Mr.
Reed: The hon. Gentleman is making a persuasive case. Like
the hon. Member for Beverley and Holderness, I have anxieties about
this discussion. I have a great deal of sympathy with what the hon.
Member for Northavon is saying, but I am concerned about the potential
for creating regional ghettos. Parents who have been out of
work for a long period are likely to be in areas of profound market
failure, where employment is hard to come by. I am not saying that the
benefits system is what it should be, but if we provide an even better
benefits system to prevent people from being in poverty, we may end up
consigning generation after generation to increased dependence on the
state. Does he share that
concern?
Steve
Webb: I understand what the hon. Gentleman is saying. One
measure of poverty in the Bill is persistent poverty. How can we avoid
children living in persistent poverty in such unemployment blackspots?
We can and do try to get mum or dad—or both—into work.
However, many are dependent on benefits for three years out of four. If
we do not give them enough to live on, relative to the thresholds, we
will not achieve the target in the Bill. We could set benefits at such
a level that we drive people to take jobs, come what may, because they
cannot otherwise survive. My worry is that we are saying inconsistent
things.
Mr.
Reed: The hon. Gentleman makes a logical and analytical
dissection of a real issue. I am not sure what the answer is, and I am
not sure that he is
either.
Steve
Webb: I suppose that I am asking the Government to be
explicit about what they do. Do the Government set benefit levels to
lift people out of poverty? Clearly not. We define poverty in the Bill,
and benefits and tax credits are not enough to lift a couple out of
poverty. What are the Government doing? Will they state explicitly that
when benefit levels are set, they are not trying to lift people out of
poverty, but seeking to provide people with short-term relief as a
temporary measure for something else? What about long-term sick and
disabled people and the argument, “We want them to get a
job”? A set of people exists who are not going to get a job.
What do we say about those people if we consign them to long-term
dependence on a rate of benefit that we have spent the last three weeks
defining as poverty? That is my point.
Ms
Keeble: The hon. Gentleman spoke about the number of
two-adult households that live in poverty, which is very striking. Does
he agree—he hinted at this point—that often in those
families, at least one adult is not capable of working? Often, someone
is not able to work because of a disability or a long-term illness.
Sometimes, they have been involved in crime and are in and out of
prison, or they might be transient and unable to work. Does he agree
that there are often explanations of why two-adult households that do
not work and live in poverty are in that position? They will sometimes
be attracting other benefits.
Steve
Webb: Absolutely. That reinforces my point. The glib
response to my point is, “Yes, but work is the answer. Work,
work, work. Let’s not pay people too much money because it
discourages them from working. The real way to get people out of
poverty is to get them to work.” I wonder whether there will
always be more than 1.2 million children living in households that are
wholly dependent on benefit, because their parents are long-term
unemployed, sick, temporarily unemployed, or whatever. Unless benefit
levels are set at or above the poverty line, is it physically
possible to achieve the 2020 goal?
What has
frustrated me about our discussions—I did not think about this
until I looked at the numbers—is that until we ask ourselves
about the right level of benefits relative to the poverty line, we
cannot think about whether we will ever achieve these goals. That comes
back to our 2017, panicky, pulling-the-levers-of-income-transfers
point.
I will give
one more example of my point. For a low-income household, it is
something even more alarming. The risk of being in poverty changes
according to whether someone is on a certain benefit. The national
average for the risk of living in poverty is 29 per cent.
[Interruption.] I am sorry, there is a 23 per
cent. risk. Children whose parents claim jobseeker’s allowance
have a 70 per cent. risk of living in poverty. If their parents are on
income support, it is a 54 per cent. risk, and if their parents claim
working tax credit, it is a 29 per cent. risk—that is
the number I read out by mistake.
A child is
three times as likely to live in poverty if their parents claim
JSA—of course, because they are unemployed. However, the point
is that JSA is set by the
Government. Income support and working tax credit are set by the
Government. The Government explicitly set benefit rates that inflict
three times the risk of living in poverty on those children whose
living standards they
determine. Mr.
Stuart: I entirely accept the logic of what the hon.
