[Relevant documents: Second Report from the Work and Pensions Committee, Session 2007-08, “The Best Start in Life? Alleviating Deprivation, Improving Social Mobility and Eradicating Child Poverty”, HC42-I; and the Government response, HC 580.]
Motion made, and Question proposed, That the sitting be now adjourned.—[Mr. Timms.]
I was rather hoping that the hon. Member for Cardiff, Central (Jenny Willott) would be here today, because she took part in the Committee’s deliberations, but as she is now a Liberal Democrat Front-Bench spokesperson and dealing with the same subject, I understand why she is not present. Our congratulations go to her; she has been a valued member of the Committee since 2005.
We are here to discuss the Government response to the Select Committee’s report. I might as well get the bad news out of the way first: the Committee found the response very disappointing. It was complacent, defensive and a restatement of existing policies, despite being published two days after the latest child poverty figures came out showing an increase of 100,000 children in poverty. Perhaps existing policy is not working. We need to put that on the record at the start.
I accept that there were significant announcements in last year’s autumn performance report and the 2008 Budget, which we hope will take 650,000 to 700,000 children out of poverty. However, there is still enormous pressure to deliver on the 50 per cent. reduction target for 2010. No doubt the Committee will return to the subject and remain watchful and vigilant, as I am sure the Minister would expect it to be.
This debate is particularly relevant when we look not only at the less than 60 per cent. of average earnings definition of poverty but the material deprivation figures, especially given what is happening at the moment in food and fuel prices. That will obviously have a significant impact on material deprivation, although it might not have an impact on incomes. We need to recognise that it is an ongoing and serious issue for families on low incomes.
I shall talk first about the education aspects of our report. The Government have long recognised that we need to deal with generational inequalities, worklessness and similar problems. The key to breaking that cycle is getting today’s poor children the best education possible.
It might be against the law, but it is a fact that many schools send letters home to parents saying that a school trip can go ahead only if contributions are received. The parents have the right to refuse to make a contribution, but if they do not make a contribution and the trip gets cancelled, word soon gets around about who has denied the rest of the class that opportunity. No matter how much that practice is against the law, it is happening. I have nine grandchildren, and they experience it week in, week out and month in, month out. It really is a problem. Children’s education is incomplete when, because of poverty, they are unable to take advantage of those educational opportunities.
The practice extends further. Because things like music lessons are charged for in our schools, the vast majority of poor children are denied that opportunity because their parents cannot afford to pay. The cost is significant, but music lessons are part of that rounded educational experience that children should be getting, above and beyond the national curriculum.
Most poor children are self-excluded from extra-curricular activities, because they need to have games kit and equipment, such as cricket bats or whatever, and the family budget does not stretch to those items. The total educational experience is just not there for those children, and that leads to diminution in their happiness and performance at school, increased truancy and other effects. The child poverty unit is, as my right hon. Friend the Minister knows, the result of a partnership with the Department for Children, Schools and Families. This problem with extra-curricular activities is a key issue for it.
The other side of this problem is that, although we know that children in poor families have worse records of truancy, achievement and everything else, we have a benefits system that penalises their parents if they endeavour to take educational courses themselves. The 16-hour rule is far too rigid, stringent and perfidious and, as I say, it penalises parents who want to improve their life and better themselves through education. That is not a good message to send to children, is it?
Quite rightly, the state spends a fortune—billions of pounds—on supporting students into higher education. They then become higher earners and will, we hope, enhance and develop the economy, but those who are at the bottom of the pile get punished and penalised for taking educational courses. I know that there were some announcements in the Budget, particularly about lone parents, and I know that there are pilots running to help 16 and 17-year-olds who are not in education, employment or training. Generally speaking, however, the benefits system penalises those who try to improve their education and thus their employability.
I understand the argument that it is not the job of the welfare system to support students, but when people are trying to improve their employability and thus their ability to lift themselves and their family out of poverty—particularly when we are talking about courses in basic subjects such as maths and English—a degree of flexibility is needed in the rules and regulations. Perhaps that is an area that might be looked at further.
I would like to state some basic facts about child care. Only a third of those who are entitled to child care tax credit take it; that is an incredibly low take-up. Nationally, 22 per cent. of child care places are vacant. There are all sorts of problems, especially in London, with the cost of child care, including fees having to be paid up front, with some outfits even demanding a term’s fees in advance. All of those costs militate against people getting child care.
Child care is crucial, not just for lone parents but for several other family structures. Having read the documentation, I think that the Treasury has really got a grip of this issue. Its review of child care tax credit and the work that it has published on that subject is spot-on. However, we need some rapid progress.
The Government’s response is that it is the responsibility of a local authority to ensure that there is suitable and adequate child care provision in its area. However, when that provision is failing, it is the Government’s responsibility to step in and deal with it. The Government simply cannot say to local authorities, “That is your responsibility and if you’re not doing it right, get it sorted.”
Last week, the Secretary of State for Children, Schools and Families announced that 658 secondary schools were not meeting their targets; they would get seven weeks to come up with an action plan, otherwise they would be taken over. Well, why do we not have the same focus and impetus when dealing with authorities that are failing to deliver adequate child care? The policy on child care is a national one—it is key to our strategy on cutting child poverty—and if local authorities are failing it is up to central Government to deal with that situation, and not to say that it is a problem that must be sorted out by others. Sadly, far too many authorities have been extremely complacent. Billions of pounds of Government money has gone into child care provision, but far too little regard has been paid to holding people to account for delivering what is necessary.
A further point is that although most people are adequately covered by child care provision between 8 am and 6 pm, lone parents in particular tend to work unsocial hours, evenings and weekends, and that is when child care is least likely to be available. The other big group facing difficulties is the parents of disabled children. Getting child care for a disabled child is inordinately expensive. Not only does the child care tax credit go nowhere near to covering the cost, but there is a paucity of supply. We know that the family of a disabled child is four times more likely to be in poverty, so we really need to do some serious analysis of how we can resolve that problem. The child care tax credit system will never work. More direct provision is required—a sort of drop-in facility, rather than parents having to go through all the rigmarole. I understand that a review is being done but that no commitments have been made.
Child care tax credit is limited to the first two children. There is no help at all if one has more than two children. Child care costs anything between £80 and £250 a week, depending on where one lives. If parents are getting a bit of cover for two children but have to pay for everything for two other children, moving into work is too uneconomic even to think about.
As I said, the Treasury is conducting a review, I hope in conjunction with the Department for Work and Pensions. I am encouraged by the scenario that it painted of the basis of the review. I hope that we will see some positive results from it, but it is obvious that child care has been a hindrance to moving into work for lone parents in particular, but for others as well. If that is the case—if it is such a key matter—we have to be big enough to say quickly that what we have been doing is wrong and that we will take the necessary action.
The Government’s response on the “better off in work” calculation was, frankly, one of the most disappointing aspects of the document. A calculation should be just that. Jobcentre staff should be able to say to a claimant who is considering a prospective job what the difference in their income will be, after expenses—people should be able to see where they are now and where they would be if they were in work. To say, as the Government do, and as they reiterated in their response, that any incidental expenses connected with moving into work will not be taken into account in the calculation is, frankly, to be deceptive. A lone parent with three children immediately faces a bill of about £25 a week for school meals, where previously the children had free school meals. I accept the Government’s argument that expenses related to moving into work are variable and that only standard expenses can be calculated, but the cost of school meals is standard, as are the costs of things such as prescriptions and everything else that one loses. For somebody who is on constant medication, that needs to be factored in. Transport costs, too, are constant.
It is insupportable to tell someone that they will be at least £25 a week better off in work when, in practice, they will be £30, £40 or £50 a week worse off. I repeat what we said in the report: that is a deception. Both sides of the equation must be put to people. Otherwise, they will lose confidence in the calculation. They will tell their friends, relatives, neighbours and other mothers at the school, and loss of confidence will rapidly decline into disbelief.
Does the hon. Gentleman agree that it is not just the end result of the calculation that is gravely flawed, but the fact that it can take up to half an hour to do it, even with the aid of an advanced piece of software and a benefits expert? By that time, any notion of an incentive to work is stone dead on the floor.
I understand why some people waiting for the calculation to be completed lose the will to live. But, as always with such things, there is probably a simple solution that would be 70 per cent. wrong, or a longer solution that hopefully would be a bit nearer to being right. It is the components of the calculation that matter. The calculation has to give an exact and honest assessment of where people will be.
Is there not an added factor? Is there not real risk of jobcentre staff saying that the person would be better off in work when in reality they would be worse off? Jobcentre staff are adopting a tighter sanctions regime, which might be based on their own thoughts about people being better off in work, even though that is not the reality.
I thank my hon. Friend for those remarks. I shall come on to sanctions in a moment, if he will permit me.
The Committee had the pleasure about 18 months ago of visiting Stratford jobcentre, which is very large. I am sure that my right hon. Friend the Minister knows it well. A huge number of people go through it. We met a group of lone parents who had some horrifying stories to tell about their experiences. Most of them had not even been offered a “better off in work” calculation, and those who had and then had it checked somewhere else—by the citizens advice bureau and so on—found that it was far from accurate. That shattered their confidence in the system. They felt that they were being used, abused and misled, and that does not help anybody. It damages the reputation of Jobcentre Plus and the whole welfare to work programme, and it undermines credibility. That really needs to be reviewed.
As the Minister knows, a trial is being done in Yorkshire and Humberside, where my home is. I shall keep a close eye on it and report regularly and frequently about any discrepancies that I find.
My hon. Friend is absolutely right that the passporting of benefits must be fully taken into account. At present, it is not taken into account when we look at in-work poverty. He may recall that in its current investigation of the role of carers, the Committee came across carers who work for 16 hours a week. Because of their caring responsibilities, they do not have the time to work more than that. As the national minimum wage has risen, they have had to reduce their hours in order to retain their carer’s benefit. Is not that another example of how in-work poverty is not being tackled by the measures that the Government are contemplating?
My hon. Friend is absolutely right. There is a link between the minimum wage and the £95 a week disregard in carer’s allowance. There is a similar problem with permitted working limits for incapacity benefit. If the two figures do not change at the same time, there can be a period when somebody suddenly finds that they are breaking the rules although they have done nothing wrong. There is an easy solution, and I hope that the Department is considering looking at it just once a year instead of at the point of change.
My hon. Friend the Member for Leyton and Wanstead (Harry Cohen) mentioned sanctions. The Minister is well aware of my personal opposition—and, indeed, the Committee’s opposition—to moving lone parents on to the jobseeker’s allowance regime. I am grateful to him and accept that he has been extremely helpful, as has the Secretary of State, regarding how the regulations will be implemented. A great deal of flexibility will be allowed.
The decision has been made, so that is where we are, but there is still the problem of lone parents who get moved on to the JSA regime being exposed to a much harsher sanctions regime. It does not increase the child poverty numbers if somebody is sanctioned, as they are already in poverty. It just means that they are even deeper in poverty. I hope that the message is going out loud and clear that sanctions must be the last resort.
There is a general problem with sanctions. Too often, people do not know that they are being sanctioned; if they do know, they do not know why; and if they do not know why, they do not know how to put things right. The whole idea of sanctions is to change somebody’s behaviour, but if communication is not clear, and if it is not apparent how behaviour can be corrected, the function of the sanction is lost. The research into the sanctions relating to the work-focused interview, which is a serious issue for lone parents, is due in about two weeks. It will be interesting to see what it has to say. I accept that there has to be a sanctions regime, but it has to work and it has to be understood by the claimant as well as the personal adviser or the decision maker.
By the bye, two large contractors who have pathways to work contracts have told me that they get a 40 per cent. no-show of referrals from Jobcentre Plus, but, although they send the names back for a sanction to be considered, nothing happens. One wonders whether these are just teething troubles in the early days, or whether people are saying, “We’ve got rid of that problem now; it belongs with the contractor so we don’t need to do anything.” Again, there is different treatment for different groups of clients.
I shall draw my remarks to a close, because I know that other hon. Members want to contribute to the debate. The key issue in relation to child poverty, identified by the Select Committee and by a number of other groups, is the point of change. People have to feel comfortable at the point of change. Too often, we are told that people on benefits are more comfortable with that much lower income—knowing that it is secure and will come every week, and most importantly knowing that the rent is paid and there is a guaranteed roof over their family’s head—rather than with the haphazard world of work. A clear majority of lone parents are in work, so for some people it obviously works, but we do not do enough to find out what made it work for them and try to apply those lessons to the people who are left. Too often, we ask people, “Why aren’t you pulling your finger out?” instead of trying to marry up the experiences of people who have successfully moved from benefits into work.
