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19 Jun 2008 : Column 343WH—continued
“up to £4.5 billion of Working Tax Credit and Child Tax Credit”
is also not claimed. As the report says, that is nearly £14 billion of unclaimed income. We have heard this afternoon calls for £3 billion to be spent and yet if everyone had claimed what they are entitled to, the Minister would be writing a cheque for £14 billion. Perhaps there is something that I do not fully understand about those figures and perhaps the Minister will explain them clearly to the Committee and me when he comes to reply, but that issue of unclaimed benefits definitely jumped out at me when I read the report.
We have had good contributions to the debate on the issue of disabled families. I will only add to those contributions by saying that improvements in the take-up of disability living allowance are particularly vital to improving matters.
The differentiation between different ethnic groups in terms of poverty is another issue that absolutely screams out at me, and I am pleased to say that it was addressed in the report.
I will just return to the point about pockets of deprivation, which was raised earlier. At Marsh Farm in Luton, millions and millions of pounds have been poured in through the new deal for communities programme, and yet my constituency has streets and areas that are just as poor, and that are only a mile or two away, but are not eligible for those sorts of budgets. There is a real issue of fairness here; if someone is poor, they cannot pay their bills and life is really tough. Just because they are in an area that is slightly wealthier, why should they miss out on this massive amount of regeneration funding that is going into some areas but not others?
My final point is that I completely agree with the hon. Member for Mid-Dorset and North Poole on the issue of vehicle excise duty. It is another Labour proposal that will hit the poorest hardest; it will be the 10p tax rate on wheels and I urge the Minister to take action on that issue too.
4.59 pm
The Minister for Employment and Welfare Reform (Mr. Stephen Timms): I begin by welcoming the report, which has given us the opportunity to have this useful and interesting debate. I congratulate the Chairman, my hon. Friend the Member for Bradford, North (Mr. Rooney), and I thank the Select Committee for its work and for the attention that it rightly focused on this important subject.
I am sorry that one or two Members suggested that they thought the Government’s response was somewhat complacent. I assure the Committee and the House that that certainly was not intended, and that there is absolutely no sense of complacency on my part or on the part of any of my colleagues about the scale of the challenge that we face and the importance of achieving the targets that we have set. Those targets have been agreed across the House this afternoon.
It is time to see the back of child poverty. It has no place in a prosperous modern society. We need every child to grow up enjoying experiences and opportunities that will enable them to fulfil their potential later in life.
Organisations such as the Child Poverty Action Group, which was referred to, warmly welcomed our substantial commitment to tackling child poverty. A financial commitment of £1 billion or so was made recently. I thought it a little unfair, after that big commitment, which was widely welcomed, to complain that there were no further announcements in the Government’s response, but that is by the bye. It is clear from the scale of the commitment that we made recently, at a time of substantial fiscal pressure, just how firmly committed the Government are to achieving their targets.
I say to the hon. Member for South-West Bedfordshire (Andrew Selous) that I certainly do not regret the fact that the Treasury has the lead on this matter. I have no doubt at all that that is part of the reason why in the Budget we were able to go so far in the direction that people have been calling for in this debate. That underlines the Government’s commitment, and that is where the matter sits.
Harry Cohen: Does the Minister think that the Government will meet the 2010 target?
Mr. Timms: We are committed to achieving the target. If hon. Members look at the numbers, we have reduced child poverty by 600,000 so far—
Andrew Selous: Will the Minister give way?
Mr. Timms: Let me answer the question first, if I may. We have made announcements that we hope and expect will lift an estimated 500,000 above the poverty line—slightly less than the figure that my hon. Friend gave. Of course, there may be a drift upwards over the next couple of years because of other things that are happening, but it is clear from that and from the progress that we have made in recent announcements that we are within reach of the 2010 target. We are determined to achieve it.
Andrew Selous: I just want to check this. The Minister said he had reduced poverty by 600,000. Is it not now 500,000, given the 100,000 increase?
Mr. Timms: I am grateful to the hon. Gentleman for raising that point, and I entirely understand why he did so. I have some sympathy with the question, but the statisticians tell us that the number is still 600,000. The reason is that the figures can be estimated only to the nearest 100,000; therefore, to the nearest 100,000, the reduction in child poverty is now 600,000, as it was last year. In that sense, we have not gone backwards. I am not a statistician, or at least I have not been one for a long time, so I shall not go further and explain how rounding works, but that is the statisticians’ advice. It is important to point out that although the survey showed a reduction, it was not significant enough to change the figure.
The Committee is right to say that poverty constrains children’s health and happiness. That point was firmly and rightly underlined by my hon. Friend the Member for Bradford, North. It makes it harder to succeed at school and to gain skills and qualifications to get on in life. Too many children suffer a poverty of expectations and aspirations, and they do not look forward to a bright future in the way that all of us would wish every child to be able to do.
