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I hope that the House will forgive me for being autobiographical for a moment-I am not referring to my own poor childhood, but to my career prior to coming into this House. My first job was working at the Institute for Fiscal Studies, whose work has been cited on a number of occasions during this debate. In the nine years I was there, my entire research was on poverty and child poverty, and the measurement of it. Although I was working for an avowedly non-party political think-tank-I had to leave it when I was selected as a parliamentary candidate to help preserve its party political neutrality-monitoring povertyunder the previous Conservative Government during the late 1980s and early 1990s was, over many years, a profoundly politicising piece of work. I say that because we would update the
figures each year, check the relevant Department's figures and monitor trends in child poverty and find that year after year the level of child poverty would remorselessly grow. A majority of people would do relatively well, enjoying tax cuts, and the people at the top would do exceptionally well, but year after year more and more children would find themselves in poverty.
One of the things that caused me to cease being an even-handed academic and to want to engage in the political process was the fact that I was appalled at what was happening in our country to the most vulnerable people. Some people did very well in the late 1980s, but children in poverty did not. Therefore, this is a Bill that could never have been brought forward by a Conservative Government, because they stood idly by and watched child poverty reach record levels. To hear Conservative Front Benchers suggest that they even care about this subject, and that it would be some sort of priority, is frankly unbelievable.
People are judged by what they do when they have the chance to do something, and, in 18 years, there was at best benign neglect and, in some cases, policies that actively made matters worse. We have heard of the freezing of child benefit, and I would add to the list the abolition of grants for essential items for lone parents on benefit, and their replacement with repayable loans from the social fund, which had to be paid back out of inadequate benefits. Under those reforms, people could get to the point at which they were too poor to qualify even for a loan. The Conservative party said that poor families were getting too much help through the grant system, and replaced it with repayable loans that had a threshold that meant that people could be too poor to be entitled to help. That is what happens when the Conservatives' priorities are put into practice.
That is one reason why I welcome the framework of this Bill, the 2020 target and the commission. There has been a spurious suggestion that there will be a vast, sprawling quango that will rob the public purse of money. In fact, the estimated cost of this new body is £20,000 for a dozen people to come together four times a year to discuss the issue, with two civil servants working on it. In the context of one of the biggest social problems of our age, that is a tiny amount of money. If this is one of the quangos that the shadow Secretary of State suggests would be abolished by a new Conservative Government, I would like to know what she would put in its place.
Andrew Selous (South-West Bedfordshire) (Con): The hon. Gentleman has launched a withering attack on my party. As a former statistician, he will be aware that the current figure for children in poverty is 23 per cent. I have looked back at the figures, and it has been around the 23 per cent. figure for the past 30 years. It has gone up and down around that figure- [ Interruption. ] If the hon. Gentleman and Ministers look at the figures, they will see that the figure of 23 per cent. has occurred fairly regularly over the past 20 to 30 years. Why does he think that there has not been a big improvement in the last 12 years?
Steve Webb:
My recollection of the years I spent looking at those figures is very different. In the late 1980s, when there was public money to spare, it was spent on cutting the standard rate of income tax. Indeed,
it was even spent on cutting the top rate from 60 per cent. to 40 per cent. That is where that Government spent money when they had money. Within a year or two of those tax changes, they also froze child benefit. The priority of dealing with child poverty was certainly not borne out in practice.
The policy of the Conservative Government in office was to link benefits for children to the retail prices index. At a time of economic growth, that link means that relative poverty rates will rise remorselessly over the long term, year in and year out. We can argue about the efficiency of the delivery mechanism when it comes to tax credits, but the amounts that have gone into them have been a substantial increase over the RPI-a marked difference to what we saw under the Conservatives.
Mr. Graham Stuart: Will the hon. Gentleman accept that child poverty rates have not fallen significantly under this Government and that employment is the biggest single influence in getting children out of poverty? It was employment that the last Conservative Government prioritised. There was no indifference or lack of care. To suggest that Conservative Members do not care about child poverty is a gross distortion and an untruth, and I ask the hon. Gentleman to withdraw that remark.
Steve Webb: I seem to recall that when Mrs. Thatcher came to power, unemployment was slightly over 1 million, and it reached 3 million within two years. It was still 3 million in the mid-1980s and that had a devastating impact on child poverty. This issue is cyclical, but the Government have clear control over the underlying policy, such as benefit rates. If benefit rates are price-indexed over a period of decades, people on benefits are cut adrift. At the time, that was explicit Government policy, because the argument was that people would be motivated to seek work if life on benefits was made very difficult for them. That was Government policy for decades, and I do not approve of it.
John Mason: Does the hon. Gentleman agree that getting parents into employment does not automatically mean that children are not in poverty? Many children in poverty now are in families with at least one parent working, and that would be made worse if there were no minimum wage-which the Conservative party does not really support.
Steve Webb: The hon. Gentleman is right that there is substantial in-work poverty. The role of the minimum wage, however, is less clear-cut. I support the minimum wage, but many of those on it are young people, so the link between it and households in poverty is not as close as one might imagine, although it is part of the overall picture.