The fear that people experience is genuine and heartfelt. We talk a lot in the report about in-work poverty, but the fact is that if people move from benefits into work, their income increases significantly, albeit it might not lift them all the way out of poverty. If people are still nervous about taking that step, there is something wrong with the advice and guidance procedure beforehand. To help, we can be a lot more imaginative with benefit run-ons—there is a run-on on housing benefit, for example. The Work and Pensions Committee has published a report on research on social housing and worklessness in which we say:
“The complex interaction between earnings, housing benefit, tax credits and resulting net income makes it difficult for tenants to fathom the financial consequences of entering work. Difficulties understanding this interaction and being able to compare net income in work compared to out of work were apparent among the people interviewed. Few respondents appeared to be aware of the operation of housing benefit as an in-work benefit, raising concerns about their ability to cover housing costs when in work.
This uncertainty expressed by some respondents about the income implications of entering work was in stark contrast to the certainty of their current situation, which allowed the development of personal strategies for ‘getting-by’. Many also drew attention to the insecure nature of the work available to them and contrasted this unfavourably with the stability of benefits”—
despite their paucity. That encapsulates the problem.
Large groups of people are opting for the safety of very low income rather than taking a chance. That is especially true in London, because of the much higher rents there. Part of the problem is lack of knowledge and poor advice and guidance about in-work benefits; part of it is the appalling performance of some local authorities in processing housing benefit claims. The current one-month run-on should last for three months. Within that three months a local authority should have to establish the new claim and, if they do not do so, full run-on should carry on at the local authority’s expense and the cost should not be reimbursed by the Exchequer. That would be a direct inducement to improve performance.
We need to get over people’s insecurity about the point of change. That applies equally to other issues. Housing benefit is the most spectacular example but there are others, such as entitlements to free school meals and school travel. For example, 57 per cent. of authorities still give clothing grants for school uniform, which people lose if they move into work. People take all those points into account in their minds: they are not stupid and they need to know that moving into work, which is supposedly so good for them, will actually work out.
Finally, I want to make two quick points about steps that we need to take to increase further the rate of progress on child poverty. At every Budget time, we see people almost scratching round to find £1 billion here or £1.5 billion there to try to at least hold the figures steady, so here are my proposals. First, if we enforced equal pay—it is nearly 40 years since the legislation came in—that would do an awful lot to reduce child poverty. Secondly, we have to grasp the nettle and increase the minimum wage by above the rate of inflation or the rate of wage increases. If we had a minimum wage of, say, £7 an hour today and enforced equal pay, we would take about 1.5 million children out of poverty straight away. Society and Government have a joint responsibility and an interest in this issue.
It is outrageous that, today, some 40 years after we passed equal pay legislation, 68,000 claims are pending at an industrial tribunal. In local government alone, some 400,000 claims of a class action nature are waiting; there are others across the public sector and many more in the private sector. Forty years on, we really should be saying, “Enough is enough; everybody’s had a chance,” and enforcing the legislation.
The two measures that I have mentioned would have a dramatic effect on the child poverty figures. At the end of the day, that is what matters. We are talking about children. Putting it crudely, these are the people who will be paying their national insurance contributions that fund our pensions in retirement and paying for our care in residential homes, or wherever, and they deserve a better chance than they have at the moment.
I congratulate the Chairman of the Committee on securing this well-timed debate, coming as it does shortly after the news that the number of children living in poverty has risen by 100,000 for the second year running. That stark statistic led the End Child Poverty campaign to say that such a poor result will be a setback to the Government’s target of halving the number of children living in poverty by 2010. The Committee Chairman has presented a pretty thorough, comprehensive survey of many of the points contained in the Committee’s report and, I am sad to say, summarised accurately the Committee’s reaction to the Government’s response, which we had hoped would be substantially more constructive and engaged than it was. I hope that the Minister will be able to embroider and develop the Government’s response and, perhaps, change that perception by the end of this debate.
This problem affects all of us. I am pretty sure that every hon. Member present has pockets of poverty and deprivation in their constituencies, no matter which part of the country they represent. In my constituency of Weston-super-Mare, according to figures released by the Joseph Rowntree Foundation, 19 per cent. of children live in families on out-of-work benefits. That local authority is one of the dozen or so worst in the south-west. In fact, we have seven super-output areas in the bottom 10 per cent. of indices of multiple deprivation, and two super-output areas in the middle of Weston-super-Mare in the bottom 2 per cent. of indices of multiple deprivation. Therefore, the issue affects all hon. Members here today, who will have pockets of severe poverty in their constituencies as well as less badly affected areas.
I want to discuss what we mean by poverty. One of our early recommendations as a Committee was that the Government should change the way in which they measure and report poverty. That might sound like a slightly dry topic, but it has fundamental and profound implications, because poverty, as we all know, is a multifaceted problem: many different factors contribute to it and affect it. Therefore, the Government could pull many different levers to try to improve the situation.
The Government have moved towards viewing poverty through three simultaneous lenses. They use a relative measure, the internationally comparable OECD measure of 60 per cent. of median income, to assess poverty. Whenever we made international comparisons in our report, the Committee used that index as a way of comparing the UK’s performance with that of others.
In addition to the relative measure, the Government use material deprivation, which is very closely linked with the indices of multiple deprivation that I was just discussing. Under that measure, it is a question not just of how much money is coming into a household—the income relative to the national median—but what someone can buy with that money. The Chairman of the Committee rightly pointed out that in London, where living costs are high, a person can have the same income as someone who lives in another part of the country, in which the cost of living is lower, and yet be able to afford fewer of the essentials of life and, therefore, be comparatively worse off. That is a particularly important issue given the environment in which we live at the moment, with rising fuel and food prices. Many of the essentials of life are becoming rapidly more expensive. Therefore, material deprivation will become more of an issue. It is appropriate for the Government to consider poverty through that lens as well.
The final measure that the Government use relates to social mobility and the persistence of poverty. Again, that is a crucial measure. It is question not just of whether someone’s income briefly falls below 60 per cent. of the median, but how long it stays there. If people are temporarily out of work—even if it is only for a week or two—their income could theoretically fall below 60 per cent. of the median. As such people may only be out of work for a week or two before getting another decently paid job, that should not push Government policy in a particular direction. We must address the problem of those who find themselves stuck in poverty for an appreciable length of time because obstacles prevent them from getting out of it.
The Chairman of the Committee made some important points about people who are affected by change and who find it, if not comfortable, comforting to remain in a situation that is stable and safe rather than take the risk of going into work. They may worry about how all the unknowns, which have overcomplicated the benefit system with multiple interactions, will impact on their situation if they take that risk.
It is appropriate for the Government to look at poverty through those three different lenses. It is vital as well because this is not just an academic debate about the causes of poverty. Were we to choose only one of those views of poverty, it would have profound implications on the policies that we pursue to relieve poverty.
For example, were we to choose the relative measure of poverty and say that it is important to minimise the number of people who are below 60 per cent. of the median income, it would unavoidably push us in the direction taken by the Scandinavians to relieve poverty. We would have to have significant rises in taxes to effect substantial rises in benefits, particularly out-of-work benefits and possibly the minimum wage as well. The Government have not gone down that road. It is not Government policy solely to use that method of alleviating poverty, and my party would probably agree with them on that. There are other things that we need to do. With the possible exception of the hon. Member for Leyton and Wanstead (Harry Cohen), who might think that the perfect solution to relieving poverty, there is not a widespread political consensus that that is the only road out of poverty, even though it works for other societies such as those in Scandinavia.
Therefore, it is vital for the Government to be clear about what they are trying to do to alleviate poverty. If they are to hit their target in 2020 of substantially wiping out child poverty—even if as gently and elegantly as they can they are backing away from the notion that they will hit their halfway-point target in 2010—it is essential that we all understand what the Government aim to do. Many of the essential planks in their platform will take effect not between now and 2010 but from 2010 to 2020—in particular, the welfare-to-work reforms.
Those reforms are critical because the Government are effectively saying that they will not rely purely on a Scandinavian attempt to raise taxes and benefits, but on getting more people back into work and off benefits, allowing them to take the step through the point of difference—to which the Chairman of the Committee referred—believing that they will be better off in work. We hope that the “better off in work” calculation will be simple, easy to understand and right. A combination of earnings and in-work benefits, or tax credits, is the way to lift people either out of severe poverty and improve their earnings or to lift them entirely out of poverty over time. I hope that that is a statement of where the Government are going.
Would the hon. Gentleman couch that in terms of the broad philosophy that David Freud has brought to Government policy in the Department for Work and Pensions and other Departments? He says that so many of our interventions to get people out of long-term sickness, disability and unemployment are very short-term—they last 12 weeks and then there is the revolving door and so on. Does the hon. Gentleman think that one of the answers is more concentrated help over a longer period, and not being fussy about who the agents are to supply that change?
I agree with large parts of the Freud report. The hon. Gentleman is right to say that Freud recommends introducing far more variety of supply into the welfare-to-work arena so that more organisations, particular those in the third and charitable sectors, can get involved in getting people in hard-to-reach groups back to work. Also, we must ensure that organisations are paid by results over an extended period. It is not enough to give someone a couple of brief courses, get them into a job and then wash our hands of them. We must ensure that the job is sustainable and that the person remains in work for an appreciable period. In a previous report, the Committee recommended that the person should be in work for at least a year before the welfare-to-work agency receives full payment. That would help to ensure that the problems mentioned by the hon. Gentleman are avoided.
My hon. Friend made the point earlier that the “better off in work” calculation should be simple. Should it not be as simple as possible? Almost from the first step, when getting on or off benefits, it should be a question of one, two or three presses of a button to do the calculation. If we can make the process really simple—almost from the first calculation that is done—it would encourage people to say with confidence, “I would be better off in work and off benefits.”
I could not agree more with my hon. Friend. Two things would need to happen for that to be achieved. An incredibly complicated piece of software must be updated in enormous and excruciating detail every time there is a benefits change to simplify the calculation. However, we can only go so far in improving that software to try to reduce the number of keystrokes in the way he describes. The fundamental problem is trying to model the effects of an appallingly complicated benefits system with multiple interactions and interdependencies. In an earlier report, one of the Committee’s conclusions was that only a limited amount can be done by improving the software. We will need to simplify dramatically the benefits system and its interaction with tax credits before we will make much headway. It is fundamental, but that is the way that we need to head.
May I finish off this point about the Government’s overall approach to poverty by pressing the Minister on a particular question? As I understand it, the Government have committed themselves to three ways of viewing poverty and have, therefore, committed themselves to the policy outcomes and approach that I have just been describing. As I mentioned, one of those ways of assessing poverty is the internationally comparable OECD measure of 60 per cent. of median income. I had thought that that measure was part of the Government’s approach; indeed, it appears throughout our report, and every time we made an international comparison, that was the measure that we used. However, in a recent debate about poverty—it was about pensioner poverty, but child poverty and pensioner poverty clearly share a common definition of poverty—two of the Minister’s departmental colleagues sought to rubbish that measure of poverty. They said that the calculations by EUROSTAT, which seeks to make international comparisons, are somehow not to be believed.
I appreciate that the Minister’s colleagues were probably seeking to avoid embarrassment on the Floor of the House because they were being accused at the time of having engineered a situation in which Britain’s pensioners were worse off than those anywhere else in the EU, apart from Latvia, Cyprus and Spain. However, the Under-Secretary of State for Work and Pensions, the hon. Member for Warwick and Leamington (Mr. Plaskitt), said:
“The EUROSTAT survey measures the median income of each country and that of pensioners. The UK is relatively well-off so our poverty line is higher, and so our “poorest pensioners” are better off than the “poorest pensioners” in other countries. The motion’s claim is therefore spurious.”—[Official Report, 4 June 2008; Vol. 476, c. 880.]
In the same debate, the Minister for Pensions Reform said:
“Because we are a wealthier country, our poverty level in the EUROSTAT statistics is set higher than that for most European countries. That is the way the EUROSTAT statistics are set…Our pensioners are therefore much better off than those in most other countries.”—[Official Report, 4 June 2008; Vol. 476, c. 848.]
I hope that the Minister will clarify the situation. The whole point of the measure using 60 per cent. of median income, which the Government and his Department have used until now, is that it is internationally comparable. It allows international comparisons to be made and conclusions to be drawn in the way that the Committee has just done in its report. It is therefore a little awkward, to put it politely, for the Government to want to have their cake and eat it by using those international comparisons when they show the Government’s record in a flattering light, but back-pedalling rapidly when they come up with conclusions that Ministers do not like. Perhaps the Minister could therefore make it clear that the Government remain committed to that measure of poverty as one of the three that they use and that his colleagues were perhaps paddling rather furiously to avoid embarrassment on the Floor of the House, rather than necessarily being bang on in their representation of Government policy at the time.
The Chairman of the Committee has covered the points made in the report in fairly comprehensive detail, so I shall focus on just one additional issue—child care. Child care is clearly one of the most important obstacles to taking parents and their children out of poverty. Although the Government have managed to engineer a substantial increase in the number of child care places over the past few years, that increase has come at a cost. There is not just the financial cost, although the Government have clearly come up with extra money to finance child care places. In increasing the number of places, however, they have also dramatically increased the amount of regulation, red tape and bureaucracy, as well as the expectations, surrounding child care places.
