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Mr. Ian Davidson (Glasgow, South-West) (Lab/Co-op):
I believe that the Government have a good record on tackling child poverty, and poverty in general. It is
particularly noticeable in constituencies how much has been achieved. It can be seen on the ground, and in the lives of real people that have been improved. The Government are to be congratulated not only on the amount that they have done, but on changing the political climate by moving this issue up the political agenda. As some of my colleagues have observed, it is discussed much more now than in earlier years, and in that context the Select Committee’s report is very welcome.
However, the Government’s record is not perfect. As I have pointed out in election leaflets in the past, much has been done, and there is still much to do. We need to identify the areas in which we think that more needs to be done. One of them is the national minimum wage. It is a tremendous achievement, but the rate at which it has been set is clearly inadequate. We should press for a substantial increase if we believe that one of the best routes out of poverty is employment. I accept that some companies will find it difficult to pay the increase, but we should not be trying to build an economy on the basis of low wages. The Government should also think more about the level of their commitment to temporary and agency workers. The way in which they have run away from that issue does not fill us with enthusiasm for their record.
Another context in which we should consider how the Government deal with those in employment is tax credit. Much of what I intended to say has already been said today, but I do not think I can avoid repeating the point that people do not comprehend how the tax credit system works. They think of it as an act of God, and that is profoundly disempowering for its recipients. It is undoubtedly far too complex. The experience of falling into debt, and of the debt recovery process, inhibits many people from claiming.
Perhaps the Government will take up the suggestion from my hon. Friend the Member for Paisley and Renfrewshire, North (Jim Sheridan) that there should be an amnesty. I am sorry if I am interrupting the Minister’s private conversations, because I hope that he will respond to that suggestion. Owing to their anxiety about the possibility of falling into debt, many people who would benefit from tax credits do not claim them. The low rate of benefit claims in my constituency is one of the issues that ought to concern us all.
The third area where the Government have a good record is the efforts that they are making to get people into work. The number of people who are unemployed has fallen substantially in my constituency, but there must be a recognition of the fact that we are now getting to those who are the most difficult to place: those who have literacy difficulties—I had to spell that twice before I got it right—those who have numeracy difficulties, and also those who have drink and drugs issues, mental health problems or physical problems. All those people are much more expensive to get into employment than the “normal” unemployed.
In those circumstances, there is a real danger that the Government’s drive to move those on invalidity benefits into work will often be easier and cheaper than tackling that hard core of unemployment. I hope that the people whom I mentioned are not neglected, but there is an indication that the targets of some
employment agencies operating in my area, which are funded partly through the Scottish Executive, are zeroing in on the invalidity benefit people rather than on the hard core of unemployed. We want to ensure that they are not left behind.
It is in that context that I have strong opposition to any policy of unlimited immigration, because I see the way in which immigration has affected unemployment in my constituency. When an employer is faced with a choice between a 50-year-old Scot who has perhaps been unemployed for 10 years and has drink problems and a number of other issues to address, and a 25-year-old Pole who is highly skilled, highly motivated and enthusiastic, it is a no-brainer to work out who will be chosen. We must recognise that those at the very bottom of the pile are being adversely affected by the scale of immigration into this country. Although the limits that the Government are seeking to put on third-world immigration are perhaps welcome, we need to keep monitoring the situation to ensure that the effects are genuine.
I believe that my hon. Friend the Member for Aberdeen, South (Miss Begg) intervened on the Opposition spokesman on the question of Wisconsin, community programmes and the like. In approaching the question of how to deal with those who are most difficult to get into employment, we must examine the idea of reinstating things like the community programme, and the idea of sanctions.
