Examination of Witnesses (Questions 866
- 879)
TUESDAY 27 NOVEMBER 2007
CAROLINE FLINT
MP, MR JONATHAN
PORTES, RT
HON JANE
KENNEDY MP AND
MR JONATHAN
ATHOW
Q866 Chairman:
Good afternoon. I am glad we are starting this session three minutes
before 11.15. I would like to welcome the Ministers and the witnesses
to our session on Poverty in Scotland. Before we
start on the detailed questions, do you have any opening remarks
you would like to make?
Caroline Flint: No, I think we
are ready to go to the questions.
Q867 Chairman:
That is fine, so we can go straight to the questions.
Jane Kennedy: Cut to the chase.
Q868 Chairman:
I am sure the Ministers are aware that there is a growing gap
between the rich and the poor and inequalities in our society
are on the increase. How does the Government intend to tackle
these growing inequalities?
Jane Kennedy: We have been focused
on assisting those we have been able to identify as being those
most in poverty, pensioners at one end of the age range and particularly
focusing on child poverty at the other end of the age range. If
we do children first, our efforts have been very carefully focused
on looking at what are the key factors that make the difference
for families, particularly families with children, and what are
the key factors that lift families out of poverty. All the research
tells us that work is the significant factor that makes that difference,
so a huge amount of the work that we have been doing has been
focused upon enabling people to work, and Caroline can say more
about that. I can certainly talk to you about what we have been
doing in terms of helping raise the income of households and enabling
work to pay, maximising the impact of wages for low income families,
particularly low income families with children. There has been
a very great deal of work done with pensioners too. If you want
I could take you through some of the issues around child poverty
and where we have focused a lot of effort on child poverty first.
I did not have an opening statement, Chairman, because generally
I come in prepared to make an opening statement and the Chairman
has usually said, "Right, let's cut to the chase". You
will know, because I have seen the range and scale of the detail
that you have entered into as part of this inquiry, that it is
very useful for us as ministers to remind the Committee and the
public where we were when we came into Government, particularly
in terms of child poverty. We had the highest rate of relative
poverty in the EU and between 1979 and 1997, when we came into
Government, the proportion of children in relative poverty had
more than doubled, so we were inheriting a problem that was not
only a very great problem but had got worse over a period and
the trends were all in the wrong direction. The efforts that we
have made since 1997 to date have seen, again, the biggest child
poverty reduction in Europe with over 600,000 children having
been lifted out of poverty and the number of children living in
absolute poverty has more than halved from 3.4 to 1.6 million;
it is a fall of 1.8 million. The number of children in workless
households has fallen by 400,000 since 1997. The lone parent employment
rate has increased from 45.3% in 1997 to 57.2% in 2007. Those
are the facts that I know you will already be aware of but it
is the point that I think it is best we start from and say to
you that notwithstanding that progress we are aware there is still
a lot more to do in terms of child poverty. We are aware of the
slip in the figures in the last year but, whilst we approach that
slip in the figures with a degree of caution, nonetheless we are
focused on making sure that we get back on track and the commitment
from the Budget in 2007 and the further commitments in the Pre-Budget
Report and the Comprehensive Spending Review have been focused
on refocusing the Government and restating our absolute commitment
to reaching our targets to get back on track with that. In terms
of pensioner poverty, there has been a huge improvement in the
position of pensioners in the UK. I do not want to go on too long,
I want to know where the Committee would like to focus to be helpful
to the Committee, but I can say that both of those areas are areas
of major work that we have been engaged in. Caroline may want
to say a word or two.
Caroline Flint: Just to mention
a couple of things that may be specific to Scotland. We have seen
the employment rate go up across the UK. We are seeing, I am pleased
to say, the numbers of people who are claiming main unemployment
benefits going down, including, pleasingly, for the last 11 quarters
the numbers of people claiming Incapacity Benefit coming down
and fewer new claims to a number of these benefits as well. In
Scotland the progress in some of these areas has been faster than
in the UK as a whole, and we will probably explore some of the
factors for that in the questions that you are going to ask, both
in relation to all individuals, in relation to child poverty and
also pensioner poverty as well. For the first time ever in a period
of sustained economic growth, pensioners are less likely to be
in poverty than the population as a whole. These are very important
shifts in terms of trend given what Jane was saying earlier about
the fact that in 1997 we had seen a doubling of child poverty.
