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Child Poverty

5. Tony Lloyd (Manchester Central) (Lab): What assessment he has made of the impact of Government policy on child poverty. [172714]

The Paymaster General (Dawn Primarolo): By 2002–03 there were around half a million fewer children in relatively low-income households than in 1998–99—4.2 million down to 3.6 million after housing costs, and 3.1 million down to 2.6 million before housing costs. Those data do not fully reflect the effect of increased support from the introduction of the new tax credits in April 2003, or the increase in the tax credits that took effect last month.

Tony Lloyd: There is no doubt that the various schemes introduced by the Government both to assist children in the poorest families and to help adults into work have had a real impact on child poverty, but I am sure my right hon. Friend accepts that we still have a long way to go if we are to help those 3.6 million children. Are the Government still committed to the eradication of child poverty in this generation? Is that still a priority, and does my right hon. Friend agree that the biggest single threat to its achievement is the lack of national consensus and, in particular, the failure of Opposition parties to support the Government's programmes?

Dawn Primarolo: Between 1979 and 1996–97, the proportion of children living in low-income households
 
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more than doubled under the last Government. Following the introduction of this Government's policies, by 2002–03 the number of children in low-income households, in absolute terms, fell by 50 per cent.

The Government's historic commitment to eradicating child poverty means that we must tackle poverty on all fronts. We need to ensure that we get money to families, to ensure that people can be in work, and to ensure by means of active labour market policies that that work pays adequately. We need to support parents in their parenting role, and we need to deliver high-quality public services to improve children's lives in the short term and break the cycles of deprivation. All those policies are opposed by the Conservatives in their desire to cut the new deal and cut investment in public services. It is a tragedy for the nation that we cannot secure a consensus once and for all on tackling child poverty.

Dr. Vincent Cable (Twickenham) (LD): I acknowledge the priority that the Government have given to child poverty and the progress made towards reducing it, but in the light of the utterly chaotic introduction of the child tax credit last year, may we have an absolute guarantee that under the even more complex regime envisaged for this year—incorporating the child supplement to income support, for instance—hundreds of thousands of poor families will not once again find themselves plunged into poverty, either through non-payment or through demands for repayment of amounts that should not have been paid in the first place?

Dawn Primarolo: It is a shame that the hon. Gentleman did not take the opportunity to commit himself fully to the policies that the Government are pursuing to eradicate child poverty. He ought to look at the details of the introduction of the tax credit. It has proved a popular policy. The contribution made by the tax credit, and by the April increase, has been fundamental to lifting children out of poverty. As has been said outside the House,

"Following the increases in benefit and tax credit rates, severe hardship among in-work families almost vanished in two years"

—the two years to 2001.

That is to be celebrated. The hon. Gentleman should concentrate on ensuring that families know what they are entitled to and receive it, rather than trying to undermine their confidence in the system.

Mr. Tom Harris (Glasgow, Cathcart) (Lab): I stand here as a Member of Parliament who is proud to support a Government who maintain their commitment to eliminating child poverty within our lifetime, but has my right hon. Friend thought about the way in which we calculate child poverty levels? For example, if I win the national lottery on Saturday—as I fully intend to—the increase in my income will raise the threshold for the calculation, and more children below it will be deemed to be living in poverty. Is it possible for the Government to calculate in absolute rather than relative terms?

Dawn Primarolo: I congratulate my hon. Friend on the hard work that he undertakes in his constituency
 
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and in the House in drawing attention to the particular issues around child poverty. As he will know, the Government are well on course to achieving their target of reducing child poverty by a quarter by 2004, but he is quite right to identify the challenges for the medium and long term. To that end, the Government are introducing a series of three indicators, all of which will measure our progress on eradicating child poverty: an absolute low-income test, a relative low-income test and a test of material deprivation and relative low income. They will ensure that we have clarity and comprehensiveness in tackling the questions of child poverty. That means investment in tax credits, investment in public services, support for child care, support for training and a commitment to full employment—all policies that the Conservative Opposition do not support.

Trade Agreements (Poverty)

6. Dr. Doug Naysmith (Bristol, North-West) (Lab/Co-op): What steps he is taking to reach further agreements on trade in order to tackle poverty in the world's poorest countries. [172715]

The Chancellor of the Exchequer (Mr. Gordon Brown): Following last year's setback at Cancun, Britain and the European Union are now considering new proposals to break the deadlock on trade negotiations, not least to tackle agricultural protectionism. I hope that our proposals will have the support of Members on both sides of the House.

Dr. Naysmith : I thank my right hon. Friend for that reply. He obviously agrees with me that a large part of the problem is due to agricultural protectionism around the world. That includes the common agricultural policy, for which we have at least some responsibility. What more can be done to effect change?

Mr. Brown: The Treasury, with the Department of Trade and Industry, will next week be publishing proposals on trade and a major study of the impact of trade on developing countries. My hon. Friend will, I think, be pleased that on 9 May the Commissioner in charge of trade, Pascal Lamy, published a letter outlining new proposals to deal with agricultural protectionism. He says in his letter that

"we have a historical opportunity for a breakthrough . . . it is clear that the objective of eliminating all forms of export support is one which is shared by the great majority of participants."

