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Child Poverty Bill

Volume 716: debated on Tuesday 5 January 2010

Second Reading

Moved By

My Lords, I beg to move that this Bill be now read a second time. In doing so, I welcome the fact that the right reverend Prelate the Bishop of Hereford has chosen to make his maiden speech on this measure and look forward to hearing what he has to say.

A decade ago this Government made an historic commitment to end child poverty by 2020. At the time we made that pledge, child poverty was rising inexorably and had doubled over the previous 20 years. Had we simply moved forward with the policies that we inherited, about 2.1 million more children would have been likely to be in relative poverty today. We did not; we chose to act. We acted by investing well over £25 billion in early years and childcare since 1997, with some 3,000 Sure Start children’s centres currently helping 2.4 million young children and their families. We acted by delivering direct tax and benefit measures which, since 1997, mean that in 2010-11, households with children will be, on average, £2,200 a year better off; and households with children in the bottom fifth of the income distribution will be, on average, £5,000 a year better off.

We acted by helping more lone parents into work. Since the New Deal for Lone Parents was introduced, more than 625,000 lone parents have been helped into work, of whom almost 60 per cent have moved into sustainable jobs. We acted by establishing the minimum wage, ensuring that people are not paid a poverty wage. Those and other measures have made a substantial difference to many families, without which many more would be in poverty today.

We have made significant progress in tackling child poverty. We have turned around that upward trend and, by 2007-08, helped to lift 500,000 children out of relative poverty. We have halved the number of children in absolute poverty from 3.4 million to 1.7 million.

Measures announced since Budget 2007 will lift a further 550,000 children out of relative poverty. That includes the announcement in last month’s PBR to extend provision of free school meals to primary school-aged children in low-income working households. That may require primary legislative changes and we are considering whether it may be appropriate to include these changes in the Child Poverty Bill.

Despite substantial progress, there is still a huge amount to do to meet our commitment. Child poverty still blights the daily lives of many—too many—children, families and communities across the UK. A child who grows up in poverty may lack many of the experiences and opportunities that others take for granted, and can be exposed to severe hardship and social exclusion.

Childhood experience lays the foundations for later life. Growing up in poverty can damage physical, cognitive, social and emotional development, which are all determinants of outcomes in adult life. To borrow an expression used by my noble friend Lord Morris in the Queen's Speech debate, this can create “spirals of poverty”, pernicious cycles of inter-generational poverty that lock families into deprivation. Indeed, as my noble friend so aptly stated,

“the spiral continues—never upwards, always downwards. Not only does inequality affect the family now, it affects the future of every member of that family and, perhaps, for generations yet unborn”.—[Official Report, 26/11/09; col. 512.]

We can and must do more to ensure that disadvantage and deprivation do not transmit through generations.

Tackling child poverty will help improve children’s lives today, and it will also enhance their life chances enabling them to make the most of their talents, achieve their full potential in life and pass on benefits to their own children.

Child poverty also places substantial costs and burdens on the economy and on public services. The Joseph Rowntree Foundation estimates that child poverty is costing at least £25 billion a year in extra public spending, lost taxes and lost GDP. These costs fall not just on children and families in poverty, but on communities in general and the taxpayer, so it is clear that there is both a strong moral and economic imperative for taking further action to tackle the causes and consequences of child poverty. To do this, we must shape a society where children do not have their lives scarred by poverty and where every child has the chance to realise their potential, no matter what their background.

The current economic circumstances we face have brought additional challenges to tackling child poverty. Everyone recognises it will be hard to meet the target to halve child poverty by 2010, but we will continue to strive to make progress, and the Bill underlines our commitment and determination to succeed.

There are five key aspects of the Child Poverty Bill that I should like to focus on in this Second Reading speech. First, the Bill provides a definition of success in tackling child poverty by setting targets that must be met by 2020. Secondly, it will ensure that targeted and sustained action to address child poverty is taken on a comprehensive basis by requiring the Government to prepare and publish child poverty strategies through to 2020. Thirdly, it will boost the transparency and accountability of government through its reporting requirements. Fourthly, it will ensure that co-ordinated action is taken across the UK by requiring specific action from the devolved Administrations. Finally, it will require action at local level to prioritise the tackling of child poverty and improve outcomes for disadvantaged children and their families.

Clause 1 imposes a duty on the Secretary of State to meet, by 2020, four challenging UK-wide targets set down in Clauses 2 to 5. The targets relate to relative poverty, absolute poverty, combined low income and material deprivation and, finally, persistent poverty. A range of targets is needed to capture the many facets of child poverty, and these four targets have been chosen following rigorous public consultation. The Government already measure progress against the relative, absolute and combined low income and material deprivation measures. The persistent poverty target was included following research demonstrating that long periods of poverty have a particularly damaging effect on a child’s life chances and that the risk of escaping poverty decreases the longer the period in poverty. Taken together, the targets provide a challenging definition of success for tackling child poverty by 2020 and allow progress towards this goal to be measured.