In terms of the applicants to Incapacity Benefit, for example,
they had been going up steadily for ten years before that and
only when we got to around 2004 did we see a plateauing and then
a tilt down. It is important to look at these trends, whilst accepting
exactly what Jane said about some changes, and I would not want
to trivialise it by saying blips because we should not trivialise
it, in-year that affect some of this. Certainly in terms of child
poverty, whilst there is a lot more to be done, what we have seen
is a halt in the rise to arrest that and starting to see now an
opportunity to see what more we can do. There are difficult issues
here, Chairman. For example, in periods of recession the gap in
terms of poverty is often not as stark as it is in periods of
good economic stability and prosperity. That is quite a hard example
to get but it is one of the reasons why we look at things like
relative poverty, absolute poverty and we also look at issues
around material deprivation to try and give us the best judgment
we can about how we are making progress in these important areas.
Q869 Chairman:
We accept that Government policies, particularly the Child Tax
Credit and Pension Tax Credit, have positive effects and the number
of pensioners and children in poverty has decreased, but in Scotland
we still have 980,000 people and 250,000 children living in poverty.
I believe that is a huge figure, but you think you are on target
to meet the target by 2020.
Caroline Flint: You are absolutely
right. I am not complacent and I do not think Jane is, or her
Department, or for that matter other Government departments that
have a role to play in this. Clearly issues around poverty are
important in relation to the income people have and we can do
that in terms of support for people who are completely on benefits
and, of course, what HMT does in relation to those in work, but
there are other factors too about improving housing. For example,
we know amongst children that if we are going to look at the intergenerational
poverty that is a factor, not just in Scotland but elsewhere in
the UK, education is very important to children who may have been
born into very poor families, the opportunity for them to aspire
and get qualifications that their parents might not have got.
As someone who is one of three children, two of whom left school
at 16, I know what that is like. Education is really important
to tackle the intergenerational aspects of opportunities too.
I have to say we have had a focus definitely on work in the last
ten years which has proved successful but now within the Department
for Work and Pensions we are looking at how for those people on
benefits, whether it is Incapacity Benefit, Income Support or
Jobseeker's Allowance, we can have a much more personalised service
that really tries to get to grips with individuals, their families
and what they need. I hope the Committee will welcome the announcements
yesterday, whilst we have to acknowledge that on the skills agenda
that is a devolved issue for Scotland but that does not mean we
cannot work together on this employment skills agenda to identify
much earlier when people have a basic skills problem that is preventing
them getting into work but, more importantly, when people are
in work making the progression for them to move on to higher wages
that then help their family. That is why it is absolutely right
ten years down the road, despite the success of New Deal Programmes,
despite the high employment rate in Scotland and the successes,
I have to say, of the combination of the Scottish Executive in
the last five to six years working with us in Westminster so they
can have added value and we can have added value working together
on this, that we should refresh our policies and look to the next
ten years.
Q870 Chairman:
Since you have mentioned the devolved administration, it is very
important that the British Government and, within the British
Government, the Treasury, DWP, devolved administrations and local
government have worked together in a coherent approach to tackle
poverty. Do you think the change of administration in Scotland
has had any effect on the close working relationships between
the two Parliaments and the two Governments?
Jane Kennedy: For us it is business
as usual. We are engaged in programmes of work within a well worked
set of policies. There are high level policy objectives that the
new administration has which are in step with ours and that work
will continue. We are working from an agreed set of protocols
which will not get in the way of the work that we are doing.
Q871 Mr Devine:
So you are ignoring them!