Tackling child poverty is a moral imperative, but it is also an economic necessity. Inequality and disadvantage in communities make them more likely to suffer from crime and antisocial behaviour, and to lack social capital that they can draw on to prosper. That is why, for a strong economy as well as a strong society, the Government made a commitment in 1999 to eradicate child poverty in a generation, and to halve it by 2010.
Last week, as a contrast to gloomy news about the world economy, the monthly employment figures showed that the number of people in work in the UK had hit a new record: 29.55 million, the largest number ever. The number claiming unemployment benefit went up a little as well, but it remained in the low 800,000s. The last time the number claiming unemployment benefit was that low was in 1975.
It is 10 years since the new deal was introduced. What can we say about the progress of reform since then? It is true that the claimant count has been reduced by almost half, but that is only a partial measure of worklessness. A better yardstick is the number claiming all the out of work benefits: incapacity benefit, lone parent benefit, income support for others and jobseeker’s allowance. The number has fallen by almost 20 per cent. since 1997, from 5.5 million to 4.45 million on the latest figures, which are for May last year. It is interesting to look at the graph: the fall has been sustained and consistent. That is an important and substantial achievement. We have delivered what we said we would deliver, and moved people from welfare to work.
But it is also clear that there is still more to do. That is important for children, as the experiences of many people whom I meet underline. Last week I was in Paisley, just outside Glasgow, and I visited one of the GP surgeries where Jobcentre Plus pathways to work advisers have been working. It appears that they are extremely effective. I met a lone parent with four children. She had been out of work looking after her children for a long time. She wanted to get back to work but did not think that it would be practical for the reasons that Members fairly raised in this debate: child care, being better off and so on. She did not think that it would be practical with four children. Her GP recommended that she speak to the Jobcentre Plus adviser. Last November, she started part-time work as a traffic warden, and she hopes to join the police force in due course. She told me that when she was unemployed she had zero confidence. She said, “People say they wouldn’t believe I was the same person.” Her life, and her children’s lives, too, are being transformed through work and through the support that she has been given.
To pick up on an important point that came out in the exchange between my hon. Friends the Members for High Peak (Tom Levitt) and for Bristol, East (Kerry McCarthy), that lone parent continues to be in touch with the adviser whom she worked with at the GP surgery, as I saw for myself. She clearly finds that valuable. My hon. Friend the Member for High Peak said that he had seen that happening in Cardiff. Such support for lone parents going into work is now offered nationwide for six months. That is a good example of how we have been improving the system to help people overcome the undoubtedly substantial barriers that they face.
Andrew Selous: I am sure we are all delighted to hear that story, but if the labour market in this country is as robust and strong as the Minister says, why do we have the highest number of workless households in the whole of Europe?
Mr. Timms: We have far fewer than we used to have—there are 400,000 fewer. That is a reflection of the terrible starting point that we had in 1997. The hon. Gentleman was frank enough to say that he did not support everything that the previous Conservative Government had done. As my hon. Friend the Member for Bristol, East said, child poverty more than doubled during that period. I was in the House for the latter part of it, and there used to be a claim that there was no such thing as poverty in the UK. I very much welcome the fact that the Conservative party now recognises that there is a real problem that needs to be addressed. I shall come on in a moment to the policies that need to be put in place to address it.
My hon. Friend made a point about public views on the subject. I agree that we need to communicate to the public the compelling moral and economic case for eradicating child poverty. There is a job still to be done there. Organisations such as the CPAG, the End Child Poverty coalition and others can help us, and I warmly commend their contributions. “Ending child poverty: everybody’s business”, which was published at the time of the Budget, was a step in the right direction, but we need to do more to get messages across to the public and to persuade people that there are real problems behind the statistics.
My hon. Friend the Member for Bradford, North raised several important points. Let me respond to some of them. He made a point about the charge for music lessons and the difficulties that that has imposed on some children who find themselves excluded from part of the benefit of schooling as a result. We have committed £332 million over the next three years, so that by 2011 all children of primary school age will have had an opportunity to learn a musical instrument. I hope that that will be a significant step towards tackling the particular problem that he mentioned.
There were a couple of contributions about the higher incidence of poverty for disabled children than for children as a whole, and it is true that there is a higher incidence. However let me remind the House of the most recent statistics. The risk of poverty for disabled children in 2006-07 was 24 per cent., compared with a 22 per cent. risk of poverty for non-disabled children, so on the most recent data there is only a 2 per cent. difference between the two groups. Since 1998-99, the risk for disabled children has fallen from 30 per cent. to 24 per cent. There is still an issue that needs to be addressed, but, again, that is an example of our having been able to move in the right direction.
I agree with my hon. Friend about the need for people to understand that housing benefit is an in-work benefit as well; he is right about that. That is one reason why people are sometimes unwilling to take work and why the “better off in work” calculations are so important.
I listened to what hon. Members said about the “better off in work” calculations. The feedback that I have received, including from some of the organisations that have been mentioned, suggests that people mainly think that those calculations should be more readily
available. People find those calculations useful: the woman in Paisley, whom I mentioned, did. Quite a lot of people find those figures to be a revelation and discover, once they get into work, that the calculations are correct. There is certainly no deception here.
