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9 Feb 2010 : Column 202WH—continued
The biggest factor in child poverty in London is housing costs. In my area, which is fairly typical of inner London, about 40 per cent. of the population lives in social housing-property owned either by the council or by a housing association-on fixed and economic rents. About 30 per cent. of my constituents are owner-occupiers, which is a low proportion compared with the national average, and one that is declining fast. Again, that is typical of inner London; owner-occupation levels are declining fast because people cannot sell their property, so they move and rent it out privately.
The private rented sector is the fastest growing sector, and the rents charged there are unbelievable. I met a family recently who lived in an ex-council flat that had been bought under the right to buy some years ago. For a two-bedroom walk-up council flat on an estate, that family was paying £250 a week. That is not the highest amount; some pay far more than that. I have come across figures of £400 a week for ex-council property, which is high by any standard.
Who pays that rent? In the majority of cases, the housing benefits system pays it. We have got into the crazy situation of saying that there is a market rent and that the housing benefit system will support it. The market is therefore supported by the housing benefit system. I have made that point to successive Secretaries of State for Work and Pensions. I know that they understand the issues and that there are changes on the way, but I hope that we will be bold and go a lot further by bringing in rent controls for the private sector.
I hope that we will look hard at the enormous benefit trap that is implicit in this problem. Most local authorities in London place housing applicants not in council accommodation, but in the private sector, sometimes paying the deposit so that they take up the place. That means that if someone on housing benefit with a family wants to get a job, they must earn enough to pay for the private rent for the flat of £200 to £300 a week. A rent of £300 a week represents £15,000 a year. The Department for Work and Pensions has recognised that problem and has increased the length of time for in-work benefit and for the continuation of housing benefit.
Some 80 per cent. of people in my constituency have no chance of buying property within the constituency. Unless we rapidly invest much more in social housing, housing associations and local authorities in inner-city areas, we will be consigning an awful lot of children to a life of terrible overcrowding and the problems that flow from it, such as illness and underachievement in school.
Ms Abbott: On the contribution of housing issues to child poverty, does my hon. Friend agree that although our Government have a fantastic record on refurbishing old estates and bringing them up to modern standards, they have failed London with their over-reliance on the theory that councils should get out of the business of building new stock and that the market, above all, should be a provider? That was never going to be a practical option in London. I am glad that they have reversed some of that thinking, but it has created a problem.
Jeremy Corbyn:
My hon. Friend is right that that has been an enormous problem. This debate is not solely about housing, but that is a major factor in child poverty and child opportunity. I agree that the refurbishment
of estates is brilliant and that the decent homes standard is welcome, but unless we get children out of overcrowded flats, their life chances and aspirations will be damaged severely.
We must imagine what it is like to be a young teenager of 13 or 14 in a two-bedroom flat with two other children of roughly the same age. What is it like for a girl to grow up sharing a room with her brothers? There is no space. They might feel embarrassed to bring friends home and they might not want to stay over with other friends because they cannot reciprocate. Those things might seem minor to us, but they are major for the children of that age group who have that lifestyle. We must invest all we can in building housing for the adults of tomorrow-the children of today.
My final point is about job opportunities and barriers to work and training. The levels of unemployment in inner London are high by London averages and are usually above the national average. That puzzles and concerns me. The southern part of my borough and the constituencies of my hon. Friends the Members for Islington, South and Finsbury (Emily Thornberry) and for Hackney, South and Shoreditch (Meg Hillier) border the City of London. The City is a major employer. From the high-rise flats in our constituencies, we can see the gleaming office towers of the City of London. Do many of our children get jobs there? No. Do they travel there to work? No. Are they unemployed? Yes. Are they lacking job opportunities? Absolutely. There is a disconnect in London between opportunities for work and children living in the inner-London ring. I do not have all the solutions, but I know that the problem exists.
Ms Abbott: Some might argue that more young people in Hackney and Islington do not get jobs in the City because they do not have the requisite white-collar qualifications. An even bigger scandal is the relatively small number of children from Olympic boroughs who are apprentices, labourers, builders, plasterers and carpenters on the Olympic site. The Olympics provided an opportunity for our semi-skilled young people and those in manual trades to get jobs, but it appears to have been missed.
Jeremy Corbyn: Absolutely. Olympic building, as with any other building, ought to be an opportunity for training and development. Local colleges are not making sensible decisions. Carpentry, plastering and bricklaying courses have been closed down and yet people wonder why there is a shortage of carpenters, bricklayers and plasterers. It is not rocket science to recognise that if we do not invest in those skills at college level, it will result in skill shortages, underachievement and poverty.
Opportunities for work are important. It is important that the barriers that stop parents of young children going to work are removed through Sure Start, children's centres, a more benign benefit system and a less bureaucratic approach. It is important to ensure that the minimum wage means at least that, if not more in the case of London. We must provide educational opportunities to parents so that they can take up new courses and receive education, if they did not achieve in school.
