§ [Relevant documents: Second report of the Work and Pensions Committee, Session 2003–04, HC 85, and the Government's response thereto, Cm 6200.]
§ Motion made, and Question proposed, That the sitting be now adjourned.—[Mr. Heppell.]2.30 pm
§ Sir Archy Kirkwood (Roxburgh and Berwickshire) (LD)
I am very pleased to have the privilege just before the summer recess of introducing this debate on the Work and Pensions Committee report on child poverty in the UK, which is an important piece of work. I am gratified that colleagues have turned out in such numbers for the debate, even though they are busy and have other duties clearing their desks before the summer recess. I am pleased to see the Minister as well. He will not have to sit by his phone for the next three hours. Last night, I heard him described in the bars downstairs as a dark horse. I do not know whether that is good or bad, but I wish him well, as I am sure other colleagues do, and look forward to hearing what he has to say.
It is particularly apposite to stage our short debate on this important subject now, as we are able to consider the detail of the Government's plans as outlined last week in the Chancellor of the Exchequer's statement on the comprehensive spending review. We know where we have come from, and we now have a better idea of where we are heading. After the debate this afternoon we might also have a better idea of how we will get there.
I just want to outline some of the details in the report in order to facilitate the debate. For me, the value will be in listening to what other colleagues have to say, especially those who are not diligent members of the Select Committee. It is always good to get views other than the contributions normally made by members of the Committee.
First, I shall briefly discuss the extent of child poverty, the targets and how the Government propose to change the methods of measurement, and employment strategies for specific groups, and then, if there is time, I shall speak briefly about child care, tax credits and benefits.
It is astonishing that over the past 25 years the United Kingdom has done relatively poorly on child poverty. Internationally, our child poverty rate has been comparatively high. It is salutary to remind ourselves that in 1998 the UK had the highest child poverty rate in the European Union. That has significantly changed. By 2001—the figures for that year are the most recent—the UK was ranked 11th out of 15 European nation states, and I am sure that our relative position will have improved a great deal since then. We will learn more about that when the figures are updated. It is clear to any objective observer that much progress has been made, but we started from a very low base.
136WH If one considers the subject and looks at the past, it becomes absolutely clear that specific groups of people who look after children are at a much higher risk of poverty. On the basis of measurements after housing costs, 3.6 million children in the UK are in poverty today. This is a serious issue, and although commendable progress has been made, much more needs to be done. We must not be complacent about this policy area.
The at risk groups about which we all know and about which the statistics are clear include households in which no adults are working, households headed by a lone parent, households with four or more children, households from black or minority ethnic groups, and households with disabled persons. The preponderance and risk of rooted, in-depth child poverty in families with those characteristics are clearly demonstrated.
There is also a geographical and spatial incidence of poverty, and that was demonstrated to those who took evidence as part of the Committee's work. It is clear that there are difficult pockets of poverty in Wales and parts of Scotland. The Committee visited Northern Ireland. Although the measures for assessing the extent of the problem were slightly different and not directly comparable, I was struck by the relative extent of poverty in Northern Ireland.
However, I was struck most forcefully by the extent of poverty in inner London and Parliament and the Government must do something about that. The ambitious targets that the Government have rightly set for themselves cannot be properly achieved unless significant progress is made on the extent and incidence of child poverty in inner London. It is something to which the Department must pay careful attention.
§ Mr. David Drew (Stroud) (Lab/Co-op)
The report is highly readable, and that is not unimportant given the gravity of the subject matter. Does the hon. Gentleman agree that hidden child poverty is not necessarily picked up on, particularly in rural areas because of the increasing social stigma and the way in which we measure that poverty through free school meals, which is the most appalling measure in small rural primary schools that one could use? Does he not agree that we must pick up on the sensitivity of data collection methods used?
§ Sir Archy Kirkwood
I am very happy to concede that point in full. The hon. Gentleman would expect nothing less, given the area that I come from. Rural poverty is very difficult to measure and the poverty indicators do not pick it up. We must tackle rural poverty as a matter of urgency.
