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The problems of the Child Support Agency are well known; we expect a statement on the matter within the next couple of weeks. Again, we could debate that for hours, but it is worth pointing out that £3.5 billion maintenance arrears have accrued since the CSA was set up by the Conservative Government in 1993. The £3.5 billion that has not got through to families with children would have made an enormous difference in tackling child poverty, and until there is a working CSA, it will be more difficult to tackle the problems of child poverty.
The Government policy that is pushing against its own targets on child poverty is council tax, which is probably the most regressive tax in Britain—it has increased by about 100 per cent. since 1997. There are about 800,000 households with children who are in relatively low-income poverty and not in receipt of the council tax benefits to which they are entitled. In other words, about 50 per cent. of households with children in poverty who are entitled to council tax benefit are not in receipt of it.
The Government’s vehicle for dealing with the regressive nature of council tax is very ineffective, so we have a very regressive tax, which is making the Government’s job of reducing child poverty much more difficult.
The hon.
Member for Wirral, West gave us a number of signposts about future
issues. He indicated that
without a continued increase in transfer payments from the Government it
will be very difficult to meet the ambitious targets that have been
set. I agree; getting more money into low-income families is a crucial
part of the complex policy challenge of giving those children greater
opportunities.
The hon. Gentleman’s right hon. Friends have flagged up some major issues, not only in respect of the administration of the tax credit system, but about the balance between means-tested and non-means-tested benefits. The number of people facing very high marginal deduction rates as they go back into employment has risen, as the hon. Gentleman knows, by about 1 million since 1997. Although those facing the highest marginal deduction rates have come down, that figure remains extremely high. Recent reports, including that from the Fabian Society, suggest that there is a debate about the right balance between means-tested and non-means-tested benefits, and in that respect the hon. Gentleman’s point about take-up rates is highly relevant. The Government should be engaging in a debate on that matter, and by retaining the child benefit element alongside the child tax credit, they clearly indicate that they think that those two elements need to be part of their child poverty strategy.
The hon. Gentleman mentioned the child trust fund. It is clear that under any Government spending rounds in the next few years will be considerably less generous than those since 1999. Scarce resources will have to be spent where they will make the most difference. Our view is that the child trust fund is not the priority when setting aside £2.25 billion per Parliament as money that will be accessible by an individual only when they reach 18, by which time most of their disadvantages, such as poverty and problems in early years education, will already have been consolidated. We would much rather that that money went in at an early stage and was spent on additional help to low-income families to make a difference to people’s opportunities, rather than its coming to them at the age of 18.
I want to touch briefly on two other, vital, issues. Recently, in his speech on child poverty the Secretary of State questioned whether ultimately the strategy of simply increasing benefits and tax credits could ever deliver on the very ambitious targets that have been set, and he was right to do so. One reason why there are such high child poverty rates in this country is the number of children in workless households and in single-parent households, although it is extremely difficult for any Government to do much about the latter.
We need to get more parents into work; that is an issue that relates to single parents and to people on incapacity benefit who have been written off in the past but who could be moved into employment. I hope that they will be important elements in the Bill that has been published today. It is clear that low skills are associated with worklessness, and the skills agenda and early years agenda are therefore vital.
Housing is also
vital. About 32 per cent. of the income of low-income families is spent
on housing costs, a much greater percentage than in higher-income
households. Housing costs have been rising rapidly in recent years, and
the housing market is not working. If
we are to hope to meet the very ambitious targets, we cannot rely on one
policy vehicle alone, we must tackle problems in the housing market and
in worklessness, and we must address the skills agenda.
I again congratulate the hon. Gentleman on securing the debate and hope that we will have further opportunities during the rest of the year to debate the issue in greater detail.
10.26 am
Miss Anne McIntosh (Vale of York) (Con): I welcome you to the Chair, Mr. Martlew, and say what an honour it is to appear before you. I welcome the debate, and congratulate the hon. Member for Wirral, West (Stephen Hesford) on securing it. He is a brave man, perhaps lacking the political ambition of some of his colleagues who have chosen to stay away from this debate, for a reason that eludes me.
The debate is particularly timely and gives us a welcome opportunity to bring together some of the strands underlining child poverty. At the outset, for the benefit of the House, I ask the Minister for Employment and Welfare Reform whether the Government will confirm their definition of poverty for the purposes of child poverty? The Library briefing note prepared for today’s debate states:
“The standard definition of income poverty is living in a household with an equivalised household income that is below60 per cent. of the median household income. Income is ‘equivalised’, meaning it is adjusted to take account of variations in household size and composition to make it a better measure of standard of living.”