The 1980s was a period of mass unemployment in this country, as much in central London as in the south Wales valleys, the north-east or the north-west. At the height of the 1980s depression, unemployment in my
constituency was at about 20 per cent. That was as high as anywhere in the country, although it was probably even higher in Hackney and other parts of east London.
This crisis is an opportunity to redress the imbalance between the rich and poor in our society. We should defend and maintain public expenditure. It will do us no favours if we start cutting public expenditure, removing services and losing public sector jobs. The public sector is a major employer in the poorest parts of the country. Such an approach would risk another generation losing the possibility of work. As my hon. Friend the Member for Hackney North and Stoke Newington explained, children who grow up in households in which neither parent works, or none of the grandparents have ever worked, do not aspire to go to work themselves. I therefore hope that we will maintain or increase public expenditure on socially valuable and useful work. We owe it to our children to eliminate poverty so that they can make the very best of this wonderful city of London.
10.27 am
Paul Rowen (Rochdale) (LD): I congratulate the hon. Member for Hackney, North and Stoke Newington (Ms Abbott) on initiating this debate and on her thoughtful and thought-provoking views on child poverty and its effects on our capital city. I agree with her that as well as the issues that affect child poverty in general, there are specific issues with regard to our capital city. Solutions ought to be found to those problems.
In their first term, the Government set the laudable and impressive target of halving child poverty by 2010 and eliminating it by 2020. It is disappointing that in 2010, 3 million children still live in poverty, 600,000 of whom are in London. Given that we have the sixth richest capital in the world, that is very disappointing. I agree with the hon. Lady that it is easy when moving around the city not to see some of the issues or appreciate the poverty that many people are living in.
The hon. Lady highlighted eloquently some of the issues that politicians of all parties must tackle if we are serious about tackling child poverty. They are the worklessness cycle, the benefits trap and poor housing.
I agree with what the hon. Member for Islington, North (Jeremy Corbyn) said about housing being an issue that affects London more than any other region. My region-the north-west-has the largest number of children in poverty after London, so I appreciate some of those problems. Alongside the problem of housing, there is a lack of educational achievement and opportunities. Perhaps more peculiar to London is the problem that very high child care costs discourage many people from taking employment. We must tackle a range of issues with a range of policies.
To their credit, the Government introduced the national minimum wage, but what has not been mentioned so far is that there is a living wage for London, which takes account of some of the particular factors in London. Last year, that living wage was £7.45 an hour, which is higher than the national minimum wage. After some publicity last year by the Zacchaeus 2000 Trust, the Department for Children, Schools and Families agreed that it would pay its cleaning staff-contract and non-contract-the London living wage. I would be interested to hear from the Minister whether the Department for
Work and Pensions is paying the London living wage, because I suspect that it is probably not. If we are talking about doing something, that should be dealt with.
Several hon. Members have mentioned the benefits trap, the 50-odd different benefits for which people can apply and the disincentives. As the hon. Member for Hackney, North and Stoke Newington said, the benefits system should be simplified, because we are concerned that if someone is receiving tax credits and they are working a small amount of extra overtime or additional hours, it can throw the whole system into disarray. Through no fault of their own, someone can end up owing hundreds of pounds. The system is inflexible and people have to go through umpteen call centres to try to get something rectified. We have said that one simple thing that ought to happen is that the level of tax credit should be set for the year and changed annually, rather than being constantly changed every time someone does something.
The Child Poverty Bill is currently in the House of Lords. I hope that the hon. Member for South-West Bedfordshire (Andrew Selous) will reassure us with regard to that measure, because some Liberal Democrat Members of the House of Lords are expressing concern that the Conservatives might attempt to sidetrack the development of the legislation. I agree with the general point that has been made, particularly by the London Child Poverty Network and several hon. Members: the issue is not just about giving local authorities more responsibility; real power and finance need to be devolved, otherwise those freedoms will not be successful.
On the review of housing benefit, I agree with what the hon. Member for Hackney, North and Stoke Newington said about it being more sensible to ensure that someone is back in work for six months. That is certainly something we would want to be developed. The number of apprentices has been mentioned. It is disappointing that there are only 350 apprentices on the London Olympic site. That golden opportunity has not been grasped. When many local authorities deal with public sector building, they try to make it a condition of the contract that local labour is employed and a number of apprentices are taken on.
Ms Abbott: For some time, I have raised the issue of local employment on the Olympic site. Far from recruiting afresh, the big contractors on the Olympic site have switched people who work for them on sites all over the south-east to the Olympic sites. Not only is the number of apprentices there very low, but the number of young people from Olympic boroughs within that figure is even lower.