Caroline Flint: No, I think Jane
is right, it is business as usual. As with anything, not just
in terms of Scotland, Wales and your colleagues in Northern Ireland,
devolution and getting the administrations to work together, you
have to work at it. It is about looking at added value. Certainly
I am pleased that the new Employment and Skills Commission has
the support of the devolved administrations. There will be a Commissioner
for Scotland on that august body as well as for England, Northern
Ireland and Wales. It is not without its challenges, but it is
about working at it and, as I say, adding value. Within Scotland
itself at an even more devolved level I am pleased to say that
we are looking from DWP at what more support we can give to the
City Strategy Pathfinders, for example. We have three in Scotland
and 15 across the UK as a whole. That is where we are looking
to think how we can devolve resource, flexibilities and decision-making
in particular areas to much more localised areas as part of a
partnership and consortium, some led by local authorities, some
led by business, to address the worklessness and lack of employment
opportunity in those communities. Some of this is national, some
of it is UK, but some of it is very local as well.
Jane Kennedy: Just one extra thing
on co-operation with the Scottish administration. If you wanted
an indicator of how well or otherwise things are going, the fact
that at the CSR we were able to negotiate successfully with the
Scottish administration on PSAs, their draft spending plans that
they published in November, as I said, do share high levels of
strategic objectives, amongst others of delivering a wealthier
and fairer Scotland, there is a whole range of other national
outcomes that they have set for themselves which are in step with
many that we would share. You can be encouraged by the fact that
there is very clear demonstrable good working going on which will
not get in the way of achieving our shared objectives.
Q872 Danny Alexander:
I just want to go back to some of the statistics you quoted in
your initial presentation. You made a couple of interesting points.
The first was on relative measures of poverty and what you had
seen over the last ten years was that Scotland had done slightly
better than the rest of the UK. I just wondered what analysis
you had done in your Departments as to why that is the case, whether
there are particular policies that we have pursued in Scotland
that are different that have led to better outcomes, and what
lessons will you have drawn from that in terms of the policies
that might be applied UK-wide. The second point was in relation
to the child poverty statistics. Jane quite rightly made the point
that in the last year the figures have gone up, and I do not want
you to go too much into that, but I wondered what analysis you
had done about why it was those figures went up in the last year
and whether you expect that to be a new trend or whether you expect
the figures to return to the downward trend that we have previously
seen.
Caroline Flint: I will deal with
the first part of that, some thoughts about why it is different
in Scotland, and ask Jonathan to go into some more detail about
the analysis we have done in the Department in terms of the changes
in the last year. It is very difficult to pinpoint anything in
particular but interestingly, and Jonathan can correct me if I
am wrong on this, Scotland, like parts of England, for example,
had had a much higher level of people proportionately on benefits
and in poverty than other parts of the UK before we introduced
a number of our different strategies. If I look at my own example
in Yorkshire and Humber, for example, we have had particularly
high levels of people who are reliant on benefits in one form
or another, and I think parts of Wales have got that as well.
Scotland started at a high base. What we have seen is that some
of the policies we have introduced, both in terms of support for
people who are on benefits but also the in-work support, and attached
to that a number of different initiatives that look at deprivation
in communities and targeting support to tackle some of the inequalities
in those communities, looking at education, housing and what have
you, looking at regeneration in terms of employment, a combination
of that has partly contributed to a much quicker fall in those
areas of higher disadvantage compared to when we look across the
piece, which is good.
Q873 Danny Alexander:
So because the problem was worse there was more low hanging fruit
to be picked, as it were?
Caroline Flint: In some respects
that is one way to describe it but, because our policies were
directed at particular groups, if you have a community that is
higher than average in that group they are going to be disproportionately
affected because there are more of them. That is absolutely right
and why those targeted policies are important. That has had an
effect. In Scotland too, and I am not saying this has not happened
elsewhere in England, that combination of those overarching UK-wide
policies, along with initiatives at a more local level, which
I think the Scottish Executive has contributed to in the last
five years, has been helpful as well. Not just in terms of looking
at regeneration of employment but the healthier initiatives they
have embarked on and so forth. A lot of these issues mesh into
an overarching narrative which is about opportunity, aspirations
for people, supporting people. That is one of the reasons why
Scotland has moved ahead quicker than other parts of the UK. Where
we are now is obviously sustainability but also how we need to
refresh what we are doing in terms of some of the changes we have
been consulting on this summer, as you know, but also some of
the changes to that skills/job mix for sustainability and longer
term outcomes. Can I ask Jonathan to talk about some of the more
recent statistics.
