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it is not just about choosing from the existing menu. The whole point of giving people personal budgets is to change the provider side. It is to change the menu, not to choose from traditional conventional services. If we are going to create a flexible system, it is not just about giving people power and control, it is also making sure that the provider side, the supply side, is completely different and people can use that money in an innovative and imaginative way.
it is about completely reorganising the relationship between the State and the citizen. It is a massive redistribution of power, frankly, from the State to the citizen without leaving the citizen alone.
I think probably personal budgets in the hands of lead professionals, right and responsibility contracts, ruthlessly identifying which families we are talking about would be a major way of tackling child poverty and breaking into generational deprivation, stopping kids drifting into the criminal justice system, supporting good parenting. It has the potential to transform.
That was eye-opening, fresh and new and I thought that it was a potential answer to a great many of the criticisms and concerns outlined in our report. The contrast between what he had to say and the Governments response to the report was very stark, so I hope that the Minister will explain to us either that the Department is examining that approach, to see how it can be applied to child poverty more generally, and particularly to child care issues, or, if it is not, why not. One of the answers I have recounted seems a great one; the other one, as encapsulated in the Governments reply to the report, does not.
Harry Cohen (Leyton and Wanstead) (Lab): It is a pleasure to follow the hon. Member for Weston-super-Mare (John Penrose). I cannot say that the earth moved while he was speaking; it was just my hon. Friend the Member for Ealing, North (Stephen Pound) moving the furniture around. Nevertheless, he made a valuable contribution to the debate, and he made a valuable contribution to the Committees work and its report.
The report is called The best start in life? and that question mark says a lot about whether we are giving such a start to children. That is the aspiration, of course. The subtitle is Alleviating deprivation, improving social mobility and eradicating child poverty. It is a very good report, and it has been acclaimed by many organisations. One of them, the Child Poverty Action GroupI shall quote it again latersaid it was
a comprehensive analysis of many of the issues facing poor children and families.
I am proud to have helped, as a member of the Committee, to produce the report. I pay tribute to the Select Committee Chairman on steering the report through, notwithstanding that he turned down several of my radical suggestions, which would have improved it still further. Nevertheless, he did an excellent job.
Significant progress has been made in tackling child poverty. In 1998-99 the UK had the worst record on child poverty of any major European nation; there were 3.4 million children living in poverty and child poverty had more than doubled over the previous two decades. Since then this rising trend has been reversed and there are now 600,000 fewer children living in poverty.
In their response the Government pointed out, with reference to their Budget measures and the comprehensive spending review, how those new measures should lift another 500,000 out of poverty. However, there is a gap, and the Child Poverty Action Group spells it out in statistics in its briefing for this debate. It says that what the Government are doing will
still leave a major gap to meet the 2010/11 target.
In 1998/99 the Governments central measure (relative incomes before housing costs) counted 3.4 million children as poor. If the governments target to halve child poverty is to be met poverty needs to fall to no more than 1.7 million children. In 2006/07 on this measure poverty stood at 2.9 million children, leaving a gap to the target of 1.2 million children. Taking account of recent announcements which have not yet fed into the figures the unmet gap between the projected poverty level and meeting the target is around 650,000 children.
That is a sizeable gap still to be covered. On top of that we must consider the impact of higher inflationthe food, fuel and energy prices that could also put the Government off track in getting the figure down.
I know that the Chairman summarised the report, but I want to go through the key points. It said that it is only through further investment that the Government can meet their target of halving the number of children living in poverty by 2010. That is crucial; notwithstanding what is happening in the Budget and the comprehensive spending review. Further investment is still needed if we are to get there. The report also says that the Government must accelerate their efforts if the targets are to be met. It talks about the Government missing the target by
close to a million children,
which is not out of line with what the CPAG says, because of recent figures showing a rise of 100,000. The figure could be 1.5 million children after taking housing costs into account. We know from the Governments response that they will not take them into account in relation to their targets, but it is worth recalling those extra 500,000 children. It is a question of reality. Families do not live on income before housing costs are taken into account; they live on income after taking into account housing costs.
The Committee went on to talk about evidence of the damaging effect of poverty on children. They are more likely to experience social exclusion and poor educational outcomes. The groups of children who faced a much higher risk of living in poverty were those from families in which there was disability, those with lone parents, some from ethnic minority families, and those from London, which has some of the worst child poverty.