However, the Bill goes much further than just setting targets, important as they are. It establishes a mechanism for driving forward progress towards meeting them by requiring the Government to prepare and publish a child poverty strategy through to 2020. Clause 8 commits the Secretary of State to publish the strategy within a year of Royal Assent, and it must be refreshed every three years. The strategy is for the whole of the UK and should cover all children, so it is not only about meeting the targets but about ensuring that children in the UK do not experience socio-economic disadvantage.

The Bill deliberately avoids being too prescriptive about the content of the strategy. Such specificity would not be appropriate, as each three-year strategy will need to respond to changing circumstances between now and 2020, building on evidence about what works in tackling child poverty. It is envisaged that more specific measures will be considered as appropriate for each three-year phase. However, Clause 8(5) specifies a number of broad policy areas that must be considered when preparing strategies. These encompass the main drivers for tackling child poverty, which have been developed following an extensive period of analysis, discussion and consultation with internal and external stakeholders. I should stress that this is not intended to be an exhaustive list of policies. Indeed, there is nothing to prevent consideration of a wide range of policies which may help to end child poverty.

We recognise that the causes and consequences of child poverty are multiple and complex, and that it is not possible to rely solely on one policy measure. Ending child poverty will require co-ordinated and sustained action across all areas of government policy. Noble Lords may be aware that this provision prompted much debate in the other place, with Members seeking to insert additional policy areas. We resisted this approach as many of the proposed areas were already effectively covered in the Bill. There was, however, clear support on all sides that childcare should be more explicitly stated in the Bill, a proposition we accepted by way of a government amendment.

Before I move on to other measures of the Bill, I should like briefly to touch on Clause 9, which requires that the strategy is informed by a range of views, including those of the Child Poverty Commission and the devolved Administrations. There was some concern in another place that the Bill does not spell out our intention to seek the views of children as clearly as it could. Some Members felt that Clause 9(4)(c) should be amended so that the Secretary of State is required to consult such children and organisations working with or representing children as the Secretary of State thinks fit.

We have always been clear that the strategy will be informed by the views of children and their families, particularly those with direct experience of poverty. We are committed to ensuring that children’s views underpin all our policies to improve outcomes for all children. However, we recognise a concern that the Bill could be interpreted as leaving room for the option of not consulting directly with children and we are considering whether it is necessary to clarify the wording on this matter.

Another important aspect is about setting an accountability framework and securing expert, independent advice to inform the development of child poverty strategies. Clauses 13 and 14 require annual reports to Parliament on progress made on the targets and steps outlined in the strategy. This means that the government will, for the first time, be properly held to account for delivery on their strategies to end child poverty.

Clause 7 and Schedule 1 establish the Child Poverty Commission, an advisory body that the Government must consult when preparing child poverty strategies. Clause 9 requires the Government to have regard to the commission’s advice and Schedule 1 requires that this advice is made public. This will ensure that it is clear to Parliament and the public what steps the commission thought were necessary in the development of the strategy. Commission members will be selected on merit against criteria published at the start of the appointment process. Paragraph 1 of Schedule 1 requires that the Secretary of State will appoint the chair and any such number of members as he sees fit. In addition, Scotland, Wales and Northern Ireland will each appoint a member. In appointing members, paragraph 4 of Schedule 1 requires that the Secretary of State must aim for a commission that has knowledge and experience of child poverty policy, research and work with families. This will ensure that the commission is able to provide the best possible advice on what works best in tackling child poverty.

During debate in another place, Members on all sides pressed the Government to provide the commission with a research function to support its work under the Bill. We were persuaded that using its expertise and experience the commission may identify particular areas where, in order to improve the quality and effectiveness of its advice, it feels new research would be helpful. It may be that the necessary new knowledge can be generated by mining existing research and data from a fresh perspective, or there may be a need to conduct entirely original primary research.

We responded by tabling a government amendment to Schedule 1, which now, through paragraph 10, empowers the commission at any time to request the Secretary of State to carry out or to commission research on its behalf with a view to improving the effectiveness of its advice. This model follows the very successful one used by the Low Pay Commission, an advisory body that is renowned for the quality of its research. This will improve the quality and independence of its advice to the Secretary of State. There are also non-legislative research means at the commission’s disposal. The commission will be provided with a secretariat that will offer librarian-style research support that includes finding, and where necessary collating and summarising, research materials.

The goal to eradicate child poverty by 2020 is UK-wide, although a number of the levers for tackling child poverty are devolved. We recognise that the devolved Administrations are best placed to determine how to tackle child poverty in their jurisdictions in line with their particular priorities. Clauses 10 to 12 separately provide for Scottish and Northern Ireland Ministers to prepare their own strategies. These strategies will set out how they will contribute to the UK-wide targets as well as how they will ensure that children in their respective countries do not experience socio-economic disadvantage. Scottish and Northern Ireland Ministers are required to consult a range of partners, including the Secretary of State and the Child Poverty Commission, and must prepare annual reports on progress. Our goal is UK-wide, so our approach to tackling child poverty must be co-ordinated across all Administrations. Strategies prepared by the devolved Administrations must also be considered in future UK child poverty strategies.

