 House of Commons |
Session 2008 - 09 Publications on the internet General Committee Debates Child Poverty Bill |
Child Poverty Bill |
The Committee consisted of the following Members:Chris
Stanton, Sarah Davies, Committee
Clerks † attended the
Committee WitnessesCharlotte
Pickles, Senior Policy Adviser, Centre for Social
Justice Edna Speed,
Chairperson, Save the
Family Reverend Paul
Nicolson, Chairman, Zacchaeus 2000 Trust Public Bill CommitteeThursday 22 October 2009(Morning) [Mr. Martin Caton in the Chair]Child Poverty BillWritten evidence to be reported to the HouseCP 05
Zacchaeus 2000
Trust CP 08 City of
London Corporation CP
09 Save the
Family 9
am The
Committee deliberated in
private. 9.4
pm On
resuming—
The
Chairman: May I remind Members and witnesses that we are
bound by the Standing Orders and the deadline agreed on Tuesday? That
means that this morning’s sitting must end at 10.25 am. I hope
that I do not have to interrupt Members or witnesses in the middle of a
sentence, but if I need to I will have to do so. We will now hear
evidence from Charlotte Pickles, Edna Speed and Reverend Paul Nicolson.
Welcome to our meeting at this early hour of the morning. Could you
please introduce yourselves and tell us something about your
organisation? Can we start with Reverend
Nicolson? Rev.
Paul Nicolson: We started the Zacchaeus 2000 Trust in
the 1990s as a direct result of working with very vulnerable people who
could not pay their poll tax. We found that not only were they not able
to pay the poll tax, but they were in trouble with rent and fines. We
needed to deal with those as well. We came to the conclusion that the
reason they could not pay their poll tax was that they did not have
enough income. Therefore, Professor Jonathan Bradshaw and I, as
directors of the Family Budget Unit, approached the Joseph Rowntree
Foundation and it turned us down. I found that Lord Sainsbury had just
moved into my parish, in Turville, and was calling himself Lord
Sainsbury of Turville. Turville is where I had the pleasure of giving
permission for the filming of “The Vicar of Dibley”. I
was the real vicar of Dibley for seven years, which I thoroughly
enjoyed. Sainsbury’s came up with a very substantial donation,
as did Barclays, Barnardo’s and some private
donors.
We
commissioned the Family Budget Unit. We found that the unemployment
benefits being taxed were already £40 below what was needed, so
there was really serious poverty. We went on from there. We worked as
volunteers. I spent 10 years helping people fill in their means
statements for the magistrates in Wycombe magistrates court, as a
McKenzie Friend.
We at last
got to a point where people began to notice that we might be doing
something useful and raised substantial sums of money. We now have two
full-time lawyers. We have an administrator and an office courtesy of
the Duke of Westminster in Ebury street. I have
some embarrassment in fighting poverty with the Maserati outside the
door, not to mention the Bentley. However, there is a very nice grant
to help us pay the rent and it is a very convenient place. We work
hands-on with the most vulnerable. We only take those below the radar;
we do not take mortgage or credit card debt cases. We deal with the
most
poor. Charlotte
Pickles: I work for the Centre for Social Justice. We
were set up in 2004 by Iain Duncan Smith. Our focus is poverty and
social exclusion. We produce policy focused on addressing those things.
We also have an alliance of around 200 different grassroots charities,
community organisations and people working with those who live in
acutely deprived communities, who face the various different challenges
of living in poverty and who are excluded from the mainstream. Our
focus is on tackling the causes of poverty, and how and why families
and individuals end up in those situations.
Edna
Speed: I am the founder and chair of an organisation
called Save the Family. I have been working at very close quarters with
the organisation for 34 years. It came out of my school; I was a head
teacher. For my sins, I have spent all my working life in desperately
deprived areas. The whole thing is rooted in the poverty of a child.
The organisation provides accommodation for homeless British families
with absolutely necessary services to turn those families around. We
are the largest provider of homeless accommodation for families in the
whole of the British isles and, as I speak, we are overwhelmed with
referrals.
I would just
like to point out that not one of our children—and it is a
growing group—ever appear on the radar. It is not absolute
poverty; it is abject poverty. I was introduced to the Bill through
Theresa May’s committee. I joined it in the summer and all I can
say is that I am very saddened to come in at such a late time, because
after 34 years of smelling, touching, seeing—day in, day
out—abject child poverty in this country, I believe we have a
lot to contribute. Thank you for this
opportunity.
Q160Steve
Webb (Northavon) (LD): What some of us would like to do,
because you have kindly provided evidence, is follow through on some of
the questions you have asked relating to the Bill. I will start with
Charlotte and the Centre for Social Justice. Your “Dynamic
Benefits” report is very helpful. We are very grateful and have
some interesting ideas about earnings disregards and so on. You have a
set of proposals that cost £2 billion or £3
billion but your argument is that over the long term you will get that
money back, as 600,000 people will find jobs because you have removed
barriers to work. That is my understanding. Can you clarify for us
whether your model says that there would be 600,000 more jobs for those
people to go into, or would those 600,000 people take jobs that other
people would otherwise have had? Have you costed in the benefits that
you would then have to pay to those 600,000 who would not be in
work?