Gentleman says. Regardless of the legislation, does he believe that we
should set benefit rates above the poverty line? Is that the right
thing to do in the broadest sense, regardless of the Bill? Is that the
right policy?
Steve
Webb: This is where new clause 4 comes in. I am saying
that, if the poverty thresholds and the targets in the Bill mean
anything, we should at least think about those thresholds when setting
benefit rates. We patently are not doing that. It would cost a lot of
money—I do not know how much because the numbers are quite
complicated, but it would be billions of pounds, and I am certainly not
committing to that—but if we set benefit rates each year without
thinking about the thresholds on which we are legislating, we might as
well give up as we are not going to achieve our goals. That is my
point.
Ms
Keeble: I remember reading those figures as well,
although I might have been looking those for a different year. However,
I think that the group that is most likely to be in poverty is families
on housing benefit. Being on that benefit is one of the prime
indicators of poverty. A measure that allows families on housing
benefit to retain more of their child benefit is an effective way of
tackling of chid poverty, because it puts more money into exactly
families that are at the highest risk of
poverty. 6
pm
Steve
Webb: The hon. Lady is right. There is a 53 per cent. risk
for people on housing benefit, which is higher than the average, but
still lower than the risk for those on jobseeker’s allowance. I
have no problem with helping families on housing benefits—they
are, on average, a poor group who should be helped. However, surely the
Treasury has worked out internally whether we will ever achieve the
goal of the Bill as long as we pay benefits below the poverty line,
which is what we are doing. Is it possible to achieve the 2020 target
without paying benefits and tax credits at or above the 60 per cent.
median? It might not be. Furthermore, a single parent who claims
everything should be clear of the poverty line, but 30 per
cent. of children in poverty are the children of single parents on
benefits. Why are so many of them still below the poverty
line? Finally,
let me turn to the issue of minimum income standards, which is
addressed by new clause 4—I shall speak to it now to save me
from coming back to it. I have suggested setting benefit levels by
making them relative to the poverty line under the Bill, but another
attractive approach would be to make them relative to what people need
to live on—the Joseph Rowntree Foundation used to talk about
“subsistence” and “modest but adequate”
levels. The measure would enable an intelligent discussion about the
adequacy of benefit levels, which I am afraid we do not have in British
politics at the moment. We simply set benefit levels on the
basis of what they were the previous year, plus a bit more.
Every
Government have been terrified of opening a can of worms by asking how
much is enough to live on. However, that is done in plenty of other
countries, such as Norway, Sweden, Germany and Canada. Minimum income
standards are not novel. Unless and until we talk about how much we are
paying people who have no other income and how that relates to their
need, I am not sure that we can address the issue of child poverty
properly. The living standards of adults without children have fallen
massively in the past 15 years, as they were the group whose benefits
were least prioritised. Benefits for children and pensioners are linked
to earnings, but there are groups of people who are highly dependent on
benefits whose living standards have fallen and fallen, and who cannot
attain the “modest but adequate”
benchmark. I
shall conclude my remarks by saying that all I am pleading for is that
we cease setting benefit levels arbitrarily. Benefit levels now are
essentially what they were post war, when most of the current situation
was invented. Benefits have been uprated on a whole variety of ad-hoc
bases with no relation to anything outside—that is the key. When
we are setting benefit and tax credit levels, let us relate them to
something real, whether that is the definition of poverty in the Bill,
or a minimum income standard that is needed for someone to have a
modest and adequate standard of living, rather than just plucking them
out of the air and saying, “How much cash do we have this year?
Let’s add inflation, plus a little bit.” We should set
benefits objectively, which would be a firmer foundation for tackling
child poverty in the
future.
Mr.
