the progress that has been made; to be fair, Opposition hon. Members also acknowledged that. However, my hon. Friends did something more: they spoke of a genuine, passionate desire to go further, do more and make deeper inroads into the problems that still beset so many of our communities. I share that desire. Our achievements are real, and in some areas progress has been nothing short of remarkable, but much more needs to be done.
Before I turn to some of the comments made today, I should like to thank those who have made a significant contribution to the debate, inside and outside the Chamber. First and foremost, our thanks go to the Chairman and members of the Scottish Affairs Committee for producing an excellent and thoughtful report. I particularly thank my hon. Friend the Member for Glasgow, Central (Mr. Sarwar), the convenor and, ultimately, the author of the report.
In part, today’s debate grew from a round-table discussion, convened by the Scotland Office, that brought together many organisations involved in the day-to-day reality of helping those still affected by poverty. Many of those organisations have taken a great deal of time and effort to draw up detailed briefing papers in order to inform our deliberations better. I would like to add my thanks to Barnado’s, the Church of Scotland, the Child Poverty Action Group, Citizens Advice Scotland, NCH and Save the Children. I assure them that their contributions have been studied by the Scotland Office and the Department for Work and Pensions. We shall continue to work with those organisations towards our common goal of eradicating child poverty.
The shadow Secretary of State for Scotland, the hon. Member for Dumfriesshire, Clydesdale and Tweeddale (David Mundell), said that he did not want to talk about the past. I wonder why. He did not make an apology for the fact that child poverty doubled when the Conservatives were in charge, although, in fairness, for much of that time he was in the Social Democratic party, so he does not bear personal responsibility. He spoke about the new Conservative approach of making poverty history. It stands in sharp contrast to their old approach, which was just making poverty. He launched his usual attacks on tax credits, then said he would keep them. He condemned clawbacks, but dodged the chance to set out his views on clawbacks. He attacked the definition of poverty as being 60 per cent. of median income, despite the fact that that is the acknowledged international standard, used around the world and certainly throughout the European Union. The organisations that I mentioned earlier said, in the submissions that they put to us, that we should be working to that standard.
The hon. Gentleman did not mention the fact that in the document “Making British Poverty History”, a new target emerged—not 60 per cent. of median income, but 40 per cent. That is now going to be the aspiration that the Conservative party will address. I think that I hear the sound of goalposts being moved. I think that I hear the sound of targets becoming aspirations. I think that I hear the sound of a Labour Government’s definition of poverty at 60 per cent. of median income being downgraded to 40 per cent. I think that I hear the sound of a return to the bad old days. The hon. Gentleman quoted Churchill—another famous convert from Liberalism to Toryism—who also said, “you can rat, but you can’t re-rat.”
My hon. Friend the Member for Glasgow, Central, the Chairman of the Select Committee on Scottish Affairs, spoke in detail about his Committee’s excellent report on poverty. He said that good progress has been made, and he welcomed the new consensus of all parties, which is welcome, if a little late. None the less, his Committee worked collegiately on the report, and it reached out to all parts of Scotland in making its final recommendations. We have responded to the report. We do not share all of its analysis or accept every one of the recommendations, but we acknowledge the tremendous contribution that the report has made in furthering this important debate.
I look forward to working with my hon. Friend and other members of the Select Committee because the problem of poverty, which has taken generations to build up, cannot be eradicated overnight, even with 11 years of progress. That is why we are aiming to meet the target in 2020. It is a tough target—an immensely challenging one—and as the hon. Member for Orkney and Shetland (Mr. Carmichael) rightly said, external factors are now making that target even more challenging. I shall say a word about that in a moment. However, we are not resiling from it or backtracking. We want to hit those targets in 2010 and 2020, but we know that we will have to work, as the Under-Secretary of State for Work and Pensions rightly said, with the Scottish Administration, non-governmental organisations, charities, faith groups and all of those working in Scotland to eradicate poverty, or we will not hit the target. We cannot do it on our own, and the Select Committee report highlights ways in which we can make definite progress.
