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19 Jun 2008 : Column 348WH—continued
Mr. Timms:
I reassure the hon. Gentleman that there is no slackening of our focus on the relative poverty measure, defined as those living in households below 60 per cent. of median income. However, the EUROSTAT
database changed in 2005 from households with below average income to a general household resources survey, so it is difficult to make valid comparisons in the case to which the hon. Gentleman refers between different European countries. It is important that we should be able to make those comparisons internationally, which is one advantage of the 60 per cent. measure before housing costs in the case of child poverty, because that is the widely accepted definition and allows us to keep close track of how we are getting on compared with other countries.
Tom Levitt: Will my right hon. Friend say something about in-work poverty? The Government are right to say that for most people most of the time work should be the route out of poverty, but for too many people it is not and it is a route into a different sort of poverty. We must tackle in-work poverty as well as out-of-work poverty.
Mr. Timms: I agree. The incidence of poverty as a proportion is much lower in households where someone is in work. Nevertheless, a significant proportion of the overall number of children in poverty live in homes where one parent or another is in work. A variety of measures is needed. We announced recently that we will above-index the child element of the working tax credit over the next couple of years, and that will be a significant help, increasing the return to work for many.
The other area where we must be much more attentive—the Committee was right to draw attention to this—is in doing a better job of integrating employment support with skills support so that when people go to a job centre to look for work, they can get help with basic skills. My hon. Friend the Member for Bradford, North referred to the 16-hour rule, and we are strongly committed to ensuring that the system allows people to undertake courses to address basic skills problems, and for skills health checks to be routine. There has been good progress, but we must improve the opportunities to train and to obtain skills as part of the process. One benefit is that people will be better able to progress when they go into work, to increase their income, and to move out of poverty. The combination of the tax credit system and promoting support for skills will allow us to make more progress. As a result of personal tax and benefit changes since 1997, by October 2008, families with children in the poorest fifth of the population will be on average more than £4,000 a year better off in real terms. Those reforms have been key to our progress.
I want to comment on the interesting point made by the hon. Member for South-West Bedfordshire—Conservative Members often draw attention to it—about severe poverty, and people living in households with incomes of less than 40 per cent. of the median. I want to draw his attention not to the 2007 report of the Institute for Fiscal Studies, which he properly and fairly quoted, but to the 2008 report, which contains an extensive commentary on that point. The position essentially is that the statistics that the hon. Gentleman quoted are not reliable. The 2008 report’s executive summary states that
“children in households with less than 40 per cent. of median income—so called severe poverty—are on average less deprived than those in households with between 40 per cent. and 60 per cent. of median income”.
It goes on to make the point that
“at the very bottom of the income distribution”—
“in the first and second percentiles, material deprivation scores are lower”—
“than anywhere else in the bottom third of the income distribution”.
“It seems highly likely that a significant proportion of this group have high living standards, but, for whatever reason, their current recorded income is quite low”.
Those points clearly raise some interesting questions for further research into what is going on with that data, but it shows from an unimpeachable source that the Conservative party cannot validly draw the conclusions that they do from that data. I do not want unfairly to criticise Conservative Members, but I caution against trying to redefine the problem. I heard the shadow Secretary of State for Work and Pensions on television recently suggesting that child poverty is not about money.
The hon. Member for South-West Bedfordshire referred to a wide range of issues, including the report “Breakdown Britain”. I do not agree with its description of what Britain is like.
Andrew Selous: “Breakthrough Britain”.
Mr. Timms: I am sorry. “Breakdown Britain” is a term that I have in this context, but I do not believe that it is an accurate description of what has happened in the UK.
It is dangerous—the hon. Gentleman did not fall prey to that danger, but his party needs to be careful about it—to argue, as the shadow Secretary of State has certainly done, that the problem is not about money. That takes us back to the position of the last Conservative Government, under which child poverty doubled to the highest rate in Europe. We still have some way to go to recover from that, and tackling child poverty requires serious investment of the sort announced in the previous couple of Budgets and the pre-Budget reports. We all need to square up to that. It is fair to raise other issues and concerns about what is happening in families, but that must be in addition to addressing the financial aspects of poverty, not instead of that.
The hon. Gentleman made a point about reducing the marginal rate of benefit withdrawal, and we all understand why that is attractive, but the consequences would be either significantly greater costs and extending access to tax credits much further up the income scale—I thought that the Conservative party opposed that—or scaling the system back and leaving people a great deal worse off. There is not a straightforward solution. I do not know which view the hon. Gentleman favours. Reducing the marginal rate of benefit is attractive in theory, but there are many questions about how that could be done.
Andrew Selous: During the two minutes remaining, will the Minister respond to the issues about family stability and child poverty?
Mr. Timms: Family stability is an important contribution to the well-being of children, so the Government have invested substantially in relationship support over a long period—since 1997. I do not agree with the hon. Gentleman’s characterisation of the Government’s policy in that area. My point is that we must not use that as a way of ducking out of the big financial challenge in achieving the target that we have all acknowledged this afternoon.
I have talked about the changes that we made in the Budget, and I shall respond to the important point about child care. It was suggested during the debate that the Government’s response to the Committee’s report implied that having imposed a statutory duty to secure
sufficient child care in the Childcare Act 2006, the Government would walk away and do nothing. I assure the House that that is not the case. The duty came into place in April and Departments are considering carefully what local authorities are producing and their sufficiency assessments. They will challenge local authorities to improve those when necessary. We are certainly not proposing to do nothing. There was some concern about that.
I am grateful for the opportunity to take part in this important debate and to make important points—
The sitting having continued for three hours, it was adjourned without Question put.
Adjourned at half past Five o’clock.
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