The Welsh Assembly Government introduced the proposed Children and Families (Wales) Measure on 2 March 2009. The measure places similar duties on Welsh Ministers and other public bodies in Wales to prepare child poverty strategies and to report on progress as the Child Poverty Bill places on the Secretary of State and Scottish and Northern Ireland Ministers. Clause 9(5) includes provisions to ensure that the UK Government have regard to the Welsh strategy when preparing a UK child poverty strategy. The Welsh measure also includes provision to consult the Secretary of State on the content of Welsh Ministers’ strategy. The two pieces of legislation therefore complement each other and provide a joint framework to ensure that all four countries work together towards the 2020 goal.

Finally, tackling child poverty is not just a priority for central government; it should also be seen as core business by local authorities and their delivery partners. This view was shared by witnesses to the oral evidence sessions in another place. The justification for this focus is clear; child poverty is present in every locality across the country but is often masked by overall affluence. In many areas, poverty has persisted for generations, damaging the general and economic well-being of the area. Tackling child poverty helps local communities. It will reduce the burdens placed on local services and create a more cohesive society.

Many local authorities have already made a commitment to tackling child poverty, and pockets of excellent work are under way. There are examples of vision and leadership in helping families to get support, in narrowing gaps in education, in helping parents into work or in regenerating communities to help families to escape the experiences of poverty. Unfortunately, progress varies across the country and best practice is not universally shared. We now have to make it a priority for all local areas. Meeting our challenging target therefore requires all local authorities and partners to do more. We know that we can achieve our ambitions only with their absolute buy-in and with child poverty high on their agendas. Clause 20 therefore introduces a new requirement on responsible local authorities and relevant delivery partners to work together to tackle child poverty in their area.

Respondents to the Bill’s consultation indicated that it was important to name the key partners in the legislation. We share this view and have listed the relevant partner authorities in Clause 19. The importance of understanding the needs of local communities was also raised by respondents to the consultation, and we have responded by placing a duty to carry out a local child poverty needs assessment in Clause 21. We intend to set out how local partnerships should carry out a needs assessment in statutory guidance. The Bill will ensure that all local authorities and their partners take strategic, co-ordinated action by requiring them in Clause 22 to prepare joint child poverty strategies based on an analysis of the needs and characteristics of children in poverty in their areas. The Bill also amends the Local Government Act 2000 to ensure that local authorities take the duties under this Bill into account when preparing their sustainable community strategies.

Child poverty is not only a moral issue but also a key component of economic and social prosperity in the UK. It is right that we refresh and strengthen our commitment to deliver on the 2020 goal through the Child Poverty Bill. It will give us a renewed impetus to deliver on our goals, to ensure that the right strategies are in place and to stimulate actions which make a difference. It will build on and sustain the momentum towards eradicating child poverty, create a clear definition of success, put in place a framework for accountability, and improve partnership working and collaboration to tackle child poverty at the local level. We believe this legislation is part of creating a fairer Britain, one where no child suffers from deprivation and every child has the opportunity to aspire and to flourish. I commend the Bill to the House.

My Lords, why did child poverty in the UK stop declining in 2004? It simply should not have happened. Everything was set up to see the measure continuing to improve. We were talking then about the fourth largest economy in the world; that economy was enjoying a major boom, and we had a Government who had focused on the reduction of child poverty as a major policy goal. Whatever criticisms I may have of the Government in this area, I do not doubt for a moment their sincerity in wishing to reduce the levels of child poverty. So why did those improvements go into abrupt reverse in 2004? It is the sociological whodunit of our era.

Let me provide the figures to your Lordships. When this Government came into office in 1997, 4.2 million children were in households below the poverty line, defined as below 60 per cent of median income and using the figure after housing costs. In 2004-05, the best year, the figure had fallen to 3.6 million, but by 2007-08 it had risen again to 4 million. I do not use these figures to make a cheap political point. I do not accuse the Government of callous disregard. The truth is that the Government have been pouring money into the fight against child poverty.

In the first year, 1997-98, transfers in the shape of credits and benefits to households with children stood at £15.5 billion. By our turning point year of 2004-05, they had nearly doubled to almost £29 billion, from which level they have continued to grow. So it is not a lack of government spending that lies behind this disturbing trend. Indeed, the OECD found that by 2003 we were spending more on our children than most other OECD countries.