John Battle: I pay tribute to the hon. Gentleman for sticking with this issue since 1980s, paying close attention to the figures and having a clear analysis. Some of us were working on poverty in charities and non-governmental organisations at the time. Does he agree that perhaps the language that we have used has been wrong? We have looked at poverty as though there are puddles of poverty that can be mopped up here and there, when in fact we face deep, entrenched and endemic poverty that has a multitude of causes. We need long-term, patient and serious attention paid locally to those challenges.
Steve Webb: The right hon. Gentleman is right to say that poverty has many facets. One of the welcome aspects of the Bill is that rather than pick a single point of a graph and say, "That is poverty, but that is not", it measures poverty in various ways, including material deprivation and persistent poverty.
My hunch is that the Government have made a rod for their own back with this Bill. They have set four targets. The absolute poverty target is a waste of time. It will just enable the Government to pat themselves on the back-if they cannot reach the poverty target for 10 years ago, we are really in trouble and might as well all go home. The target on persistent poverty, however, will be a nightmare, as will the one on material deprivation. Therefore, it is entirely laudable that the Government have included those targets in the Bill, and I welcome that.
Mr. Streeter: I respect the hon. Gentleman's expertise in this matter, and I shall therefore ask him a genuine question removed from the party political issues. Does he think that it is possible for a family living wholly on benefits to be living above the poverty line?
Steve Webb: That is a central question in this debate. If there is a goal to abolish child poverty in a meaningful sense, and benefit levels are below 60 per cent. of median, some families will always be in child poverty. Even with the most benign economic environment, significant numbers of families will probably always be on benefit. Ministers will have more accurate figures, but I suspect that the benefit level for an unemployed family with two children is not far off the 60 per cent. line. It is not implausible to think that people on basic benefit levels are just out of income poverty. The assumption that people would be in income poverty by being on benefit troubles me, and it should relate to the definition of the adequacy of benefits. I hope that the Minister will be able to give a more precise answer to that question than I can.
Britain's historic record, especially in the 1980s, was shocking, but where we are now is very worrying. In the European context, we are better only than Italy, Poland and Romania. All the other 25 EU countries have lower child poverty rates than we do. The goal of being about as good as the best European countries is a start, but it should not be the end of our ambitions.
One of my greatest concerns is that an opportunity has been missed in the last 12 years. If we have made so little progress when the economy was doing relatively well, it will get much harder in several respects. Presumably, the first to be taken out of poverty are the low-hanging fruit-those who are only a few percentage points below the line, who are temporarily on a low income, who will find another job or who are poor for a simple, single reason rather than complex and multiple reasons. Relatively speaking, it is cheap and easy to take such people out of poverty. If we are behind schedule in the good times, what will be different about the years to 2020 that mean that we will not only catch up but accelerate our progress? If we could not achieve the goal when we had the political will and the money in the bank, when the public finances looked relatively good and the economy was growing-if all we could do was tackle the low-hanging fruit and even be behind schedule on that-is it credible that we will accelerate progress and tackle the most
difficult cases when the public finances are crippled? It is an admirable goal, but do the Government believe that we will achieve it? If they do, why have we gone so slowly relative to what we need to do, given that we have been going only for the low-hanging fruit?
The needs of children in poverty are complex and the policies for tackling them will be expensive; for example, complex issues arise for children in families with disabilities or for children living in care. My understanding is that children in care do not count in the figures because they do not live in households, and surveys are based on households. I have no idea what the number of children in care is, although I ought to know-[Hon. Members: "Sixty thousand."] Although there are 60,000 children living in care, could we declare the problem of child poverty solved because the children are not in the survey? Is there some way of grafting them on? I appreciate that mixing and matching is tricky, but it would be an omission if we excluded children living in local authority care.
Children in homeless households probably do not find their way into the surveys. In theory, a household survey can pick up a homeless household, but if people are in temporary accommodation or transient, or if they moved out between the time the survey application comes and the interviewer turns up, they would at the very least be under-represented. Might not a whole set of vulnerable children be missing from the survey? Can the Government think of a better way of including them because they are very important?
Ms Keeble: The hon. Gentleman might also want to take into account the fact that Traveller children and the children of asylum seekers are not included, which is a major point.
Steve Webb: Obviously, a lot will depend on the exact methodology of the survey. There are permanent local authority Traveller sites in my constituency where the residents are on the electoral register, so they would be included, but I accept the general point. The hon. Lady is right: there is a risk that some of the most vulnerable children would be under-represented.
As I think has already been pointed out in the debate, the issue is not just about cash, but dealing with financial hardship and pressures on families will certainly help. That is one of the causative factors in family breakdown-to return to the point made by the hon. Member for South-West Devon (Mr. Streeter) about the impact of family breakdown. When people go to bed every night worried about paying the bills, relationships come under pressure. Tackling that problem might be one of the most practical things we could do to support couples in staying together. The hon. Gentleman suggested that we put something about marriage or parents in the Bill. I am not sure that we need to write anything explicitly in the Bill-that we need to legislate-but there are a lot of policies that might address that point, en route to delivering the child poverty goal.