There are sometimes excellent reasons for the changes. Some have happened because of child protection issues and because we have needed to ensure that Criminal Records Bureau checks on child care providers are done correctly. In other cases, the concern has been to improve the quality of child care, and that has led to regulations governing child care providers’ minimum qualifications and the minimum ratios of child care providers to children. As a result of such provisions, however, the number and range of child care providers has been dramatically reduced as fewer organisations have been able to provide the care envisioned in the Government’s guidelines, which have become substantially tougher and more serious. The cost of child care has also grown dramatically, and one direct result of that, which we can all see, is that child-minding provision has declined dramatically.
As the Chairman of the Committee said, we have therefore ended up not only with an increase in the number of child care places, but with a dramatic increase in the number of vacancies and unused places, which now account for about 22 per cent. of places up and down the country. I suspect, as do many others, that that means that we have a monolithic, bureaucratic, over-engineered set of providers providing what the Government have defined as the right kind of care, which will, however, almost inevitably not match what parents want and need.
The Select Committee on Children, Schools and Families has just returned from two intensive days’ work in Copenhagen. What the hon. Gentleman says strikes a particularly discordant note for someone who has just come back from a country that supplies very high-quality early-years care. Does he not agree that if we are to stimulate young children as early as we can, it is the quality of the setting that matters? He would surely agree that part of what the Government are trying to do is to squeeze out below-standard child care. I, too, would like to have my cake and eat it and to have low-cost, stimulating, high-quality care. At this point in the 21st century, however, society can surely no longer accept the fact that poor children go into environments where they are not well stimulated because the pay and training of those who work there is poor.
I completely agree with the hon. Gentleman’s point about the importance of quality. The point that I am trying to make is that although the regulations that the Government have introduced in an effort to achieve their laudable aim have improved quality in some respects—I am sure that hon. Members on both sides of the Chamber would sign up to that aim—they might also accidentally be squeezing out some potentially high-quality providers. I have no problem with squeezing out poor-quality provision—that is absolutely fine—but highly regulated, bureaucratically defined provision can often lead to other, unusual, different kinds of high-quality provision being excluded too. I suspect that that is one of the problems that we are seeing at the moment, which is why we have a mismatch between what parents want and what is being provided, and that has resulted in a large number of underused and vacant places in the existing child care sector.
I was therefore concerned by the Government’s response, which did not seem to address the issue or suggest that any material change was in the wind. Clearly, there must be some way of providing a high-quality but far more flexible set of services at an affordable cost or at a different time of day, a different day of the week or a different month of the year. In that way, people who do not want to work from 9 to 5, but at other times of the day, or those who want to continue their jobs during school holidays, would not have to give up their jobs when the existing level of provision caused them child care problems.
I was filled with gloom when I read the Government response. Yesterday, however, the clouds parted, and I saw a ray of sunshine. Two of the Minister’s colleagues came to give oral evidence to the Committee on the issue of care. That was part of an inquiry into social care, but there are clear parallels and overlaps with the causes of child poverty, as I am sure that the Minister will understand. The difference between the Government’s approach to social care and what they said in response to the Committee’s report was stark.
Yesterday, the Under-Secretary of State for Health, the hon. Member for Bury, South (Mr. Lewis), who has responsibility for care services, said that the Government were trying to move towards a system of personal budgets and personal accounts, giving people control over the money that is spent and allowing them to choose who provides their care services. He said that the Government were looking at three different models. In one, people would employ their own staff and run their own operation. In the second, they would get the money and pay a traditional care provider to provide a service. In the third, the person would want the maximum ability to articulate their own needs and would want the authorities to settle the bills because they would not want the hassle of the bureaucracy. He then went on to tell the Committee that
“it is not just about choosing from the existing menu. The whole point of giving people personal budgets is to change the provider side. It is to change the menu, not to choose from traditional conventional services. If we are going to create a flexible system, it is not just about giving people power and control, it is also making sure that the provider side, the supply side, is completely different and people can use that money in an innovative and imaginative way.”
The Under-Secretary then got the wind in his sails and a couple of pages later started to get very enthusiastic. He said that
“it is about completely reorganising the relationship between the State and the citizen. It is a massive redistribution of power, frankly, from the State to the citizen without leaving the citizen alone.”
He finished by saying that
“I think probably personal budgets in the hands of lead professionals, right and responsibility contracts, ruthlessly identifying which families we are talking about would be a major way of tackling child poverty and breaking into generational deprivation, stopping kids drifting into the criminal justice system, supporting good parenting. It has the potential to transform.”
That was eye-opening, fresh and new and I thought that it was a potential answer to a great many of the criticisms and concerns outlined in our report. The contrast between what he had to say and the Government’s response to the report was very stark, so I hope that the Minister will explain to us either that the Department is examining that approach, to see how it can be applied to child poverty more generally, and particularly to child care issues, or, if it is not, why not. One of the answers I have recounted seems a great one; the other one, as encapsulated in the Government’s reply to the report, does not.
It is a pleasure to follow the hon. Member for Weston-super-Mare (John Penrose). I cannot say that the earth moved while he was speaking; it was just my hon. Friend the Member for Ealing, North (Stephen Pound) moving the furniture around. Nevertheless, he made a valuable contribution to the debate, and he made a valuable contribution to the Committee’s work and its report.
The report is called “The best start in life?” and that question mark says a lot about whether we are giving such a start to children. That is the aspiration, of course. The subtitle is “Alleviating deprivation, improving social mobility and eradicating child poverty”. It is a very good report, and it has been acclaimed by many organisations. One of them, the Child Poverty Action Group—I shall quote it again later—said it was
“a comprehensive analysis of many of the issues facing poor children and families.”
I am proud to have helped, as a member of the Committee, to produce the report. I pay tribute to the Select Committee Chairman on steering the report through, notwithstanding that he turned down several of my radical suggestions, which would have improved it still further. Nevertheless, he did an excellent job.
As I am paying tributes, I shall start my speech with one of the first conclusions of the Committee, which was praise to the Government. The report states:
“Significant progress has been made in tackling child poverty. In 1998-99 the UK had the worst record on child poverty of any major European nation; there were 3.4 million children living in poverty and child poverty had more than doubled over the previous two decades. Since then this rising trend has been reversed and there are now 600,000 fewer children living in poverty.”
In their response the Government pointed out, with reference to their Budget measures and the comprehensive spending review, how those new measures should lift another 500,000 out of poverty. However, there is a gap, and the Child Poverty Action Group spells it out in statistics in its briefing for this debate. It says that what the Government are doing will
“still leave a major gap to meet the 2010/11 target.”
“In 1998/99 the Government’s central measure (relative incomes before housing costs) counted 3.4 million children as poor. If the government’s target to halve child poverty is to be met poverty needs to fall to no more than 1.7 million children. In 2006/07 on this measure poverty stood at 2.9 million children, leaving a ‘gap’ to the target of 1.2 million children. Taking account of recent announcements which have not yet fed into the figures the unmet gap between the projected poverty level and meeting the target is around 650,000 children.”
That is a sizeable gap still to be covered. On top of that we must consider the impact of higher inflation—the food, fuel and energy prices that could also put the Government off track in getting the figure down.
I know that the Chairman summarised the report, but I want to go through the key points. It said that it is only through further investment that the Government can meet their target of halving the number of children living in poverty by 2010. That is crucial; notwithstanding what is happening in the Budget and the comprehensive spending review. Further investment is still needed if we are to get there. The report also says that the Government must accelerate their efforts if the targets are to be met. It talks about the Government missing the target by
“close to a million children”,
which is not out of line with what the CPAG says, because of recent figures showing a rise of 100,000. The figure could be 1.5 million children after taking housing costs into account. We know from the Government’s response that they will not take them into account in relation to their targets, but it is worth recalling those extra 500,000 children. It is a question of reality. Families do not live on income before housing costs are taken into account; they live on income after taking into account housing costs.
The Committee went on to talk about evidence of the damaging effect of poverty on children. They are more likely to experience social exclusion and poor educational outcomes. The groups of children who faced a much higher risk of living in poverty were those from families in which there was disability, those with lone parents, some from ethnic minority families, and those from London, which has some of the worst child poverty.
The Committee congratulated the Sure Start local programmes, and I pay tribute to the Government for those—some excellent work has been done on health education and financial advice for parents. However, it also raised the issue of the need for good quality child care—particularly for lone parents, if we are to get them back to work. The Committee agreed that that is an ideal for which we should be working. However, it identified a mismatch between the child care that is available and what parents need—provision that is affordable as well as being available during the hours that they work. Again, the availability of child care is a particular problem in deprived areas of London, where the mismatch is stark. As to part-time jobs and flexible working, many other workers are available to take those jobs, so there is a shortage of them for lone parents.
The Child Care Act 2006 places a duty on local authorities to ensure a sufficiency of child care in their areas. The Committee welcomed that, but said that it needed to be monitored. However, the Government said in their response that they had no plans to do so; they will not collate and publish local authorities’ assessments of child care in their area. Those will be published only by the local authorities in question. I wonder how that duty will be effectively implemented on that basis.
The Committee argued that if employment is to be sustainable, parents must be financially better off in work than they are on benefits, which suggests improvements to in-work benefits. There is a need, as has been said, for higher wages to close the gender gap and in London where costs are higher. The Committee also argued, in that context, that even if the Government were to achieve their 80 per cent. employment rate, many children would still live in workless households where the pay is insufficient to lift the whole family out of poverty. There must be an anti-poverty strategy to deal with that.
The Committee also argued that there is a case for higher benefit uprating for targeted groups such as those with children who are unable to work, through no fault of their own, because of a disability; child benefit and tax benefits could also be raised to try to achieve the child poverty reduction targets.
One important recommendation that I made, which was included in the report, is that all major new Government tax-and-spend policies should be accompanied by a report to Parliament explaining their impact on child poverty. We do that for human rights, and if child poverty is the major priority, as the Government have said—I agree that it should be—we should have such assessments. That would stop the Government being waylaid, sometimes by the Opposition, and taxing and spending on something that will have no impact on that key target, and may work against the provision of resources for this key target. I support that recommendation that the Chairman allowed me to squeeze into the report.
I want to draw attention to the Child Poverty Action Group’s response, which said that the Government’s
“response was disappointing in largely restating existing policy positions, this was made worse given the response was published a mere two days after the latest figures showed that child poverty continued to rise in 2006/07. Child poverty rose in 2006/07 because the government took its foot off the accelerator, with that in mind we are looking to government for a much more vigorous response to the challenges faced today.
This government response, frequently complacent and defensive, looks markedly different from welcome investments in children in Budget 2008, the Ending Child Poverty everybody's business' document, published with the budget, and from recent joint oral evidence given by Ministers from the Departments for Work and Pensions, Children, Schools and Families and HM Treasury on the 9th June. At this stage of policy, approaching the 2010 target and with meeting this interim target a vital base for moving towards the eradication ambition CPAG is looking for more enthusiasm, energy and investment around what has been perhaps the key recent change making pledge.”
I agree that we want energy and investment from the Minister, not the Government’s bland and unsatisfactory response.
I shall go into some aspects of the Government’s response with which I am not satisfied. I mentioned the local authority child care duty not being monitored or effective. If it were effective, it would have an enormous impact on child poverty, so I am dismayed that it will be put on the back burner. I also referred to the decision not to consider income after housing costs. I know that the Government are struggling to achieve their target, but housing costs are a reality for families and affect 500,000 people. I shall say more about that in a moment, but perhaps there is scope to pick that up in the review of housing benefit.
The Select Committee recommended that the higher child care tax credit for families with a disabled child should be raised to £300 a month. In their response, the Government said that there is a disabled child element of £2,540, but if the monthly amount were raised to £300, the annual amount would be £3,600. In their response, the Government said that the disabled child element is £2,540 per annum, with an additional severely disabled element of £1,020. The Committee recommended, and I believe, that there should be uprating of about £1,000, which would impact enormously when there is poverty in families with disabled children.
The Government’s response on disabled living allowance was surprising. They said that it is not designed to cover the extra costs of disability, but went on to say that it is a broad-brush contribution towards a generality of extra costs faced by disabled people. That is an almost meaningless distinction, and I would like the Minister to explain it. The Government go on to say that no work is planned.
The DLA was informed by surveys on disability during the 1980s. We are now more than 20 years on from that, and today’s evidence should be considered. It would show that there are extra costs, and the Committee alludes to extra costs causing child poverty in families with disabled children. The Government rejected the Committee’s recommendation that winter fuel payments should be extended to families with a disabled child under five and in receipt of DLA at the middle or higher rate. That is disappointing.
On child care in London, especially for lone parents, the Select Committee expressed concern about the difficulties of finding work with suitable and flexible hours and conditions, and the effect of sanctions on children. The Chairman made that point, and the Government’s response was that the sanctions on jobseeker’s allowance would be flexible. We wait to see what that means, but the indications are that they are increasing considerably, including for lone parents. The response says that parents will not be sanctioned if child care is not available, but it will be up to the parents to prove it. How will that work? Will the Minister explain? There are clear cases in London of that mismatch where child care is not available. How will parents provide proof in such circumstances?