Let me try to explain these counterintuitive developments. Clearly, there has been an effect from the slowdown in earnings growth since early in the decade. That slowdown has been magnified by the sharp redistribution of income in favour of the richest in the country. It means that the conventional measure of income inequality, the Gini coefficient, rose to its highest level since records began in 1961. I must confess that until I studied these recent numbers closely, I had not realised that new Labour was quite so much the party of the rich. Nevertheless, these factors alone are not enough to explain the disturbing trend in child poverty that we have seen. The clue has been lying under our noses all the time. Perhaps it is not the case that child poverty has risen despite money being transferred to the poorest sections of the community, but maybe the financial transfers themselves have masked poverty and created poverty traps. At this point, let me make it quite clear that, despite Government alarmism, we will retain tax credits. They have been a financial benefit to families but we do not assume, as the Government have in the past, that they are the only answer to child poverty.

There were warnings about the operation of the poverty trap in the 1970s but, as we contemplate what is forecast to be a substantial shortfall from the interim 2010 child poverty target, perhaps we should turn to examine what has more recently been dubbed the iron triangle of benefit reform. For the first time we can begin to assess its impact as a result of the analytical work of the Centre for Social Justice and Oliver Wyman in their recent publication, Dynamic Benefits—a formidable achievement by a working group chaired by Dr Stephen Brien.

The triangle is the closest thing to scientific law in the social sciences and establishes a mathematical relationship between three factors: the level of benefit; the earnings break-even point; and the rate at which benefits are withdrawn. The analysis in Dynamic Benefits offers up the grim warning that,

“there are mathematical constraints on the design of the benefits system. These mean that simply pouring money in will make little difference—and indeed is massively inefficient—and that we must make a normative choice based on a societal vision: a society mostly on benefits or off benefits”.

As it stands, the Bill is two-headed. It contains within it the drive towards income transfers, which has been the hallmark of Treasury strategy in this area, as Sir Nicholas Macpherson, the Permanent Secretary, explained to the Treasury Select Committee in 2007. He said that,

“financial support is the most important lever”.

This is the kind of intervention that our experience since 2004 suggests has broken down—failed. However, the Bill also encourages a wide range of interventions via public services of the kind that is embodied in the Welfare Reform Act that we have just passed. It is this latter aspect of the Bill that we wish to reinforce. Our strategy will concentrate on tackling the causes rather than the symptoms of poverty.

Child poverty is not a concept commonly used in European social policy. This is not surprising as children normally do not have income or wealth themselves. It sounds great; it is a compelling soundbite; and in March 1999, when Tony Blair first announced a goal to end child poverty in a generation, it captured the imagination of the country. However, there are two ideas at war with each other within the soundbite: the first concerns general poverty and minimum standards of living for citizens; the second is about child well-being. It is dangerous to put the two together in the unthinking way that new Labour has done, not least because we risk undermining the strategies that matter most for child well-being. We urgently need to get those strategies sorted out. According to UNICEF we are ranked bottom of 21 rich countries in child well-being despite spending more and being richer than most of them. Not half way; the very worst.

The Child Poverty Action Group recommends a holistic approach to tackling the problem of poverty and pursues the approach now being developed in welfare to work. It states that in the same way it is already recognised that a,

“personalised, multifaceted service is required to assist jobseekers successfully into employment”,

so a similar approach needs to be applied to poverty. This mirrors our strategy—perhaps not surprisingly, given our involvement in developing this policy approach in welfare.

First, let me emphasise the Conservative belief in the importance of tackling poverty. This goes to the roots of one nation conservatism. Secondly, let me confirm that we believe that poverty is indeed a relative phenomenon—in other words, that we should seek to ensure that the poor are not excluded from the mainstream of society. That means a series of strategies to tackle problem areas which have been increasingly well documented in recent years. I particularly want to emphasise the importance of stable families, which has been a central Conservative policy for many years. The number of lone parent households—those most likely to be in poverty—has increased by 40,000 a year for the last quarter century. Yet the Child Poverty Action Group found that,

“the effect of separation on a couple (whether married or cohabiting) in terms of increasing the risk of poverty was much greater than for any of the other triggers that we were able to investigate, including job loss”.

Let me summarise the four problem areas we will target. On family breakdown, our commitment to ending the couple penalty in the tax credits system is just one of a series of measures to tackle this critical issue. The second is addiction to drugs and alcohol. We will put rehabilitation at the forefront of efforts to tackle this problem. The third is education and skills. We will introduce a pupil premium to ensure that extra funds follow the poorest children to the school that educates them. The fourth is work strategy. We will push ahead aggressively to establish outcome-based financing to support those who are economically inactive and able to work back into the workforce.

How would we amend the Bill? Our key concern is that the targets set out in the Bill are poor proxies for achieving the eradication of child poverty. We will aim to widen the agenda and build up targets, which are more likely to address the underlying causes of poverty. Let me spell out our concern about the statutory financial targets. While financial measures can be a useful guide to action, when they become targets we need to look at them with much more rigour. If they are taken seriously, they will inevitably become subject to serious manipulation and may encourage counterproductive activity by the state. There are already disturbing signs of this. According to Save the Children and the IFS, the number of children in severe poverty had been growing even before the 2004 turning-point year, as policy concentrated on pushing those just under the 60 per cent line to just over it. That is exactly opposite to the effect that most voters, appalled by child poverty, actually want to see.