In the big picture, we have not so far dwelt enough on the get-out clause: clause 15. I do not think the shadow Secretary of State mentioned it-probably because she hopes to invoke it. The idea that the Government might say, "Well, child poverty is terrible, but we are broke," really would cause fundamental doubt about the whole Bill.
Mr. Mark Harper (Forest of Dean) (Con): We are broke.
Steve Webb: But is the Conservative party committed to the Bill or not? We know the state of the public finances, so we risk doing a disservice to our electors if we sign up to a Bill and then all quietly go off saying, "Of course, none of us thinks it will ever be implemented because we're broke." If that is how we view the Bill, we should come clean. As the hon. Member for Copeland said, it is a question of priorities. We will be spending money on some things over the coming years and child poverty clearly needs to be a priority.
The Liberal Democrats have argued that we should be prioritising within existing budgets; for example, rather than paying tax credits right up the income scale, we could reallocate some of the money to lower income families. That would assist in meeting the child poverty goal.
I have one or two more points about measuring child poverty. Happily, we have the whole summer for the Financial Secretary to reflect on all the points I am making-I know he is pleased about that. When he and the Under-Secretary of State for Work and Pensions, the hon. Member for Bishop Auckland (Helen Goodman), gave evidence to the Select Committee on Work and Pensions, the issue of disabled people on disability living allowance was raised. The point was made that if two people-for example, the Financial Secretary and me-were on identical wages, but I was disabled and receiving DLA and had matching costs, the official methodology would say that I was better off than him because my income was higher. However, my costs would be higher. One option is not to include DLA and then we would be the same-as we should be; but the Minister said that as the DLA is income, it has to be counted. That may be so, but another way addressing the issue is through the equivalence scale.
The equivalence scale takes otherwise different households and converts them to a common denominator. Families with extra children have extra needs, so there is an extra factor in the equivalence scale. Why not include a factor for disability in the scale? We can look at the spending patterns of households where someone has a disability, just as we have looked at households with children, and exactly the same method that was used to derive the Maclennan equivalence scale could be used for a scale that reflects disability. We would thus have a truer impression of child poverty in households where an adult is disabled. It might take many years of research to sort that out, but the question needs to be addressed, because I believe that the official figures understate poverty in disabled households. They must do so, because they add an income that is only to meet costs; it is money that goes in and goes out again. It does not make the household better off net than if it was a non-disabled household, but treats it as such. I hope the Minister will look at that issue.
We talked briefly about omissions from the survey data, but some groups are under-reported, such as children from minority ethnic groups where poverty rates are higher. Among white children, the figure is about 20 per cent; it is 42 per cent. among Asian British children, and 31 per cent. for black British children. On average, children from minority ethnic groups are more likely to be in poverty, but they are less likely to be in the
surveys, because we know that the household surveys on which the statistics are based tend, for various reasons, to under-represent urban areas and people from minority ethnic groups. The surveys are grossed up to population figures to correct for biases in age, sex and marital status, but not, as far as I am aware, in ethnicity. There is a limit to how far we can go down that route, but my worry is that the official figures under-state poverty, because such groups are under-represented in the surveys and that is not corrected when the data are scaled up to population estimates. Will the Minister look at that point?
In Committee, we shall have many happy hours looking at the detail of the reports. Modesty forbids me from commending various papers that the Minister might like to read over the summer; no doubt, we shall come back to them in the autumn. Stepping back from the minutiae, it is good to have a Bill of this sort. It is 10 years since the then Prime Minister said that we must abolish child poverty in a generation. A child born the day after he said that is now more than halfway through their childhood. As the hon. Member for Copeland said, there is a real worry about urgency, although given that we are behind schedule, even 2020 looks a bit ambitious from where I stand. The worry is that whole generations may go by, so we need an enforcement mechanism.
In response to the Work and Pensions Committee, Ministers said that the Bill states only that Ministers have to have regard to the economic situation in designing their programme. That looks like a get-out clause to me. I would like clause 15 to be taken out of the Bill, because the goal should be tackling child poverty. Of course Ministers will have regard to the economic situation-they always do and they always should-but why do we need that clause in this Bill? It has the feel of a get-out clause and I hope the Government will reflect on that.
When the Government introduced the Climate Change Bill, they had an ambitious goal for a long-term problem and they set up the Committee on Climate Change to oversee and monitor its enforcement. There is recognition of the fact that the public do not trust us when we say, "Vote for us and we'll fix the problem in 20 years' time". We need a mechanism to monitor progress-to chivvy and cajole. The child poverty commission is, if anything, quite clearly under-resourced. If we want it to report to the House on the failure of any successive Government to achieve progress on child poverty, it needs more teeth and more resources. If the commission is to meet only four times a year and be serviced by only two civil servants, will it really have the needling role that the Committee on Climate Change has? We need that for the child poverty commission too. MPs come and MPs go, and people move from portfolio to portfolio, so we need a body whose role in life is to chivvy whichever Government are in power to make sure that we make progress towards a noble aim that will be incredibly difficult to achieve.
6.10 pm
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