Previous Section | Back to Table of Contents | Lords Hansard Home Page |
Baroness Hollis of Heigham: My Lords, I shall expand on this point when I wind up the debate, but if I may, I shall put on record that that is not a correct reading of what my right honourable friend the Chancellor of the Exchequer said. It is important to correct that misapprehension.
Lord Higgins: My Lords, I was quoting from the party press release; it may well not be accurate.
It is important to establish the facts about that claim. Strangely, the figure is derived from two entirely separate sources: first, a study by POLIMOD at the University of Cambridge; secondly, a separate government study. Both studies produced the figure of 1.2 million. That is surprising, because they deal differently with housing benefit and the first study makes an allowance for take-up, whereas the government study assumes 100 per cent take-up. Yet both produce the figure of 1.2 million.
When I used to mark exam papers, I found that if two people got the right answer they were probably both right, but if two of them got the wrong answer one of them was cribbing. Perhaps the noble Baroness can explain how that strange situation arose. Neither the Child Poverty Action Group nor Barnardo's thinks that the Government's claim is borne out by the facts. That is worrying because we would all like to see that kind of performance.
Part of the problem relates to the complexity of the system when people make claims, as referred to in the maiden speech of the noble Baroness, Lady Howarth of Breckland. Undoubtedly, take-up is most important and perhaps the Minister will comment on that.
There are many different measures of poverty and today I shall not bore your Lordships by describing all the alternatives. Some are more quantitive than others. However, I want to make an important point. The measures most usually quotedcertainly those relating to the issue I have just discusseddepend on a certain level above the mean or the median income level and the extent to which children in families, for example, fall below the particular average. We must recognise that that target is constantly moving. The average constantly rises as incomes generally rise. Therefore, to some extent, we are talking not about poverty but about equality.
One of the stranger events of recent years is that, far from decreasing, the disparity between the rich and the poor families with children seems to have widened. There appears to be a conflict of view between the Prime Minister and the present Secretary of State for Work and Pensions as to whether that widening is to be regarded as disadvantageous. It would be helpful to have the Minister's comments.
I want to raise another important issue. Among all the measures about which we hear, little attention is paid to secondary poverty. That poverty arises not
necessarily from an absolute or relative level of income but from the way in which those receiving the assistance operate. The noble Baroness, Lady Massey of Darwen, referred to smoking. Research undertaken by the Policy Studies Institute shows that an incredibly depressing amount of money is being spent on tobacco and cigarettes by low income families, including those with children. That subject needs examination but it is often neglected.Finally, I join the noble Baroness, Lady Walmsley, in her comments about the Social Fund. I am sure that the Minister will point out that that was introduced by a Conservative government and has various deficiencies. I say merely that as a constituency Member of Parliament I entirely agree that the system worked badly. Indeed, my majority fell massively to about 18,500! Be that as it may, there are real concerns about the Social Fund. Barnardo's, which has already been quoted, stresses that too many families across the country in receipt of income support are having to pay back money. Furthermore, across the services, the majority of hard-pressed families are struggling to pay Social Fund loans. That means that they are living £10 or more below the rock-bottom poverty line.
The Social Security Select Committee in another place similarly expressed concern about the way in which the Social Fund system is working against the Government's key aim of reducing poverty. Its inquiries show that the discretionary fund in its present form is adding to poverty and the social exclusion of families and children by, in many cases, denying them access to the basic necessities and increasing their indebtedness.
That brings together the two themes; the international and the national. Indebtedness is a problem in the third world. As has rightly been pointed out, it is equally a problem in this country among the poor, in particular the poor with children. It would be helpful if in the generally constructive approach to the problem we looked at the interest rates which are being paid by many such families. The noble Lord, Lord Northbourne, commented on that matter.
The debate has been interesting and it could not have been better informed. All noble Lords who have spoken have great experience in the area and it is with considerable diffidence that I congratulate them. The debate has been most helpful and we look forward to hearing what the Minister has to say.