The targets selected for this Bill do not measure the problem accurately enough. A substantial number of families, according to the IFS, manage to remain out of hardship even during prolonged periods of poverty. We see here the distortions created by a set of targets relying in the main on surveys with all the confusion for respondents on what to report. This distortion is undoubtedly compounded by the anxiety that people operating in the black economy must feel in providing accurate information.

Central to the Government's targeting is the OECD reference point of 60 per cent of median income, with a standard equivalence scale. This makes it possible to compare our performance with that of other countries. But we are, I believe, the first country to aim to adopt this figure and scale as a statutory target, and a statutory target carries with it a far higher requirement for precision. First, how genuinely comparable is the figure across countries? It does not include benefits in kind; it does not adjust for the benefits of free healthcare, for instance. There are a lot of apples and pears in the basket.

Does the equivalence scale, which adjusts for different sizes of household, work? Ominously, the IFS found that the modified OECD income equivalence scale may be inappropriate. As Policy Exchange has pointed out, different equivalence scales will generate quite different poverty estimates. These discrepancies really start to matter if we have statutory targets. We will be driven to devote resources to the wrong people. The purely financial nature of the measurement is a real danger. As the OECD publication Doing Better for Children recommended:

“Interventions in early childhood need to be both in cash and in kind…. The higher the risk in the family situation, the more effective … services in kind will be”.

Yet such effective interventions will be discouraged under this legislation. It could also spell the death knell for passported benefits delivered in kind and not included in the measured target.

What is it with round numbers? As a comparison base, using the figure of 60 per cent is not a matter of great moment. As a statutory target, however, it takes on an altogether different significance. The laws of the iron triangle are inexorable. If we wish to reduce the numbers in poverty, we need to set strategies that work within the constraints of the three sides of the triangle, not set one side at a predetermined level that will inevitably not optimise outcomes.

Such considerations will drive the amendments that we will seek. We will want the flexibility to establish financial targets that will work in the real world. We will want targets that capture the real outcomes that we have identified. We will also want a commission that will help us in this strategy. At the moment the membership is locked in. That reeks of a political subterfuge designed to trap a successor Government rather than a measure to help the poor.

My noble friend Lord De Mauley will deal with the role of local authorities and the duties of the proposed new commission in his winding-up speech. We look forward to the maiden speech of the right reverend Prelate the Bishop of Hereford.

I shall summarise the points that I have made. We have the lowest child well-being in a comparison of 21 rich countries. The Government’s child poverty targeting regime has failed, broken on the iron triangle. This double failure suggests that the next Government must urgently search out and establish an alternative approach. For that reason, our policy in this area will concentrate on the causes of poverty and inadequate child welfare, with particular focus on the four main drivers: family breakdown, addiction, inadequate education and skills, and work. We will seek to incentivise outcomes in these areas, and we will wish to use poverty targets as a guide and spur to performance but not as a driver towards financial manipulation. The difference between our Benches and the Government on child poverty is that we will apply policies to deal with the causes, while all they have to offer are stale and historic soundbites.

My Lords, we on these Benches support the Bill. I thank the Minister for his typical thoughtfulness in making sure that we all had the Peers Information Pack before Christmas, which I found invaluable, although it was not the most exciting holiday reading.

It is difficult to know whether to be pleased with a Bill that has a purpose with which we can all agree wholeheartedly or whether to despair of the structure that the Bill puts in place, which could crush all its good intentions by overloading it with bureaucracy. There are a dizzying number of buzzwords strung together like beads on a chain, such as “targets”, “strategies”, “partnerships”, “building blocks”, “visions”, “assessments”, “principles”, “aspirations”, “outcomes” and so on. Fine words in themselves butter no parsnips. Will the elaborate pathways set out by the Bill lead to real action to eradicate child poverty?

On the plus side, the Bill puts child poverty explicitly further up the political agenda than it has ever been, and the statutory nature of targets in the Bill should ensure that it stays there. It has also given a platform for some interesting and important oral evidence to be heard in the other place, with expert witnesses in key lobby groups—such as the Child Poverty Action Group and Gingerbread, senior local government councillors and officials, researchers from think tanks and academics—all bringing a different perspective on the Bill. There was plenty of discussion not only about what constitutes child poverty but about the definition of a child, which we may well repeat during the passage of the Bill through this House, and what should be done about child poverty, although the Bill itself sadly does not go into what one witness called “solutions mode”.

Several myths were exploded during the evidence sessions, especially where lone parents and poverty are concerned. The first myth is that most lone parents are teenagers, whereas only about 2 per cent are—the average age of lone parents is in fact 36. Another myth is that single parenthood automatically leads to child poverty. In countries with a similar rate of single parenthood, child poverty is much lower than it is in this country. However, it is true that children in single-parent families face twice the risk of poverty facing those in two-parent families. A major cause of that is spelt out in Gingerbread’s written evidence: the fact that median gross weekly earnings for male lone parents is £346 whereas the median for lone mothers, who are the majority of lone parents, is £194.