On child care and the local authority’s role, the Government have said that there is enough money in the system already, and that in deprived areas it may be preferable to ensure that providers have a realistic business plan instead of making financial payments to providers. How will that help a London lone parent to have the child care that she needs to work and to avoid sanctions when the duty on local authorities will not be monitored or enforced? What exactly does “realistic business plan” mean in that context and to the individual concerned?
Another area that I was keen to promote in the report was the London living wage, which the former Mayor of London adopted for the Greater London authority. The Government’s response was that although DWP works with contractors, it does so on staff conditions, including the minimum wage, but there was no mention of the London living wage. That is a serious omission by the Government, who should support the London living wage. The extra costs of working in London are considerable, and they contribute to the problem of child poverty and whether parents are better off in work or not. The Government should face up to that. The CPAG said:
“For a very large government department, responsible for the child poverty target, CPAG would like to see clearer and stronger leadership. It is a scandal that half of all poor children have a parent in work. Government can and should lead by example, not just in London but across the UK.”
That makes the point about in-work poverty.
The Government accept that the gender pay gap contributes to child poverty. They are seeking belatedly to close it, and it is a public service agreement target. But how will that work, and what effective measures will they provide and at what speed will they move to close the gender pay gap? There was no response from the Government to the Committee’s recommendation for research into the problem. Again, that was a disappointment.
Another response from the Government referred to the DWP’s position in relation to disabled children. The Government said that parents who are not eligible for carer’s allowance have children who by definition do not require a level of care that would prevent them from working. That would have a potentially pernicious effect if it were adopted as a rigid policy by the jobseeker’s allowance staff because other factors can prevent a lone parent with a disabled child from working—for example, the lack of child care that I have mentioned. That response does not reflect the reality for families with disabled children. The Committee argued that a broader definition is needed to exempt those people from the requirement to work and that the Government need seriously to consider whether a wider group should be exempted. Otherwise, sanctions would be unfair and unreasonable and would reinforce poverty, not alleviate it.
I shall now refer to the representations we had from Treehouse, which is the national charity for autism in education. It has stated that
“Children with autism are disproportionately represented in those being excluded from schools; 27% of children with autism have been excluded from school”.
It went on to say:
“The impact of disability on poverty is clear, the figures speak for themselves: 3% of mothers of a disabled child being in full-time employment as compared to 22% of mothers of a non-disabled child. 84% of mothers of disabled children do not work, as compared to 39% of mothers with a non-disabled child. It costs, on average, three times as much to raise a child with a complex impairment than a non-disabled child. Over a quarter of parents with a disabled child are lone parents.”
Treehouse agrees with the Committee’s report, particularly those aspects pertaining to disabled children. In addition, it recommends improvements to support services, more inclusive schooling, greater flexibility in the workplace, and better access to services to ensure traditionally deprived and hard-to-reach groups are well-informed about them and that they are able to access them.
The main representations we had were from the Child Poverty Action Group. It said:
“it is essential that the Government invests a further £3billion in child tax credit and child benefit to meet the 2010 target…This is affordable and the cost of not meeting the target will be far greater in the long term.”
The CPAG also drew attention to schools and the school costs referred to by the Chairman in his opening remarks. It said:
“Though CPAG accepts there are legal limits around what schools can charge for, it is still our experience that the costs of uniforms, trips, requests for contributions, and the costs of meals do cause families hardship, single some children out for bullying and may cause them to miss out on opportunities, both in the school day and within the wider 'extended' school period.”
It also said that
“The Government makes the extraordinary statement that ‘it is not aware of evidence showing that the cost of school uniform is a major barrier to poor families’ or that ‘it is common for schools to provide free school meals in a stigmatising way’. These answers strike us as complacent and blinkered in their approach to educational exclusion.”
The CPAG goes on to refer to the report of the schools costs coalition and the citizens advice bureau, “Adding Up”, which includes a survey that found that one in five parents of primary school children and 50 per cent. of parents of secondary school children reported spending more than £200 a year on uniform and PE kit. The same report points out that in 2007, 57 per cent. of English and Welsh authorities did not provide uniform grants. School costs do have a kick-in effect on the poorest and their families. Indeed, the campaign that the CPAG is running is called “2 skint 4 school”.
My hon. Friend referred to the stigma attached to having free school meals. I am very much aware of that problem. The other day, I visited a school in my constituency that is one of the brand new schools built under the Building Schools for the Future programme. Children at the school are given smartcards—a bit like Oyster cards—that they can charge up with cash. The cards mean that children are not aware of whether somebody is having free school meals and has been given a card that has already had money put on it, or whether they have added the money themselves. There is therefore no way of telling whether someone is on free school meals when they pay. Is that something that has come to the Committee’s attention and does it think that should be adopted more widely?
I am grateful to my hon. Friend for mentioning that example. The Government should be pressing schools to adopt such ideas, and they should have been doing so a while ago. The Government cannot say that there is no stigma to free school meals when the CPAG has pointed out that some schools run separate queues. If such techniques are available, the Government should accept that they have a role to play in dealing with that problem.
The CPAG also talked about the Government’s response in relation to Gypsy and Traveller families. The Government argue that Gypsy and Traveller families are a small group and that Office for National Statistics definitions do not allow separate measurement for that group. That answer is weak. Even if population surveys do not provide the evidence, the DWP could conduct specific research among that group to explore child outcomes. The group is known to face high levels of poverty and barriers to using services, therefore such research must be a priority. The Government should not be so complacent. It is a relatively small group, but a little action could have a major positive affect on those involved. Will the Minister look at that matter again?
On large families, the CPAG and other organisations have long argued for the second and subsequent child on child benefit to be on the same rate as the first child. Although that was not accepted by the Committee, I certainly support that measure as it would have an impact on child poverty and is a simple way of dealing with child poverty in large families.
Job retention is important in relation to in-work benefit—not just because people are better off in work and are out of child poverty when they are working, but because it means that people can stay in a job, particularly lone parents. The Government need to put more emphasis on in-work benefits to assist with job retention.
As I said, a review was announced in the last Budget on housing benefit. Will the Minister give more details of the scope and progress of the review—not in this debate, but at some point soon? As far as I am aware, those details have not yet been placed in the public domain. Will the Minister ensure that the review has a specific mandate to consider reform of housing benefit for the best impact on child poverty?
On benefits uprating generally, the Joseph Rowntree Foundation recently published a report stating that the gap is widening for those who have to rely on benefit because benefits are not properly inflation-proof. The CPAG says that
“the lack of budget standards analysis to inform benefit rates or of a consistent approach to ensure rates keep track with changing social norms is indefensible if the safety net is intended to meet basic need and prevent poverty. The year on year degradation of benefits relative to typical wealth is part of the UK’s damaging culture of inequality that must be ended.”
Again, I agree. The Select Committee argued that there was a case for targeted increases in benefits, particularly in the area of disability, to which I have referred.
Poverty is, as we have said, damaging, but prices are going up for food, fuel and energy and that must be taken into account in meeting the child poverty targets. That means that the Government have to put their foot back on the accelerator and do more than they have been planning to do. I do not want to go through in detail the debacle of the abolition of the 10p tax rate; we all know what happened. I understand that it affected 5.3 million people. I am told that the Government’s uprating of the tax allowance benefited some 17 million people net. Some of those—not all—will be dealing with child poverty. My concern is that that measure is for one year only—it is not recurrent—so come this time next year, those people, particularly the poorer groupings, will be plunged back into crisis. I want to use the opportunity offered by this debate to urge the Government to think again on that issue, particularly for the lower-paid, painful though that may be.
Then there is the credit crunch and the risk of recession. There is the issue of stagflation as well. That could have impacts on the employment market. I am not saying that that would necessarily mean higher unemployment. The Government have done very well to buck trends and keep unemployment coming down, but there could be an impact. If that happens, the policy of pushing people into employment and getting children out of poverty will need to be rethought. If the credit crunch had such an impact, there might be areas, such as London, where that would need to be mitigated.
I reiterate that there is a need for higher in-work pay and benefits. The American model of being in work and in poverty is unacceptable. The Government should make it a priority to ensure that that does not happen in this country. There need to be in-work benefits. Also important are the London living wage, a higher minimum wage and closing the gender pay gap. Those are my main points. I reiterate the case that I made in the Select Committee that tax-and-spend measures are a major issue. The Government should submit a report to Parliament on their impact on child poverty. That in itself would have a good effect.
I start by congratulating the Select Committee on producing the report. Although child poverty may be fairly easy to describe in headline terms, the devil is in the detail, and the report gives a comprehensive overview of the different factors that have an impact on child poverty and the various measures that need to be taken to tackle it. Quite often, something looks in theory as though it would alleviate a particular family’s poverty, and it is only when we get down to the detail and start making those complex calculations that we realise how it works in practice. It is therefore important that the Committee is giving the matter a great deal of scrutiny and responding to it in such detail.
Such a timely report can help to keep child poverty on the political agenda. We are in a slightly strange situation now. Hon. Members have referred to the disappointing figures that were released recently, but they are now quite significantly out of date. As the Child Poverty Action Group and others have said, we already have measures in place from the 2008 Budget, and some from the 2007 Budget as well, that will help to lift another 500,000 children out of poverty. We should not lose sight of the fact that certain measures have not yet come into effect, but are still moving the Government’s trajectory towards meeting the target in the right direction.
I shall focus on one small aspect of the report, because the three Committee members who have spoken have already talked in detail about things such as child care, the take-up of benefits, and “better off in work” calculations. I shall explore the broader issue of how we make the political case for tackling child poverty. That is increasingly important now. Perhaps the public’s attitude was more sympathetic when people generally felt quite well off, but when they start to feel the pinch in their own pockets as food and fuel prices rise and they feel that things are not quite as rosy as they were, it is even more difficult to make the case for redistribution from the better-off to the people who need it the most.
I was struck by the reference in the report to evidence that the public tend not to believe that poverty really exists in the UK. That was mentioned a lot when, with the Chairman of the Select Committee, my hon. Friend the Member for Bradford, North (Mr. Rooney), and other Members of Parliament, I took part in a discussion yesterday with people from the Joseph Rowntree Foundation and others. Now, people tend to think of poverty as something that is seen in Darfur—people living on the brink of starvation in desperate circumstances. They quite easily dismiss claims about poverty in the UK with comments such as, “Oh, you can’t afford a new pair of trainers.” They think that that is all it is. The case needs to be made.
I was struck by this statement in the report:
“Long-term economic stability in the UK means the public tend to feel there is no excuse for poverty; it is the result of bad choices and wrong priorities, and therefore not a subject for public help.”
The report also states:
“The public believe that social relations within society are breaking down due to antisocial behaviour; the real problem is seen as ‘emotional poverty’, not lack of physical or concrete resources.”
The Committee cites research from 2007 by the Joseph Rowntree Foundation and Ipsos MORI to back that up. It is a telling point. To an extent, such attitudes are nothing new. In the past, distinctions have been drawn between the so-called deserving and undeserving poor. The media and certain politicians have focused on attacks on feckless single mothers, workshy scroungers, or benefit fraudsters—often straying into racist territory. We are all familiar with stories—grossly distorted—about immigrants and asylum seekers coming to Britain to take advantage of our generous benefits system.
I do not deny that some people out there play the system. They are in it for what they can get and they do not feel that they have any reciprocal responsibility to society. We know that some people do not want to work. We see that in our constituencies and in the press. However, for every person I see at my surgeries, hear about from other constituents or read about in the local press who might fall into that category, I come across many, many more who are desperate to get themselves out of the situation in which they find themselves. They know how soul destroying, demeaning and exhausting poverty can be and they do not want that for their children. There is an intergenerational cycle whereby children who are brought up in poverty tend to go on to be poor themselves—poverty is passed on from generation to generation. Although some people do not have aspirations for themselves, many more are quite willing to move into work; they just need help and support to do that and the Government policies that can point them in the right direction.
As I said, the research on public attitudes revealed that people believe that poverty is the result of people making the wrong choices and having the wrong attitudes and the wrong priorities—that the problem is emotional poverty. There has been a recent public focus on what, rather than the undeserving poor, could be termed the dysfunctional poor. The focus is not so much on people as economic participants but on people’s behaviour. To some extent, the media these days are almost celebrating dysfunctionality in families. I do not want to give yet more publicity to certain television shows, but Members probably know the sort that I mean—the sort of show, for instance, in which someone having a DNA test live on television is thought to be a good way of announcing to the world who a child’s parent is. There is something seriously wrong with that.
We see that attitude also in relation to certain celebrities. One young woman, who obviously has serious mental health and drug problems, shares my name. I often walk into the newsagents and see headlines saying “Kerry on the verge of collapse”, “Kerry back in rehab”, “Kerry’s drugs hell”, “Kerry not fit to be a mother” and so on. That is presented as entertainment, but for celebrities income is not a problem. At a lower level in the media, however, dysfunctional families are paraded as if they were entertainment.