As we know from the Department’s press release in March, the target on child poverty was only narrowly missed before housing costs were taken into account, yet on closer examination the gap in missing the target was greater after housing costs were taken into consideration, and there are a number of reasons for that.
Let us consider the geographic spread represented by those present in the debate—the north-west, Scotland, Yorkshire and the south-west. It is interesting to note that the average house in north Yorkshire is the most expensive in the country. It is important that housing costs are taken into consideration in setting child poverty levels. Will the Government confirm that that is their understanding, and that it will remain so?
It fills me with dread when the Government appoint a tsar to a policy area. The hon. Member for Wirral, West alluded to the appointment of Lisa Harker as the tsar for child poverty. The Minister issued a press release at the end of June setting out her remit. The Secretary of State yesterday set before the Select Committee the reasons for the Government’s failure—that is perhaps why the hon. Member for Wirral, West, finds himself alone on his Benches today, regrettably—saying that of all the aspects of the Department’s work, the hardest is eradicating child poverty. The Secretary of State claims that child poverty rates have been falling because of the introduction of tax credits and improvement in the employment rate of parents, particularly through the new deal for lone parents.
If there is one thing that the
tax credit system and the Child Support Agency share, it is a
lamentable failure of their computer systems. The hon. Member
for Yeovil (Mr. Laws) referred to the £3.3 billion not yet
collected by the Child Support Agency. I simply add that £2
billion of that is deemed uncollectible. What do we say to the parents
with care who are owed that money and who will possibly never get
it?
The Secretary of State claimed that the target had not been reached because not enough lone parents had got back into work. The Child Poverty Action Group, to which I pay tribute for its work over the years, commented in a November press release:
“Child poverty cannot be eradicated without significantly raising the safety net of the welfare state, supporting more people into employment, ensuring that work pays and making further improvements to the administration of tax credits”.
The Secretary of State said that two key areas are focusing more heavily on getting lone parents back into work and improving child support. The National Audit Office last week came out with the most damning indictment of the Child Support Agency. That should be taken together with the damning report by the Work and Pensions Committee, which came out before last year’s election, and which went to the heart of the matter. Some very good people work for the Child Support Agency—indeed, the Minister might take this opportunity to thank them for their work, often in difficult circumstances—but the Select Committee said that they lack training and that their skills were not necessarily deployed to best advantage.
We are poised to hear, any day now, a statement by the Secretary of State on the result of the David Henshaw review; obviously, that will give us more time to focus on the issue, but I would like to rehearse the reasons why the Government failed to reach the last target and to say why we believe a course of action can be followed that will eradicate child poverty more quickly.
Will the Minister say why Northern Ireland is not included in the figures? That gives a distorted view of the child poverty picture, because a third of children in Northern Ireland live in poverty. Will he provide a letter, to be placed in the Library for the benefit of all right hon. and hon. Members, giving the data with the figures for Northern Ireland aggregated into the total? Also, will he, on a regular basis, give the target both before and after housing costs are included, and explain which of the definitions the Government will use?
The Government have a quantifiable public service agreement target for child poverty in 2005; levels of child poverty are to be at least a quarter lower than in 1998-99, using the poverty line of 60 per cent. The Government missed their child poverty targets for 2005 and are on track to miss them again in 2010. I have to say that the two biggest problems in my constituency surgeries are overpayment of tax credits—that can have an impact in thrusting a household into poverty, because the Government try to claw back the overpayment in one go—and child support cases.
Stephen Hesford: I have already made a point about tax credits but, for the record, I do not think that I said I thought that the Government were on track to miss 2010; I think that I made the point that we ought to put in place measures that help us to get there, having accepted that we missed 2005.
Miss McIntosh: Save the Children questioned Labour’s success in tackling child poverty. In a press release last December, it said that
“there has been little or no improvement in the percentage of children living in severe poverty”
in Britain. It went on to say:
“The Government needs to sort out the absurd mess of 11 different departments working on child poverty without a joined-up strategy”.
The hon. Member for Wirral, West, did mention tax credits, child support and lone parents, and we can see that already three Departments come into play there. The Government may wish to consider that.
The Government are on track to miss their target in 2010. The principal tool that they are using is tax credits, yet those have had a marginal effect that is diminishing, and that might well be squeezed in the next spending round. As the calculation of child poverty is a relative one that sits near the middle of the curve, a small movement in any direction has the effect of taking large numbers of children into or out of poverty. From our point of view, it is difficult to sign up to a target that the Government are clearly on course to miss.