Charlotte
Pickles: The report is not a report on job creation,
if that is what you mean. It is about removing the barriers for people
who are not moving into work at the moment. Obviously, we are in a
recession and there are limited jobs available, but we will come out of
that.
The recommendations in “Dynamic Benefits” are focused on
us coming out of the recession, and the people who are currently
workless will be able to move from that position. Our focus is on
getting workless households into paid employment. Our
“Breakthrough Britain” report on economic dependency and
worklessness made recommendations around welfare to work programmes and
how you can additionally provide support and ensure that those people
moving into work are sustained in
work.
Q
161Steve
Webb: So in terms of the Committee assessing the value of
the proposals—we could all spend £2 billion or
£3 billion making the benefits system better—can I just
be clear that the assumption that you get that money back takes no
account of the fact that the people you think would be able to get into
work would displace another set of people to whom you then pay benefit?
Have you allowed for that in your costings?
Charlotte
Pickles: I am not aware of that being in the
costings. Although we are currently in a recession, we know that over
the past decade there have been around 5.4 million people completely
out of work and dependent on benefits in a boom time when jobs were
available. Our point is that we are going to come out of the recession
and there will be jobs available. At the moment we have a lot of people
who are not necessarily British workers taking jobs. Removing some of
the barriers and supporting people who perhaps have not been in work
for a very long time, which is often the case, will not only provide
better lives for those families, and indeed the children who live in
such families, but be much better for Britain. Our costings
are probably somewhat conservative in taking into account all the
different savings that could accrue down the line—for instance,
the benefit of having someone moving into
work.
Q
162Steve
Webb: I have just one other question. One of your
arguments for your scheme is that it is much simpler than what
currently goes on, and you argue that you take the Inland Revenue out
of the assessment process. You also propose delivering the benefits
that you have invented through the pay packet, through a tax code-type
thing. A big problem with tax and benefit reform is that you have
benefits based on households and taxes based on individuals. If you
have a couple where both partners are working and one gets the
household’s tax credits, how would you keep tabs on both
partners? If I were the higher earner, my spouse’s tax credits
would have to be cut through their pay packet. How would the
administration of that work?
Charlotte
Pickles: I am sorry—I did not work in that
much detail on the report, so I cannot answer that
question.
Q
163Mr.
Graham Stuart (Beverley and Holderness) (Con): Although
you did not work on this particular paper, is the reason that you did
not include the idea of a static supply of jobs, that we are part of
the European Union? There were jobs that sucked in foreign workers, for
instance, because of the benefit blocks that disincentivise people here
who would like to work and to get out of poverty but find that doing so
is not to the economic benefit of their family.
Charlotte
Pickles: Yes, that is very much the case. We looked
in great detail at both the participation and marginal tax rates and
the huge disincentive that that provides, particularly for those who
are completely
workless. Once you have added on the cost of travel and losing free
school meals and other such passported benefits, in some cases you can
be worse off moving into work than being on benefits. If we do not
tackle those disincentives, we will not be able to move people into
work. As I said, we know there are social benefits for adults and
children living in a working household as opposed to a workless
one.
Q
164John
Barrett (Edinburgh, West) (LD): You mentioned, Reverend
Nicolson, some very close, first-hand examples of people living in
poverty. We talk about legislation here. Do you think that that will be
effective as a way of tackling poverty? Are there not really issues
like jobs, education and other issues? Could you give us your thoughts
on how legislation might deliver? Out there, those who are actually in
poverty, do you think that they believe that legislation is the answer,
or is it something else? Could I ask you to speak from your own
experience? Rev.
Paul Nicolson: First of all, I shall make a comment
on what has been said. We have read that report and, broadly speaking,
welcome it. I think that there are specific things in it that will be
extremely valuable: increasing disregards, reducing the rate of
withdrawal, abolishing the couple penalty and, indeed, having one place
where claimants can get all benefits, which was being said by the local
authorities yesterday. All these steps forward would be very good
things. We
are not so sure about the suggestions about two benefits; we think that
needs a lot more examination. We are very pleased that at least an
attempt has been made to calculate the savings, because we asked the
Treasury if it could tell us what estimate had been made of savings
from reducing child or any other poverty and it said that it did not do
that. However, the Joseph Rowntree Foundation has, and it is £25
billion, but it does not include adults of working age or pensioners.