That may be partly because, as has been said, there has not been so much of a focus lately on economic issues. If people feel relatively well off, they will not be so concerned that their money is being used to support those unemployed people who want to be unemployed. However, there is now more of a pejorative element—it is more a moral judgment about people’s other choices, rather than specifically about work.
That element is linked in part to the fact that, for laudable reasons, the Government have focused on antisocial behaviour and their Respect agenda. That is entirely laudable and something that should certainly be pursued, but it has moved the debate on a little. Instead of it being about people who live in poverty and deprivation in difficult circumstances, it is now seen as being about families who have drug and drink problems, who may suffer domestic violence, or who are involved in criminal activity or prostitution. That is what people think of when the subject of poor families is raised. The focus is important.
The Government’s Families at Risk review is concentrating on those families that have multiple disadvantages, and that is to be welcomed. However, focusing only on those families, and seeing poverty just as something associated with that sort of dysfunction, does a grave disservice to those who are on relatively modest incomes and lead relatively modest lives but who are struggling to keep above the breadline.
We know that 50 per cent. of children who live in poverty have one or more parents in work and that they have relatively normal lifestyles. It is about making work pay, being able to afford transport, being able to meet those unexpected costs, such as when the fridge stops working, or when the car that one needs to get to work breaks down. Rises in the price of fuel and food will have a disproportionate impact on the poor.
I shall not go back into the detail of what has already been said. I think that the Government are on the right lines with the packages that they are trying to deliver to people to make them better off in work. I am more concerned about what could be the subjective judgment on whether a person is better off in work. We have heard that the calculations are complex. However, we need to deal with the sort of situation described by my hon. Friend the Member for Leyton and Wanstead (Harry Cohen), of someone having to prove that child care is not available.
I am thinking of a particular scenario. In Bristol, public transport is pretty appalling. Someone who has a part-time job, perhaps in the new retail development that is soon to open in Bristol city centre, will have to fit that job around getting one child to a child minder and getting the other child to school and then getting the bus into work, and after work having to be at the school gates in time to pick up one kid and then go to the child minder to pick up the other one. If the buses are persistently late or do not turn up at all, that element can throw the whole arrangement out. On paper, the authorities can say, “We’ve done the sums. You can afford the child care with the help of child care tax credits. You can afford the bus fares and this and that.” But if the bus does not turn up and the bus company does not admit that the buses are running late, which happens, the whole thing goes out of the window.
We have heard figures on how many lone parents work—I believe that it is about 30 per cent.—but I wonder how many of them are in longer-term jobs. The lone parents whom I know tend to work for three months or six months, but find it too much of a struggle and go back on benefit; a few months later, they are struggling on benefits, and they decide to try another option. They have a succession of low-paid, casual and temporary jobs, and it is difficult for them to sustain the kind of job that would lead to a career or to them acquiring more skills.
My hon. Friend may like to know that when the Committee visited Cardiff to see Jobcentre Plus working with lone parents, great emphasis was placed on the advisers remaining as advisers to the lone parents once they had gone into work. They were advising them for several months. That proved to be a much better way of avoiding the revolving door problem. I am sure that my hon. Friend would agree that if every jobcentre did that, and did it to that extent, employment would be much more sustainable.
I thank my hon. Friend for that intervention. Ongoing advice is important, especially on things like managing debt and benefits.
The subject has been touched upon, but there are also problems with the administration of housing benefit and tax credits. As constituency MPs, we all know of people who have been billed the wrong amount for electricity, or who have similar problems. Having someone available to give guidance is important, because small things like that can mean that being in work is not sustainable. It might not even be the financial impact; the stress caused by trying to juggle and deal with the various agencies may be another factor.
It is generally accepted that all political parties are signed up to the agenda. I hope that we will hear from the Liberal Democrat and Conservative spokesmen not only what they believe the Government should be doing but what their parties will do. In particular, I would be pleased to hear from the Conservative spokesman what his party means by an “aspiration” to abolish child poverty and how that differs from a target or commitment.
The Opposition have been wary of state intervention to tackle poverty—measures such as tax credits, the minimum wage and the other tools that we use to fulfil our aspiration of meeting the 2010 and 2020 targets. If the Conservative party believes in state intervention, I would be interested to hear what form it will take. The party leader, the right hon. Member for Witney (Mr. Cameron), has said that the Conservatives will be judged on how they tackle poverty, but many voters would like to make that judgment before the next election rather than having to wait until afterwards before getting a glimpse of the party’s policies.
At the moment, all that we have to rely upon is one stark statistic, which has already been quoted. It is that between the late 1970s and the mid-1990s, the proportion of children living in households on less than 60 per cent. of the median income more than doubled. As some hon. Members have said, it is disappointing that the Government have so far managed to lift only 600,000 children out of poverty, but I have been told by the various organisations involved in the End Child Poverty coalition that if the Government had not introduced the measures that they have, another 1.7 million children would be living in poverty. The number would not have remained static; even more children would be affected. I look forward to hearing from the Liberal Democrat and Conservative spokespeople, and the Minister, how we can achieve our targets.
Thank you, Lady Winterton. I welcome this first opportunity to serve under your chairmanship.
I congratulate the Work and Pensions Committee on its extensive report, “The Best Start in Life?”, and the Committee Chairman, the hon. Member for Bradford, North (Mr. Rooney), on presenting the report to the House today. I may not be quite so enthusiastic about the Government’s written response, and I hope for a better verbal response today.
We have heard some interesting and wide-ranging speeches. I may pick up on a few of the points that were raised. As we rapidly approach the deadline for the target of halving child poverty by 2010, it is helpful to note that progress has been made, with 600,000 fewer children in poverty when the report was published. I congratulate the Government on that progress. I well remember how much child poverty grew in the 1980s. I do not need to look at the statistics. That time is embedded in my memory.
More recently, however, we have seen the publication of the latest figures, which show that the number of children living in poverty has increased by 100,000. That rise, which has occurred for the second year running, is cause for serious concern, and it makes our debate particularly pertinent, given the Government’s response. This is not a time to be complacent or proud simply of setting targets and having aspirations. For the sake of our children and future generations, we must make better progress.
The latest figures represent a setback to the Government’s achieving the 2010 target, and although the recent Budget changes will make some difference, there is a consensus that much more action is needed, especially if both the 2010 target and the longer-term goal of eradicating child poverty by 2020 are to be achieved. In addition, it has always been known that although some families need only a small change in circumstances to take them out of poverty, the more marginalised families who live in persistent poverty will be much harder to reach.
It is important to make the position clear both before and after housing costs are taken into account. I agree with the Committee that after-housing-cost data better reflect standards of living, especially in areas of high housing costs. Changes to benefits and tax credits for families with children have helped to lift a substantial number of children above the poverty line. However, it is a great irony that the policy of tax credits and the complexity of the system have plunged some families into poverty. Families have been overpaid and the money subsequently clawed back, sometimes in a very unsympathetic manner. There are also complexities in the child care element of the working tax credit. The guide alone is 23 pages long. We need reform and simplification of such things. The Committee rightly draws attention to the low take-up and the problems that are recounted by many of the poorest families.
The expansion of child care provision and other policies aimed at reducing the number of out-of-work families have undoubtedly had a positive impact on reducing child poverty. The Committee rightly flagged up the difficult balance between the provision of quality child care and affordable child care, and the availability of child care for working parents during school holidays and for parents who work long hours or part-time.
I was concerned to read in a recent report on research by the National Centre for Social Research that
“in terms of older children, only 17 per cent. of parents are using…after school clubs. This figure has not changed since 2004”.
When I have tried to obtain information on the provision of extended schools by parliamentary question, I have been told that the information is not collected centrally. Similarly, it is difficult to get a clear picture of how much holiday provision is available. That ties in with the duty under the Childcare Act 2006 to provide sufficient child care. I remain concerned about the extent and cost of that much needed provision, particularly in deprived areas. With the change in policy that requires lone parents with older children to register for work, the extended schools programme is important, as are the problems of affordability and parents applying for the tax credits for which they are eligible.
The Government have made considerable investment in Sure Start, but the latest evaluations continue to show that the most disadvantaged are not being reached. I therefore agree entirely with the Committee’s recommendation on reaching out into the community and the assessment of the impact of investment on poverty eradication.
The involvement of Jobcentre Plus is vital, but we should ensure that workless families receive more support for child care, because that would be a way of providing extra early-years provision to the most needy children, thereby breaking into the cycle of deprivation. It could also enable parents to take a step towards accessing training. I well remember hearing a story of a woman who, aged 40, I think, received the first certificate of her life. The certificate was for completing a swimming course. That lady was enthusiastic to go on and take more courses. Training that does not qualify for child care provision might be the first step on the training ladder.
Quality child care needs qualified staff—of that I am absolutely convinced. We have a problem in this country with our early-years provision. We have taken enormous steps since 1997, but we started at a terribly low level. We have incredibly low-paid workers in child care and low qualification levels, and all the evidence shows that poor-quality child care can be damaging, particularly for deprived children. The challenge is enormous, as is the mismatch of the provision of places, which the Committee brought to our attention. We must have sufficient good-quality places available where they are actually needed, and we must not waste money on providing places where it appears that they are not needed, give or take some surplus places, which will happen because there is a market.
The Committee accepted the case for greater conditionality on lone parents to seek work, but I agree that sanctions should never apply when there is a proven lack of affordable and suitable child care—however that can be proved—or when the lone parent is engaged in work-related education or training. I am especially worried about pressures on the parents of disabled children, for whom appropriate child care is so hard to find and likely to be expensive. Many partnerships break up because of the demands of looking after a disabled child, and we need to consider carefully making a lone parent work in such circumstances. More than a quarter of parents with a disabled child are lone parents. Currently, 84 per cent. of mothers of disabled children do not work. Against that, it costs on average three times as much to raise a child with a complex impairment than a non-disabled child.
The Government are consulting on extending the right to request flexible working. I wish that that process had started much earlier, so that there was a prospect of the measure lining up with the timing of the new requirements on people to seek work once their children reach certain ages. Half the children living in poverty come from households in which at least one parent is in work. Clearly, we need to make progress toward better paid and sustainable work. Several Members this afternoon have described so well the in-and-out-of-work pattern that is so disruptive to family life. Obviously, we need to encourage education, training and mentoring, as well as to make work pay and beneficial for lower-income families. We need to look at the costs of entering the labour market and ensure that people are supported.
Several Members asked, “Is it worth people going back to work?” The Committee concluded that the complexity of calculating the value of lost passported benefits makes it difficult for people to know whether they are better off in work. It recommended that the Government increase the earnings disregard for out-of-work benefits to improve the incentives for people to work in mini-jobs. I agree strongly with both points and I am sad that the Government are so dismissive of them. Mini-jobs are means by which a person can get on the first step to full-time employment. We must accept that when people or members of their family have not worked for a long time, it takes more than one simple step to get back into the labour market.
Families with disabled children remain disproportionately likely to be in poverty. The risk of poverty is increasing faster for families with disabled children than for any other group. Families with disabled children are 50 per cent. more likely to be in debt and 50 per cent. less likely to be able to afford holidays, new clothes, school outings or treats for their children than other families.
I should like to mention a letter that I received from a constituent and to make a plea to the Minister—this is slightly off-topic but it is relevant to the debate. My constituent, who has a severely disabled child and has received great support for the adaptation of her house, applied to the family fund for financial assistance and was surprised to learn that the income threshold for getting help in England is £23,000 per annum, which does not take into account housing costs or the number of children in the family. She is in a position to get absolutely nothing, as the family’s income has just increased.
I represent a constituency in Dorset, where housing costs are very high in relation to wages. That is well known. Purbeck, for example, has the sixth highest ratio in the country in that respect. It is a problem. My constituent asks whether there is any hope that the Government will respond to a request to increase funding from the family fund, as it would help some of the most deserving, such as families with disabled children. It makes a big difference to such families just to have the possibility of a few days’ holiday, or whatever the request for assistance involves.
The Select Committee recommends a review of disability allowance, measures to improve the take-up of that allowance and the extension of the winter fuel allowance to families with disabled children under five. I was sad that the Government agreed only with the second recommendation, because the winter fuel allowance will become more and more important, given the rise in fuel prices that so many Members have mentioned.
Other groups besides families with disabled children are more likely to suffer from poverty: large families, black and ethnic minority children, Traveller children, children leaving care and asylum seekers. Children in those groups are the most socially excluded and are faced with inequality and poor social mobility. If we are to reduce child poverty permanently, we must solve those problems. We can talk about the extra spending needed, but the reduction must be sustainable. That entails breaking the vicious cycle of deprivation and inequality that makes children who grow up in poor families far more likely to be poor themselves. Britain consistently performs poorly in OECD studies of social mobility, and the UK came bottom in most measures in last year’s UNICEF report.
The strong relationship between family income and educational attainment indicates the desperate need to form policies aimed at tackling inequality across society. That involves targeting funding at the poorest and most disadvantaged sections of society in order to improve opportunities for all. One Liberal Democrat policy that I might mention is the pupil premium, which would attach additional funding directly to pupils identified as disadvantaged. The idea is for the funding to follow the pupil to whatever school the pupil attends. I was challenged to mention a few policies—
I can assure the hon. Gentleman that there are plenty of them. The Liberal Democrats are proud to have signed up to the child poverty targets. That is not a vacuous promise.