Stuart: It is my pleasure to have tabled new clause 4, on
which the hon. Member for Northavon just commented. The new clause sets
out an entirely different approach. Nowhere in the Government’s
measurements of poverty is there any estimate of what it costs per week
to live healthily in the UK. Low income is a statistic, not a measure
of the weekly cost of items in a family budget. The centre for research
in social policy at Loughborough university and the family budget unit
at the university of York define a minimum income standard as
follows: “A
minimum standard of living in Britain today includes, but is more than
just, food, clothes and shelter. It is about having what you need in
order to have the opportunities and choices necessary to participate in
society.” The
Government themselves, in the explanatory notes to the Bill,
state: “Children
are materially deprived if they live in households that cannot afford a
range of basic activities, such as...school trips for the
children, or celebrations on special occasions, or if they cannot
afford basic material goods, such as fuel to keep their home
warm.” The
targets in the Bill must be credible. It would be offensive to claim
credit for meeting a statistical target, or making progress towards it,
if the target means nothing to children living in households lacking
basic material goods. To avoid that, I suggest that we must take
minimum income standards into consideration to ensure that the income
distribution calculation of the poverty threshold never falls below the
income required to meet basic
costs.
Ms
Keeble: Will the hon. Gentleman give
way?
Mr.
Stuart: I shall give way to the hon. Lady in a moment, if
I
may. My
new clause does not prescribe what the Government must do, but it does
suggest that they must keep up to date an assessment of what a minimum
income standard would look like. That would at least allow policy
makers to compare what that looks like with the actual moneys that
families receive. This is the right time to demand a proper,
evidence-based minimum income standards methodology against which to
check the adequacy of the Government’s income
thresholds. A
combination of a minimum income standards approach and an income
distribution approach is already in use in Britain—in the
calculation of the London living wage by the Greater London
authority’s living wage
unit.
Ms
Keeble: Will the hon. Gentleman give
way?
Mr.
Stuart: I will, as I said, give way to the hon. Lady in a
moment. The
hon. Member for Northavon refused to commit to, or say that he
necessarily supported, raising the benefits threshold, despite having
pointed out the logical inconsistency of a Bill that says that it will
eradicate child poverty but none the less does not ensure that benefit
levels put families above the child poverty level. The right hon.
Member for Birkenhead (Mr. Field) always puts the case that
a combination is needed. Perhaps we are talking about more generous
benefits combined with time limits on the period for which people can
access them. I do not blame the hon. Member for Northavon for not
taking an intervention on this point, as he had been generous at taking
interventions, but if I had been allowed to intervene yet again, I
would have asked whether he thought that more generous benefits coupled
with time limits might have been an appropriate
approach. New
clause 4 would not oblige the Government to change what they do, but it
would mean that they would have to provide the information that I
described, against which one could then measure actual outcomes,
especially if any Government—whichever party was in
power—claimed to be serious about eradicating child
poverty.
Ms
Keeble: Given that the Conservative party did not support
the minimum wage, which was the basic
underpinning— [Interruption.] There is no point
Conservative Members groaning about it. The minimum wage represented
the basic underpinning of the whole tax credits system—there has
to be a minimum wage to be able to have the tax credits. I do not think
that that party even supported the minimum income guarantee for
pensioners. Given that, how on earth does anyone think that that party
will be taken seriously when talking about minimum income
standards?
Mr.
Stuart: Some of my colleagues had anticipated the quality
of that intervention. We might as well discuss Disraeli or CND, which
doubtless features in the hon. Lady’s past. We have to deal with
policy today. If she bothered to read the new clause, she would see
that it does not say that these amounts must necessarily be paid out.
It says that the Government should publish and maintain the
information, which anyone—child
poverty campaigners and so on—could use as a lever with which to
engage with the Government and hold them to account on eradicating
child poverty. Despite the hon. Lady’s years on the Treasury
Committee, I think that she fails to understand the combination of tax
credits and the minimum wage. Of course, the minimum wage’s
actual impact, given the provision of tax credits, is rather more
slight than perhaps she would have us
believe.
Steve
Webb: In the interests of not ending the harmony that we
have enjoyed in Committee, I will support the hon. Gentleman’s
new clause. Does he agree that having benchmarks for different sorts of
families would allow us, for the first time, to assess whether the
benefits structure disadvantages particular families? For example, the
benefit levels for families with three children or with one child could
be compared with the needs of such families. I do not have a strong
feeling on whether the benefits system adequately compensates for the
costs of additional children, so the benchmarks would help us to do
that. That would give us some useful benchmarks for families with
different numbers of children, or for pensioners as opposed to
non-pensioners.
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