Savings have been calculated at £25 billion, which includes
£17 billion in costs. To have that sort of figure available does
help the publicity, partly answering your
question. I
think that there are two poverty thresholds. There is the 60 per cent.
of the median poverty threshold and there is the level of statutory
minimum incomes. Unless the policy increases the level of statutory
minimum incomes, be they unemployment benefits, the national minimum
wage or the state pension, the policy is not going to succeed. We know
perfectly well that all the unemployment benefits are below the
Government’s poverty threshold and that when people go into work
on the national minimum wage without holiday pay or sick pay they are
still very much in poverty—it will depend so much on how the
local authorities manage the housing and council tax benefit transfer
from one to the other. We know that such people are in poverty because
of our experience with the living
wage. I
have been overtaken by megalomania since I retired. I am also trustee
of London Citizens, so I have had great joy in standing outside
KPMG and yelling at the top of my voice, “Low Pay”, with
200 cleaners replying vehemently, “No way.” We go in and
see the management of KPMG, who say, “Look here, we are very
embarrassed, but not by your shouting. We have been telling our
employees that we’re one of the best employers in the world and
you have told us that we are not.” KPMG helped us by making the
business case for the living wage, and we are very glad to see that it
has
now been taken on by the Department for Children, Schools and Families.
We cannot begin to understand why the cleaners in every other
Department are not also receiving it. Indeed, we have an amendment
suggesting that all local authorities should support it, just as the
Mayors of London have, because it was Ken Livingstone who required the
GLA to calculate the level of the living wage by using the research
that we used and raised the money for in the 1990s—updated, and
triangulated with national statistics. It comes out now as
£7.60, including the use of tax credits and all other benefits.
You have to be over £10 to get in the blissful area of work
where you are actually out of the benefit system, which would be the
goal of everyone who has ever been on a
benefit. There
is a huge difference between £7.60 and £5.80. It means
that anyone on the national minimum wage without holiday pay or sick
pay is suffering. As I said, my answer to your question is that unless
you raise the statutory minimum incomes—in work, out of work and
on pensions—this target is not going to be
met. Edna
Speed: First, I would like to say that the name of
the Bill is not right. No child is in poverty—it is the family
who are in poverty. That starts the whole focus. It is not a child in
isolation. Whatever model of family life we have today, it is the whole
family. That should focus into the reality of poverty.
I have had
problems with legislation down the years because, and I have repeated
this over and over, I believe that among the people who write our Bills
there is a large perception and not reality. May I repeat that
please—perception and not reality. Hence the Bill is so
restrictive and restricted. We have only talked today about money:
benefits, salaries and levels. That is very important. There has to be
a level of money coming into a home. However, sooner or later and
hopefully through Bills such as this, we will have to face the fact
that that is not the only
problem. We
have a growing number on benefits. Many of those who are on benefits
because of the recession do not want to be on those benefits. Hence
lifting them out of that is important. I am not an academic. I am a
practitioner. I am with people. I believe we need to look more closely
at the roots of poverty. I believe that there is soil that has never
been properly analysed and then brought back to Committee and looked
at. I am concerned because as I sit here today, I know that thousands
and thousands of children are in poverty. That is my campaign. My drive
is to lift them out of it.
I urge you,
if you would like to liaise with us, to meet with me and I will talk
you through my concern about the constriction of the Bill. It is not
broad enough. It has gone in on one level and I would love not just to
pull it apart—I know it is too late and I know there is a
deadline—but to see whether other things can be inserted into it
that would give a much broader look. I would say that today we are
setting the scene for the future. It could be that someone is back in
this room in 10 years’ time and my words have come true. I do
not want that to happen, but I believe that the Bill itself is too
restricted and
constrictive. Charlotte
Pickles: I would echo what has been said. Obviously
we need to look at the income levels and whether they are sufficient.
In our report we chose not
to look at that specifically. I would certainly support that. Just to
pick up on Edna’s comments, our raison d’être at
the CSJ is to look at the causes of poverty and it is vital that we do
not solely look at income as the issue around child poverty. For
example, we know that 1 million children live with alcohol-addicted
parents and a further 350,000 children have drug-addicted parents.
Giving more money to either of those categories is not going to bring
that child out of poverty. In addition we know that it will take a
great deal more than simply focusing on increasing benefits to break
the cycle of inter-generational poverty.
Our fear
about the Bill is that because it has these specific income or material
deprivation-related targets and very little else it will skew the
policy process towards increasing benefits. We know that increasing
benefit dependency does not break the cycle of inter-generational
poverty. Indeed a child who grows up in a benefit-dependent household
is much more likely to be benefit dependent in their adulthood and so
will their children be and so it will carry on. It is important that we
look at much wider things such as family circumstances, emotional and
psychological poverty, relational poverty and poverty of
aspirations. A
study done in Canada showed that even if you eliminated child poverty,
you would see only a 10 per cent. reduction in the behavioural and
academic difficulties of the children involved in the study. If you
cannot get that right, then those children will grow up and most likely
live in poverty and have dysfunctional family units when they are
older.
|
| |
| ©Parliamentary copyright 2009 | Prepared 23 October 2009 |