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Child Poverty

2.30 pm

Fiona Mactaggart (Slough) (Lab): It is a pleasure to have this debate with you in the Chair, Mr. Bercow—I know that you care more than many people about this issue.

Eradicating child poverty is a bold ambition and in politics it is important to be bold and to say that we can get rid of it. Halving child poverty by 2010-11 and eradicating it by 2020 is necessary because by making bold claims we drive change forward. Without such claims, we bibble along and make the world less worse rather than better. I am glad that we have a target and that we are doing much better than the previous Government; when in power, they managed to double child poverty between 1979 and 1997. In addition, the figures changed from one in six to one in three children living in poverty. The target is not enough; we have to deliver on that target. We know that, if we fail to deliver, we will increase cynicism and a sense of hopelessness about politics, and make poverty seem an ineradicable problem. At a time when the latest figures show that we might be going backwards, it is important carefully to consider what needs to be done to tackle this problem.

The Institute for Fiscal Studies—a body that we all admire for its rigour—predicts that if we just carry on steady as she goes, we will be 700,000 children short of our target. That is not tolerable. All the experts in the field agree that, despite the £2 billion set aside in the 2007 Budget for tax credits and the rise in child benefit to £20 a week by 2010, which adds up to more than £1,000 a year, more money is needed, otherwise we will miss our target. I initiated this debate because I believe that the forthcoming Budget is our last chance to make sure that we do not miss the target.

The recipe is fairly straightforward; we know what needs to be done. For child poverty to fall, the incomes of those at the bottom need to rise faster than average income. It sounds straightforward, but how do we do that? The IFS says that £4 billion is needed. The Government are suggesting that that amount is not available at the moment, although it seemed to be available to deal with inheritance tax issues. It would be nice if we could find some resources to tackle the issue, which I know is this Government’s priority. It is absolutely essential to do so. I wish to use this debate to highlight some of the demands we have, many of which have been proposed and worked though by a range of charities that have campaigned excellently on the subject. I thank them, as I am sure other hon. Members will, for the briefings and information that they have provided us with.

One call that is supported by an alliance of groups against child poverty is for seasonal cash grants for children in poverty. If we could deliver that, it would make a massive difference to the poorest children. There are two seasons when the grant is particularly important. In winter, some parents must choose between keeping their children warm and keeping them fed, and an extra cash grant would make all the difference to the cost of keeping them warm. Fuel poverty is one of the most shocking aspects of child poverty because it is an example of the poorest people paying more for the same services than richer people. It is shocking that, for example, people on an electricity pre-payment meter pay a 10 per
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cent. premium for their electricity and those on a gas pre-payment meter pay 8 per cent. more for their gas. Nobody who can afford not to have a pre-payment meter has one. The poorest people are paying premium prices for warmth, which is a basic human need.

John Battle (Leeds, West) (Lab): I am grateful to my hon. Friend for raising this topic at this time. Both in relation to electricity meters and borrowing money—whether from loan sharks who come to the door or through adverts on television—the facts show that the poorest have to pay more to subsidise the rest of us, who are either on direct debit or have cards that we can use at the bank. The poorest are charged a higher tariff throughout so their expenses are actually more. The argument could be made that the poor are subsidising the better off.

Fiona Mactaggart: My right hon. Friend is right. It is not only in relation to utilities that the difference in charges exists. For example, when purchasing household goods, if someone buys a washing machine—a washing machine that works is critical for a mother of a large family—the cost in Argos might be about £160. In a cheap credit sales shop it will cost more than £400 for the same washing machine, which will be paid for over time. That is another example of the poor paying more.

As I suggested, we could tackle some of the problems with cash seasonal grants, which would help with fuel poverty. We could reform the social fund so that it could become like a national Grameen bank—the nation owns a bank now so perhaps it could deal with some of these proposals. The poor should have access to credit on reasonable terms. That is a no-brainer for all of us who have been involved in making poverty history. We have been proposing such ideas in relation to poor people in Bangladesh, India and Africa. Why do we not make sure that poor people in Britain have access to credit on reasonable terms, instead of having to pay a premium for credit, which is what happens at the moment?

John Penrose (Weston-super-Mare) (Con): I am listening with interest to the hon. Lady’s remarks. Does she agree that the credit union movement in this country is exactly the kind of excellent initiative that she is describing? It fulfils many of the necessary and vital functions that she has mentioned and is aimed at those at the bottom of the income scale.

Fiona Mactaggart: It absolutely does aim to do that. If credit unions work, they are excellent. However, let us be honest: many parts of the country do not have a credit union and people often have to be resourceful and energetic to find their local credit union. That is the other burden on the poorest people. The problem is not simply that they pay a premium, but that access to information is more complicated. Poor people do not have broadband web access in their homes so they cannot on insurance. As a result, many poor people are uninsured, even though they often live in areas of high crime and are more likely to be victims of burglary and other crimes.

