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6 Mar 2007 : Column 420WH—continued

I support my hon. Friend in what she said: it is unacceptable that some financial institutions, including the banks, should make excess profits on the back of charges on our poorest constituents. We all celebrate the fact that the banks make profits, but it is difficult to
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justify doing so on the back of the cashpoint charges imposed on our poorest communities.

My hon. Friend the Member for Manchester, Central brought a personal insight to our debate. It was a thoughtful contribution. I recently visited Manchester—not my hon. Friend’s constituency, but the Sure Start centre in Harpurhey. I was told that only a few years ago the centre was a car park beside the shopping centre. It has been transformed into a hub for the local community and provides exactly the sort of early intervention of which my hon. Friend spoke.

My hon. Friend also mentioned an unjustifiable difference in life expectancy of eight years. We all know that children in this country have never been born equal—it is an unacceptable truism. At no point in our history have children been born equal, and one way to measure it is by life expectancy. I remind hon. Members that eight years is entirely unjustifiable. However, the difference in life expectancy between the east end of Glasgow—my hon. Friend the Member for Glasgow, East (Mr. Marshall) attended the debate—and Kensington is not eight years but 27. That is a real difference.

Mrs. Miller: What does the Minister think is his most effective policy in trying to reduce the continuing gap of eight years in life expectancy between children born in different parts of the country?

Mr. Murphy: If time allows, I shall come to that. However, the House will acknowledge that although the hon. Lady made an interesting speech, it was policy-lite.

Some of the important things that we can do are contained in the Welfare Reform Bill. I know that Glasgow and Manchester share the experience of having too high a concentration of people on incapacity benefit. One in six of those on that benefit have dependent children. The welfare reform proposals currently being debated by Parliament could have a real impact on child poverty.

My hon. Friend the Member for Manchester, Central spoke about the married couple’s allowance, and I echo his strong critique of what I think is a Conservative policy, although I am no clearer on that because the hon. Member for Basingstoke was no clearer on it. I repeat that no Government have ever designed a tax credit that makes people fall in love—and no Government have ever designed a tax credit that ensures that people stay in love. A public policy and a financial incentive designed around the false sense that it could bring about that state of affairs would be entirely flawed.

The hon. Member for Croydon, Central (Mr. Pelling) made a series of entirely reasonable points, echoed by the hon. Lady, about the specific challenges of child poverty in London—partly based, if he does not mind me putting it this way, on the poverty of race and of place. As we know, there is a concentration of children living in poverty in some of our ethnic minority communities, with a particular concentration in London, so the challenge there is acute. Another challenge of place, in ensuring that people are better off in work than on benefits is the additional cost of housing in London. I am happy to listen to him if he wishes to make further specific points in the next few weeks and months.

The hon. Member for Yeovil (Mr. Laws) made a fair and genuinely interesting contribution on the evolution of Liberal Democrat policy. Of course, he would
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expect me to say that it is a commitment of sorts that he has decided again to shake the Liberal Democrat money tree to fund the commitment on child poverty.

To suggest, as the hon. Gentleman did, that responsibility for social mobility lies with the current Administration would be quite wrong. To allege that, as others have done, ignores the causes, the time scale and the drivers. The big opportunity to have an impact on children’s chances of social mobility comes in the early years, which is why child poverty is such a problem, why early years education is so important, and why family support and aspiration in the soft skills that the family can provide are crucial.

Mr. Laws: I did not suggest that social mobility was getting worse as a consequence of Government policy, but I did say that even the Prime Minister has acknowledged that no progress has been made in turning the problem around.

Mr. Murphy: That is entirely fair, but the question for us all, despite the real and remarkable improvements of recent years, is whether we are satisfied that we have done everything that we can to drive future social mobility. Labour Members would never suggest such a thing. The progress that has been made is remarkable and historic, but it is not enough to guarantee that our political philosophy—that everyone should be born with an equal chance in life—has yet been achieved.