The Committee congratulated the Sure Start local programmes, and I pay tribute to the Government for thosesome excellent work has been done on health education and financial advice for parents. However, it also raised the issue of the need for good quality child careparticularly for lone parents, if we are to get them back to work. The Committee agreed that that is an ideal for which we should be working. However, it identified a mismatch between the child care that is available and what parents needprovision that is affordable as well as being available during the hours that they work. Again, the availability of child care is a particular problem in deprived areas of London, where the mismatch is stark. As to part-time jobs and flexible working, many other workers are available to take those jobs, so there is a shortage of them for lone parents.
The Child Care Act 2006 places a duty on local authorities to ensure a sufficiency of child care in their areas. The Committee welcomed that, but said that it needed to be monitored. However, the Government said in their response that they had no plans to do so; they will not collate and publish local authorities assessments of child care in their area. Those will be published only by the local authorities in question. I wonder how that duty will be effectively implemented on that basis.
The Committee argued that if employment is to be sustainable, parents must be financially better off in work than they are on benefits, which suggests improvements to in-work benefits. There is a need, as has been said, for higher wages to close the gender gap and in London where costs are higher. The Committee also argued, in that context, that even if the Government were to achieve their 80 per cent. employment rate, many children would still live in workless households where the pay is insufficient to lift the whole family out of poverty. There must be an anti-poverty strategy to deal with that.
The Committee also argued that there is a case for higher benefit uprating for targeted groups such as those with children who are unable to work, through no fault of their own, because of a disability; child benefit and tax benefits could also be raised to try to achieve the child poverty reduction targets.
One important recommendation that I made, which was included in the report, is that all major new Government tax-and-spend policies should be accompanied by a report to Parliament explaining their impact on child poverty. We do that for human rights, and if child poverty is the major priority, as the Government have saidI agree that it should bewe should have such assessments. That would stop the Government being waylaid, sometimes by the Opposition, and taxing and spending on something that will have no impact on that key target, and may work against the provision of resources for this key target. I support that recommendation that the Chairman allowed me to squeeze into the report.
response was disappointing in largely restating existing policy positions, this was made worse given the response was published a mere two days after the latest figures showed that child poverty continued to rise in 2006/07. Child poverty rose in 2006/07 because the government took its foot off the accelerator, with that in mind we are looking to government for a much more vigorous response to the challenges faced today.
This government response, frequently complacent and defensive, looks markedly different from welcome investments in children in Budget 2008, the Ending Child Poverty everybody's business' document, published with the budget, and from recent joint oral evidence given by Ministers from the Departments for Work and Pensions, Children, Schools and Families and HM Treasury on the 9th June. At this stage of policy, approaching the 2010 target and with meeting this interim target a vital base for moving towards the eradication ambition CPAG is looking for more enthusiasm, energy and investment around what has been perhaps the key recent change making pledge.
I shall go into some aspects of the Governments response with which I am not satisfied. I mentioned the local authority child care duty not being monitored or effective. If it were effective, it would have an enormous impact on child poverty, so I am dismayed that it will be put on the back burner. I also referred to the decision not to consider income after housing costs. I know that the Government are struggling to achieve their target, but housing costs are a reality for families and affect 500,000 people. I shall say more about that in a moment, but perhaps there is scope to pick that up in the review of housing benefit.
The Select Committee recommended that the higher child care tax credit for families with a disabled child should be raised to £300 a month. In their response, the Government said that there is a disabled child element of £2,540, but if the monthly amount were raised to £300, the annual amount would be £3,600. In their response, the Government said that the disabled child element is £2,540 per annum, with an additional severely disabled element of £1,020. The Committee recommended, and I believe, that there should be uprating of about £1,000, which would impact enormously when there is poverty in families with disabled children.
The Governments response on disabled living allowance was surprising. They said that it is not designed to cover the extra costs of disability, but went on to say that it is a broad-brush contribution towards a generality of extra costs faced by disabled people. That is an almost
meaningless distinction, and I would like the Minister to explain it. The Government go on to say that no work is planned.