I understand the argument for more information being provided on the cost of school meals, transport costs and so on, but it will be clear to anyone listening to the debate that that is the intention. The other criticism was that the information takes too long to get, is complicated and should be available instantly. However, working out bus fares, for example, cannot be done in a couple of minutes. Our approach is right. There is absolutely no deception. We are saying, “This is the basis for the figure that we are presenting to you. It does not include x, y and z. Other factors may need to be taken into account.” If we try to include too much information, it will get impossibly complicated and will be less valuable. I have picked up on a big demand for such information to be more widely available.
I mentioned that we have now rolled out advice to lone parents nationally and, in addition to that, have in place an in-work emergency discretion fund to help lone parents with unforeseen financial problems in their first six months in work. That is a significant change, which recognises that the problems will not all necessarily be over on day one of employment: they may continue beyond that time.
My hon. Friends the Members for Leyton and Wanstead (Harry Cohen) and for Bristol, East and the Committee Chair, my hon. Friend the Member for Bradford, North, were dismayed about the comment in the Government’s response on the absence of evidence of a concern about stigmatisation for those who receive free school meals. I accept that criticism. The Secretary of State wrote in March to all schools and local authorities, asking them what they can do to encourage families who are eligible for free school meals to take up that entitlement. We have developed a new system to simplify and streamline the way that local authorities check a family’s eligibility. I was interested in the example from her constituency that my hon. Friend the Member for Bristol, East gave. I accept that, in that respect, the response should not have said what it did and that, perhaps, the criticism of complacency is justified. I apologise to the House for that comment having been included.
The hon. Member for South-West Bedfordshire talked about the number of jobs taken by non-UK nationals. More recent data have been produced showing that of the 3.2 million increase in the number of jobs since 1997, UK nationals have taken 55 per cent., or 1.8 million jobs, and foreign nationals have taken 1.4 million. He will acknowledge that the foreign nationals who have come to the UK have made a substantial contribution: they have worked hard and contributed to the UK economy. The fact that those people have come has been consistent with our having the lowest number of people claiming unemployment benefit since 1975. Non-UK nationals’ contribution has been positive and has not been in contradiction with the aim of raising the number of people in employment in the UK.
I can also give the hon. Gentleman some updated data on the number of children on free school meals getting five or more good GCSEs. He makes a fair point about the gap. Some 35.5 per cent. of children in 2006-07 who were eligible for free school meals achieved
five good GCSEs, compared with 62.8 per cent. of other children. The gap between the most disadvantaged schools and the rest narrowed by 19 per cent. between 1999 and 2005. We have a public service agreement target to narrow that gap further. The hon. Gentleman is right to highlight the gap. Again, we have made progress in that area, although there is more that we need to do.
Let me pick up on the hon. Gentleman’s point, which I noted carefully, about commonly shared targets on child poverty. I think that I am right in saying that a spokesperson for his party has not previously referred to his party’s having a target for eradicating child poverty. I am not sure whether what he said reflects a policy change, but if it does I certainly welcome that and look forward to hearing more details about how the Conservative party plans to deliver it. In a moment I shall make a couple of points about the Conservative party’s policy in this area.
Andrew Selous: I should just like to clarify that it was not my intention to change the language that my party has used. If I have misled hon. Members on that point, I apologise. In politics it is better to under-promise than to cause disillusionment later.
Mr. Timms: I am grateful to the hon. Gentleman for that clarification, but disappointed. I thought that perhaps we had made a breakthrough there, but there we go.
The hon. Member for Weston-super-Mare (John Penrose) rightly drew attention to the different ways in which we measure child poverty. First, since 1998, 600,000 children have been lifted out of relative poverty in the UK. I am grateful for the opportunity earlier to clarify that that figure has not changed in the past year. Secondly, we have seen a drop in persistent poverty since 1997 from 17 per cent. to 11 per cent. The hon. Member for Mid-Dorset and North Poole (Annette Brooke) rightly drew particular attention to the importance of persistent poverty as a reflection of hardship. There has been an encouraging drop in that regard. The new material deprivation measure, which we have been recording only since 2004-05, has fallen by 200,000 since 2004-05.
I noted that the Institute for Fiscal Studies has made a number of points about the material deprivation measure. We shall, of course, listen carefully to points that people make. There is a widely held view, which is reflected in the consultation that we have carried out, that in measuring child poverty there should be some measure of living standards and day-to-day experiences as well as of income—not instead of, but as well as—and the material deprivation measure is an attempt to do that.
John Penrose: Before the Minister moves on from that point, will he confirm that his ministerial colleagues were incorrect when they said that the relative measure of poverty, which allows international comparisons, was in some way a flawed mechanism for comparing either pensioner poverty across different countries in Europe or, indeed, any other kind of poverty?
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