Q
53Andrew
Selous: I accept that. My earlier questioning did not
imply that I was focusing uniquely on the family. Education and
worklessness have been mentioned, and we have touched on the family. I
want to ask about addiction, debt and the benefit traps that mean that
many people up and down the country make a rational calculation to stay
on a very small amount of benefit that they view as safe and secure.
The Financial Secretary to the Treasury may remember that those issues
were raised by Jobcentre Plus staff at the child poverty
conference that he and I attended in Manchester a couple of weeks ago.
The issue is important, because if people are going to progress there
needs to be common ground on what is holding them back and on the
causes that are keeping people in child poverty.
Addiction has
not been mentioned, and I put it to the Ministers that when there is
serious drug addiction in a family, no matter how much you increase the
tax credit, it will probably not do a lot for the children. Debt and
its potential impact have not been mentioned either. There are severe
and specific issues aside from low income. A number of the causes
universally recognised by the centre-right and centre-left of British
politics are not in clause 8, and they need to be addressed if we are
going to do better over the next decade. I have not heard a list, but I
have a list of six: educational underachievement, worklessness,
addiction, debt, family separation and benefit traps. We have heard
about a couple of causes from the Ministers, but I want more on this
issue. Dawn
Primarolo: You are absolutely right in noting how
drug addiction and alcohol misuse in families act as a barrier to the
parent getting work. The National Treatment Agency for Substance Misuse
is working with local partnerships and Jobcentre Plus on employment; I
would be happy to send the hon. Gentleman a note on that. They are
looking at how movement into employment—I am sure that we all
agree that employment is the best route out of poverty—is
prevented or does not occur because of addiction. It is important that
we focus the provision of services, both through Jobcentre Plus and the
local partnerships, on families with children—though not
exclusively on such families—and address the hon.
Gentleman’s
point. The
issue rests with the Department of Health but, because of the impact on
children in families, it also comes under my brief, to ensure intensive
support. That goes back to the hon. Gentleman’s earlier point
about whether relationships are stable within the family and the
consequences of that for children. Work is being undertaken and I see
it as part of the employment, education and skills remit to look at
drugs and alcohol, which is another area where there can be neglect,
and an inability for the child to benefit from Sure Start and outreach.
Specific strategies are being developed in relation to substance misuse
and alcohol, which echoes another point that the hon. Gentleman made
earlier. The stubbornness of some of the causes of poverty in
particular families and the necessary strategies needed are clearer
now. The
first five years in education are more important than the next 45
years. The investment in the early years, and the fact that that is now
beginning to show progress through this year’s early years
foundation stage results, show how important it is to work at that
early stage. Education has a role to play in future skills and
employability. The strategies on narrowing the gap and raising
attainment in both primary and secondary schools have a crucial role to
play in contributing to the overall strategy. They are being taken
forward and are clear successes in what are still the relatively early
stages. The hon. Gentleman will know that it takes quite a long time to
see the effects.
Finally, I
share the hon. Gentleman’s interests and concerns about the
family. It is important that we understand the causes and how to
support stable and positive relationships and parenting because of the
clear benefits to the child. In my view as a Minister, to put the child
at the centre is to ask what are the supporting requirements to ensure
that that child can flourish. I will be happy to send a copy to all
Members of the
Committee. Helen
Goodman: May I say something about benefit traps and
debt? I do not know whether members of the Committee are aware that
last week we published the tax-benefit models tables. They show
progress over a long period of time. Obviously, the concern with the
benefit trap is to do with cases where withdrawal rates of benefits are
extremely steep as people’s paid income goes up. The number of
people with a marginal deduction rate of over 90 per cent. has fallen
in the past 12 years from 130,000 to 60,000. The number of people with
a marginal deduction rate of 70 per cent. has fallen similarly from
740,000 to 300,000. We can see in both those cases, looking across the
board, that there are now about half the number of people in benefit
traps that there were when the Government came to power. That is in
large measure because of the significant reforms we have made to the
tax and benefit system.
We have also
latterly done a number of things to address particular concerns about
the uncertainty that people face when they move into work. They have a
lot of anxiety about whether they will be better off. When people go to
the jobcentre nowadays they get a better-off calculation done for them
to enable them to understand that they will be better off. We have also
introduced run-ons on tax credits and housing benefit. We have
increased the earnings disregards. There has been a range of such
reforms. Each in itself might not seem significant, but taken together,
they have produced that halving of the number of people in the
so-called benefit traps.
