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The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Hollis of Heigham): My Lords, I do not believe that is the verb that I would use when talking about money.
Lord Northbourne: My Lords, my knowledge of the enormous ability of the noble Baroness gives me confidence that she will be able to deal skilfully with all the issues raised in the debate.
Poverty creates a cycle in that it leads to certain outcomes; those outcomes lead to more poverty; and more poverty leads to the same outcomes in the next generation. We have to address not merely the issue of inadequate funding, but also some of the underlying causes of poverty.
The Barnardo's study that I mentioned identifies some of the causes and identifies certain categories of the population that are more likely to live in poverty compared with others. One or two of the categories are obvious; for example, families with chronic illness and families with one or more members who are disabled. Perhaps other categories need to be reconsidered: lone parents, families with many siblings, non-white households, care leavers and families without work. I shall consider each of those in turn.
The reasons why lone parents are poorer are so obvious that I do not believe that it would be sensible to waste time talking about them. The Government want to get lone parents into work. Subject to that applying only to lone parents of children over three or four years of age, they are absolutely right. I wonder whether other matters should be considered as well. I hope I shall not be considered to be politically incorrect or unreasonable, but in this country we have by far the highest percentage of lone parents compared with the whole of Europe. Is it not worth asking ourselves whether there is anything that can be done to help to reduce that percentage and to help more people to live happily in two-parent families? I believe that many things could be done.
For families with many siblings—it is not a dissimilar problem—there must be opportunities to spend more money and effort on helping—I must be careful how I say this—to persuade parents to plan their families more effectively and rationally without in any way intruding on their right to decide how they want to live.
I turn to non-white households, which could be an even more politically sensitive issue. Unless we face these real issues honestly, we shall never solve them and if we do not solve them, we shall never achieve the equality of opportunity that we seek for all the citizens of our country. In the case of ethnic-minority employment, trainers and employers have a responsibility, but it may be worth considering and exploring the possibility that certain non-white communities themselves should join together to develop better access to work and employability for their members, with the help of government resources where necessary.
The most obvious answer in certain communities is English language classes. The inability to speak English can be a cause of unemployability. English language courses were provided and a considerable amount of money was made available in districts like Tower Hamlets, which I know well, for the teaching of English. Unfortunately, the previous government decided to withdraw that grant.
The case of care leavers is different. That care leavers should have a higher risk of living in poverty when they leave care is nothing short of a scandal. I recognise that children who are taken into care are already damaged children. But as a society, do we have the right to take children into care and not provide them with the care and the healing that they require? Do we have a right to put them into children's homes where fewer than 10 per cent of the staff have any relevant training? As a trustee of the Caldecott Community, I know what a difficult and expensive job it is to heal children who have been damaged while living with their families. If the job is done properly, as a community we would save an enormous amount of money in terms of unemployability, exclusion, juvenile crime, ill health and drug use. In the end it would pay to do the job correctly.
I shall not speak about unemployment as other noble Lords have spoken on that subject with great wisdom. It is a difficult subject and could be the subject of a debate on its own. The Barnardo's brief does not address some categories: families plagued by alcohol addiction, families with a parent with mental health problems, families in poor housing or in bed-and-breakfast accommodation, and families where parents constantly quarrel. Many noble Lords have referred to those points.
I do not have time to talk about all those points, but I want to speak about debt. Some people who work with very poor families say that debt is the worst of all the problems that they have to face. Last year more than 2 million people approached the citizens advice bureaux about problems related to debt. For families who live on benefits or on equivalent low incomes, it is just possible to manage if they are very careful until a special demand for expenditure arises. It may be a birth, a marriage, a death, a fire or the need to buy the children new clothes because they have grown. Those matters tend to lead families into debt. Catalogues also are a major source of debt for families as they offer tempting goods on credit.
I know of a mother whose son came home from school in tears every day because he did not have a Puffa jacket or the trainers that all his fellow pupils had. She was so harrowed by that that she borrowed the money and bought the items but the debt was so oppressive that she prostituted herself until she could pay it off. That story links in with what other noble Lords have said about the problems of young people coping with poverty and prostitution.
On the street the cost of borrowing is as much as 10 per cent per week—about 500 per cent APR. Again there are things that can be done. The Government are conscious of that problem. There is the problem of poor financial literacy. The Government are considering teaching financial literacy in schools. Do schools actually engage the attention of the target people who need to have better literacy skills? I wonder whether they do.
Financial services in this country are geared to the needs of the rich and not to the poor. Poor families suffer from a lack of the tools, as well as the skills, with which to manage their money. The Government have announced a bold initiative to address these problems through the Child Trust Fund and the Saving Gateway. I ask the Minister whether these services will be provided through the banks because the banks are very bad at reaching out to "hard to work with" groups.
Credit unions do a marvellous job. There are 1,000 credit unions in this country and they cater for only 1 per cent of the population. Could not the Government do much more to encourage mutual self help organisations of that kind? The citizens advice bureaux do a marvellous job but they cannot give long term help. At Toynbee Hall we are developing a new service which combines services to meet immediate needs with those to help people to cope better for the future, to develop workable credit strategies and to avoid financial exclusion.