The Long Title of the Bill states that it sets,

“targets relating to the eradication of child poverty”.

Many people have questioned the novel use of the word “eradication”, which seems to allow for 10 per cent of children to remain in poverty when eradication has been achieved. Perhaps it is a smoke screen to hide the fact that, in 2007, 23 per cent of UK children were in poverty—shamefully, as we have heard, among the worst figures in Europe. The Government’s target, announced by the Prime Minister in 1999, of halving child poverty in 10 years will now certainly not be met. Have the Government introduced the Bill to atone for their failure to deal adequately with child poverty over the past 10 years? Steve Webb, my colleague in another place and an expert in this field, said:

“Tackling child poverty is a bit like running up a down escalator. If we do not do very much, we end up going backwards”.—[Official Report, Commons, Child Poverty Bill Committee, 27/10/09; col. 191.]

Beside that figure of 23 per cent, a 10 per cent target by 2020 looks quite good, if unambitious, and appears to be a sustainable figure compared to equivalent countries in Europe, although it still means that two-thirds of 1 million children will be left in poverty. On top of this figure must be those children not included in the household surveys, such as the 60,000 looked-after children. We recognise that it is very difficult to measure the level of poverty of children who do not live in households, but Richard Kemp, the deputy chair of the Local Government Association, put his finger on an important point when he said:

“If we do not help them early, we know we will be dealing with them for the rest of their lives”.

My noble friend Lady Walmsley will say more about that problem later.

To a layman, the four targets in Clause 1 seem at first glance to be mind-numbing in their subtle complexity and seeming similarity, but with the help of the Peers Information Pack one discovers the differences. We believe that the one target that could be dropped is the absolute low income target. The figures for households below average income—HBAI in the jargon, which we shall come across a lot in the Bill—provide statistics for the preceding 10 years, so, nine years later, poverty is virtually certain to have been improved in that time. In other words, the Government are bound to meet that target without even trying. This is a classic example of picking the low-hanging fruit. Our suggestion is either to drop that target, attractive though it would be to any Government, and substitute it with a different target that measures income after the deduction of housing costs, or to add this as a fifth target. This would not involve more work, because the information is published regularly in the HBAI statistics.

As we all know, housing is a large part of most people’s budget and thus of their living standards. The cost of housing is particularly important in low-income areas, where rents are no lower as a result of the recession but income probably is. It is also important in London and other urban areas, where housing takes a high proportion of people’s income. If it is argued that even poor people can choose whether to live in a more expensive or a cheaper house, evidence shows that this is not the case. People often have no choice about what sort of house they live in, because of constraints over jobs, schools, transport and other factors. Another reason is the curious fact that the measure of income before housing costs includes housing benefit. Unless this figure is discounted, it will look as though a large family receiving housing benefit has a pretty high income, which makes a nonsense of the figures. It also masks the situation in poor rural areas where housing takes up a disproportionate amount of a person’s income.

The Minister may say that housing is included in the questions under the material deprivation measure; so it is, but the questions are only about keeping a house adequately decorated and having enough bedrooms. Housing costs are not stripped out as they would be with an after housing cost target. Kate Bell of Gingerbread said that the sector view has always been that the after housing costs measure of poverty is the better one; Neera Sharma of Save the Children agreed. This is echoed in the summary of consultation responses, under the heading “Targets and measurement” in the impact assessment for the Bill, on page 122 of the Peers Information Pack. The second bullet point reads:

“Measuring income after housing costs was considered by stakeholders to be the best way to determine accurate levels of poverty”.

If the Government themselves continue to collect the after housing costs, this proves that they think that they are worth having, so why not add them as a target for relative low income?

Perhaps the real reason why the Government want to stick with the before housing cost target is that this is the figure used in most of Europe. The Minister in another place said that the ability to make comparisons was vital, as it would allow Governments to benchmark their performance. Is being able to make comparisons with other European countries really the most vital thing, particularly given the problem of apples and pears, about which the noble Lord, Lord Freud, talked? Surely the most important issue is what gives the truest picture of child poverty in this country. We shall introduce an amendment along these lines at the appropriate stage.

I turn to the problems relating to households with either a disabled parent or a disabled child, on which the Bill appears to be silent but which are very important, given the high costs associated with disability. Clause 6 is about various matters to be set out in regulations. We believe that the costs associated with disability should be included at this point. In a nutshell, either disability living allowance should be taken out of the figures to find out what a household’s disposable income is or account should be taken of the higher cost of living for somebody with a disability, which might include increased heating, particularly in this weather, a particular diet, transport, specialised childcare or all of these. If DLA is included in the household’s disposable income, it will surely distort the figures, giving that household a relatively high income with no account being taken of outgoings.