Baroness Hollis of Heigham: My Lords, I congratulate my noble friend Lord Harrison not only on his success in the ballot today but on his powerful opening speech. The debate was wonderfully enhanced by the magnificent maiden speeches of the noble Baroness, Lady Howarth of Breckland, and the noble Lord, Lord Adebowale.
I share my noble friend's commitment to the issue. I rememberI was young at the timeGeorge Brown being asked as an MP why he was a socialist. He said that in the 1930s when he was travelling back
to London from North Wales he stopped at a roadside cafe. A young couple, who were trying to get to London to find work, came in and changed the baby's nappyand they changed the nappy from one set of newspapers to another. He said that that was why he was a socialist.As your Lordships have identified, that was absolute poverty. In the first decade of this millennium we are talking about child poverty, but it is a relative poverty. The noble Lord, Lord Higgins, was right in saying that because earnings rise incomes grow and so it is that much harder for those who are not in work to keep pace or to catch up. The perversity of that is that one way of overcoming relative poverty is to see the national wealth shrink and unemployment grow. As a result, more incomes would fall towards the mean. I would not wish to see that happen, but none the less it would explain the problem when we are talking about the concepts of relative poverty.
It has been made clear in our debate that if we ask who are the poor in our society the answer is not pensionersalthough some undoubtedly are poorand it is not disabled peoplealthough some undoubtedly are poor. The answer is children. The face of poverty in our society today is the face of a child.
As many noble Lords said, it matters because whereas in 1979 2 million children were living in low income families, by 1997 that figure had risen to 4 million. One child in three is growing up in a low-income family. If we had done nothing, another generation would have inherited that poverty and deprivation.
The recently published report, Outcomes for Children, informs us what the risks may be. Children who grow up in poverty are less likely to do well at school; they have fewer qualifications; they leave school sooner; and, as the noble Earl, Lord Listowel, said, they are likely to truant and they may well run away. In later life, such children are three times more likely to be unemployed or in low-paid work; they are more likely to suffer ill health; and they are more likely to retire without an adequate income. As the noble Baroness, Lady Howarth, so movingly said, at worst, that may lead to violence, conflict and even abuse. It may lead to a deprivation and a degradation which may be passed on to their children in turn. It is a deformed dowry of experience.
The noble Baroness was right in saying that we need to value all the social workers who may make all the difference. That is why the Government are spending £1.5 million extra on advertising to expand the number of those in social work. It is also why, incidentally, Quality Protects is so important to ensure that those children who are the most vulnerable and damaged are given the most help possible to make a successful transition to independence and adult life. The noble Lord, Lord Northbourne, made that point.
I am sure that I shall be supported by my noble friend Lady Massey in saying on behalf of social workers that I sometimes resent the extent to which they are scapegoated for the failing in today's
parenting society. They are pivotal figures and most of them do a heroic and noble job. Without their work, so many other children would be having even more deprived and degraded lives.Who are these children? The noble Lord, Lord Northbourne, identified most of the children at risk. We know that four groups of children are especially likely to be poor. Many of the poorest will be the children of lone parents who are two-and-a-half times more likely to suffer prolonged poverty than are other children. And prolonged poverty is the poverty which scars.
They are particularly likely to be poor for two reasons. First, usually their mothersthe parent with careare unlikely to be in work, and hence our welfare to work strategy. They are also likely to be poor because they are in a fractured family and thus unlikely to be receiving child support, and hence our child support reforms. Those two factors are connected. Women on income support who receive maintenance are twice as likely then to move into work. Child maintenance serves as a form of privatised family credit to springboard those families out of poverty. That is why I believe that our child support reforms are so important because they will benefit a further 1 million children.