The public service agreement target that the Government set for themselves for 2004–05 will be met. The Committee's report recognised that and the Government's CSR statement last week reiterated a claim that I think and hope will be found to be true, which is that they are broadly on course to meet the 2004–05 target. The report says, in a way that I hope that is readable and accessible, that substantial investment and a clear future focus on the hardest to help groups is needed in order to maintain momentum. Poverty is measured as household income below 60 per cent. of median equivalised incomes. The progress 137WH against the target is measured before and after housing costs and there is some controversy about which of the two measures should be used.
The spending review announced a new child poverty target to halve the number of children in relative low-income households between 1998–99 and 2010–11, on the way to eradicating child poverty by 2020. That target will use the new child poverty measure published in December 2003 using a three-tiered approach consisting of absolute low income, relative low income and, importantly, material deprivation and low income combined. Low income will be officially measured on a before housing cost basis. An important point that one cannot ignore is that, ostensibly, it will enable easier comparison with sister European and other international indices.
The Committee's report acknowledged that the after housing costs measure is important, however, and recommended that it should be used on the basis that spatial distribution is better reflected by examining both measures of poverty—merely relying on before housing costs measurements provides a distorted view of actual housing standards and does not take into account high-cost housing areas such as London.
The child poverty review document published last week stated that the Government would set an additional target in the 2006 spending reviewto halve by 2010–11 the number of children suffering a combination of material deprivation arid relative low income.The child poverty review and the Government's response to the Committee's report stated that the combined material deprivation and low income measure will reflect the impact of housing costs on living standards and capture the effects of persistent poverty. I am sceptical about that, and I would be pleased to hear the Minister's reassurance that such reflection and capture will happen.
I would also like a reassurance that the after housing costs poverty statistics will continue to be published, because the new statistics will not be available until 2006. In the interim, it is important that the after housing costs measure be maintained, lest those who are more cynical than me about the Government's motives think that they are doing it because it is an easier target to achieve.
I think that the Committee wanted the Government to pursue a clearer policy framework between now and 2010. I was certainly looking for that. I thought that it was important that we got our recommendations to the Government in time so that they could be considered before the comprehensive spending review was finalised. That happened, and I believe that we had an impact—the Department and the Government took some of our recommendations on board.
I am grateful for that, but the Government response to the report rested on the fact that the existing strategy for child poverty reduction could be found in "Opportunity for All", a document that is becoming rather long in the tooth; in the UK national action plan 138WH on social inclusion, which is used for European Union purposes and the Lisbon agenda; and finally, in the document that was published last week—the child poverty review document. If I am disappointed about anything, that is it, because it does not really add up to a strategy that will help us take the steps that I think are necessary to maintain momentum between now and 2010, if this job is to be done as the Government say they want.
I hope that we hear a bit more about the Government's coherent step-by-step strategy on how they intend to halve child poverty by 2010. Put basically, I think that the Government's policy is still merely one of work for those who can, support for those who cannot. I do not want to diminish the importance and the value of that approach, because I think that it is the right approach, but it needs to be developed. As we are talking about a Government who are gearing themselves up for a third term—should the electorate allow it—I think that we need some more coherent and detailed thinking than that. It was a perfectly serious and sensible way to approach the Government's first term, but it is now getting a bit out of date and needs refreshing to make it adequate for a third parliamentary term.
Getting parents into work is still an important factor. The Government PSA target is to reduce the number of children living in workless households by 6 per cent. from spring 2003 to 2006—the spending review set another target relative to that, to reduce the figure by a further 5 per cent. between spring 2005 and 2008.