We are committed, and state that we aspire, to eradicating child poverty by 2020. However, there are a number of issues that we would like to consider today. Does the Minister accept that the tax credits fiasco has probably impacted in such a way as to push more children into poverty? Does he further accept the mess that the Child Support Agency has got into and that the Government have failed to take up the mediation aspect, so strongly pushed by the former Home Secretary, the right hon. Member for Sheffield, Brightside (Mr. Blunkett), who, in 1998, promised to commit more resources to mediation so that there would be fewer calls on child support? Those two policies, taken together, have had a negative impact on the child poverty figures.
Mr. Laws: The hon. Lady obviously shares our concerns about the administration of the tax credit system, but she implies that child tax credits may have deepened child poverty. I am sure that that was not her intention. The problems may have meant that there was not as much of an improvement as the Government aspired to make, but the hon. Lady would surely agree that child tax credits have reduced the poverty figures.
Miss McIntosh: The point that I was trying to make—I hope that the hon. Gentleman will accept it—is that there are cases where individual households may be pushed into temporary poverty because ofthe clawback, through the incompetence of the Government. I do not think that that was the Government’s intention, but it has been the practical effect. We may not be talking about many households, but the problem has had quite an impact, certainly in my constituency, which, although it has pockets of deprivation, could not be described as a deprived area.
In addition to
tax credits and Child Support Agency failings, there is the issue of
the new deal for over-50s. There are insufficient advisers, as I think
the Minister will accept, and there is a six-month wait before
over-50-year-olds seeking work can get assistance; that
is a failing through having an insufficient network of business
advisers. The new deal for younger people has not helped as many young
people as the Government
claim.
The figures show that when the Conservatives left power in 1997, youth unemployment was on a strong downward spiral anyway.
There are two related aspects, and the hon. Member for Wirral, West touched on one. First, there is the impact on child poverty of the disabled parent who is unable to enter the workplace. Secondly, there is mental illness. A recent Joseph Rowntree Foundation paper recognised that aspect, whereby the parent is unable to work or seek work because of mental illness. It is a general problem to which I hope all parties will seek a solution. I shall set out the Conservative party’s position. I do not know whether the hon. Gentleman or the Minister know that we have stated that we embrace the principle of active market intervention. It is the best way of achieving a skilled and competitive work force. The new deal might have had a role to play, but the Government have not carried out a sufficient cost-benefit analysis. As with tax credit, child support and other targets, the Government are so obsessed with targets that they have failed to reach the 2005 figures for reducing child poverty and are not on course to reach the 2010 figures.
We invite the private and voluntary sectors to play a positive role in reducing child poverty. We are committed to improving the lot of the most disadvantaged in society. My right hon. Friend the Member for Witney (Mr. Cameron), the Leader of the Opposition, recently set out in his speech on the family four factors that promise a pathway out of poverty:
“A loving and stable home life; A good education; Economic opportunity; A life free of substance abuse and serious debt.”
My right hon. Friend the Member for—I cannot remember his constituency—
Stephen Hesford: Chingford.
Miss McIntosh: Indeed. My right hon. Friend the Member for Chingford and Woodford Green(Mr. Duncan Smith), who chairs the social justice policy group, will report on those issues and set out a programme. One area that we are considering is transferable tax allowances to help support the institution of marriage and reform the welfare and tax system.
I praise the hon. Member for Wirral, West for drawing our attention to the Government’s failings. We join the Government in the aspiration to reduce and eradicate child poverty by 2020. However, I join with the hon. Gentleman, in identifying the reasons why the Government have failed to act. We look forward with great interest to hearing how the Minister is going to get us back on track to eradicate child poverty by 2020.
10.43 am
The
Minister for Employment and Welfare Reform (Mr. Jim
Murphy): I am pleased to have the opportunity to respond
in this brief but thought-provoking debate. My hon. Friend the Member
for
Wirral, West (Stephen Hesford) was particularly thought provoking, and
if truth be told, he is the only one of us who volunteered to attend
today. All three other speakers are present, first because of our
Front-Bench responsibilities and secondly, because of our general
interest. I congratulate my hon. Friend on being the only Back Bencher
in attendance from any party. I did not know that he had experience of
working with the Child Poverty Action Group before he became a Member
of Parliament. The detail in his speech displayed the knowledge and
experience that he built up over those years.
I apologise to my hon. Friend and others. There have been myriad comments, questions and suggestions, and we may not be able in the 16 minutes available to cover them all. I hope to make a good attempt,
I welcome the points that the hon. Member for Yeovil (Mr. Laws) made. Although he has specific concerns about the Government’s strategy, the tone and reasonable way in which he put his points across improved the quality of our debate. We look forward to hearing and analysing the outcome of the policy commission that is considering the Liberal Democrat attitude to child poverty. He suggested some reasons why they do not share the commitment to the 2010 target of halving child poverty and the 2020 target of eradication. I am sure that we will discuss that in more detail as the commission concludes its deliberations.