I felt that the Government were dismissive of the costs of going to school. It is true that there are ways around some of the problems mentioned, but uniforms are another problem. I know that the Government have considered whether some schools use specific uniforms as a method of selection. I have a large comprehensive school in my constituency. I do not think for a moment that it uses the uniform as a way of interfering with admissions, but its PE polo shirt has a logo, which effectively prevents parents from going to supermarkets, some of which, I am told, produce polo shirts very cheaply. Such matters become real barriers. There is a stigma. I taught for a long time at an independent school where no stigma attached to girls with second-hand uniforms; it was a matter of course. However, it does not work like that for someone who is very poor. It is not right. It does not give self-esteem to have second-hand uniforms.
It is well documented in the 2007 UNICEF report that the Scandinavian countries, in contrast with the UK, scored highly on all measures, including those dealing with child poverty. What can we learn from those countries? I know that one hon. Member was not keen on following the Swedish model, but it should be noted that, although Sweden has a high proportion of single parents, a high proportion of them are in work. There must be lessons that we can learn from Sweden about how to avoid disincentives and to make it easier and more beneficial for parents to work. Scandinavian countries are in an enviable position, with high-quality child care, good early-years services, family centres and excellent parental leave. I say to the Government that we have come a long way since 1997, but it is such a huge journey.
Does the hon. Lady accept that although the achievements of Scandinavian countries are tremendously impressive, they start from a different position? They are smaller societies with lower populations, which are much more ethnically and racially homogenous than this country’s. They have different issues, and their solutions may not transport across precisely to a country such as Britain.
I simply think that they are worth considering. Sweden, for example, does have issues relating to ethnic minorities; perhaps those countries have some of the same problems that we have here.
Poverty affects many aspects of a child’s well-being, including health, cognitive development, achievement at school, aspirations, relationships and future employment. We must identify what action can be taken quickly to combat poverty. Equally, we should take up the Select Committee’s recommendation that alongside every change to taxes and benefits, the Government should publish a memorandum indicating the expected impact on child poverty. How useful it would have been to have had one last year, when it was announced that the Government were going to get rid of the 10p tax rate. Had they had one, the Government would not be scrambling to untangle the effects on poverty a year later. It is difficult to do so now—even the measures proposed will still leave 1 million people worse off. The same applies to the vehicle excise duty on cars. I am in favour of new cars having proportionately higher VED, depending on their carbon emissions, but the measure adopted is hard on people with seven-year-old cars, for instance, who live in rural areas such as the one I represent. They will be severely affected by it.
Not much has been said about rural poverty. Increased transport and fuel costs will have an impact in rural areas. Affordable housing is an issue for those who live in rural communities, and there are many more. We must work together, as has been suggested, but we must also try to think outside the box and ensure that a foot is on the accelerator the whole time.
Lady Winterton, I am sure that you would never give me a heart attack, but I thank you for your consideration. It is a pleasure to serve under you this afternoon, and to be back in Westminster Hall debating reports by the Work and Pensions Committee. I was a member of the Committee during the whole of the last Parliament, and I remember many happy Thursday afternoons spent here debating reports, including the report “Child Poverty in the UK”, the second report of the 2003-04 Session, to which I shall refer this afternoon.
I congratulate everyone who has spoken. Everyone here comes to the subject with passion, interest, different perspectives and detailed knowledge from their constituencies in different parts of the country. That is valuable, and it has added a lot of colour and local detail to our important debate. I shall add one or two perspectives from my own area of the country.
It is important to put the matter in context. Child poverty, sadly, has risen for the second year in a row: by 200,000 before housing costs and by 300,000 after housing costs. Some 2.9 million children are now in poverty, on a before-housing-cost basis, and 3.9 million on an after-housing-cost basis. Those figures are the same as those in 2002, so regrettably we have not made any progress on that incredibly important issue over the past four years.
The situation is even more worrying than that, however, when we consider the number of children living in severe poverty, which is defined as children living in households with less than 40 per cent. of median income. According to an analysis by the Institute for Fiscal Studies, in March 2007, that figure has increased by 600,000, from 2.5 million to 3.1 million, and a report last year by Save the Children stated that 1.3 million children in the UK are living in severe poverty. Although we want all children out of poverty—taking the 60 per cent. definition—I hope that other Members will join with me in saying that it is urgent that we do the most to help the poorest. I hope that that is common ground for us all.
The Treasury Committee’s report on the 2007 comprehensive spending review made the point:
“It is important that efforts to meet targets do not lead to an insufficient concentration upon the worst forms of child poverty in the very poorest households.”
That is a comment on the Government’s overall approach of trying to deal with child poverty through the tax and benefits system, although that must be integral to our approach—that should answer the question raised by the hon. Member for Bristol, East (Kerry McCarthy). I agree with my hon. Friend the Member for Weston-super-Mare (John Penrose) that we need a more broad-based approach, particularly to the pathways leading to poverty, as my right hon. Friend the Member for Chingford and Woodford Green (Mr. Duncan Smith) said in his report, “Breakthrough Britain”.
The Joseph Rowntree Foundation—not linked to the Conservative party in any known way—said that the
“strategy against poverty and social exclusion pursued since the late 1990s is now largely exhausted”;
its words, not mine. I shall not refer to the UNICEF report, because the hon. Member for Mid-Dorset and North Poole (Annette Brooke) has already quoted from it quite extensively, other than to say that the UK was voted lowest out of 21 OECD countries for child well-being.
I notice that the hon. Gentleman did not refer to the anti-poverty strategy prior to 1997 when there really were gateways into poverty. Will he acknowledge that the UNICEF report, to which I think that he is referring, contained no data for 2004 and after, and that the bulk of the data actually related to the 1990s?
What I do know is that the Government have a tendency not to like any report that is not favourable towards them—they do not seem to like the OECD and EUROSTAT figures, nor a range of other critical figures with which they appear to have difficulties. Furthermore, according to the Department’s analysis of its own productivity, between 2002 and 2007, published in February of this year, the 2010 targets
“are unlikely to be fully met”.
Both the Joseph Rowntree Foundation and the Department’s own research say that. Surely there is a case for changing direction and for a frank reassessment of Government policy. We all want these shared targets to be met, but given that we have gone backwards and failed to make progress over the past four years, there is an argument for looking at the matter more widely.
Paragraph 303 of the Work and Pensions Committee’s 2003-04 report, “Child Poverty in the UK”, stated:
“If child poverty really is to be abolished, the Government’s anti-poverty programme must reach beyond raising incomes, and address the human dimension of poverty in a holistic way—increasing good parenting, aiding family stability, raising levels of educational attainment and healthcare and thus boosting children’s life chances.”
Of course the Government have acted in most of those areas, although not all of them, but I am not convinced that they believe that those other areas are integral to achieving our objectives.
On social mobility, I am sure that I am not alone in being appalled by the fact that a boy born poor in 1970 has a 38 per cent. probability of remaining poor as an adult, when in 1958 the figure was 31 per cent. As a Conservative, that offends me deeply. I think that everyone here would want bright children from the lowliest backgrounds to be able to achieve their undoubted potential. The fact that only a quarter of pupils on free school meals gained five good GCSEs, compared with half for the overall population, is also deeply worrying. That shows how entrenched some of these characteristics are and that we need to intervene early.
The hon. Member for Bristol, East challenged me to come out with some of our policies. I think that I can partially reassure her, because we have a number of policies in place—we do not yet have the full suite, not least because at my latest count the Government have taken nine of our principal policies, and we would like to keep one or two in the locker until the general election. The report by my right hon. Friend the Member for Chingford and Woodford Green, “Breakthrough Britain”, has been largely acknowledged by independent commentators with no link to the Conservative party as one of the most serious pieces of work on poverty by any political party in recent times.
I shall return to school reform and how we can give children the best possible chances of turning their lives around so that they are not condemned to poverty for their entire lives. I am pleased that following our debate on the use of synthetic phonics in teaching children to read, it became a common cause. We have also proposed creating more than 220,000 good new school places through expanding the academies programme innovatively, and we want to ensure that money will be targeted at the poorest pupils, with more money made available for children from the poorest backgrounds through a pupil premium, so that we get rid of the disgraceful statistic that I just raised: that children on free school meals do half as well in their exams.
There are also human factors at work, however, for which the Government cannot be directly responsible through legislation. When some children, from rich or poor families, go home at the end of day, and walk through the door, they will be grabbed by the parent or carer, fed, sat down and told to get on with their homework. In other homes, a parent might not be available, because they are out, and in others the attitude towards school work will be completely different. That is not an indication, per se, of material advantage. I accept that it is more difficult in poorer homes, because the parents might be working antisocial hours, and other difficulties might be at play. But I could take Members to plenty of poor homes in my constituency where education is really valued and parents ensure that homework is done. We cannot demand that the Government deliver on that, but why is the high value placed on education by some of our immigrant communities not prevalent among the population as a whole? That human factor is critical in dealing with some of the very important issues raised by the Select Committee.
The Committee’s report mentioned soft skills and getting people ready and fit for work. What key disciplines does a person require if an employer is to be hungry for their services? I would put reliability and self-discipline pretty high on that list. An employer wants someone who will turn up, do what they are asked to do and be trustworthy. If children who are in difficult family circumstances are not getting those skills, what is the role of institutions? Schools have a huge role to play in developing those attitudes and qualities in children, but so do organisations such as the scouts and cadets, which the Government—all credit to them—are talking about expanding. If children are not getting those skills and disciplines at home, through their family relationships, such organisations can play a key role in achieving the outcomes that the Select Committee is rightly looking for.
The Conservatives are absolutely signed up to the notion of work as the best route for getting children out of poverty. It is not the only route—there is absolutely a role for direct state intervention—but we see work as the primary way of doing that. The Government have stated that that is their intention, but the UK has the highest proportion of workless households in the whole of the European Union, including countries such as Bulgaria and Romania. That statistic is from the 2007 EUROSTAT figures. That is surely an indictment of our country’s ability to participate fully in the labour market.
The hon. Member for Bristol, East asked me for some policies. We have come out with innovative welfare reform policies, and the Government are moving in the same direction; indeed, only the Liberal Democrats are not. We think that every claimant who may be able to work should be engaged in full-time activity as part of the back-to-work process. In some cases, that will be through mandatory community work for the long-term unemployed. That might seem callous and unkind, but I argue that it is exactly the opposite. We all know that the longer people are out of the labour market, the less work-ready they are. They are less able to get up early enough to get to work every morning and they lose the ability to get on with the people whom they would have to work alongside.
We want to enable and give much more freedom to private providers, and pay them by results only when they have got people into sustained work. I assure Labour Members that we would structure contracts in such a way that they would not cherry-pick. There must be help for those who are furthest from the labour market as well as those who are easy to approach.
I am pleased to hear that, but my conversations with people such as Debbie Scott from Tomorrow’s People lead me to believe that there is further to go. The Government are complacent about the state of the labour market. There are more jobs than ever, but if this country has the highest number of workless households, there is much more to be done in this area if we are to tackle child poverty. We can go further, and we need to consider new methods—not from a particular political philosophy, but based on what will work. Much of what David Freud has said is good. Providers such as Tomorrow’s People have been outstanding and their results speak for themselves.
With regard to the labour market, which is key to dealing with these issues, I am informed by the Statistics Commission that, since 1997, between 53 and 81 per cent. of the new jobs created in this country have gone to foreign nationals. In many cases, they have provided vital skills, but there are people of all races, colours and backgrounds in our welfare system—nearly 5 million people on a range of out-of-work benefits. Our first duty is to make sure that such people, of all races and nationalities, are not in the welfare system for years, but come into the labour market.
Using work as a means of reducing child poverty is a primary focus, and I am concerned about the tripartite agreement in the child poverty unit. I understand that the lead Department for child poverty is the Treasury and that the unit is physically located in the Department for Children, Schools and Families, so the Minister is, in a sense, the junior partner of the three Departments, which is a great shame. Responsibility for child poverty should be firmly centred in the DWP, with the Secretary of State for Work and Pensions being accountable for meeting targets. He would certainly need to co-operate with other Departments, as well as the Treasury and DCSF, such as the Department for Communities and Local Government. We have heard about the problems with child care and local authorities, on which I have much sympathy with the comments of the hon. Member for Leyton and Wanstead (Harry Cohen).
I am not alone in worrying about the tripartite agreement. The Treasury Committee said in its report on the 2007 comprehensive spending review that
“we remain to be convinced that the division of departmental responsibilities will not accentuate the possible tension between the 2010-11 target and the final target to eradicate child poverty.”
We have heard excellent contributions on whether it pays to go back to work. I shall not repeat what has been said, but I should like to consider the issue from a slightly different perspective—marginal tax rates and the withdrawal of benefit income as people go into work. I think that we all agree that with a progressive form of taxation, the best-off should pay the most tax, but we have a system in which the poorest pay some of the highest rates of tax or have benefit income withdrawn.