As we also have Sir Peter Gershon's agenda to reduce the number of staff available to man the Jobcentre Pluses, be personal advisors and do the processing for the benefits, is the Minister is confident about those who suffer multiple barriers? The easy wins have all been achieved—the people who were nearest to the labour market have, happily, thankfully and gratefully, been helped into work—so we are now dealing with a client cohort that is suffering greater barriers. The task gets harder, not easier, as do the resources in terms of personal staff time. We cannot get computers to give people personal advice if they suffer from problems such as mental illness—at any rate, not easily, as far as I can see.
There are some questions about the PSA targets for workless households in terms of the staff cuts of last week. The other big question about that, of course, concerns inactivity rates. Nearly 2 million are not active in the labour market and it is also difficult to assist them. The same problem arises in terms of reductions in staff. However, the only answer that the Government seem to have is pilot schemes. I do not diminish the importance of that, because I think that one has to be careful about rolling out new policies—we have a plethora of pilots all over the place and some are certainly worth studying—but I think that we need to see more than pilots.
I would like to see some of these bits of policy rolled out, because it seems stark staring obvious to me that, in some cases, they would help if they were rolled out nationally and funded properly. The other thing about the new deal and people who are on inactivity benefits—and not in the labour market or trying to get into the labour market—is that the pathway to work pilots need to be rolled out as soon as we can get all the evidence 139WH from the work that is being done on them. I also believe that the new deal for disabled people is grossly underfunded, given the task for which it was designed.
Lone parents are another obvious cohort of the work force that needs better and more direct attention paid to it. The Secretary of State told the Committee that the Government's target of getting 70 per cent. of lone parents into paid employment by 2010 was "challenging", which it is. There are many pilots: the work search premium; the return to work credit, which could be a very effective benefit; the compulsory action plans; the work-focused interviews, which are helpful; discovery weeks, which are welcome; child care tasters; and extended schools, which are to be piloted in six cities. All that is excellent stuff, but the pilots are likely to have minimal effect in the next three or five years unless serious money is put behind them so that they can be rolled out to give people access to them in other parts of the country.
Disabled parents are another deserving group, but there is no specific employment support for them. They have the double whammy of trying to look after children while trying to get back into the labour market. I need to be persuaded that more cannot be done to help them. The Committee recommended free registered child care for that group and extending the return to work credits nationally as soon as possible. We also need to learn quick lessons from the pathways to work packages, so that we can roll those out, too. Disabled parents are a very deserving group and we need to help them.
The Committee is doing a particularly important piece of work on service delivery to black and other ethnic minority groups. I have no direct constituency experience of this area of public policy, but it is evident that we are not giving our customers and clients in very hard-pressed communities equal access to the Department's services. It never occurred to me that merely issuing Chinese language leaflets to the Chinese community was not all that one needed to do. It has been driven home to me by examining all the evidence that many members of the Chinese community, particularly its elderly members, are illiterate in their own languages. If we know that, we cannot ignore it. It is not easy to do, but the Department needs to work harder to meets its target of reducing by about 16 per cent. the different rates of employment between black and other ethnic minority applicants and the rest of the population. That has been the target since 1998, but the situation is not improving fast enough.
The Committee considered employment zones with some care and in some detail. Extending such measures to ethnic minority communities would be a significant step forward.
Child care is crucial to making real progress in tackling child poverty. The 2004 spending review was extremely welcome. I like to think that the Committee's recommendations and our report on child care earlier in the year were partially responsible for the welcome addition of new child care places and further funding. The children's centres are also extremely good. I would like to know more about how those centres and places will be allocated, and whether that will be done on the basis of the most disadvantaged. I would also like to know where the child care capacity for the professionals who will man such centres will be found, as that is a problem. One of our worries during the inquiry was 140WH capacity. We will have the same old problem that we have with nurses, doctors and dentists: capacity is not there when we need it. The Government will need to try to do something creative to tackle that.