Mr Portes: On Scotland I would
agree with everything you have just said.
Mr Devine: That is very helpful.
Q874 Chairman:
That is very noble of you!
Mr Portes: Scotland's economic
performance has been pretty good overall for the last ten years
and Scotland now has a higher employment rate than the UK as a
whole and that has made a big contribution. It is also worth turning
it around and saying Scotland has done well and one or two places
have not done as well but if they had we would have met the Government's
child poverty target overall, which we missed narrowly, the interim
target.
Q875 Danny Alexander:
If the whole country had done as well as Scotland we would have
met the target?
Mr Portes: If the whole country
had done as well as Scotland we would have met the target. If
it had not been for London and the West Midlands we would have
met the target, which reflects the particular difficulties we
have had in London in particular, which is a topic for another
day. On what happened last year, it is very difficult to disaggregate
a fall of 100,000 which is just at the margin of what is statistically
identifiable in the numbers. Our sense is that it is a combination
at that point of when the figures were measured, which was 2005-06,
and the labour market was going through a relatively soft patch,
it was not a recession by any means but employment growth was
not as fast. Since then things have picked up slightly, the JSA
count has been falling for the last year quite significantly,
so we hope that might be reversed. In addition, in that particular
year we did not see quite the same level of increases in financial
support through tax credits and so on as we had in previous years.
As Jane said in her opening statement, the recent Budget and Pre-Budget
Report have put some more financial support into the system coming
up in the next year or two because it takes a while to feed through,
so we might hope to see some turnaround from that source as well.
We do not want to make year to year predictions but we are reasonably
clear that there is a sustained upward trend going forward that
we would look to make for progress in future years.
Q876 Mr Wallace:
I just wanted to ask the Financial Secretary, you talked about
there being some slippage, and we have discussed that, but could
you detail what that slippage has been? The figures given by your
Department are up to 2004-05. What has been the slippage in the
rates that you refer to?
Jane Kennedy: Are you talking
about the 100,000 figure which, as Jonathan Portes said, is one
we would take with caution because in terms of the overall statistical
analysis I recall when I was working in the Department for Work
and Pensions there are certain statistics where you reach a point
where it is such a small margin in the overall statistical breakdown
that you have to be careful not to draw too strong a message from
it. It is something for us to be concerned about, and that is
why we used the PBR and the Comprehensive Spending Review to reinforce
the commitment that we have to the 2010 target of reducing children
in poverty by a half and recommit to the 2020 target. We recognise
these are challenging targets but we have introduced a whole range
of things in PBR and CSR that I could go through. Jonathan, is
there anything you would like to say about the figures?
Mr Athow: What happened in 2005-06,
which are the latest figures we have available, was the number
of children in poverty in the country as a whole rose from 2.7
million to 2.8 million, a rise of 100,000 which, as has been remarked,
is actually a very small change considering the margins of error
within the statistics. That is the most recent.
Mr Wallace: Do you have figures for Scotland
at all or not?
Q877 Danny Alexander:
In Scotland the figure remains the same.
Mr Athow: It becomes difficult
to provide breakdowns for countries and regions of the United
Kingdom.
Mr Wallace: Your Department provided
us with a Scottish breakdown which goes down to 10,000, so it
would be interesting to see.
Q878 Mr Devine:
Caroline, you were talking about the City Strategy, and I know
you were in Scotland recently, and I think you visited Edinburgh
and Dundee.
Caroline Flint: I did.
Q879 Mr Devine:
We spoke to people yesterday from Edinburgh and while they were
very supportive of the strategy they felt that they were not getting
any chocolate out of it.
Caroline Flint: Really!
|