Finally, at this season, and following other noble Lords, I draw attention to the fact that child poverty is not only about money and services. It is about—many of these other kinds of poverty are not by any means exclusive to poor families in the financial sense of the word—poverty of parental time and attention; poverty of parental guidance and discipline; lack of parental encouragement and example, especially in relation to education; and, simply, parental love. With that thought, I wish your Lordships a very happy Christmas.
4.52 p.m.
Baroness Walmsley: My Lords, I first thank the noble Lord, Lord Harrison, for the opportunity of this debate today. I compliment him on his very fine speech. I also compliment our two maiden speakers on their equally fine speeches.
I share with the noble Baroness, Lady Howarth, her enthusiasm and delight in the dying art of darning, a skill which I learnt at my grandmother's knee. My late husband would proudly show around the office the darned elbows of his sweaters because to him it proved that he had a loving wife.
At this time of year, when those of us who have children and grandchildren have particular opportunities to show how much we love and appreciate them, it is appropriate that we consider those who are not so fortunate. We have heard about the scale of the problem from the noble Lord, Lord Adebowale. In 1979, 14 per cent of British children lived below the poverty line. By 1997 the figure was 34 per cent. One of the most surprising and worrying statistics I have read recently is that it has only fallen to 32 per cent under the Government, despite their efforts. If that is all that the Government can achieve when the country is strong economically, what can we expect as the economy slows down?
The Chancellor claims to have taken 1 million children out of poverty since Labour came to power, but DSS figures show that only 300,000 children have been lifted out of poverty since 1997. Is the 1 million figure just the end of a graph on the Treasury wall and therefore pure speculation? The Government will know that over-claiming the number undermines their considerable credibility in their efforts to reduce child poverty.
The Government will realise that not everyone who is entitled to a benefit actually receives it. Perhaps that is the explanation for the discrepancy. Does the Minister have any figures on the take-up of benefits for families with children? If it is not 100 per cent, and it probably is not, what are the Government planning to do about that? The benefits system is enormously complicated. Are there plans to simplify it and make benefits more accessible?
The Government have admittedly reduced the poverty statistics to some extent, but they have done so by top-slicing the poor through tax credits for those who are working. But the very deep levels of poverty lie among the unemployed, those living on benefits and with children to bring up. I agree with the noble Lord, Lord Desai, that children are poor because their mothers are poor. Benefits are inadequate and many families have high levels of debt. That is partly because there are not enough grants for essential equipment such as cookers and cots, as we heard from the noble Earl, Lord Listowel. There is, however, the Social Fund. That has survived five years longer than the Conservative government, much to everyone's surprise. It badly needs reviewing. It has several major flaws.
First, it has an emphasis on loans, the repayment of which can take claimant's income some 15 per cent below the already inadequate official poverty line. Many applicants are refused loans because they are too poor even to afford the repayments. Applicants refused the money to buy a cooker on that basis have been told to buy sandwiches. Is that the way to ensure that children in poor families are properly nourished? I share the concern of the noble Baroness, Lady Howarth of Breckland, about the poor levels of nutrition of children in poorer families. I was pleased to hear from her about the FSA's low income diet initiative. Diseases which were uncommon are becoming common again and children's resistance to
everyday childhood illnesses is reduced when they are not fed properly. Perhaps the Minister can tell us more about what the Government are doing about that.Secondly, the Social Fund has the problem of annual caps on expenditure. That causes officers sometimes to juggle budgets and produce a postcode lottery unrelated to real need. One of the main principles of social security support should be equal access for those who need it. The structures in place at the moment do not always ensure that.
Finally, many of those in need are reluctant to approach the fund because they do not believe that they can afford to pay back a loan or because they have a cultural predisposition against borrowing, such as those in the Muslim community.
We have heard from the right reverend Prelate the Bishop of Guildford how the faith community and the charity sector sometimes pick up the pieces, but they often want to know that an applicant has been refused by the Social Fund before considering an application for help. Alternatively, a desperate family may be pushed into the private loan sector with all the potential for exploitation from loan sharks that we heard from the noble Lord, Lord Northbourne.
Those who are employed fare a little better. But the need to give tax credits and family income supplements to the low paid shows only that wage structures in this country are profoundly dysfunctional. Large numbers of people work for long hours on wages they cannot live on; and employers get away with it. As the national wealth has risen by 30 per cent over the past 10 years, the gap between rich and poor in this country has widened and is the widest in Europe.
But I do not propose to emphasise "relative" poverty and the difference between rich and poor, even though that difference is the highest in Europe. My main concern is "absolute" poverty, leaving aside how well other people live. There are too many families in the UK in the new millennium where two or three generations have never worked. They receive inadequate benefits, have a high level of debt and are inadequately trained in how to manage money. As the Government reconsider the 14 to 19 curriculum, I ask the Minister whether there are any plans to encourage schools to spend more time teaching practical family budgeting to young people. After all, everyone needs that skill, whether they earn £5,000 or £50,000 per year.