If the employment market is not buoyant enough to do that work thoroughly and to the extent that the Government need, what then? Will they make up the difference? Work for those who can and support for those who cannot will not by itself last until 2010 and 2020 and deliver levels of employment and income that the Government want and we all earnestly hope for. What is the Government position? Some of us are old enough to remember the days when child benefit was a big issue in politics; it never gets a mention these days. Indeed, the whole child poverty review document, which is the foundation of the Government's plan to eradicate child poverty, mentions it only twice.
I might be being a little unfair, but I have concerns about benefit levels, and about targeted benefit increases as opposed to universal increases. We should think carefully about that. The Government should have plans. As it seemed that nobody else was going to, the Committee took a cockshy at working out what we would need to pay at 2004 prices to halve child poverty by 2010; it would be an additional £5 per child per week before housing costs, and an additional £10 a week using the after housing costs measure. Those seem like large amounts.
§ Mr. Kelvin Hopkins (Luton, North) (Lab)
I am very interested to hear the hon. Gentleman's figures. Has he calculated what that would mean in terms of gross cost to the Government?
§ Sir Archy Kirkwood
The next part of my contribution will answer that important question. There are all sorts of assumptions, and these are cockshy figures—they have to be, as assumptions for 2010 must be broadly drawn. However, if the financial support was targeted, it would cost at least £500 million; if it was universal, it would cost around £3.5 billion. Those are big sums, but compared with what we have spent to date, they are perfectly manageable over the time scale.
All I can say to the Government is, if not these figures, then what? Of course, they must be careful with figures, because some Oppositions are irresponsible and might try to hold them to them. However, I am sure that there are ways of doing research that would inform the debate in a way that would not impale Governments on hooks in the future. It is time that we did that. If the Government are serious about having a properly sponsored and informed debate between now and 2010, that is what they should do. It was what I was hoping for from the CSR and the child poverty review, which is an important document, but it lacks that essential element, which makes it less useful.
I can say on behalf of my colleagues on the Committee that we will continue to monitor closely both parts of the strategy—work for those who can, and security for those who cannot—as we accept that both are vital to eradicating child poverty. Much has been done, as Ministers are fond of saying, but how the Government are to achieve their ambition in the coming years is still not clear enough.
§ Ms Karen Buck (Regent's Park and Kensington, North) (Lab)
The Committee rightly celebrated the boldness of the commitment to ending child poverty within a generation and the achievements to date. Today, I celebrate the subsequent achievements that are set out in the comprehensive spending review and flagged up in the child poverty review. I will not rehearse those points again, because the Chairman, the hon. Member for Roxburgh and Berwickshire (Sir Archy Kirkwood) has spelled them out. I pay a warm tribute to his leadership in the Committee over the years and through this inquiry.
There is a great deal to be proud of, not just in the work of the Department for Work and Pensions but in the many complementary strategies of the Office of the Deputy Prime Minister and the Department for Education and Skills, and indeed throughout Government. We on the Government side should take a great deal of pride that the latest assessment of the poverty figures and progress by the Institute for Fiscal Studies said that the Government's "redistributive programme"—the "R" word, which I am perfectly proud to claim—hadbrought big gains for low-income pensioners and for families with children at the bottom of the income distribution.It is not just the Government drawing attention to their own achievements—the Joseph Rowntree Trust, the Institute for Fiscal Studies and many other organisations have, in a sense, audited the progress so far. We need to stress that in an era of cynicism. As the Chairman said, and I suspect that this will be echoed by others today, there is a need to step up a gear to reach the next target in 2010 and possibly even more so to reach the target of eradicating child poverty.
We must ensure that we reach those targets everywhere—in all regions of the country. I am grateful to the Chairman for drawing attention to the situation in London, which I will briefly refer to again. There is a very unequal distribution of concentrations of poverty in different areas of the country. Inner London has the highest child poverty in the whole country. I have said this before and I am afraid that I will say it again: leafy-sounding Regent's Park and Kensington, North has higher unemployment and higher free school dinner entitlement than Jarrow and Gateshead. That is an indication of how the world has changed and keeps changing. Our policies and strategies need to keep changing to keep up.