The European Union is moving to a position at which it will not only reduce agricultural subsidies that are trade distorting but, as part of the negotiations, remove export subsidies entirely. That is part of the pressure that the Secretary of State for Trade and Industry and others have been putting on the international community. I hope that everyone will welcome that.

Rev. Martin Smyth (Belfast, South) (UUP): Is the Chancellor prepared to say, apart from the advance on agricultural subsidies, whether there are any other areas in which we need to be more proactive to help world trade?

Mr. Brown: It is absolutely clear that there are two major areas on which resolution is needed in the trade
 
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talks. The first is that which we have mentioned. The developing countries will not accept the continuation of a system of agricultural protectionism, by either Europe or America, which deprives people in Africa, for example—where three quarters of the population are on the land—of being able to sell their products or, indeed, survive on the land. The second area concerns what are called the Singapore conditions, and I am grateful to the hon. Gentleman for raising the question of how we must break the deadlock on those. It is clear that the four Singapore conditions cannot be accepted by all countries. I believe that the European Union will now withdraw at least three of those conditions, which should help to achieve a breakthrough.

It is in everyone's interest, when agricultural subsidies are $300 billion but overseas aid is only $50 billion, that we remove the worst of agricultural protectionism and, by changing the Singapore conditions, try to achieve a breakthrough on trade that is of the greatest benefit not to Europe and America—although they will benefit—but to the poorest countries in the world.

Mr. John McFall (Dumbarton) (Lab/Co-op): The Chancellor will be aware of last year's World Trade Organisation laws on intellectual property, which encouraged countries to relax their patenting laws on generic antiretroviral drugs, so as to tackle HIV/AIDS in the world's poorest countries. Will the United Kingdom Government follow Canada's sterling example by introducing legislation, thereby helping to attain our health and development goals while respecting the intellectual property rights of the pharmaceutical industry?

Mr. Brown: My hon. Friend takes a huge interest in these matters, and recently visited Africa, where he will have seen at first hand the problems arising from HIV/AIDS and the failure to tackle it. I met the Finance Minister of Canada and talked to him about the announcement that Canada made only a few weeks ago about intellectual property; we shall examine his proposals. At the same time, I was able to remind him that Canada might consider the proposal that we introduced in the Finance Bill—to give research and development tax credits for companies, even those outside the United Kingdom, that are developing and patenting drugs for conditions that are peculiar or specific to, or mainly found in, Africa and other such places. We are prepared to work with Canada on those issues. The most important thing to say is that the cost of the drugs is now coming down—but we must do more, through the global health fund, to get those costs down. Again, I hope that we can have all-party support on that matter, rather than suggestions for cuts in overseas development aid.

Miss Anne McIntosh (Vale of York) (Con): The Chancellor will be aware that many of the world's poorest countries are often riven with conflict; I am thinking of Afghanistan in particular. What progress is being made with his international partners in finding alternative crops to the traditional crop in such countries, the poppy?

Mr. Brown: It is clear—and we have discussed this with the Afghan Administration—that more of
 
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Afghanistan's income is coming from drugs and associated illegal activity than from any other commercial activity in the country. It is a condition of the support that we are giving that those in Afghanistan take action to destroy those crops. We shall continue to work with them to do so, but I think that the hon. Lady will understand that if we are to have any impact on the worldwide trafficking of drugs, that will demand action not simply in Afghanistan but right around the world. I know that there is all-party support for that.

Mr. Andy Reed (Loughborough) (Lab/Co-op): I welcome the progress that seems to be being made at European level, but does the Chancellor agree that we need to work more internationally, particularly with the Americans, to ensure that the trade talks are a success? Can he give any indication of the timetable? As he rightly said earlier, some 6,000 children a day are dying in Africa, and the potential uplift from just 1 per cent. growth in world trade would far outweigh all the aid programmes, the international finance facility and much else. Can we move extremely quickly, because day by day, this is an urgent problem? Can he reassure us that even if the United States is dragging its feet, Europe can move forward?

Mr. Brown: I am grateful to my hon. Friend, who has chaired all-party committees on this subject in the House of Commons. At the last meeting of the International Monetary Fund only a few weeks ago, and at the G7 meeting, there was a declaration that there must be urgency in moving the trade talks forward. I can also tell my hon. Friend that Mr. Zoellick, the American negotiator, has been at meetings in Europe in the past few days, so that we can achieve that breakthrough. I believe that the significance of the Lamy letter on agricultural protectionism will be important in moving the talks forward, and we will do everything in our power, including the publication of our documentation next week, to move them forward. As for making more money available for Africa, I have drawn attention to what the Treasury has done to give extra support for drug research and development, and I should add that that will be carried forward by Her Majesty's Revenue and Customs, the new service, under its new chairman. Of course, the main hope is that, subject to all the conditions that have been laid down, we can persuade our partners that an international finance facility would not simply release just a few billions more in resources, but could front-load development aid by doubling the money available to halve poverty over the next few years.

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