The hon.
Gentleman also talked about debt. I am sure that he is aware of the
consumer White Paper that was published in the summer. One of its
proposals is to prevent unsolicited approaches by credit card
companies. That is precisely the sort of thing that can drive people
into a spiral of unsustainable debt. Again, we are taking action on
that. There are obviously serious issues with regard to people on very
low incomes. We have had a whole programme of activity over several
years in conjunction with the banks and credit unions to strengthen the
credit union movement. The Government established the growth fund,
which has nearly £100 million in it, to which the Chancellor
added a further £80 million in this year’s Budget. It
means that 180,000 people have received loans on reasonable terms, who
would not otherwise have been able to do so. I am talking about people
probably outside the banking system and whose credit ratings are
extremely low. We have the safety net of the social fund and, this
year, have put an additional £263 million into it. We
are extremely alert to the problems of debt and have been very active
on that
front.
The
Chairman: We will come back to clause 8 in a moment, but
the most recent exchanges have stimulated three members of the
Committee to ask further
questions.
Q
54Mr.
Gauke: I shall speak very quickly about your first point,
Minister, after which I shall ask my further question. You mentioned
marginal deduction rates of above 90 per cent. and 70 per cent. Do you
know the numbers for a rate of above 60 per cent.?
Helen
Goodman: I do not have them on me at
the
moment.
Q
55Mr.
Gauke: Until 2007, the Department for Work and Pensions
published an annual “Opportunity for all” report that
listed a range of indicators of progress or otherwise in dealing with
factors such as living in a jobless household, teenage pregnancy, low
educational attainment and erratic school attendance, school leavers
not in education, employment or training, living in substandard housing
or temporary accommodation, infant mortality rates, teenage smoking and
obesity. Those are all similar to what we were talking about when we
discussed causation, and to the points made by my hon. Friend the
Member for South-West Bedfordshire. Why did the DWP stop publishing
those reports? Why not include some of them under the Bill as points to
be picked up as part of the strategy?
Helen
Goodman: With that question, the hon. Gentleman has
tested the absolute limits of my knowledge of the history of my
Department. I do not know the answer, but I will find out. However, the
fact that the reports are not being published in one document does not
mean that the information is not available. I will find out where it is
available.
Q
56Mr.
Reed: If we were to look at the map of child poverty in
the United Kingdom, we would see direct correlations between areas that
suffered aggressive de-industrialisation during the 1980s and 1990s and
pockets of severe child poverty—the most severe child poverty
that we see today. There would be a lot of surprises, particularly with
regard to rural
areas. I
shall move on from one of the important points made by the hon. Member
for South-West Bedfordshire about the barriers that are in the way. It
is hard to address, from a technocratic point of view, some of the real
cultural problems, not only with people who are in the benefits trap
and in long-term unemployment, but with the significant numbers of
people who, by contrast, do not come forward to claim what they are
entitled to claim, and who, for whatever reason, will not enter the
system and are falling outside the scope of the programmes that we are
introducing. We do not seem to be addressing that real cultural issue
when it comes to beating child poverty. How will we address
it?
Helen
Goodman: You are asking about two different things. I
shall talk first about the regional dimension and then about the
take-up problem. What you say about there being different needs in
different regions is absolutely right. That is why we see local
authorities as key partners in achieving the eradication of child
poverty. We want local authorities to incorporate their child poverty
objectives with their sustainable communities planning so that we
achieve an approach that is sensitive to the different needs of
different areas. Although we have not set out particular measures under
the Bill, we are establishing a process that will enable us to identify
the problems that you
mentioned. Not
all benefits have high take-up rates, although child tax credits have a
particularly high take-up rate of between 80 and 90 per cent. That is
way above the 30 per cent. of the family income supplement,
which was the precursor to child tax credits way back when, and part of
the benefit system. The Department for Work and Pensions constantly has
take-up campaigns to encourage people to avail themselves of their
entitlements.
I would say that the cultural difficulties with take-up are probably
greater among older members of the community than among parents with
young children. We had a report done recently by Sir Trevor Chinn,
which looked at how further to improve our work on take-up. Mr.