The Chairman also made reference to the heavy concentration of child poverty among Britain's black and minority ethnic communities, which is indisputably true. I was fortunate enough to have a debate in this Chamber quite recently on the discrimination and disadvantage facing Britain's Muslim communities, which experience by far the worst income poverty and many of the worst manifestations of poverty in the round. That is particularly the case for the Pakistani and Bangladeshi communities. There is also a concentration of poverty in larger families. We have yet to do enough to help families with a disabled person, either a parent or a child, and others. The progress to a single target must not mask the fact that we must make progress regionally in tackling child poverty among many of the groups that have the hardest to resolve difficulties.
142WH I want to emphasise again my concern about the Government's measurement of poverty and the before and after housing costs targets. I say that again with a regional bias, because London is where the disparity between before and after housing costs will be most stark. Currently, before housing costs, 24 per cent. of children in London are in poverty. After housing costs, the figure is 38 per cent. In inner London, 36 per cent. of children are in poverty before housing costs, but after housing costs, the figure is a staggering 54 per cent. The national average before housing costs is 21 per cent. and after housing costs, it is 28 per cent. There is clearly a disparity, as the Chairman also said. We must be careful about that, and in the age of cynicism, the Government must be careful too, so that it is not easy for our critics to claim that the goalposts are being moved. As a representative of a region where the before and after housing costs differential is by far the most dramatic, I must say that the situation probably worries me more than it would worry representatives of other parts of the country.
It is right that much will depend on the rigour and the quality of the material deprivation indicator that the Government are working on. However, the Committee was concerned, as am I and many organisations—the Child Poverty Action Group, Shelter and others—that if there is a significant difference between the after housing costs measure and the new material deprivation measure, people will look askance. It will open the Government up to a great deal of criticism. The Government need to provide assurance from this day forth that the material deprivation measure will be constructed in such a way as to capture children from families with high housing costs.
I want to continue on the housing costs issue by drawing attention to a development that we referred to in passing in the Select Committee report but that has gathered pace since it was written. The implications for the anti-poverty strategy and for the Department of the Government's policy on rents causes me much anxiety. The overwhelming majority of tenants renting in the social housing sector are on benefits, and that is where poverty is most intensely concentrated. The Office of the Deputy Prime Minister has been engaged for some time in a policy of what it calls rent restructuring. Its intention is laudable in many ways, and rational: to try to minimise differentials between rents in the registered social housing sector—the housing association sector and in council housing provided both directly and through the various other manifestations, and to link rents more closely to the market value of properties.
A recent ODPM consultation document proposes a further acceleration of the rent restructuring policy. It will mean that local authority tenants pay £11 more per month; that is 5 per cent. more on top of a 15 per cent. real terms increase already planned under rent restructuring. In the housing association sector, tenants will pay £17 more per month, or 6 per cent. on top of a 5 per cent. real terms increase in RSL rents. What those dry statistics actually mean is that a pensioner with an occupational pension of £12,000 per year net of tax and national insurance and a current rent of £66 per week would pay a third of their income in rent. A family comprising a couple with two young children and a rent of £81 per week—which is about the cost of the social 143WH housing rents in my area—would have to increase its earnings by £25 a week to avoid relying on housing benefit.
The Government's rent policy will do two things, and I would like the Minister to address them: it will increase the work disincentive by deepening the poverty trap for families paying rent in social housing, because their rents will be higher and therefore higher to escape from; and it will push up the housing benefit bill. Has he discussed with the ODPM the housing benefit implications of this policy?
In terms of the child poverty agenda, the work incentives policy and the social exclusion implications concern me most. Having already begun pilots of a standard housing allowance in the private rented sector—for which there is much to be said—the Government are now moving towards introducing a pilot of a standard housing allowance in the social rented sector. That causes me much concern. Taking child poverty in the round and accepting, as the Government do, that housing conditions and the quality of housing are an important factor in child poverty, this policy will mean that in areas of high housing demand—of housing shortage—people will have to choose between their income and the quality of their housing. Those are the poorest people; I appreciate that there is a market choice higher on the income spectrum. This will intensify social exclusion, as the poorest people will be driven towards the poorest-quality and cheapest housing.