There is no doubt that a substantial group of people in my constituency and elsewhere have no intention of going into employment if they can possibly avoid it, and that in some, but not all, circumstances only the use of sanctions will be effective. I recall that there was almost unanimity when we said that there should be no fifth option for youngsters—the fifth option being simply taking benefits, sitting on unemployment and not being prepared to take one of the positive outcomes on offer. If positive outcomes are on offer, we ought to be prepared, taking account of people’s circumstances, to apply sanctions, because the generosity of the benefits system depends on the consent of those who are contributing. Many people in my constituency are turned against the generosity of the benefits system if they believe that it is being abused by people who, in many cases, they believe to be better off on benefits than they themselves are as a result of making a positive effort to look after themselves and their families. The Government have perhaps not faced up to these serious issues as we should.
In dealing with those who are not in work, we must examine how we can revise and review the benefits system. As with tax credits, the vast majority of my constituents do not understand how the system works—they find themselves struggling to comprehend how best to claim their entitlements—which means that they cannot make meaningful decisions about what their choices are. We must accept that rough justice might result from simplification, but that would be better than the current mess.
Any revision of the benefits system ought to take account of the disincentives to work that the enormously high marginal rate of penalty places on people. Depending on their exact circumstances, people who move into employment might gain tax credit, but they would possibly lose all or part of their council tax benefit, their rent rebates, free school meals, free footwear and
clothing grants, free dental care and free prescriptions. That is why the vast majority of my constituents who are on that margin do not believe the argument that work always pays. Many of them are prepared to take work, even it costs them money, because they see it as a stepping stone. None the less, for those who are on the margins, there is undoubtedly an enormous disincentive.
Poverty is not just about individuals; it is about areas. The old Strathclyde region used to have areas for priority treatment. The jargon has changed over the years, but the recognition that there are whole areas affected by the blight of poverty and unemployment, into which resources should be poured, remains a good one. The average man in my constituency does not reach pension age, but in Eastwood, in the area represented by my hon. Friend the Minister for Europe, the average age at death is some 10 years higher. That is clearly unfair and unreasonable, and should be tackled—and not only on an individual basis. Such collective poverty and misery leads to poverty of ambition and aspiration, as well as poverty of service, because service providers know that they can get away with offering a lower level of service than they do to those who are more prosperous, more educated and more articulate, and can work the system better. Those who need the services least often end up getting the most.
Initiatives such as Greater Pollok Working, under which the jobs created in the Silverburn development went overwhelmingly to local people, are to be welcomed. I hope that the jobs that will be created as a result of the Southern general hospital development will also go mostly to local people. As the Conservatives have pointed out, we need to try to empower local communities more. That is why I regret that the Scottish Government, in both its previous and current incarnations, have created community planning structures that are essentially mechanisms by which the centre can set all the rules and leave little discretion for local people to administer them.
Like many others, I could have spoken for several hours on this subject, because it is one of the main drivers of my involvement in politics, and it motivates many people in our constituencies to speak out. I welcome the report by the Committee, and this debate, and I hope that the Government will return to this issue, not just on a wet Thursday when elections are being held in England, but on a day when we can have a more vigorous exchange about how best to take more of our fellow countrymen out of poverty.
5.23 pm
Ms Katy Clark (North Ayrshire and Arran) (Lab): It is a pleasure to have the opportunity to make a contribution in this debate. I thank the Chairman of the Scottish Affairs Committee, my hon. Friend the Member for Glasgow, Central (Mr. Sarwar), for suggesting this topic for consideration by the Committee. The work that we have done has been very helpful for members, and has led to a report that makes some important recommendations and has been well received by the organisations that campaign on poverty issues in Scotland.
Last Friday I was invited by Save the Children Scotland to one of the local primary schools to discuss the issue of child poverty in Scotland with the schoolchildren.
That was part of Save the Children’s campaign to end child poverty in Scotland. It was one of the most challenging meetings that I have had to attend as a constituency MP, because the children, having had the opportunity to look at the issue through their young eyes, were outraged that adults seem to accept it as reasonable that some children in our society do not have access to basic human rights or resources. They were outraged that some children do not have the opportunity to go to the cinema or on holiday, never mind access to decent food and fuel.