Paul Rowen: I agree. That is something about which the Olympic Delivery Authority ought to be taken to task. Last week was national apprenticeship week and, probably like many hon. Members, I visited a company that had taken on a number of apprentices. A company that has its headquarters in my constituency of Rochdale has a contract with Hackney council and, as part of that deal, it took on eight apprentices. I understand that five of them are still working permanently with that company. There is a will and progress can be made, but we need to do more to ensure that it happens.
On dealing with some of the wider issues, such as the benefits trap and encouraging more people to work, my party's policies for fair taxes, which we will put forward at the general election, will ensure that everyone who earns less than £10,000 and everybody's first £10,000
will not be taxed. That would give people and families an immediate increase of £700 a year in their pocket, and would be paid for by ensuring that some of the people-there are many in London-who pay 18 per cent. on capital gains pay a lot more. Our mansion tax-£2 million-would go some way towards paying for that. We think policies such as that and fair taxation will, again, encourage people back into work. In the same way, the pupil premium is also the way forward. That involves paying schools, so that they are funded to the level of the best independent schools, and would allow them to spend that money how they want, without central Government dictating how it should be spent with yet more targets.
On housing, which is a particular problem for London, we must bring more empty properties into use. There is not necessarily a lack of properties in London, but there is a lack of them available at a price people can afford. Articles in newspapers such as the Daily Mail about the amount of housing benefit that certain individuals receive obscures the problem rather than providing a solution.
The hon. Member for Islington, North mentioned asylum seekers. Again, my party agrees with him: asylum seekers should be allowed to work. The current system is a disgrace in terms of the length of time it takes to decide on the position of asylum seekers. I shall also mention something he did not talk about, which relates to the work of the Southall Black Sisters in dealing with women who have no recourse to public funds because their marriage has broken down. Again, two years ago, the Government promised some changes on that, but they have not happened. We are still seeing women on the streets because they have come to this country, their marriage has broken down and they are not entitled to receive any public help.
Mr. Eric Martlew (in the Chair): Order. I am sure you want to leave time for the Minister and the Opposition spokesman to contribute.
Paul Rowen: Certainly. I am just winding up now, Mr. Martlew.
As I said, we would like that matter to be resolved. I was asked about free school meals by the hon. Member for Islington, North. I am not aware of what Islington council is doing. As a party, we supported the introduction of the free school meals trial, and that is what we would want to take place. I shall conclude there to allow others to contribute.
10.39 am
Andrew Selous (South-West Bedfordshire) (Con): I congratulate the hon. Member for Hackney, North and Stoke Newington (Ms Abbott) on securing the debate. She is absolutely right that London has particular child poverty issues and that no Government will successfully eradicate child poverty without paying special attention to London. I am grateful to her for securing the debate so that we can consider some of the issues. It is shocking that the children of black and minority ethnic communities are three times more likely to be in poverty than white children. That is a particular issue for London, and something that is wholly unacceptable.
London also has a higher proportion of lone-parent families, and as we know from the Government's households below average income tables, that increases the likelihood
of children growing up in poverty. My party backs the Child Poverty Bill and is scrutinising it fully in the Lords-we make no apology for that. For example, my colleague, Lord Freud, was able to scrutinise Ministers on the lack of an adequate definition of socio-economic disadvantage in the Bill. The Bill is proceeding in the Lords, and rightly so.
Getting families into work in London is incredibly important. One of the great ironies about London is that although it is a great world city that has created jobs over the past decade and brought people from around the world here to work, there are such high levels of worklessness among families in London. One of my party's proposals is to bring in a work programme. We are not satisfied with the results of the Government's welfare and work programmes over the past decade. We intend to bring in a single, integrated welfare-to-work programme that will cover all those transferring from incapacity benefit to employment and support allowance as a result of work tests.
The work programme will also cover the long-term unemployed, lone parents and the recently unemployed. It will be a fully funded programme that will replace the Government's new deals, which have not been as successful as they could and should have been, the flexible new deal and pathways to work. We will offer support to the vast majority of the people currently on incapacity benefit who have been abandoned by the Government. Through the work programme, we will offer people targeted, personalised help sooner-straight away for those with serious barriers to work, and at six months for under-25s.
Providers will be paid by results, thus driving up quality and encouraging innovation. The principle behind payment by results is simple: if a provider does not place someone in a sustainable job, they do not earn their fee. A sustainable job, as far as we are concerned, means placing someone in work for a year or longer, unlike the flexible new deal, which rewards providers when someone has been in work for just 26 weeks. The programme is about transforming people's lives, not just a quick fix.
We will also extend the period of engagement that providers have with claimants so that they can work with them over the medium to long term, thus delivering better results for those individuals. In a difficult job market, which sadly we face at present, that will also mean that providers will have a better chance of placing someone in a job and earning their fee. Under the flexible new deal, if an individual has been with a provider for a year and still not found a job, they are returned to Jobcentre Plus to begin the whole process again. That makes the flexible new deal a flawed scheme, particularly when vacancies are scarce, so we are taking a different approach to getting people back to work.
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