The Government's response to the child poverty report did not engage enough with some of the issues that we flagged up about London—in particular, its higher costs. The issues affect the whole country, but London is at the sharp end. If the Minister has not done so already, I hope that he will have the chance to study the Cabinet Office report on London, which was published yesterday. Its press release states:Higher costs of housing, council tax, childcare and transport costs mean that the tax and benefit system has a different impact on work incentives in London than elsewhere in the UK.That is the first time that the Government have seriously acknowledged that something different needs to be done to ensure that the high-cost area agenda, which relates to London, although not exclusively, has to be tackled.
Some 97,000 homeless households are in temporary accommodation and on present projections, that number is set to increase by about 5,000 a year. Families in temporary accommodation are priced out of the labour market. Rents in my constituency, many for ex-council properties, are £400 a week. The situation creates an absolutely insuperable hurdle for working families.
The progress made on tackling homelessness and bed-and-breakfast accommodation has been a real achievement by the Government. However, if we are to continue with that progress, accepting that the growth of the temporary accommodation sector will continue to increase, the Department for Work and Pensions must grasp that nettle and tackle the issue of work incentives for families in temporary accommodation, so that the people who have the double burden of being poor and having been homeless are not locked out of the labour market.
144WH The Committee welcomed what has been done so far to tackle housing need through the decent homes initiative. I welcome the Government's announcement in the comprehensive spending review of investment to create 10,000 new homes, and I welcome the fact that the DWP has agreed to include a temporary accommodation numbers indicator in its child poverty list. That rightly carries on from the decent homes initiative.
However, a vital, huge and growing area of need that impacts on child poverty is still being missed: overcrowding and housing pressure, which are chronic and growing issues. Some 300,000 families live in overcrowded housing. I ask the Minister to hear representations from those of us who are concerned that movement on targets such as the decent homes initiative, homelessness and temporary accommodation should not squeeze out that critical area of deprivation and poverty.
Finally, I turn to child care. A huge amount of work has been done: the national child care strategy, the roll-out of Sure Start, the children's centres announcement, which was further enhanced by the Chancellor last week, the neighbourhood nurseries initiative and the enormous increase in out-of-school and holiday provision. Those things are very welcome. However, the child care strategy's concentration on families looking for child care in order to work indisputably has a detrimental impact, which might not be evenly distributed across the country, on unemployed households.
In our report, we stated that we were concerned that the informal child care sector, which includes child minder networks, crèches, drop-ins and playgroups, was being squeezed. We said that that was in part due to pressures on local government funding. The Government disputed that in their response to the report, and said that there had been a diversification into early education and full-time child care.
That is true only up to a point. It is not the case in my constituency or in many others. There are massive closures and a lot of churning, although there has still been a huge net gain. That churning is impacting most seriously on families who are not in the labour market but some distance from it, and who will not make the step quickly into full-time employment and requiring full-time day care. The Department should liaise with the Department for Education and Skills about that urgent area to ensure that strategies are in place to allow families and communities in need to get the child care responses that they require as they take steps towards training and preparing themselves for the labour market.
Our report flagged up, as did our earlier report on child care for working parents, the need for some modifications to the tax credits regime. I am a little concerned that the Department continues to argue that not much modification is required and that 320,000 recipients of the child care tax credit is an adequate number. It is far better than in 1999, but it is still modest; and the scheme is not working in high-cost areas or for larger families. The line in the Government's response about the need to incentivise parents to shop around for affordable child care misses the point. As a parent, I 145WH think that we need stable and consistent child care—care that we can cherish as we cherish our children; it is not a market good or a supermarket purchase.