The school asked to me to read a short statement to the House, and I hope that you will allow me to do so, Mr. Deputy Speaker. It states:
“Gateside Primary School in North Ayrshire think that it is fantastic that the Government is aiming to half child poverty in the UK by 2010 but want to know why you can’t do more now? If the Government could provide extra funding surely child poverty in the UK could be tackled sooner rather than later. Gateside pupils don’t want children in poverty to lose hope and think life is not worth living. Children in poverty need your help now!”
After questions, I told the children that I hoped that they would be as radical in what they said as they grew older. As we get older, we sometimes see things less clearly.
Of course, we live in one of the richest countries in the world. There are disputes about how riches can be counted, but it is said that we live in the fourth richest economy in the world. However, the wealth in our country is unfairly distributed. The Government should be congratulated on the ambitious targets that they have set themselves, both on child poverty and on the eradication of all poverty in this country. It is important that we are having this debate today.
I welcome the fact that an extra £1 billion was put forward by the Government in the recent Budget. Not a huge amount of additional funds were available in the Budget, but the political commitment that was given by putting an extra £1 billion into strategies to ensure that we meet our child poverty targets by 2010 is to be greatly welcomed. However, we need to take on board the comments made by the organisations that are campaigning on the issue, such as the Child Poverty Action Group. That group strongly welcomes what the Government are doing, but says that it believes that an extra £3 billion will be required to ensure that we meet the targets by 2010.
The hon. Member for Perth and North Perthshire (Pete Wishart) said that he thought that we were shelving our targets for 2010 and that the 2020 target would never be met. The reason why the Committee wanted to look at the issue of poverty—all the evidence we received from organisations and academics showed that Scotland is meeting our targets now—was that we wanted to ensure that, politically, we continue to do everything we can to meet those targets.
I want briefly to focus on some of the Committee’s recommendations, and in particular I want to support my hon. Friend the Member for Glasgow, South-West (Mr. Davidson), who highlighted the wish of the Committee—expressed in a clear political statement—that no one in full-time work should live in poverty. Although we welcome the huge amounts of money that have been put into the system through tax credits and the number of children and families that have been lifted out of poverty through that mechanism, it is clear
that the introduction of the national minimum wage, and the fact that more than 2.5 million people are in employment who were not in employment in 1997, have been at least as significant in achieving what we have so far achieved.
We need to look again at the national minimum wage. I do not believe that it is the role of the state or of Government to subsidise bad employers. We need to question why so much tax credit money goes to people who work in full-time jobs. Is it reasonable that multinationals, supermarkets such as Asda and other organisations should pay wages that are either at minimum wage levels or just above? I hope that we will reconsider the level of the national minimum wage and significantly increase it.
Another matter related to the national minimum wage which the Committee discussed was the youth rates. Part of the evidence from all the organisations from which we took evidence showed that there were problems with young people and poverty. Young people have not benefited as much as other groups from the Government’s policies. Young people are better off than they were in 1997, but because they are not eligible for tax credits and because the minimum wage rates for them are lower, they have not benefited as much. I therefore welcome the commitment that the Government have made in the past fortnight to reconsider the youth rates for the national minimum wage.
The evidence that the Committee heard was that if young people live in poverty, there is an impact when they become parents, and on their children. We cannot compartmentalise the issue of child poverty. It is a symptom of the fact that we have such a big gap between rich and poor, and that we have accepted high levels of poverty in such a wealthy country.
The Government inherited an horrific situation in 1997. We had the highest levels of child poverty in Europe, despite the fact that we were one of the richest countries in Europe. A huge amount has been done, but we need to go further. We need to take on the comments that have been made about the tax credits system, which has done so much. The system is highly bureaucratic and it does not cope very well with people’s changing circumstances. The problem of overpayment is increasingly a disincentive to apply for tax credits. I hope that, as we go forward, we take those points on board.