The figures associated with disability are truly shocking. Families with disabled children are more than 50 per cent more likely to be in debt, while only 16 per cent of mothers with disabled children work, in comparison with 62 per cent of mothers with non-disabled children. That is a staggering difference. Barnardo’s says that one in six families with disabled children go without essentials, such as food and heating, due to lack of money. It is often very difficult, if not impossible, for families to find the right childcare for a disabled child, particularly an older child. Any Bill on child poverty—a major part of which is to collect the most relevant and carefully calibrated statistics on household incomes—surely ought to capture the number of households in this category.

I turn briefly to perhaps the most challenging part of the Bill, and that which involves local government in the strategy. Many local authorities, but not all, already have child poverty as a priority in their sustainable communities strategy. There is evident concern that the Government are, with this Bill, passing even more of the buck to local authorities to deliver their policy. We hope that the guidance that the Child Poverty Unit is working on will do more than try to micromanage local authorities, and that the Government will offer more practical help, such as training and support for partnership working. Steve Webb made a telling point when he said that,

“we are setting national targets based on some very specific definitions and then asking local authorities to be partners in delivering targets based on definitions that they cannot access or measure”.—[Official Report, Commons, Child Poverty Bill Committee, 3/11/09; col. 315.]

The link between national targets and local delivery is unclear. Perhaps the Minister can address that problem in winding up.

One matter that interests me particularly is what several local government councillors and officials have said about the benefit system, which is very relevant to child poverty. We heard the old familiar stories about delays and reassessments with benefit claims throughout the country. Local authorities would welcome working with the DWP to provide a more flexible and localised approach to all benefit claims, not just housing and council tax benefits. Can the Minister tell us whether there is any feedback yet on the pilots that I believe are taking place in this area? The way in which the benefit system interacts with, in particular, rules about low-paid and part-time jobs is of crucial importance to whether a family is in poverty. Will the Minister also clarify whether there will be any extra funding at all under the Bill for local authorities?

I have not mentioned many of the important issues to be explored during the rest of the Bill’s passage—such as the importance of consultation with children themselves, and whether Clause 15 weakens the Bill and is a get-out clause for the next Government. I look forward to the rest of the debate, particularly the maiden speech of the right reverend Prelate the Bishop of Hereford.

My Lords, it is my great pleasure to join in welcoming this important Bill, which could make such a big difference to the lives of so many of our children. I am most grateful for all Her Majesty’s Government’s efforts on behalf of children growing up in poverty. I was grateful to be reminded of the Government’s investment in children’s centres and Sure Start. It is unacceptable that, in a nation as prosperous as ours, so many children continue to grow up in such poverty.

As a reflection on what the Minister said, I regret that there is no strong voice for social work because social workers should surely be the champions in this area. I hope that the investment the Government are now making in social work, including the social work task force and the development of a royal college for social work, may raise the status of the profession and that, in future, social workers will be a powerful voice in eradicating child poverty.

I listened with great interest to the noble Lord, Lord Freud, and was pleased to hear what he said about tackling addiction in parents. I was also pleased that he highlighted the UNICEF report and how poorly we perform against all other developed nations in regard to children. I wonder whether he and his colleagues will give special attention to the proposal in the forthcoming schools Bill to put personal, social and health education on a statutory basis. That will contain sex and relationship education. The clear evidence from the Netherlands and the United States is that good quality sex and relationship education reduces the number of teenage pregnancies and will help to achieve the target that the noble Lord wishes of more stable parents and more successful families.

I hope your Lordships will forgive me if, in the interests of brevity, I read from a script on this occasion. As vice-chair of the Associate Parliamentary Group for Children and Young People In and Leaving Care, I have a particular interest in the children we are speaking of as there is such a strong association between poverty and children being taken into public care. It is hardly surprising to find that where families find their basic needs are not being met, the result can be family dysfunction and risk to the children.

I am utterly persuaded of the need for a strategic approach with a strong mechanism to ensure that strategy is implemented. Governments have too short a horizon, less than five years, before they have to face the electorate again. Issues of this kind so easily get lost. I remind your Lordships of the appalling lack of strategy in the development of sufficient housing for our people. I was grateful to hear the noble Baroness, Lady Thomas, raise this issue. It appears that in the sale of social housing no thought was given to our people’s needs. Clearly, there have been other pressures such as immigration and reduction in the size and increase in the number of households, but the failure adequately to plan has had catastrophic consequences. It has contributed to powerful resentment against those incomers who are provided with the housing they need. Many families live in unsuitable, unsanitary, overcrowded accommodation.

