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In-work Poverty

Volume 695: debated on Monday 17 May 2021

Analysis shows that prior to the pandemic, the poorest 20% of households saw their incomes increase by over 6% in 2019-20, even after taking account of inflation. Since the pandemic hit, we have strengthened the welfare system, spending £7.4 billion on measures such as the universal credit uplift, on top of additional support such as the coronavirus job retention scheme and the self-employment income support scheme. Her Majesty’s Treasury analysis has shown that the Government’s unprecedented support package means that working working-age households in the bottom 10% of the income distribution have seen no income reduction.

I am not at all surprised that the Minister’s answer bears little resemblance to the reality. Even pre-pandemic, 75% of children living in poverty lived in a household where at least one person worked. A recent NHS England-funded report found that around 700 child deaths could be avoided each year by reducing deprivation rates. Under this Government, work is no longer a route out of poverty. Why is that?

I thank the hon. Lady for her question, and I know the passion with which she raises the issue. We have measures in place to tackle in-work poverty, and we intend to go further: whether it is our 13,500 additional work coaches in Jobcentre Plus up and down our country, kickstart or restart, or our £30 billion plan for jobs, it will help tackle in-work poverty through progression in work. In addition, we have the In-Work Progression Commission, which will report in the coming months on the barriers to progression for those in persistent low pay and, importantly, set out a strategy for overcoming them.

I have lost count of the number of times the Minister said all the evidence suggests that work is the best route out of poverty. We agree, in that the last Labour Government showed how it could be done, but under this Government it is simply not true, is it? As we have just heard from my hon. Friend the Member for South Shields (Mrs Lewell-Buck), 75% of children living in poverty are in a family where at least one parent is at work. Getting a low-paid and insecure job is not a route out of poverty if parents cannot afford childcare and housing, and if their universal credit will be cut. What is the Government’s strategy for making sure that work does pay?

I thank the hon. Lady for her question, but the statistics show that full-time work substantially reduces the chance of poverty. The absolute poverty rate of a child where both parents work full time is 3% compared with 47% where one or more parents are in part-time work. That is why we are supporting people into full-time work wherever possible, for example through our comprehensive childcare offer. As I said, we had a jobs miracle before the pandemic, and, through our £30 billion plan for jobs and with the help of businesses up and down our country, we will again. Part of that is having a welfare system that encourages and incentivises work. With universal credit, that is exactly what we have.

In my Rochdale constituency, no ward has fewer than one in five children living in poverty. Some wards have over half of all children living in poverty, and the bulk of those have parents who are working. That is a scandal. What is also a scandal is that the Minister insists that work always pays and keeps people out of poverty. It does not. What can he say to my constituents to assure them that they will be part of a genuine levelling-up process, with money in their pockets and their children not living in poverty?

When the opportunity allows, I would be delighted to visit the hon. Gentleman’s constituency. I would say to him, however, that a child growing up in a home where all the adults are working is around five times less likely to be in poverty than a child in a household where nobody works. That is why our relentless focus is on supporting and empowering people into work, and progressing in work. As I said, we have a benefits system with universal credit, unlike the system proposed by Labour, that incentivises and encourages work—that is the key.

Over the years, Ministers have parroted the same lines over and over again on poverty, which is that work is the route out of it. Elements of the right-wing media have been trying to unscrupulously label hard-working people as scroungers from the welfare state, yet the true legacy of a decade of Tory Government is that the number of households in poverty where at least one adult is working increased by almost 2 million people. What are the Government going to do to rectify that unacceptable situation and ensure that hard-working Brits get a decent wage?

I have been absolutely clear. The evidence suggests that work is the best route out of poverty and that is why, through our £30 billion plan for jobs, we plan to make that happen. We increased the national living wage and have taken millions of people out of income tax all together. We continue to take action on the cost of living and the Secretary of State is looking at further measures we can take in that regard, such as, for example, our childcare offer. As I said, our plan for jobs will be game-changing and I hope the hon. Gentleman will get behind it. I will of course be very happy to meet him and businesses in Slough to see how we can make it happen.