The second group of children likely to experience poverty are those in larger families. In the period 1991-97, one-third of children in large families, compared with 15 per cent of children in smaller families, were classified as having persistently low incomes. Often that group overlaps with another; namely, ethnic minority families. Again, that problem was identified by the noble Lord, Lord Northbourne. Although Britain is a multi-racial society, we know that some of our ethnic communities are far more likely than others to suffer severe disadvantage. In 1996-97, for example, seven out of 10 families with a Pakistani or Bangladeshi head were in the poorest fifth of income distribution. Proportionately, they should have comprised two in 10 families, but in fact the figure was seven in 10. The result of that is clear and noble Lords have already pointed out that it is parental poverty which produces child poverty. Whereas 30 per cent of white children live in poverty, 60 per cent of Pakistani/Bangladeshi children do so.
I turn to the final group, about which I am slightly surprised not to have heard mention during the debate. I refer here to families where either an adult or a child suffers from a disability or a long-term illness. A disabled child, however much richness it brings to family life, at the same time creates financially a disabled family. Whereas 28 per cent of all children are in the bottom quintile of incomes, that percentage rises to 44 per cent of children where either they or their parents are disabled.
What are we doing about the problem? We are determined to reverse the growth of the numbers of children living in poverty through our policies to tackle worklessness, to increase financial support and to improve public services in the form of the
environment and in particular education services for such children. The noble Lord, Lord Adebowale, emphasised that latter point.The best routeprobably the only long-term and sustainable route out of povertyis work. In 1979, 10 per cent of children lived in workless households. In 1997, that figure has risen to almost 20 per cent. At the same time, the number of children living in poverty had tripled. The noble Baroness, Lady Walmsley, supported by the noble Lord, Lord Higgins, asked about the statistics in playwhich is why earlier I intervened in the debate.
Nowadays, some 300,000 children are in poverty than was the case when the Government took office. But there would have been 1.2 million more children in poverty had the policies we inherited in 1997 continued. That is why the two statistics vary. It is important to point that out; otherwise there appears to be a crossing of wires.
We are providing help and advice to families wishing to return to work through programmes like the New Deal. At the core of that scheme is the personal adviser, the work-focused interview and Jobcentre Plus. I too respect the right of parents, in particular those with young children, to reach a decision about what is best for their child as regards whether they do or do not move into work. However, it is interesting to note that half of the lone parents coming on to the New Deal have children under the age of five. Why are they doing that? They are the parents who were most recently in work and they want to return to work. That is their choice.
One lone parent of a young child told me, "I don't want my child growing up thinking that grown-ups do not work". Another lone parent of one child of two years and another of five years said that, "Work for me is not the second-best way of supporting and looking after my children; it is the best way I have of being a parent". That is why the strategies that we have put in place are so important.
However, we must also ensure that when parents do move into work, that work must pay. As a result of the working families' tax credit and our proposals for the new integrated child credit which I shall have the pleasure of bringing before the House in a few months' time, I believe that we shall be able to achieve what was called for by my noble friend Lord Desai; that is, to introduce effectively a portable citizen's income for children. The statistics are important here.
My noble friend Lady Thornton pressed me on the implications of the working families' tax credit for children living in poverty. We know that what matters is the entry wage, because it is that which brings a lone parent into work. We know also that most lone parents work part-time, on average between 16 and 22 to 24 hours per week. Quite rightly, those parents need to balance childcare against the hours of work. In other words, unlike most men, lone parents cannot extend their incomes by working longer hours to compensate. For someone working for only 16 hours per week and receiving the minimum wage of £4.10 an hour, that hourly pay is raised by working families' tax credit to
£11 per hour. Adding in child benefit and taking off average housing costs results in net pay for working 16 hours per week of a sum in the order of £10 per hour. The result of our interventions means that such a parent can more than double her hourly rate of pay. That is before child maintenance is added, which on average is worth £35 per week.
Obviously for someone in full-time workover 30 to 35 hours per weekthere is far less need for working families' tax credit and therefore that help tapers out. But whereas the minimum income for a family working part-time would be in the order of £160 per week, for a family working full-time they would have at least £202 per week before any question of maintenance would come into play.
Next Section
Back to Table of Contents
Lords Hansard Home Page