 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 WitnessesDr.
Tess Ridge, Senior Lecturer, Department of Social and Policy Sciences,
University of
Bath Donald
Hirsch, Academic Researcher at the Centre for Research in Social
Policy, Loughborough
University Mike
Brewer, Director of the Direct Tax and Welfare research programme, the
Institute for Fiscal
Studies Neil
O’Brien, Director, Policy Exchange Public Bill CommitteeThursday 22 October 2009(Afternoon)[Mr. Martin Caton in the Chair]Child Poverty Bill1
pm The
Committee deliberated in
private. 1.4
pm On
resuming—
The
Chairman: May I remind Members and witnesses that we are
bound by the deadline agreed to on Tuesday? That means that this
afternoon’s evidence session must end at 2.30 pm. I hope that I
do not have to interrupt Members or witnesses in the middle of their
sentences, but if that time arrives, I am afraid that I will have to do
so. We
will now hear evidence from Dr. Tess Ridge, Donald Hirsch, Mike Brewer
and Neil O’Brien. Welcome to our meeting. Would each of you like
very briefly to introduce yourselves and your organisation, starting
with Dr.
Ridge? Dr.
Ridge: I am Dr. Tess Ridge. I am a senior lecturer in
social policy at the university of Bath. I imagine that I am here
because I have a considerable amount of experience in carrying out
research with low-income children and their
families. Donald
Hirsch: I am Donald Hirsch. I am head of income
studies at the centre for research in social policy at Loughborough
university. I have done a lot of work for the Joseph Rowntree
Foundation, initially in calculating what it would take to meet some of
the child poverty targets and, latterly, looking at the cost of child
poverty and at what a longer term strategy might
entail. Mike
Brewer: I am Mike Brewer from the Institute for
Fiscal Studies. I have done research on tax credits, on welfare to work
policies for lone parents and on trends in child
poverty. Neil
O'Brien: I am Neil O’Brien. I am director of
Policy Exchange, which is an educational charity looking at a wide
range of public policy
issues.
Q198John
Barrett (Edinburgh, West) (LD): I would like to ask each
of you to what extent you think that the Bill is going to be an
effective means of tackling what is a very complex issue. A number of
witnesses have gone over a range of issues that the Bill does not
tackle. I think that all members of the Committee appreciate how
complex the issue is; passing legislation is clearly not going to
deliver the end result on its own. Could you say how effective it will
be and how much support you think that the legislation might
have?
Dr.
Ridge: Okay. May I start by saying that I very much
welcome the Bill? I think that it is a very important mechanism for
keeping children’s needs and concerns central in the policy
process. They very easily drift out to the margins—that has
certainly happened in the past—which is to their disadvantage. I
agree with you completely, John, that poverty—and family
poverty—is an exceedingly multifaceted issue, and tackling it
needs many different approaches. The Bill in itself is an important
part of that, in the sense that it has a strategy of focus, annual
reports and a framework to keep children’s needs central in
policy as we go through time, so I think that that is very important.
There are aspects of the Bill that I would like to see strengthened,
and it cannot exist on its own, of course. There have to be very
important, very well thought-through strategies right across the board
to get some real developments in the
area. Donald
Hirsch: I agree with all that and I certainly agree
that while having the Child Poverty Bill is helpful, because of the
signals that that sends out, it can do very little on its own. Perhaps
the most important thing in the Bill and the way that it is followed
through is the requirement to have a specific broad strategy. Of
course, everything will be on what that strategy is—how specific
and how tough it is, and how much leverage it
has. There
are several things that really have not been planned for in a coherent
strategic way over the past decade, in terms of what is going to
contribute to reducing child poverty. One of those regards the whole
benefits and tax credit system. There is no systematic way to ensure
that the amounts being received by families with children on low
incomes even keeps up with rising incomes generally—when they do
rise—let alone makes progress towards narrowing the gap, which
is what would be
required. A
second big one is about the types of jobs that people move into and the
ways in which you can reduce in-work child poverty without an excessive
burden on in-work tax credits. The third—on which, to be fair,
there have been strategies but they have not proved adequate—is
on child care and how genuinely adequate that is, in terms of making
opportunities available to
families. I
mentioned all those because they are three things in which something
pretty big needs to happen. I would judge the effectiveness of a
strategy by how tough it is on things like that in really planning
forward to create a significant change, rather than just small changes
at the margin.
Mike
Brewer: I can’t really see what the Bill would
achieve that Government action could not do. The Government missed
their target in 2004, and it looks like they will miss their target in
2010. I think they would have missed it even if they had had this Bill
12 years ago. The Government publish indicators at the
moment, in the “Opportunity for all” report—others
are proposed in the Bill—but still they missed their targets in
2004 and 2010. The reason why they will miss their targets in 2010 is
because of a lack of money. The child tax credit is not high enough.
The Government have not yet found the political will to raise taxes and
increase spending on tax credits, and I cannot see what the Bill will
change, compared with the current
arrangements.
Q
199John
Barrett: Do you think that it is effectively hot air? It
sounds like something is being done, but not a lot is being done. Is
that what you are saying?
Mike
Brewer: I welcome the individual things in the Bill,
but I question whether you need all 650 MPs to sit round and talk about
it for something to come about. Why do you need an Act of Parliament to
do it? Why can’t the Government just say, as they do at the
moment, “We’re going to have an annual report on poverty
and we’re going to measure progress by these indicators”?