The hon. Member for Argyll and Bute (Mr. Reid) stressed the need for us to work together, and graciously acknowledged that much progress has been made. I am afraid, however, that he fell into the trap that often affects individuals who consider these problems. He piled up more and more spending commitments with no real ability to say how much anything would cost, or to say whether spending much more on administration, which was his solution, would divert money from those who need it in the fight against poverty. It is right that the Department for Work and Pensions has tough efficiency targets. Hon. Members from all parties know that sometimes local jobcentres are asked to make challenging efficiency savings. However, we are doing that so that the massive amount of extra money that goes towards the fight against child poverty gets through to the front line and those who need it most. The hon. Gentleman’s vision of a series of super first steps centres in every community, combining Jobcentre Plus and Revenue and Customs functions, was presented without any idea of how much it will cost, let alone how much the Liberal Democrats will pay for it.
The Minister’s description of the policy is at variance with what it actually is. We propose using existing jobcentres, which are half empty because staff have been transferred from them to call centres, and employing staff who can give local advice to local people rather than expecting people to phone a call centre, where local circumstances are not understood.
I think that the hon. Gentleman went further than that in his original contribution. We need to consider what the benefit processing centres do. There is one in Greenock in my constituency. Bringing together benefit processing activities can create greater efficiency, leading to people’s benefits being processed much more quickly than when functions are disaggregated throughout the country. It means that money gets to people who need it more quickly. That is why we are making efficiency savings and I do not believe that those who work in the call centres, whom the hon. Gentleman has callously dispatched to the dole queue, perceive their job as having no interest in people’s local circumstances. That is grossly unfair.
My hon. Friend the Member for Ayr, Carrick and Cumnock (Sandra Osborne) made an excellent speech. She reminded us that poverty is not simply about material deprivation—lack of stuff—but the crushing of ambitions and condemning communities to never being able to better themselves, dream that life can be better or aspire to something beyond the circumstances in which they grew up. The crushing of ambition is part and parcel of poverty. Unlocking people’s potential and realising their ambitions is as much part of the target to eliminate child poverty as any specific indicator of material deprivation.
My hon. Friend raised an issue to which many hon. Members reverted during the debate—the age-old quandary between universalism and targeting. It is as old as the welfare state and no Government will ever say that they have completely solved it. However, in the past 11 years, we have been able to increase universal benefit such as child benefit and the winter fuel payment at the same time as increasing targeted benefits such as tax credits and pension credit. We have managed to do both: increase universal benefit and target most help at those who need it most.
The hon. Member for Na h-Eileanan an Iar (Mr. MacNeil)—
I have been practising. However, I am afraid that that is as good as it gets for the hon. Gentleman. He paid lip service to the issue at hand and moved quickly to the nationalist comfort zone—the consuming obsession with constitutional wrangling, in contrast with my right hon. Friend the Member for Coatbridge, Chryston and Bellshill (Mr. Clarke). It is shameful that the First Minister has not found time to meet my right hon. Friend to discuss child poverty, but has found time to write to Robert Mugabe and President Ahmadinejad of Iran, attempting to form some sort of coalition with them.
The hon. Member for Orkney and Shetland rightly said that the current huge external challenges make the targets harder to achieve. That is why we have to keep down inflation and unemployment and avoid the return to boom and bust, which occurred whenever those external shocks happened in the past.
I regret that I do not have time to go into detail about the important contributions of my hon. Friends the Members for Aberdeen, South (Miss Begg) and for North Ayrshire and Arran (Ms Clark), and the hon. Member for Perth and North Perthshire (Pete Wishart).
As I said at the outset, this has been a significant and timely debate. It has involved important contributions from beyond the House, from those on the front line of the campaign against the scourge of poverty. The debate has allowed us to reflect, 11 years to the day after our election, on the tremendous progress that has been made on reducing poverty and tackling low pay. The debate has also given us the opportunity to reflect on what still needs to be done. The Labour party came into being to combat poverty. It is our historic purpose and one to which we are as committed today as we have ever been—
It being Six o’clock, the motion lapsed without Question put.