Timms: May I add a couple of points? Helen has raised
the cultural issue, which is important. We have made some progress on
that. At the beginning of 2008, we had 29.4 million people in
work—more people in employment in the UK than we have ever had
before. When I was Minister with responsibility for work, the best part
of the job was meeting people who had gone into work after long periods
out of work, perhaps because of a health problem. Returning to work
after 10 or 18 years, they said how their lives had been transformed as
a result. We have made some headway in dealing with the cultural
problems, but I agree that there is more to be
done. It
is interesting that in the area that I represent in east London, the
mayor of Newham has introduced an employment pilot. The idea is that
the local authority works intensively with the small number of people
who take part. The deal is that we guarantee that if you go into a job
you will be better off. If we need to, we will give you extra money to
make absolutely sure that you will be better off as a result of having
gone into
work. Something
like 100 families have been part of the pilot. It is interesting
because it has not been necessary for the council to give extra money
to anyone so far. Mr. Selous made the point about the
perception. That is not to say that there is no one at all who is not
better off for going into work; there are people in some circumstances
who are not. The incidence of that problem is much less than is widely
thought and one of the things that we have to do is to explain to
people and show them what the benefits of being in a job
are.
Q
57Ms
Buck: That leads into what I was going to say, although I
hate to disagree with a colleague. Important though the impact of
de-industrialisation on employment was in many parts of the country,
the Minister knows that the highest concentration of poverty is in
London, despite the fact that overall, and notwithstanding the present
situation, it is one of the healthiest labour markets in Europe. That
tells us something important. It tells us that there is an issue about
better-off calculations and marginal rates of deduction. It is good to
hear from the Minister that a proportion of that has fallen
significantly, but I think it is still very much in
place. The
bigger picture, and something that has been entirely missing from what
we have talked about this morning, concerns the role of employers and
the world outside the state in meeting the poverty target. Is it not
true that half of all children in poverty are living in families where
at least one person is in work? Is it not the case that one of the most
important ways we can achieve the poverty target is to deal with the
problem of low pay? Some of that is to do with work incentives and
tapers and so forth, but a lot of it is to do with challenging
employers on the issue of low pay. We have a dilemma. Tax credits are
important and valuable, but in a way they subsidise bad employment
practice and low pay. Should that not be at the heart of what the
Government are trying to achieve?
Mr.
Timms: I very much agree with the point that you made
about employers having an important role. One of the strengths of the
London Child Poverty Commission
work that you were involved in, and the follow-up to that, has been a
recognition of the importance of engaging employers and everyone
working together to tackle the problem. It is certainly right that if
we can find ways to increase people’s incomes in work, that will
make a significant contribution to what we need to do. Going to
employers directly about that, and the sort of living wage campaign
that we have seen in London, can make a helpful contribution. Equally,
we need to be able to work with people to help them progress once they
are in work. That is one of the substantial benefits of the big
investment that we are making in skills training at the
moment—the Train to Gain programme. That will enable people who
are in work to develop their skills and, over time, to increase their
incomes. Your point about employers is important. As you will know, the
other thing that came out strikingly from the work in London was the
difficulty parents there had in finding part-time work. If we can
encourage employers to provide that kind of opportunity it will help a
lot,
too. Helen
Goodman: To add to those points, 1.5 million children
are living in families where there is somebody in work. Of those, 25
per cent. are families where one parent is working full time and 21 per
cent. are those where one or both parents are working part time only.
One of the conclusions we draw from this is that we need to concentrate
more on what we call second-earner activity in families and attaching
those people more strongly to the labour market. We have programmes in
the jobcentres now for addressing specifically the needs of those
workers, as well as encouraging the one parent in a family who is
working to move on from part-time work to full-time work.
The minimum
income guarantee, which people now have when they are in work, has
increased in real terms by 30 per cent. over the last 10 years. That is
very significant. As well as what Stephen has just said about
encouraging employers to offer more part-time work, we have put new
legal obligations on employers to offer more flexitime. Obviously that
will enable more families to balance better their work and their family
life and thereby encourage people to take jobs who might otherwise have
felt that the barriers and the practicalities were simply too
difficult.
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