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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.
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.
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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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