We also need to consider the recommendation in the Committee’s report that says:
“Ministers must be cautious in suggesting that all parents are now expected to enter paid work.”
There has been a change of policy recently, whereby people with children aged 12 and over are now expected to work. That may not be appropriate in all circumstances. We must say clearly that there is a strong role for parents to look after their children at home.
We must also consider an issue that all the campaigning organisations have raised with us: we should equalise the rate of child benefit. There have been significant increases in recent years, and we must continue that trend of big increases. However, we also must ensure that large families benefit as much as they can. The
evidence that the Committee heard was that families with many children are often the families in the most extreme poverty, and the Government should look into that.
I also ask the Minister to consider something that has been raised with me by Citizens Advice Scotland over the last couple of days. Regulations will be introduced in July to cut the backdating of benefit, particularly housing benefit, council tax benefit and pension credit. If there is any attempt to reduce the backdating of those benefits in October, that could affect some of the poorest families with children who rely on them. I ask the Minister to reconsider.
We need to look at all our policies from the perspective of the impact that they have on child poverty and on meeting our poverty targets. As a Labour MP, I expect the Government to poverty-proof all our policies—whether those policies are on taxation or on other things. We have done a huge amount, and I believe that the political will is there to make sure that we meet the 2010 target. With all-party support from colleagues throughout the House, we will make a real difference to children’s lives.
If we allow children to live in poverty now, we will be living with the social consequences of that in the future. Those consequences include antisocial behaviour, crime and drug abuse—subjects that we have not dwelt on in the debate. The children at Gateside school were concerned about the impact on children of parents abusing drugs. If we do not deal with all those issues, we will live with the problems in the future.
I am grateful to my hon. Friend the Member for Glasgow, Central for instigating the report that has led to this debate. I very much hope that we will be able to come back here in two years’ time to say that we have met our targets.
5.34 pm
Mr. Ben Wallace (Lancaster and Wyre) (Con): Today’s debate has been a welcome opportunity to debate child poverty in Scotland, and the UK Government’s policy on child poverty in general. Undoubtedly, in many regards, the Government’s efforts have helped to reduce poverty levels for thousands in Scotland. The questions that we must all continue to ask are whether the Government’s policies are a short-term or long-term solution, and whether the large sums of money being spent are having the desired effect of stemming people’s need for Government assistance and reducing the risk of people entering poverty.
As was said by my hon. Friend the Member for Dumfriesshire, Clydesdale and Tweeddale (David Mundell), the shadow Secretary of State for Scotland, we fully support some of the measures. It is clear that the minimum wage has made a real difference and acts as a strong incentive for people to go out and work—making work pay, so to speak. As we are the originators of the tax credit concept, hon. Members would expect Conservative Members to recognise the role that tax credits play in eradicating poverty and in ensuring that a person who makes the effort to work is rewarded by state support.
However, we worry that the Government have perhaps put too much faith in the tax credit system, instead of spending in other areas to address the underlying causes of poverty. Some have said that in its
current state, the tax credit system now at best serves merely as a guaranteed comfort blanket for target groups, increasing benefit dependency and diverting funds away from tackling underlying poverty. In the words of the right hon. Member for Darlington (Mr. Milburn), tax credits
“cushion the blow of poverty rather than help...people to escape it.”
People are perhaps becoming more entrenched in the system, rather than breaking away from it.
Department for Work and Pensions figures from June last year show that although in the UK 1 million children have moved from just below the poverty line to just above it, there are 1 million more children than a decade ago who need support to get above that line. The benefit system is having to run harder and harder just to stand still, and tax credits are perhaps masking the symptoms of poverty, not curing it.
Let me turn to the very poorest in society—those people in our society who earn 40 per cent. less than the median. In our inquiry, the Scottish Affairs Committee heard that Save the Children felt that
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