There has been real progress, as my hon. Friends said. Under the previous Conservative Government, 210 children were falling into poverty each and every working day. Under this Government, 240 children have been lifted out of poverty each and every day. As my hon. Friend the Member for Bristol, East said, under the previous Government the United Kingdom had one of the highest poverty rates in the industrialised world. The child poverty rate is now at a 15-year low. The previous decade saw the UK making the biggest improvement in child poverty of any European Union nation.

It did not happen by chance. It happened by choice—the choice of a Labour Government to make it an overarching priority, to invest in early intervention and to ensure that everyone has an opportunity to develop to their full potential. I welcome what the hon. Member for Yeovil said, and I look forward to discussing the detail of his policies later in the summer.

It is characteristic of me to say that we heard the traditional warm words from the Conservative party, but today they were not so much warm as tepid. There is no new commitment from the Conservative party on any specific anti-poverty measures. They will not even commit themselves to adhering to our investments to lift children out of poverty. They opposed the minimum wage, tax credits, flexible working and the money for Sure Start and for early intervention and education. Their only possible policy is a non-committal on an ineffective married couple’s allowance. Those excellent campaigning organisations such as the End Child Poverty coalition, the Child Poverty Action Group and Save the Children acknowledge that there is little commitment from the Conservative party on the means to achieve an end to which the Labour Government have been committed for the past decade.

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It is generally acknowledged that Lisa Harker’s report was an excellent piece of research. She made 31 recommendations. In her report, she said that

We will respond to that report in the coming weeks, but it acknowledges, as others have done, that there has been real improvement in recent years.

My hon. Friend the Member for Manchester, Central spoke about lone parents, and the children of lone parents not in work are five times more likely to live in poverty than those of lone parents in work. The core of a refreshed strategy on child poverty has to be an assessment of work—supporting people to get into work that pays and work that becomes a career—and supporting the transition into work by upskilling people while they are in work.

I thank my hon. Friend the Member for Bristol, East not only for securing the debate but for setting its parameters. I look forward to specific proposals from hon. Member for Yeovil in the summer—

Mr. David Amess (in the Chair): Order. We now come to the next debate.

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State Benefits and Taxation Rules

12.30 pm

Mr. Roger Gale (North Thanet) (Con): I am grateful for the opportunity to raise an issue of particular concern to one of my constituents that may, in broader terms, affect many other people. I am mildly surprised, although delighted, to see that the Paymaster General will be responding on behalf of the Government. I had expected a Minister from the Department for Work and Pensions, because I believe that this is an issue dealt with by the DWP rather than the Revenue. The right hon. Lady may be relieved to know that I do not intend to dwell on tax credits——that will happen in about a fortnight’s time. I make no apology for saying that this issue is emotive and personal. It is not personal to me, but there is animosity towards the Government. I hope to convey the frustration that has been felt by my constituent.

Let me start with some background. Elizabeth—not the name by which this young lady is ordinarily known, although it is her middle name—was born in May 1985 and is nearly 22. She was born with muscular atrophy and was in hospital——not all the time, but regularly——from 1985 to 1996. She was in hospital in 1991 and in 2001 was diagnosed with thyroid cancer and had her thyroid removed. From 2001 to 2004, she was again in hospital. She has been seen by eight consultants and, sadly, is currently in King’s College hospital where the prognosis is not good. She is a very sick young lady.

Elizabeth’s mother, who is well known to me as a constituent, is an extremely brave woman who has sought to care for her daughter for the whole of her relatively short life. Elizabeth’s mother was the manager of a retirement home, but gave up her job to look after her daughter and, because her flat went with her job, also gave up her flat. She gave up her home and her livelihood to look after her daughter, who because of medical incompetence was incorrectly diagnosed. In fact, that was not entirely surprising because she had a condition that was one in a million. We now know that it is two in a million because one other person with the same condition has been found. I do not pretend that the medics should not be forgiven for getting the diagnosis wrong, but they did get it wrong and, as a result, Elizabeth was denied disability living allowance and her mother was denied carer’s allowance.