Let me give some figures. Income support and jobseeker’s allowance are withdrawn at 100 per cent., housing benefit and council tax at 85 per cent. and working tax credit at up to about 70 per cent. in many cases. In its “Benefits Simplification” report, the Work and Pensions Committee said that if 41 per cent.
“is the highest tax rate that it is right to expect a high-income earner to pay, how much worse it is that the government effectively charges low income earners more than twice that rate.”
I agree. I also agree with earlier remarks on this issue.
I am listening to the hon. Gentleman’s comments with interest. What would his policy response be and how would he reduce those withdrawal rates?
I freely admit that it is not easy, but the Minister has all the clever people behind him and the very bright civil servants, a number of whom are in the Chamber, who are able to do that. In broad terms, we need to consider having a more gradual taper so that there is not such a dramatic cut-off. We have heard examples from Labour Members about people who are worse off. The Chairman of the Select Committee said that some people are £30, £40 or £50 worse off, in spite of the “better off in work” calculations telling them that they will be £25 better off. That particular case was probably because of the loss of passported benefits. If the benefit system were analysed in detail—I accept that that is serious work and is not something that the Department could do overnight—I think that that would be found to be a serious issue and a major barrier to getting people back into work. I commend to the Minister and his officials the need to consider that area.
The benefit system in this country, as opposed to most other OECD countries, to a marked degree treats couples much less favourably than single people. The Government’s equivalisation tables say that a childless couple need about 75 per cent. of the combined incomes of two single people, as single people and single parents need to receive more, and a couple should not need twice as much. The Government say that a couple with two children need about 80 per cent. of the combined income of a lone parent and a single person.
However, when one analyses the benefit system in rather greater detail, one finds that workless couples receive only about 60 per cent. of the benefits received by two workless single people. There is a range of countries that have a different benefit system and do not discriminate against couples in the way that our benefit system does: Canada, Iceland, Germany, Luxembourg, Norway, Ireland, France, Belgium, Spain, Finland, Austria, Sweden, the Netherlands and Switzerland, to name just a few.
Very briefly, the rates that we have today were set in 1988 under the Social Security Act 1986 and uprated by inflation. The opportunity was there in 1988 to do things differently. At that time, it was not thought right to do things differently, and it was not thought right to do things differently at any time up until 1997, so why the change now?
I am certainly not the sort of Conservative who defends everything that my party has done in the past. I say quite frankly to the hon. Gentleman that I do not think that the rates were right then and I do not think that they are right now; just because it is wrong now does not mean to say that it was right under a Conservative Government.
My hon. Friend is absolutely right. Let me just remind the Committee that children of separated parents are twice as likely to be in poverty as those of parents who remain together. Therefore, when I raise the issue in this debate, it is for no other purpose than wanting to reduce child poverty. As I say, the fact is that if someone is the child of separated parents, they are twice as likely to be poor than if they are fortunate enough to have parents who have stuck together.
It is interesting that, around the world, other Governments of the left seem to get this concept. Australia gets it, with Kevin Rudd’s Government maintaining the focus on families that John Howard’s Government introduced, with the family relationship centres. In President Clinton’s welfare reform Bill, there was an explicit measure to promote marriage and the two-parent family. I also note that only last week Barack Obama, the Democratic candidate for the US presidency, was talking about the fact that in America,
“children without a father are five times more likely to live in poverty and…nine times more likely to drop out of schools”.
So I say to the Minister that I would love this issue not to be an area of difference between us. I can enjoy the situation politically, because I happen to think that the Government’s policy is lousy and in a debate we can probably knock spots off it. However, I say to him that I genuinely do not want to go down that route. I would love it if he were to join those on the left and centre-left in Australia and America who realise the importance of family issues and the importance of strong, stable, committed families in reducing child poverty.
Again, it is not just me who is saying this. Let me quote a report from the Joseph Rowntree Foundation, entitled “What are today’s social evils?” The report does not just reflect the foundation’s views, but those of the people interviewed in its research. At the top of their list—this is not my preference as a Conservative that I am putting forward—was:
“The decline of the family: family breakdown and poor parenting were felt to cause many other social problems and leave young people particularly vulnerable.”
The hon. Member for Bristol, East did the debate this afternoon a service by raising this issue. I say to her that it is definitely not an either/or situation. Reducing child poverty is not just about providing the money to help people to get out of poverty, or promoting these softer emotional commitment and family issues; it is a both/and situation, where both factors matter. I will accept that poverty leads to couples splitting up, when money is scarce, but I think that it works the other way round as well, in that, in any given set of circumstances, a more stable and committed family relationship helps children to stay out of poverty. As I say, that is reflected in the data; children whose parents separate are twice as likely to be poor.
Again, we have some proposals to improve matters within the working tax credit system. We will increase that credit by £38 a week, to try to do away with this couples penalty. That measure will help 1.8 million of the poorest couples with children, so there will be some big gainers from that.
In the family area, we have also said that we will increase the health visitor service. Under our proposals, the very youngest children will receive six hours of home support in the first two weeks; a visit every two weeks in the first six months; monthly visits in the next six months, and two visits a year between the ages of one and five. It is critical to do that work at those very early stages.
I would just like to raise briefly with the Minister the issue of people in poverty with mortgages as opposed to living in local authority housing. There are 2.56 million families with mortgages living in underlying poverty, as opposed to 2.75 million families in local authority housing living in underlying poverty. When I was on the Select Committee, various people who gave evidence were concerned about the former group: those with mortgages. I may have missed any reference to them in the current report—I do not know whether there is any reference to them—but it is an issue that should not be off the radar screen. There is a very significant issue with this group of people, too.
Regarding the debt that people get into, the issue of affordable credit is incredibly important for families that are existing on low income, for the reasons that the hon. Member for Bristol, East quite properly gave. Someone’s fridge can stop working, or the classic example is that someone’s boiler stops working in winter; if they do not have insurance, that situation can send many families totally over the edge.
Again, there is a major piece of work to be done on the area of affordable credit. I will not be specific or prescriptive now. However, I am not convinced that the social fund works nearly as effectively as it could or should. There are opportunities, perhaps through working with private finance, to expand greatly what the social fund does, perhaps in collaboration, or separately, or in addition to the work of credit unions and friendly societies. Financial literacy is also something that we need to look at, given that there is evidence that people are wasting up to £700 a year by taking poor financial decisions.
Can I please encourage the Minister to do more on the issue of pre-payment meters? We had a recent pledge on this matter, but it really is scandalous that the poorest are paying most for their fuel. I raised this issue in the House on 23 March 2006; I was told then that nothing could be done. The current Secretary of State for Environment, Food and Rural Affairs called for action on this issue in 2000, when he was a Back Bencher, and he has been in the Cabinet since 2003. This issue has been around for a long time; many people from all parts of the House have raised it, and with fuel prices as high as they are and possibly going up by another 40 per cent. next winter, as we have heard yesterday and today in the news, something needs to be done urgently.
I was particularly shocked to see in paragraphs 381 and 382 of the Committee’s report that
“up to £9.4 billion are not being claimed in means tested benefits by those who are entitled to them.”
The report goes on to say that
“up to £4.5 billion of Working Tax Credit and Child Tax Credit”
is also not claimed. As the report says, that is nearly £14 billion of unclaimed income. We have heard this afternoon calls for £3 billion to be spent and yet if everyone had claimed what they are entitled to, the Minister would be writing a cheque for £14 billion. Perhaps there is something that I do not fully understand about those figures and perhaps the Minister will explain them clearly to the Committee and me when he comes to reply, but that issue of unclaimed benefits definitely jumped out at me when I read the report.
We have had good contributions to the debate on the issue of disabled families. I will only add to those contributions by saying that improvements in the take-up of disability living allowance are particularly vital to improving matters.
The differentiation between different ethnic groups in terms of poverty is another issue that absolutely screams out at me, and I am pleased to say that it was addressed in the report.
I will just return to the point about pockets of deprivation, which was raised earlier. At Marsh Farm in Luton, millions and millions of pounds have been poured in through the new deal for communities programme, and yet my constituency has streets and areas that are just as poor, and that are only a mile or two away, but are not eligible for those sorts of budgets. There is a real issue of fairness here; if someone is poor, they cannot pay their bills and life is really tough. Just because they are in an area that is slightly wealthier, why should they miss out on this massive amount of regeneration funding that is going into some areas but not others?
My final point is that I completely agree with the hon. Member for Mid-Dorset and North Poole on the issue of vehicle excise duty. It is another Labour proposal that will hit the poorest hardest; it will be the 10p tax rate on wheels and I urge the Minister to take action on that issue too.
I begin by welcoming the report, which has given us the opportunity to have this useful and interesting debate. I congratulate the Chairman, my hon. Friend the Member for Bradford, North (Mr. Rooney), and I thank the Select Committee for its work and for the attention that it rightly focused on this important subject.
I am sorry that one or two Members suggested that they thought the Government’s response was somewhat complacent. I assure the Committee and the House that that certainly was not intended, and that there is absolutely no sense of complacency on my part or on the part of any of my colleagues about the scale of the challenge that we face and the importance of achieving the targets that we have set. Those targets have been agreed across the House this afternoon.
It is time to see the back of child poverty. It has no place in a prosperous modern society. We need every child to grow up enjoying experiences and opportunities that will enable them to fulfil their potential later in life. Organisations such as the Child Poverty Action Group, which was referred to, warmly welcomed our substantial commitment to tackling child poverty. A financial commitment of £1 billion or so was made recently. I thought it a little unfair, after that big commitment, which was widely welcomed, to complain that there were no further announcements in the Government’s response, but that is by the bye. It is clear from the scale of the commitment that we made recently, at a time of substantial fiscal pressure, just how firmly committed the Government are to achieving their targets.
I say to the hon. Member for South-West Bedfordshire (Andrew Selous) that I certainly do not regret the fact that the Treasury has the lead on this matter. I have no doubt at all that that is part of the reason why in the Budget we were able to go so far in the direction that people have been calling for in this debate. That underlines the Government’s commitment, and that is where the matter sits.
Let me answer the question first, if I may. We have made announcements that we hope and expect will lift an estimated 500,000 above the poverty line—slightly less than the figure that my hon. Friend gave. Of course, there may be a drift upwards over the next couple of years because of other things that are happening, but it is clear from that and from the progress that we have made in recent announcements that we are within reach of the 2010 target. We are determined to achieve it.
I am grateful to the hon. Gentleman for raising that point, and I entirely understand why he did so. I have some sympathy with the question, but the statisticians tell us that the number is still 600,000. The reason is that the figures can be estimated only to the nearest 100,000; therefore, to the nearest 100,000, the reduction in child poverty is now 600,000, as it was last year. In that sense, we have not gone backwards. I am not a statistician, or at least I have not been one for a long time, so I shall not go further and explain how rounding works, but that is the statisticians’ advice. It is important to point out that although the survey showed a reduction, it was not significant enough to change the figure.
The Committee is right to say that poverty constrains children’s health and happiness. That point was firmly and rightly underlined by my hon. Friend the Member for Bradford, North. It makes it harder to succeed at school and to gain skills and qualifications to get on in life. Too many children suffer a poverty of expectations and aspirations, and they do not look forward to a bright future in the way that all of us would wish every child to be able to do.
Tackling child poverty is a moral imperative, but it is also an economic necessity. Inequality and disadvantage in communities make them more likely to suffer from crime and antisocial behaviour, and to lack social capital that they can draw on to prosper. That is why, for a strong economy as well as a strong society, the Government made a commitment in 1999 to eradicate child poverty in a generation, and to halve it by 2010.
Last week, as a contrast to gloomy news about the world economy, the monthly employment figures showed that the number of people in work in the UK had hit a new record: 29.55 million, the largest number ever. The number claiming unemployment benefit went up a little as well, but it remained in the low 800,000s. The last time the number claiming unemployment benefit was that low was in 1975.
It is 10 years since the new deal was introduced. What can we say about the progress of reform since then? It is true that the claimant count has been reduced by almost half, but that is only a partial measure of worklessness. A better yardstick is the number claiming all the out of work benefits: incapacity benefit, lone parent benefit, income support for others and jobseeker’s allowance. The number has fallen by almost 20 per cent. since 1997, from 5.5 million to 4.45 million on the latest figures, which are for May last year. It is interesting to look at the graph: the fall has been sustained and consistent. That is an important and substantial achievement. We have delivered what we said we would deliver, and moved people from welfare to work.
But it is also clear that there is still more to do. That is important for children, as the experiences of many people whom I meet underline. Last week I was in Paisley, just outside Glasgow, and I visited one of the GP surgeries where Jobcentre Plus pathways to work advisers have been working. It appears that they are extremely effective. I met a lone parent with four children. She had been out of work looking after her children for a long time. She wanted to get back to work but did not think that it would be practical for the reasons that Members fairly raised in this debate: child care, being better off and so on. She did not think that it would be practical with four children. Her GP recommended that she speak to the Jobcentre Plus adviser. Last November, she started part-time work as a traffic warden, and she hopes to join the police force in due course. She told me that when she was unemployed she had zero confidence. She said, “People say they wouldn’t believe I was the same person.” Her life, and her children’s lives, too, are being transformed through work and through the support that she has been given.