I get on very well with the hon. Member for Vale of York (Miss McIntosh), except when we have debates. From the tone of her comments, I do not sense that she is a fully paid-up member of the new, modern Conservative party. Rather than pressing on specifics, which is entirely reasonable, she might more appropriately have acknowledged that because of the generational nature of poverty, lack of ambition, the challenge of social mobility, and inequalities in education and public service provision, many of the problems with which we are dealing did not start on1 May 1997. In many respects, but not all, finding a solution to those generational and long-term problems has been one of our greatest priorities over the past nine years. It would have been more appropriate for her to start with an apology.
The hon. Lady suggested that the Conservatives share our aspiration, but for the Labour party and the Labour Government it is not an aspiration but a determined target to deliver. It is not a wilful aspiration that we might one day aspire to achieve; it is a determined target that we have set out to achieve. Working with others, we will continue to drive public policy to achieve it.
Miss McIntosh: I am grateful to the Minister for allowing me to clarify our position. As he continues with his prepared speech, he will accept that we support the Government but recognise that they failed to achieve their ambitious target in 2005. They look as though they will also fail to achieve the target in 2010, by which time we aspire to be in government and will have to deal with the situation.
Mr. Murphy: That is one target that we intend to miss.
In my prepared speech, I was to going to welcome the tone of the hon. Lady’s remarks. However, I am doing no such thing, because I thought that her tone was entirely inappropriate. Her suggestion that we are not hitting our target because we are obsessed with hitting our target raised three sets of eyebrows across the Chamber.
My hon. Friend the Member for Wirral, West intervened on the hon. Lady’s comments about the experience of the right hon. Member for Chingford and Woodford Green (Mr. Duncan Smith), the former Conservative leader. I do not doubt the right hon. Gentleman’s motivation, based on his visit to a Glasgow housing scheme. However, for many of us who grew up in housing schemes, and certainly for myself, who grew up in a Glasgow housing scheme, it is not a visit to a housing scheme that drives us, but the life experiences of each and every individual with whom we grew up in those communities.
I am delighted about and thank hon. Members for their congratulations on the role that I have been invited to play at the Department for Work and Pensions. The Secretary of State rightly identified tackling child poverty as our No. 1 priority. There is no room for complacency, but child poverty is at a 15-year low. It more than doubled in the previous 20 years, when one in three babies in Britain was born into poverty. There have been policies such as Jobcentre Plus, the new deal, the minimum wage and tax credits. The hon. Lady and others have had their concerns about the latter, but despite the serious administration problems, which we do not seek to belittle, and having again put on record the apologies that other Ministers have made for the administration, I may say tax credits have made a substantial contribution to alleviating poverty in many of the poorest families in every constituency, including the hon. Lady’s. Some 6 million families and 10 million children have received support through the tax credit system. Of course, we have to find ways in which to improve the administration. For people in relative poverty, a mistake in administration can have long-term effects on the stability of their income and the way in which they can live their lives.
As I have mentioned, there is a generational challenge, as identified by the statistics on life expectancy. If we compare the life expectancy of a child born in Kensington and Chelsea with that of one born in Wirral, West, there is a five-year gap. If we compare the life expectancy in Wirral, West with that in Calton in my home city of Glasgow, there is an additional 22-year gap. That does not need policies about tax credits, the minimum wage, primary education or getting lone parents into work, but a general approach to target and to focus relentlessly across government, along with business and the voluntary and private sectors, on the ways in which we can drive a sense of social mobility and real change in those families.
One
of the interesting points that everyone has made today is the lack of
awareness among many people about the nature of child poverty in this
country. Of course, that lack of awareness exists not among those who
continue to experience child poverty despite all their
efforts—there is a real sense of what it means in those
families—but in the wider public domain, which may be reflected
in the attendance at today’s debate,
and perhaps among some journalists. I do not criticise them for it at
all, but in preparation for some work last week I found myself having
to persuade a journalist that child poverty was a continuing and real
problem in our country. The hon. Member for Vale of York made the fair
point that, for some, child poverty is something in the developing
world, about which celebrities campaign vocally for good purpose and to
great effect, which we welcome. However, although the nature and scale
of child poverty are entirely different here, the challenge
remains.
We seek to co-ordinate our work to maximum effect so that policies in education, health, employment and across all Departments are more focused in the way in which they are brought together. I welcome the appointment of my right hon. Friend the Chancellor of the Duchy of Lancaster as Minister for Social Exclusion. She has brought together a Cabinet Sub-Committee, and that means that Ministers from all Departments are working together and trying to support the poorest 5 per cent. in our communities.