The only way to eradicate child poverty is to guarantee a minimum income standard and to ensure security for those who cannot work as well as those who can. Tax credits should be set at a level that guarantees that all children are lifted above poverty levels. Some families need a little more than others; for example, those with disabled children and those with only one parent at home. Sadly, despite recent policy changes, many working families remain close to or below the poverty line; 44 per cent of children in working families remain below median income; and 7 per cent remain below the poverty line. Research has shown that paid work may boost income but there is no guarantee of an escape from poverty.
However, if parents are to work, there must be more focus on adequate, good quality and affordable child care. Although I welcome the national childcare strategy, there is still a long way to go. The strategy provided 140,000 new places last year, but 66,000 places were lost, so the net gain was only 74,000. That contrasts with the Government's target of 85,000 new places.
Affordability of childcare is a major issue in parents' decision to go to work, especially if the pay offered is at about the minimum wage. Currently, almost all childcare places for children under three years old are fee paying. According to the Daycare Trust, about 600,000 under-threes are living in poverty in England. Of these, only about 43,000 receive free or subsidised services. That is clearly not enough to allow parents to work and improve their family's income. The Sure Start initiative is excellent, but it still has a long way to go. It plans to reach a third of children under four in poverty by 2004, but I must ask the Minister: what about the other two-thirds?
The Government should put more resources into their child care strategy. That will empower parents, help children and add to the workforce, so improving the country's economy in the long term. We must take the long view and see good childcare as an investment in the future of both our children and our economy.
As we heard from the noble Baroness, Lady Howarth of Breckland, and the noble Baroness, Lady Massey of Darwen, poverty manifestly affects educational attainment. According to research carried out by the Liberal Democrats, most failing schools have a large number of children receiving free school meals. If we are to provide equality of access to a good education—the key to economic independence—we must address the issue of deprivation.
I encourage the Government to reconsider the recommendation of the Social Security Select Committee in another place that they should conduct research into the levels of income necessary to avoid poverty and provide ways to achieve that, for both those who can work and those who cannot. Given the political will and a thorough review of the considerable research that already exists, that could be done quickly. Without that work, British children could die in poverty this winter.
5.2 p.m.
Lord Higgins: My Lords, I join all those who have expressed appreciation to the noble Lord, Lord Harrison, for initiating this debate. His opening remarks set the tone for the debate, as they put child poverty in this country in the context of that in the rest of the world. It is important to remember that most other parts of the world are dealing with absolute poverty: in this country, on the whole, we are dealing with relative poverty.
The noble Lord referred to the United Nations target for aid of 0.7 per cent of gross national product. Alas, that has been an aspiration in politics for as long as I can remember. That must be put in the context of provision made by private assistance to the third
world, and, in particular, of debt repayment. Under all parties, we have made considerable progress. However, having at one time been involved in that process, I am always worried about giving debt relief to the third world, because the original money may not have been well spent. We may be giving further relief to a country when we could devote the resources to another country in greater need. None the less, we have made important progress and debt relief is certainly of great value to many third world countries.In that context, I shall make one purely personal point. I am worried about how the present situation in Afghanistan may distort the allocation of resources in the aid programme as a whole. Not only is there the military expenditure; there is clearly enormous poverty in Afghanistan. Once the immediate crisis is over, it will be important to ensure that the overall sense of priorities that the departments concerned must establish are not distorted.
This debate has been remarkable for two maiden speeches. The noble Baroness, Lady Howarth of Breckland, brings to the House great experience as chief executive of Childline and made many important points. She will present something of a problem for those of us on the Front Bench, because I began to make a note of each of her points and rapidly ran out of paper. Despite having covered so many points, she in no way dealt with them superficially. She made an important contribution to the debate.
Similarly, the noble Lord, Lord Adebowale, comes with great experience from Centrepoint, and so on, and made several important points, stressing that it makes economic sense and is in our self-interest to seek to solve the problem of child poverty. He made another important point by arguing that resources often go not to the areas most in need but to those that are relatively well off. Consequently, we often find that educational and sports facilities, and so on, are least good in the most deprived areas. He brings great experience of such issues and we look forward to hearing both from him and from the noble Baroness on many future occasions.
Many of the speeches that we have heard derive from front-line experience of dealing with the problem. I should like to make some specific points. Yesterday, speaking before me, the noble Baroness, Lady Hollis of Heigham, anticipated what I was going to say and produced some arguments that I had not even thought of. Perhaps I may do the same, as the Minister will no doubt refer to the Government's record on the matter.
In a speech on 25th September, the Chancellor of the Exchequer said:
- "With already 1.2 million children lifted out of poverty, we can aim higher. We will seek a simple and fundamental mandate to eradicate child poverty in our generation and give every child the best possible start in life."
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