The DLA was informed by surveys on disability during the 1980s. We are now more than 20 years on from that, and todays evidence should be considered. It would show that there are extra costs, and the Committee alludes to extra costs causing child poverty in families with disabled children. The Government rejected the Committees recommendation that winter fuel payments should be extended to families with a disabled child under five and in receipt of DLA at the middle or higher rate. That is disappointing.
On child care in London, especially for lone parents, the Select Committee expressed concern about the difficulties of finding work with suitable and flexible hours and conditions, and the effect of sanctions on children. The Chairman made that point, and the Governments response was that the sanctions on jobseekers allowance would be flexible. We wait to see what that means, but the indications are that they are increasing considerably, including for lone parents. The response says that parents will not be sanctioned if child care is not available, but it will be up to the parents to prove it. How will that work? Will the Minister explain? There are clear cases in London of that mismatch where child care is not available. How will parents provide proof in such circumstances?
On child care and the local authoritys role, the Government have said that there is enough money in the system already, and that in deprived areas it may be preferable to ensure that providers have a realistic business plan instead of making financial payments to providers. How will that help a London lone parent to have the child care that she needs to work and to avoid sanctions when the duty on local authorities will not be monitored or enforced? What exactly does realistic business plan mean in that context and to the individual concerned?
Another area that I was keen to promote in the report was the London living wage, which the former Mayor of London adopted for the Greater London authority. The Governments response was that although DWP works with contractors, it does so on staff conditions, including the minimum wage, but there was no mention of the London living wage. That is a serious omission by the Government, who should support the London living wage. The extra costs of working in London are considerable, and they contribute to the problem of child poverty and whether parents are better off in work or not. The Government should face up to that. The CPAG said:
For a very large government department, responsible for the child poverty target, CPAG would like to see clearer and stronger leadership. It is a scandal that half of all poor children have a parent in work. Government can and should lead by example, not just in London but across the UK.
The Government accept that the gender pay gap contributes to child poverty. They are seeking belatedly to close it, and it is a public service agreement target. But how will that work, and what effective measures will they provide and at what speed will they move to close the gender pay gap? There was no response from the Government to the Committees recommendation for research into the problem. Again, that was a disappointment.
Another response from the Government referred to the DWPs position in relation to disabled children. The Government said that parents who are not eligible for carers allowance have children who by definition do not require a level of care that would prevent them from working. That would have a potentially pernicious effect if it were adopted as a rigid policy by the jobseekers allowance staff because other factors can prevent a lone parent with a disabled child from workingfor example, the lack of child care that I have mentioned. That response does not reflect the reality for families with disabled children. The Committee argued that a broader definition is needed to exempt those people from the requirement to work and that the Government need seriously to consider whether a wider group should be exempted. Otherwise, sanctions would be unfair and unreasonable and would reinforce poverty, not alleviate it.
Children with autism are disproportionately represented in those being excluded from schools; 27% of children with autism have been excluded from school.
The impact of disability on poverty is clear, the figures speak for themselves: 3% of mothers of a disabled child being in full-time employment as compared to 22% of mothers of a non-disabled child. 84% of mothers of disabled children do not work, as compared to 39% of mothers with a non-disabled child. It costs, on average, three times as much to raise a child with a complex impairment than a non-disabled child. Over a quarter of parents with a disabled child are lone parents.
Treehouse agrees with the Committees report, particularly those aspects pertaining to disabled children. In addition, it recommends improvements to support services, more inclusive schooling, greater flexibility in the workplace, and better access to services to ensure traditionally deprived and hard-to-reach groups are well-informed about them and that they are able to access them.
it is essential that the Government invests a further £3billion in child tax credit and child benefit to meet the 2010 target...This is affordable and the cost of not meeting the target will be far greater in the long term.
Though CPAG accepts there are legal limits around what schools can charge for, it is still our experience that the costs of uniforms, trips, requests for contributions, and the costs of meals do cause families hardship, single some children out for bullying and may cause them to miss out on opportunities, both in the school day and within the wider 'extended' school period.
The Government makes the extraordinary statement that it is not aware of evidence showing that the cost of school uniform is a major barrier to poor families or that it is common for schools to provide free school meals in a stigmatising way. These answers strike us as complacent and blinkered in their approach to educational exclusion.
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