A few years ago, visiting families in West Ham with a health visitor, we saw some of these conditions: a mother sharing her one room with her two young children; another mother with three young children and water running down her mildewed walls; a man showing us the flooded basement of his family home; and a father showing us the lavatory which combined as a shower. More recently, again visiting a family with a health visitor, this time in Walthamstow, we spoke to the mother of a seven week-old baby. A lone parent and a refugee, separated from her own family in Africa and with the father of the child expressing no interest in the child's welfare, she shared the kitchen and the bathroom of this accommodation with five other families. Further testimony of our failure to plan to meet the housing needs of our people has been provided to us by users of Barnardo's Families in Temporary Accommodation Project. So many of these families are separated by long multiple bus journeys from their extended families and communities because of the lack of appropriate accommodation in their area. I pay particular tribute to John Reacroft, who has led this project for many years and has supported your Lordships in understanding this area. A proper strategy to address child poverty that is robust, well implemented and resourced is vital if we are to avoid the same failure as we have witnessed in housing.

By contrast, the Government’s rough sleepers’ strategy of 1998 delivered. A clear target was set to reduce rough sleeping to one-third in three years and a robust implementation mechanism was established. Louise Casey was appointed to get this job done. I saw for myself the change that she and the Government wrought. A winter shelter for homeless 16 to 23 year-olds with which I was very familiar was transformed. Prior to 2009, it had seen the least experienced staff working with the most vulnerable young people. The staff were young, some of them were just globetrotters overwintering in the UK and picking up what work was available to them. Among the residents was a young man who had been on the street injecting heroin. His time in the hostel was the opportunity to get him off drugs and into work, training or study and proper accommodation. Another young man had communication difficulties, easily isolated himself and was frustrated at his inability to connect with others. Both of these young men's needs were unmet and the chance to intervene was lost. However, the following year, a crack team of professionals was introduced to the shelter. I had the honour of working with one of them for some time at a later date. I cannot speak for the effectiveness of that team as I was not a visitor to its project, but I am certain that these workers stood a far better chance of intervening effectively and assisting these young men into some meaningful activity and secure accommodation than those present in the previous year had done.

Having clear targets and timeframes and sufficient resources can ensure that the differences we would all wish to see in improving outcomes for our children and young people do happen. Many times I have heard my noble friend Lord Laming call for a clear strategy for children's homes in order to address the shortcomings in that sector. To make a difference we need to make a sustained and focused effort over a number of years and certainly over more than one Parliament.

Turning to the detail of the Bill, I share the concern expressed by Barnardo's and others that the Bill should not miss the needs of the most needy. I hope we can strengthen the targets to ensure they reach down to the most vulnerable and that no especially needy groups are overlooked. Sure Start has proven a great success, but its early efforts were put under a cloud by the first evaluation, which found that it failed to reach the most vulnerable group: teenage parents. In framing this Bill, I hope we can ensure that Travellers, black and ethnic minorities, care-leavers, families of ex-offenders and other important groups are not overlooked.

I welcome the new duties on local authorities and other local agencies to work together to combat child poverty. I would like to be certain that there are sufficient levers to ensure the development of good quality childcare and appropriate accommodation in particular.

I declare my interest as a trustee of the Sieff Foundation. At last September's Michael Sieff conference, Professor Melhuish, Professor of Human Development at Birkbeck College, University of London, made a powerful presentation on the effectiveness of good quality pre-school education on improving the educational attainment of children in deprived areas. He clearly demonstrated that children from similar deprived backgrounds had quite different educational trajectories depending on their exposure to good quality pre-school. In particular, he showed that good quality pre-school care inoculated children against the effects of poor quality primary education. At the age of 11, those children who had experienced good quality pre-school were, on average, doing well in education, whether they had experienced a poor primary school or a good one. Good quality childcare is a key factor in breaking the cycle of failure, and I hope that this Bill will make it more available to families in poverty. Professor Melhuish's presentation on the long-term effects of good quality early years care is on the Sieff Foundation website.

There is much public concern about the increasing prevalence of gang culture and gang violence in some of our communities. Last year, a number of parliamentary groups, including the parliamentary group for children and its chairman, the noble Baroness, Lady Massey of Darwen, whom I see is in her place, met to learn about gang violence. We were addressed by Professor John Pitts, who is a youth worker as well as an academic. We heard from him that what was at the root of this change was the way in which many of our communities had been neglected in recent periods of economic success. The immense disparity and the polarisation between the wealthy norm and these impoverished places contributed to a severe intensification of problems. This provided the breeding ground for the new gang culture, which is so much more virulent and anti-social than in the past. I very much hope that this Bill will help to play a part in recognising these areas and ensuring that they receive the interventions needed to prevent them becoming ghettoes.

I pay tribute to the health visitors who have helped noble Lords to understand these problems over the years, particularly Ros Bidmead, Marilyn Claydon and Dr Cheryll Adams.

To conclude, I applaud the Government for bringing forward this much-needed legislation. Of course, on its own it means nothing, but if local authorities and governments show themselves determined to meet the challenges set out in this legislation it can be an important force for good. I very much regret that I will be absent from your Lordships’ House from 26 January to 5 February but, as far as I am able to participate, I look forward to working with your Lordships to improve the Bill in Committee.