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Cost of Living: Low Income Families with Children

Volume 823: debated on Wednesday 13 July 2022


Asked by

To ask Her Majesty’s Government what financial support they have provided specifically for low income families with children to help with the increased cost of living.

My Lords, our £37 billion cost of living package is particularly focused on low-income households. Children living in families receiving qualifying means-tested benefits will receive the cost of living payment of £650 in two instalments. Households with a domestic electricity bill will receive the £400 energy bill rebate. We require at least a third of the current £421 million household support fund in England to be spent on supporting households with children. That fund will continue with a further £421 million from October, for which guidance will be announced in due course. The devolved Administrations have received separate funding through the Barnett consequentials.

My Lords, children, especially those in larger or lone-parent families, are at disproportionate risk of poverty. This has been made worse by a decade of social security cuts. Children in poverty are among those hardest hit by the cost of living crisis. Ministers stress that the latest help with the crisis targets those who most need it, yet, as the Children’s Commissioner lamented last week, children were overlooked—and not for the first time. What will the Government now do to ensure there is specific support —not discretionary support through local authorities but specific, as of right, national support for children—as the cost of living crisis worsens this autumn?

The Government’s position is that we have made money available throughout the cost of living crisis. We are doing extra things for children, such as free school meals and all the other holiday support payments. As it stands at the moment, I am not able to say if we will be doing anything further. As we have always promised, we keep everything under review and respond where we can.

Does my noble friend agree that the cost of living measures are more beneficial than uprating benefits?

We are spending over £5 billion for qualifying means-tested benefits, which is around £2 billion more than the additional cost had the qualifying benefits been increased in July 2022 to 9% higher than the previous year. By delivering flat-rate payments at pace we can make transfers to over 8 million people, and 6 million disabled people. The IFS has said that government support means that, on average, the poorest households will be approximately compensated for the rising cost of living this year. The Resolution Foundation said that the May 2022 packages were highly progressive. There is support for what the Government are doing.

My Lords, does the Minister agree that one of the most effective ways that financial support could be provided to larger families would be to scrap the two-child limit on universal credit payments?

The two-child limit on universal credit is the subject of much debate, and much angst for many people. The right reverend Prelate the Bishop of Durham has a Private Member’s Bill going through Parliament, and no doubt that will be discussed in full. As I have said before, the Government keep everything under review.

Is the Minister aware that children in lone-parent families are almost twice as likely to be in poverty than children in two-parent families? The evidence is overwhelming, as recorded in a report by the Institute for Fiscal Studies. Does she believe that all children deserve a decent start in life and, if so, what measures will the Government be taking to ensure that these children do not suffer a double disadvantage?

Of course we agree. All young children should have a good start in life, even if their circumstances vary. I pick up on the point about lone-parent families that the noble Baroness raises. I have received a number of documents from Gingerbread, which is a real advocate for this and does a terrific job. One of the ways in which we can help is to make sure that people who should pay child maintenance actually pay it. I know there is a lot of criticism of the Child Maintenance Service, and I for one would not stand here and say it is perfect. But let me tell the noble Baroness that we are using enforcement powers, because that is one way we can get money to children who really need it.

My Lords, Loughborough University research shows that the temporary £20 uplift to universal credit helped reduce the number of children in poverty from 3.8 million to 3.6 million. That is a sizeable amount, without a shadow of a doubt. The report warns that the decision to end the uplift threatens to reverse this positive trend, and that in-work poverty has now become a major issue for many families. Does the Minister agree that the Government should be taking every possible step to reduce the scandal of child poverty, starting with restoring the uplift and raising social security by at least the rate of inflation, so that no child has to stare poverty in the face?

I think it was said by our previous Chancellor and many others that the Government cannot solve every problem. That does not mean that we reduce our efforts to do so. The £20 uplift was, at the risk of boring everybody, a temporary measure and has been stopped, but we will have the annual uprating of benefits and the Secretary of State will look at it in September this year.

My Lords, with the increased cost of living hitting many families who are continually trying to balance their finances day by day, just how did the Government arrive at these amounts for cost of living payments? Does my noble friend think they are enough?

I have listened to the questions today and there is a real swell of opinion that the payments are not enough—I doubt that we could ever do enough. The package of measures we have provided is designed to target support to those most in need. It will make a real difference and, I am sure, help people through these very difficult times.

My Lords, I fully accept that the Government cannot solve every problem, but one of the problems is that they cut billions off the value of benefits and tax credits, which meant that we went into the pandemic and then the cost of living crisis with families unable to manage. The Government’s response, which is welcome, is to give exactly the same amount of money to a single person living on their own as to a couple with three children, even though their costs of energy, clothes, shoes and everything else are way higher. Does the Minister not accept that families out there are seriously desperate and need more help?

I accept that families are struggling and that some are desperate. We have tried to make the process of giving the money we are giving as simple and unbureaucratic as possible. That is why we are making the payments as we are, starting this week, I think. We hope to have them all done by the end of July.

My Lords, can the Minister be precise about what families will get during the coming summer holidays, given that free school meals cease for most children next Friday?

On free school meals, children will get what we have already announced. We are not proposing to increase free school meals rates to reflect rising inflation at the moment. They will get their holiday breakfast clubs and the support we have previously announced.

My Lords, in her initial Answer, my noble friend mentioned the household support fund, which gives valuable support to low-income families. It was due to close in September, but I think she announced that it will now be extended into October, which is welcome news. Can she give guidance to local authorities so that there is some similarity in the assistance given to low-income families and not a postcode lottery?

It is correct that the household support fund has been extended until March 2023. The Government have kept it under review and extended it where possible and appropriate. The guidance for the household support fund is being written, and there will be a heavy emphasis on one-third of that money going to families with children.

My Lords, the Minister has a good heart. She says that she has a range of options which the Government are keeping under review. Can she share with the House which of those options she would like to see implemented?

We will have a new Prime Minister and anything could happen with jobs, so I will wait until then—before I get my P45. As soon as I can tell the noble Lord and the whole House what we can do, believe me, I will be the first one here to do so.