Although the credit unions are capable of providing part of the answer, we have a responsibility to find universal mechanisms through which people can access cheap credit, so they are not dependent on the credit union movement. Through reforms to the social fund
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and without fundamental cost to the Treasury, it is possible to provide access to affordable credit, which would mean that large expenditure items do not cause problems.

I am going to talk about the other time of the year when cash grants would make a big difference. In the summer, a poor family is faced with feeding children who are eligible for free school meals at other times of the year. Just to give lunch to a child costs a family at least £50 to £100 over the summer. The family also faces the cost of school uniform. In today’s world, they feel that their kids’ clothing must compete with that of the other children so that their kids do not feel socially excluded. Therefore, cash grants at that time of year would tackle a specific problem. We all know how much difference the extra cash grant for heating makes to pensioners just before Christmas. It seems to me that we should follow the Government’s lead on that and look at whether we can give cash at the other end of the age scale so that we can help to tackle child poverty. Save the Children estimates that seasonal grants could lift 440,000 children out of poverty.

Kerry McCarthy (Bristol, East) (Lab): My hon. Friend mentioned winter fuel allowances for pensioners. Is she aware that the Every Disabled Child Matters campaign has called for winter fuel allowances to be paid to families with disabled children under the age of five because they incur extra heating costs and extra expense at that time of year?

Fiona Mactaggart: In whatever strategy that we develop, we should recognise the features that are most associated with poverty. Compelling evidence exists that shows that, where there is a disabled child in a family, there is more poverty. Initiatives that help families with disabled children—for example, by looking at how the disabled living allowance works—might help to deal with some of those in the most dire poverty.

Cash on its own does not deal with the social isolation that poverty brings. That is another issue that needs to be addressed. While cash is critical to tackle child poverty, services are also important.

Ms Karen Buck (Regent's Park and Kensington, North) (Lab): Before my hon. Friend moves off the subject of money, does she agree that one of the great scandals of child poverty now is the fact that there are 1 million children in poverty whose families are in work? We often equate poverty with people on benefits, but the real tragedy now is that we are encouraging low-income families off benefits and into employment that simply does not pay. Does she think that there is now a strong argument for revising the minimum wage and backing living wage campaigns, particularly in high-cost areas, to give people the chance to get out of poverty through employment?

Fiona Mactaggart: My hon. Friend is absolutely right. There is a compelling case to look at the minimum wage. The minimum wage is £5.52 an hour at present, and there are too many people who exist on that level of pay. Often, minimum wage jobs not only create poverty, but trap people. People on the minimum wage do not usually get annual upratings unless they
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are forced by increases in the minimum wage. They often do not get anything above minimum holidays. If they have to take time off because their child is sick, they lose pay. One of the things that we need to do in our employment strategy is to follow the Harker report, which states:

I am glad that the Minister who is replying to this debate is from the Department for Children, Schools and Families. As well as access to better pay in work, we need to give people access to better training and to qualifications. Often, people in the lowest-paid work are expected to train outside working hours. If they have children, that is not possible because of the cost of child care. In our welfare-to-work strategy, we should put some energy into assisting parents in the lowest-paid jobs to raise their capacity to earn more as well as to improve their income. A critical need in my constituency is access to English for speakers of other languages. Such assistance will enable people to step out of the lowest-paid work into potentially better paid work. Often, it is not better paid at the first step but it becomes better paid thereafter.

We should place emphasis on not just getting people into jobs but keeping them in jobs and helping them to get promotion. That can be done by mentoring and supporting people in low-paid work. At the moment, our services do not focus on that. It is not a requirement of the jobcentre, yet assisting women in low pay to hang on to work and to get the skills that they need to get promotion and to improve the quality of their work would do much to sustain levels of employment and to increase their and their families’ income.

Mr. Mark Harper (Forest of Dean) (Con): The hon. Lady and the hon. Member for Regent's Park and Kensington, North (Ms Buck) made a good point about the importance of helping couples in work. Has she given any thought to ending the couple penalty in the tax credit system to help lift many children out of poverty?

Fiona Mactaggart: I am not a benefits expert. I think that much has been made of the so-called couple penalty. What I am concerned about, and what this debate is about, is children, particularly the poorest children. The Government need to decide which children constitute the very poor. A lot of our progress to date has been on lifting children who are poor out of relative poverty. However, we have not succeeded in reaching the very poorest children.