Ultimately, what counts is the strategy of the Government, or future
Governments. This Government said that they were serious about child
poverty. They had high-profile targets and an annual report, but still
missed the target. I do not see why an Act of Parliament would change
that.
Neil
O'Brien: The good thing about your question was your
point about the problem being complex. The good thing in the Bill is
the broad-based strategy to deal with that. The bad thing in the Bill,
from my point of view, is the narrowness of the legally binding
targets. What you have is not a child poverty target; it is an income
inequality target. That strongly drives you relentlessly towards
downstream intervention to give people income, rather than upstream
intervention to tackle the causes.
For example,
the IFS points out that you could spend £4 billion and hit the
target by giving people more through the tax credit system. But would
that be the best use of £4 billion for tackling long-term child
poverty? That is less clear. The strategy recognises that, but the
targets do not. It would be better to have a set of targets, or a set
of indicators, that are more broadly based on opportunities for jobless
households, low educational attainment, substandard housing, infant
mortality, teenage smoking, teenage pregnancy and children in care who
do not get adopted. The Government have recognised that there is a
tension there. Yvette Cooper said that the child poverty targets had
never just been about poverty, but had always been about narrowing
unfair inequalities. That might be a good thing, but there is a
trade-off between tackling inequalities and tackling child
poverty.
The other
problem with rather narrow, income-based targets is that they do not
tell you too much about the depth of poverty. Because incomes cluster
just above the line—you know all this stuff—it is
possible to bring about big changes in the headline rate by giving
people just enough money to get over the line. In a sense, it is an
arbitrary line. If you look at a measure based on 50 per
cent. of median income, you would have the same number of people in
poverty as in 1997. If you look at 40 per cent. of median income after
household costs, it looks like there is more poverty. I am not saying
that there is overall more poverty, I am just saying that it is, in a
sense, an ambiguous and arbitrary measure. You might be better off
tying your targets to your broader strategy and using those concrete
measures instead.
Q200Steve
Webb (Northavon) (LD): Obviously, we are in a recession,
but most of the statistics that we have got so far are
pre-recession. I wonder if I could ask—initially to get the IFS
perspective, although others might want to comment—how you think
that the recession will impact on the level of child poverty on these
measures.
Mike
Brewer: Colleagues of mine carried out research to
look at what happened to poverty as measured by the Government in
previous recessions. It shows that there is a tendency for relative
poverty to go down in a recession because Mr. and
Mrs. Median, if you like, are more likely to be affected by
the recession than people who are living around the poverty line. The
median household gets more of its income from the labour market, so
when unemployment goes up, that tends to affect them more than it
affects families around the poverty line who get an awful lot of money
from the state. We do not see any reason why this recession should be
different from previous ones. I suspect that relative poverty will fall
in 2008-09.
Q201Steve
Webb: Looking ahead to 2020, if we are going to
“eradicate” or get down to 10 per cent, and if we have
tax credits and benefit levels below 60 per cent. of median income, can
you see any way in which we can achieve the goal? Presumably, there
will always be 10 per cent. of children at any one point in
time on benefits. Is it credible to think that any party will ever
achieve those
goals? Mike
Brewer: That is a question about politics rather than
economics. We set out in our report earlier this year that it would be
possible to get child poverty in the UK down to 10 per cent. by 2020 if
benefits were raised high enough, but that would be at some
considerable cost and would probably lead to a set of incentives in the
benefit system that would be undesirable. I would not say it is
impossible to imagine. You are getting at saying that if you know the
poverty line, is it not straightforward to eradicate child poverty by
just setting benefit rates high enough? I agree with that; it is as
simple as that. Again, that leads me to question why we need a Child
Poverty Bill to bring that
about. Donald
Hirsch: The slight retreat from
“eradication” literally to 10 per cent. might slightly
change the answer to that question. It has recently gone up, but I
believe that the number of children in workless households went down to
about 16 per cent. The number in workless families would be a bit below
that, so it is conceivable that we could actually work to get that
number down to about 10 per cent. That is important because it
illustrates how adopting the 10 per cent. target could, in a sense,
make a fundamental difference to the ambition. When it was as close to
zero as technically possible, we could not get away from the fact that
there would always be a certain number of people who, for good reasons,
were not working. The concept of trying to get benefits above the 60
per cent. median level is no longer quite so important, which might be
a bit troubling to people who thought that that was being
promised. On
the recession point, Mike and I collaborated on modelling work under a
year ago to look at initial and projected effects of the recession.
Whether or not it was a net decrease or stayed the same, the important
thing was that one group of people would be shifting slightly above the
poverty line as a result of the poverty line being fairly static, while
the income of people in work on low incomes was going up because tax
credits were going up. However, that was a bit of a statistical thing
and their incomes were not changing very
much. Another
group of people were those who were losing their jobs and entering
poverty. If those two numbers were about the same, the people who were
making the
losses were suffering a lot more than the people who were making the
gains and getting better off. As was mentioned earlier, that also shows
why the pure statistics do not tell the whole story. There really is an
issue now about people who have entered deep poverty because of having
lost their
jobs.
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| ©Parliamentary copyright 2009 | Prepared 23 October 2009 |