To pick up on an important point that came out in the exchange between my hon. Friends the Members for High Peak (Tom Levitt) and for Bristol, East (Kerry McCarthy), that lone parent continues to be in touch with the adviser whom she worked with at the GP surgery, as I saw for myself. She clearly finds that valuable. My hon. Friend the Member for High Peak said that he had seen that happening in Cardiff. Such support for lone parents going into work is now offered nationwide for six months. That is a good example of how we have been improving the system to help people overcome the undoubtedly substantial barriers that they face.
We have far fewer than we used to have—there are 400,000 fewer. That is a reflection of the terrible starting point that we had in 1997. The hon. Gentleman was frank enough to say that he did not support everything that the previous Conservative Government had done. As my hon. Friend the Member for Bristol, East said, child poverty more than doubled during that period. I was in the House for the latter part of it, and there used to be a claim that there was no such thing as poverty in the UK. I very much welcome the fact that the Conservative party now recognises that there is a real problem that needs to be addressed. I shall come on in a moment to the policies that need to be put in place to address it.
My hon. Friend made a point about public views on the subject. I agree that we need to communicate to the public the compelling moral and economic case for eradicating child poverty. There is a job still to be done there. Organisations such as the CPAG, the End Child Poverty coalition and others can help us, and I warmly commend their contributions. “Ending child poverty: everybody’s business”, which was published at the time of the Budget, was a step in the right direction, but we need to do more to get messages across to the public and to persuade people that there are real problems behind the statistics.
My hon. Friend the Member for Bradford, North raised several important points. Let me respond to some of them. He made a point about the charge for music lessons and the difficulties that that has imposed on some children who find themselves excluded from part of the benefit of schooling as a result. We have committed £332 million over the next three years, so that by 2011 all children of primary school age will have had an opportunity to learn a musical instrument. I hope that that will be a significant step towards tackling the particular problem that he mentioned.
There were a couple of contributions about the higher incidence of poverty for disabled children than for children as a whole, and it is true that there is a higher incidence. However let me remind the House of the most recent statistics. The risk of poverty for disabled children in 2006-07 was 24 per cent., compared with a 22 per cent. risk of poverty for non-disabled children, so on the most recent data there is only a 2 per cent. difference between the two groups. Since 1998-99, the risk for disabled children has fallen from 30 per cent. to 24 per cent. There is still an issue that needs to be addressed, but, again, that is an example of our having been able to move in the right direction.
I agree with my hon. Friend about the need for people to understand that housing benefit is an in-work benefit as well; he is right about that. That is one reason why people are sometimes unwilling to take work and why the “better off in work” calculations are so important.
I listened to what hon. Members said about the “better off in work” calculations. The feedback that I have received, including from some of the organisations that have been mentioned, suggests that people mainly think that those calculations should be more readily available. People find those calculations useful: the woman in Paisley, whom I mentioned, did. Quite a lot of people find those figures to be a revelation and discover, once they get into work, that the calculations are correct. There is certainly no deception here.
I understand the argument for more information being provided on the cost of school meals, transport costs and so on, but it will be clear to anyone listening to the debate that that is the intention. The other criticism was that the information takes too long to get, is complicated and should be available instantly. However, working out bus fares, for example, cannot be done in a couple of minutes. Our approach is right. There is absolutely no deception. We are saying, “This is the basis for the figure that we are presenting to you. It does not include x, y and z. Other factors may need to be taken into account.” If we try to include too much information, it will get impossibly complicated and will be less valuable. I have picked up on a big demand for such information to be more widely available.
I mentioned that we have now rolled out advice to lone parents nationally and, in addition to that, have in place an in-work emergency discretion fund to help lone parents with unforeseen financial problems in their first six months in work. That is a significant change, which recognises that the problems will not all necessarily be over on day one of employment: they may continue beyond that time.
My hon. Friends the Members for Leyton and Wanstead (Harry Cohen) and for Bristol, East and the Committee Chair, my hon. Friend the Member for Bradford, North, were dismayed about the comment in the Government’s response on the absence of evidence of a concern about stigmatisation for those who receive free school meals. I accept that criticism. The Secretary of State wrote in March to all schools and local authorities, asking them what they can do to encourage families who are eligible for free school meals to take up that entitlement. We have developed a new system to simplify and streamline the way that local authorities check a family’s eligibility. I was interested in the example from her constituency that my hon. Friend the Member for Bristol, East gave. I accept that, in that respect, the response should not have said what it did and that, perhaps, the criticism of complacency is justified. I apologise to the House for that comment having been included.
The hon. Member for South-West Bedfordshire talked about the number of jobs taken by non-UK nationals. More recent data have been produced showing that of the 3.2 million increase in the number of jobs since 1997, UK nationals have taken 55 per cent., or 1.8 million jobs, and foreign nationals have taken 1.4 million. He will acknowledge that the foreign nationals who have come to the UK have made a substantial contribution: they have worked hard and contributed to the UK economy. The fact that those people have come has been consistent with our having the lowest number of people claiming unemployment benefit since 1975. Non-UK nationals’ contribution has been positive and has not been in contradiction with the aim of raising the number of people in employment in the UK.
I can also give the hon. Gentleman some updated data on the number of children on free school meals getting five or more good GCSEs. He makes a fair point about the gap. Some 35.5 per cent. of children in 2006-07 who were eligible for free school meals achieved five good GCSEs, compared with 62.8 per cent. of other children. The gap between the most disadvantaged schools and the rest narrowed by 19 per cent. between 1999 and 2005. We have a public service agreement target to narrow that gap further. The hon. Gentleman is right to highlight the gap. Again, we have made progress in that area, although there is more that we need to do.
Let me pick up on the hon. Gentleman’s point, which I noted carefully, about commonly shared targets on child poverty. I think that I am right in saying that a spokesperson for his party has not previously referred to his party’s having a target for eradicating child poverty. I am not sure whether what he said reflects a policy change, but if it does I certainly welcome that and look forward to hearing more details about how the Conservative party plans to deliver it. In a moment I shall make a couple of points about the Conservative party’s policy in this area.
I am grateful to the hon. Gentleman for that clarification, but disappointed. I thought that perhaps we had made a breakthrough there, but there we go.
The hon. Member for Weston-super-Mare (John Penrose) rightly drew attention to the different ways in which we measure child poverty. First, since 1998, 600,000 children have been lifted out of relative poverty in the UK. I am grateful for the opportunity earlier to clarify that that figure has not changed in the past year. Secondly, we have seen a drop in persistent poverty since 1997 from 17 per cent. to 11 per cent. The hon. Member for Mid-Dorset and North Poole (Annette Brooke) rightly drew particular attention to the importance of persistent poverty as a reflection of hardship. There has been an encouraging drop in that regard. The new material deprivation measure, which we have been recording only since 2004-05, has fallen by 200,000 since 2004-05.
I noted that the Institute for Fiscal Studies has made a number of points about the material deprivation measure. We shall, of course, listen carefully to points that people make. There is a widely held view, which is reflected in the consultation that we have carried out, that in measuring child poverty there should be some measure of living standards and day-to-day experiences as well as of income—not instead of, but as well as—and the material deprivation measure is an attempt to do that.
Before the Minister moves on from that point, will he confirm that his ministerial colleagues were incorrect when they said that the relative measure of poverty, which allows international comparisons, was in some way a flawed mechanism for comparing either pensioner poverty across different countries in Europe or, indeed, any other kind of poverty?
I reassure the hon. Gentleman that there is no slackening of our focus on the relative poverty measure, defined as those living in households below 60 per cent. of median income. However, the EUROSTAT database changed in 2005 from households with below average income to a general household resources survey, so it is difficult to make valid comparisons in the case to which the hon. Gentleman refers between different European countries. It is important that we should be able to make those comparisons internationally, which is one advantage of the 60 per cent. measure before housing costs in the case of child poverty, because that is the widely accepted definition and allows us to keep close track of how we are getting on compared with other countries.
Will my right hon. Friend say something about in-work poverty? The Government are right to say that for most people most of the time work should be the route out of poverty, but for too many people it is not and it is a route into a different sort of poverty. We must tackle in-work poverty as well as out-of-work poverty.
I agree. The incidence of poverty as a proportion is much lower in households where someone is in work. Nevertheless, a significant proportion of the overall number of children in poverty live in homes where one parent or another is in work. A variety of measures is needed. We announced recently that we will above-index the child element of the working tax credit over the next couple of years, and that will be a significant help, increasing the return to work for many.
The other area where we must be much more attentive—the Committee was right to draw attention to this—is in doing a better job of integrating employment support with skills support so that when people go to a job centre to look for work, they can get help with basic skills. My hon. Friend the Member for Bradford, North referred to the 16-hour rule, and we are strongly committed to ensuring that the system allows people to undertake courses to address basic skills problems, and for skills health checks to be routine. There has been good progress, but we must improve the opportunities to train and to obtain skills as part of the process. One benefit is that people will be better able to progress when they go into work, to increase their income, and to move out of poverty. The combination of the tax credit system and promoting support for skills will allow us to make more progress. As a result of personal tax and benefit changes since 1997, by October 2008, families with children in the poorest fifth of the population will be on average more than £4,000 a year better off in real terms. Those reforms have been key to our progress.
I want to comment on the interesting point made by the hon. Member for South-West Bedfordshire—Conservative Members often draw attention to it—about severe poverty, and people living in households with incomes of less than 40 per cent. of the median. I want to draw his attention not to the 2007 report of the Institute for Fiscal Studies, which he properly and fairly quoted, but to the 2008 report, which contains an extensive commentary on that point. The position essentially is that the statistics that the hon. Gentleman quoted are not reliable. The 2008 report’s executive summary states that
“children in households with less than 40 per cent. of median income—so called severe poverty—are on average less deprived than those in households with between 40 per cent. and 60 per cent. of median income”.
It goes on to make the point that
“at the very bottom of the income distribution”—
“in the first and second percentiles, material deprivation scores are lower”—
there is less deprivation—
“than anywhere else in the bottom third of the income distribution”.
“It seems highly likely that a significant proportion of this group have high living standards, but, for whatever reason, their current recorded income is quite low”.
Those points clearly raise some interesting questions for further research into what is going on with that data, but it shows from an unimpeachable source that the Conservative party cannot validly draw the conclusions that they do from that data. I do not want unfairly to criticise Conservative Members, but I caution against trying to redefine the problem. I heard the shadow Secretary of State for Work and Pensions on television recently suggesting that child poverty is not about money.
The hon. Member for South-West Bedfordshire referred to a wide range of issues, including the report “Breakdown Britain”. I do not agree with its description of what Britain is like.
I am sorry. “Breakdown Britain” is a term that I have in this context, but I do not believe that it is an accurate description of what has happened in the UK.
It is dangerous—the hon. Gentleman did not fall prey to that danger, but his party needs to be careful about it—to argue, as the shadow Secretary of State has certainly done, that the problem is not about money. That takes us back to the position of the last Conservative Government, under which child poverty doubled to the highest rate in Europe. We still have some way to go to recover from that, and tackling child poverty requires serious investment of the sort announced in the previous couple of Budgets and the pre-Budget reports. We all need to square up to that. It is fair to raise other issues and concerns about what is happening in families, but that must be in addition to addressing the financial aspects of poverty, not instead of that.
The hon. Gentleman made a point about reducing the marginal rate of benefit withdrawal, and we all understand why that is attractive, but the consequences would be either significantly greater costs and extending access to tax credits much further up the income scale—I thought that the Conservative party opposed that—or scaling the system back and leaving people a great deal worse off. There is not a straightforward solution. I do not know which view the hon. Gentleman favours. Reducing the marginal rate of benefit is attractive in theory, but there are many questions about how that could be done.
Family stability is an important contribution to the well-being of children, so the Government have invested substantially in relationship support over a long period—since 1997. I do not agree with the hon. Gentleman’s characterisation of the Government’s policy in that area. My point is that we must not use that as a way of ducking out of the big financial challenge in achieving the target that we have all acknowledged this afternoon.
I have talked about the changes that we made in the Budget, and I shall respond to the important point about child care. It was suggested during the debate that the Government’s response to the Committee’s report implied that having imposed a statutory duty to secure sufficient child care in the Childcare Act 2006, the Government would walk away and do nothing. I assure the House that that is not the case. The duty came into place in April and Departments are considering carefully what local authorities are producing and their sufficiency assessments. They will challenge local authorities to improve those when necessary. We are certainly not proposing to do nothing. There was some concern about that.
I am grateful for the opportunity to take part in this important debate and to make important points—
The sitting having continued for three hours, it was adjourned without Question put.
Adjourned at half past Five o’clock.