Elizabeth’s mother spent her time looking after her child and went to the jobcentre for help where she was told that she must go back to work because she did not qualify for benefits. To qualify for jobseeker’s allowance, someone must be working or be available for work, but Elizabeth’s mother could not be available for work because she was looking after a very sick girl. She set up a business because that was the only way that she could survive, which shows that she is a woman with real guts. She established a design business, which I will not identify because I do not wish to identify the lady concerned.

The Government abolished the annual review for tax purposes in April 2004. The previous review was in December 2003 when, for benefit purposes, Elizabeth’s mother declared her design business as having a nil income because it was an embryonic business that was making a loss, not a profit. The conflict between Her Majesty’s Revenue and Customs and the benefits system began at that point. There was no review in
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2004 because the Government had abolished it. The next review that she was subjected to was in August 2005—just over a year later—by which time the design business was failing. In order to hold the body and soul of herself and her daughter together, she went into the care business and established a care services enterprise that made a modest profit. The design business went out of business in December 2004.

Elizabeth’s mother received a letter from Thanet district council about her housing benefit in 2005. It stated that her housing benefit had been cancelled with retrospective effect from 2003 because she had made a profit on one business—the care business. The “massive” profit accepted by the Inland Revenue amounted to just under £8,000. The regulations do not allow for the losses of the design business to be offset against the profits of the care business in the same way as they do for tax purposes. Thanet district council informed me in a letter dated 28 November 2005 where a

On the one hand, a loss can be offset for tax credit purposes, but it cannot be offset for benefit purposes.

Thanet district council, which it now transpires acted entirely properly and within the regulations, informed me that

That has left my constituent in a black hole.

I wrote to the Minister for Local Government to inform him that my constituent was doing her utmost to remain self-sufficient and at the same time provide support for a severely handicapped child while the system was doing its utmost to confound her best endeavours.

A letter from Thanet district council dated December 2005 states that my constituent’s

That was written about a woman with virtually no income who is caring for a sick child. Those responsible for the benefits system have told her that she must find some money from somewhere.

The Under-Secretary of State for Work and Pensions, the hon. Member for Warwick and Leamington (Mr. Plaskitt), who I thought might be here this morning, wrote to me on 11 January 2006 and stated:

He helpfully goes on to say:

In this individual case, my constituent has been told that she has made a profit—a net loss in revenue and customs terms—of £7,337, which added to everything else puts her outside the housing benefit margins. The council wrote to her and told her that according to the regulations, she has been overpaid housing benefit by £2,622—riches beyond the dream of avarice. This
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woman does not have 2,622 pence, never mind pounds, but the council wants her to begin to repay the money, because the regulations require that.

Thanet district council wrote again on 18 January 2006, citing

It again said—quite correctly, apparently—that those specifically exclude

being offset

Thanet district council is bending over backwards, trying to keep the bailiffs out. It wants to help a woman who is trying to help herself and her child.

I wrote to the Under-Secretary on 27 January 2006, saying:

That was on 27 January 2006, and at the end of the letter I said that, although I did not want to do so, unless an answer was found the case would have to be raised in public in an Adjournment debate. That is why I am here today. I have waited a year. I also wrote to the leader of the council, saying that unless we did something, the family would be brought “to its knees”—the family is on its knees.

The Under-Secretary wrote back to me on 13 February 2006, saying that

and that local authorities

You bet your sweet life they don’t. The Under-Secretary says that he “fully” understands that my constituent

Well, they do not.

The leader of the council wrote back to me, saying that

The bottom line is that we are dealing with a lady who has a dying daughter; who is deprived of benefit; and who is being told by the council that she has to increase her repayments. She has got the amount that she owes down to £660. She is being told that she has to increase her payments to £15.95 a week out of her pitiful income to repay a debt that should never have existed in the first place. That is what is so iniquitous about this case.

Revenue and Customs understands that business loss is set against business profit for tax purposes. I understand the argument that it is not up to Revenue and Customs or the benefits system to allow one business to subsidise another, but we are not talking
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about Rolls-Royce. We are talking about a woman who is struggling to bring up, to survive with, a very sick, very disabled child.

I raised the case with the Under-Secretary a year ago. Earlier this year—last month—I wrote him a letter in which I said:

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