A striking fact is that the very poorest children have probably gone backwards compared with the bulk of children who are in poverty. Frankly, I would expect every initiative to be tested against whether it makes a difference to the very poorest children. I would like the Minister to consider creating a measure of extreme poverty and targeting an initiative towards it. That should have a higher priority than pretending to support—or not—the institution of marriage, which I suspect is what the hon. Member for Forest of Dean (Mr. Harper) was getting at.

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John Battle: My hon. Friend has been most generous with her time. May I draw her attention to a set of essays—I am sure that she is already aware of them—published by practitioners and experts called “Why Money Matters”? Two lines in the essays struck me, and they relate to the question from the hon. Member for Forest of Dean (Mr. Harper). One stated:

which is contrary to popular opinion. I would like the Government to focus on the fact that the essays

Unless we look at how we can get more money to the poor, we will not tackle this problem.

Fiona Mactaggart: My right hon. Friend is quite right.

Mr. Oliver Letwin (West Dorset) (Con): Will the hon. Lady give way?

Fiona Mactaggart: I will not at the moment because I have just found my place, as it were. I had taken quite a detour, so it would be helpful for me to regroup to make the speech that I wanted to make.

I was about to say how services as well as money can change the experience of poverty, and how they are critical to dealing with child poverty. Cash on its own does not deal with the social isolation of poverty, and accessing services can be a struggle for the poorest people. For example, they do not have access to cars so that they can drive their children to the dentist. Indeed, other things that everybody in this Chamber takes for granted are not accessible to those children.

One of the most telling things is that the prosperity premium starts operating very early in children’s lives. Children who are born into poor families who are ahead at age two—the testing could be on child achievement, understanding and so on—would be overtaken by more prosperous, middle-class children by the start of schooling. Children are born with a wide range of abilities, but one group of children descends in the achievement and success scale and the other ascends because of parental income and family prosperity, such is the impact of family poverty by the time a child is two years old.

We must concentrate not only on family income, but on how we give children who are born into poor families access to experiences that will enable them to succeed. I thoroughly praise the Government for investing in access to outdoor play for children. The poorest children often have no access to safe outdoor play areas where they live. More prosperous children have a back garden, but poorer children could be stuck in high-rise homes or, if they have a garden, it is shared or dangerous or tiny. There would be no equipment in those gardens; there would be no lovely trampoline on which children can play adventurously, for example, as one sees in many middle-class households. That makes a real difference to what children achieve and how they behave.

I praise the Government for identifying outdoor play as an important issue in the children’s plan. My local council, which is run by a “barmpot” alliance of every party except Labour, has managed to fail to achieve a
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grant of a third of a million pounds that was identified by the lottery—it had Slough’s name on it—because its playgrounds policy was to build on them. The council said, “We’ll close the little playgrounds on the council estates, which really make a difference to mums, and put playgrounds in the big parks.” The lottery saw through that and said, “You’re not getting our money so you can do that”.

I am happy to say that today, the Government have identified Slough as a possible play pathfinder, and the town has a one-in-two chance of getting up to £2.5 million to improve its play areas. The campaign that I have been running since the council developed its ineffectual play strategy could give kids in Slough the chance to access safe outdoor play areas.

That is one of the ways in which the children whose parents cannot take them to toddler Tumble Tots, Jungle Gym or ballet lessons could get physical activity that is safe and enjoyable. As a universal service, that would actually make most difference to the poorest children. It is one of the exemplars of how universal services, which do not stigmatise, can make most difference to the most excluded children, and it is useful. Some services should be universal, but we need to target some exclusively at the poorest children at the youngest ages. That is what makes the difference. We know that before the age of two, children have a range of abilities that are not determined by parental income. If we intervene early, we can really make a difference.

There is an example of an excellent scheme in Slough—the nurse family partnership. It works with about 100 families, the women in which became mothers before the age of 20. That is a good way of targeting, because just as we know that families with disabled children are likely to be poorer, we know that children of very young mothers are likely to be poorer. Some 61 babies have been born and only two were premature, which is a much improved statistic. Only one of the 61 babies had a low birth weight, which is a huge difference from the usual situation. The partnership helped mothers to improve their diet—again, that improved the prospects for the children—and to cut down on smoking and drinking. It also alerted them to antenatal appointments by text message, for example. Services are not good enough at doing such things. We need more such early intervention initiatives.

We need to be brave. The High Scope Perry research shows that the payback for intervention with a two or three-year-old is not over five or 10 years, but over 25 or 30 years. In 25 or 30 years’ time, such early intervention will mean that those people will have better jobs, will be less likely to be in the criminal justice system, will themselves be better parents and will be more likely to have degrees. Investment in the first two years of a child’s life really makes a difference.

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