Poorer children with a high developmental score as toddlers fall behind by the age of 10 compared with children from higher social economic groups who had a lower developmental score in early childhood. At key stage 3, fewer than half the pupils who receive free school meals reach their expected attainment levels. It is not only an issue of weaker educational outcomes; it goes much wider than that. An ever-increasing body of research attests to the importance of children’s early years informing their life chances, which is why this debate is so important in focusing on what more can be done to eradicate child poverty.
The poverty and disadvantage that afflict people, and children above all, are not new phenomena, as we have already heard. They grew grotesquely, out of all sense of proportion and beyond all sense of justification, throughout the ‘80s and early ‘90s. The way in which that grotesque level of poverty was allowed to grow embarrassed this country and shamed public life through that period.
I shall now reflect on what more can be done. The Welfare Reform Bill, which we publish today, will be an important step towards improving life chances by no longer writing anyone off and by supporting those with incapacity benefit to give them the chance to build confidence, which is important, rebuild their skills, which is key, and find work, obtain work and stay in work through personal advice and support, which will be crucial. The city strategy, of which we will announce more details later this month, focused on many of our big cities where the problem is even more acute. Two thirds of people on benefit in the United Kingdom live in our big cities, which is the rationale for the city strategy. Today, we shall announce the national roll-out of the pathways programme, again involving the private and voluntary sectors. That is an important part of the overall strategy.
Miss
McIntosh: I am listening with great interest. The Minister
accepts that, as I mentioned, there are pockets of rural deprivation
across areas such as the Vale of York, but the fact that the cost of
housing is significantly higher than anywhere else in the country and
the average wage significantly lower has an impact. Can he confirm the
definition of poverty, so that we all
know what we are talking about? Is it assessed in income terms, and is
it assessed before or after housing costs?
Mr. Murphy: There is an accurate definition in the House of Commons Library note for this debate, which I will confirm to the hon. Lady in writing.
Miss McIntosh: And housing costs?
Mr. Murphy: Both sets of figures, before and after housing costs, will be published, so there will be maximum openness. As I say, our definition of relative poverty does not take into account the hon. Lady’s specific point about regional variations in housing costs. Both sets of figures will be published so she will be able to make her observations as she chooses.
The key to our approach to child poverty is the drive on social mobility, which, as the hon. Member for Yeovil said, has stalled, and I have said that in public before. I argue that that is largely the consequence of the fact that the socially-immobile 30-somethings of today were the children of the ‘80s and a time of substantial mass unemployment. The nature of social mobility is such that there is a generational challenge about how we break the cycle of poverty of aspiration. Early education is key, family support is crucial, and the alleviation of child poverty is absolutely essential.
I was reminded again of that
when I was in Liverpool last week, knocking on doors with an
organisation called Streets Ahead. In the daytime, there were three
generations of one family behind a door in the poorest ward, I think,
in Liverpool, all of whom were able through interaction with Streets
Ahead to see that there is some opportunity through the new deal and
other employment programmes for them to get closer to the labour
market. Such projects are
absolutely crucial if we are to overcome the generational nature of the
lack of social mobility that is so endemic in so many of our larger
cities.
Breaking the cycle of disadvantage is not simple. It is not about one specific policy. However, we are seeking to refresh our strategy at the Department for Work and Pensions. We have not appointed a tsar, although the newspapers suggested that we had. We have invited Lisa Harker, who has vast experience of the subject of child poverty through the Child Poverty Action Group, Save the Children, and the Daycare Trust, to advise us on what more we can do to achieve our targets for 2010 and to get us on track to eradicate child poverty by 2020. I want her to challenge us and to see what more we can do, and to challenge our policy approach,our organisational approach, our systems, our prioritisation, the way in which we structure our employment programmes and the interaction between those programmes. However, although my Department is important, we will not simply deliver the alleviation of child poverty on our own. There is a poverty of public services in some communities, and some people’s experience of public services is still take it or leave it, and take what you get. Despite recent improvements in extending equality of public services in such communities, we have to go much further in personalising public services in some of our poorer communities.
With that in mind, I thank my hon. Friend the Member for Wirral, West for introducing the debate in such an informed way and for giving the House the opportunity to reflect on what more can be done to alleviate child poverty in the UK by 2010 and to eradicate it by 2020, so that instead of having the highest levels of child poverty, as we did in the 1980s and 1990s, we can head the league table in Europe for the eradication of child poverty, rather than heading the table for its propensity and the grotesque way in which it was allowed to spread in many of our urban and rural communities.
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