§ Mr. Hopkins
I draw my hon. Friend's attention to a report in last week's Sunday Mirror, which said that the average cost of child care in this country is about £134 a week but that in the Scandinavian countries of Denmark and Sweden it is zero. Should we not aim for zero?
§ Ms Buck
Yes, we should aim for zero. We have a long way to go, and further progress is required. At the moment there is a real gap in affordability and supply. I have no problem with paying for my child care—as a higher earner, it is right and proper that I should do so. However, a mix of taxation and charging is not unreasonable for child care for younger children. That might change as children aged three and four move to early education, but lower-income families—I would define that term generously—should not have to contribute.
The report said that child poverty should be at the heart of the strategy, that poverty reduction could be achieved through work incentives, and that a wide-ranging series of strategies would be needed to improve neighbourhoods and life chances. However, inequality matters too. My serious worry is that although the IFS report gave the Government due credit for their work in raising incomes for the poorest, it also flagged up the fact that inequality, which rose sharply during the 1980s, remains historically high.
An opinion poll earlier this week showed that many members of the public do not believe that Britain has become a fairer place. Although we need to make further progress in tackling the incomes of the poorest, we should recognise that inequality in itself has moral, social and economic disbenefits to society. Unless we do so, poverty reduction will not occur as widely as we would wish; and we will not achieve all that we can to transform the country.
§ Tony Baldry (Banbury) (Con)
The hon. Member for Regent's Park and Kensington, North (Ms Buck) made some extremely good points about the impact of housing costs on poverty. However, their impact is felt not only in London, as I hope to make clear.
I congratulate the Select Committee on producing an excellent report. Most observers would expect politicians to agree on public policies to eradicate child poverty. No one wants child poverty—everyone wants to eradicate it—but, like poverty on a global scale, everyone would do it differently.
The buzz word in the report is strategy. Many of the Committee's conclusions focus on the national strategy on child poverty. For instance, it recommends that the strategy developsimmediate policy initiatives to assist children in severe and persistent povertyand that it shouldearmark new resources to provide for adequate school clothing for all low income families".146WH The Committee also recommends that the national strategy shouldensure nutritionally balanced school mealsandexpand the role of the social fund to help tackle severe and persistent child poverty".The national strategy is clearly seen as the means to ending the grinding and unremitting poverty in which, shockingly, many children live in the United Kingdom.
As one would expect from a Select Committee report, the recommendations to which I have alluded and many others deal with the detail of child poverty and how the Government should tackle it. On the big picture, however, I was slightly surprised to read the recommendation that a separate fighting fund should be set up for London and other city areas. Of course, I acknowledge that London often has the most visible poverty, but there is often hidden poverty elsewhere—the sort of poverty that we may not see because we are blinded by the wealth seen elsewhere in those areas. Those pockets of hidden poverty, as the hon. Member for Stroud (Mr. Drew) mentioned, are often in rural areas. I represent a constituency in north Oxfordshire that I suppose could be described as essentially rural.
People often think that the sun is always shining for people in Oxfordshire. For some, maybe it is. However, for many, especially children, their daily experience is of the poverty that one associates more with inner-city streets—poverty that means that they have a tough upbringing as children and a tough life as young adults, made all the tougher by the fact that they live in an area where the cost of living is way beyond their means but where they are trapped. The only way in which they can escape is often to end up homeless in areas such as London.
Let us consider two wards in my constituency. Banbury was an overspill town in the 1960s. Large numbers of new houses were built at that time and people moved from inner-city London and Birmingham, many to work at the General Foods factory—now Kraft's factory—in Banbury. In Ruscote, according to the last census, 30 per cent. of families have no central heating; 45 per cent. of young adults do not hold any further education qualifications, often because they have not had the opportunity to gain them; and unemployment is more than double the average for the district.
Ruscote is not alone. Neithrop, another ward in Banbury, is much the same. Almost 40 per cent. of people have only the very basic qualifications because of limited opportunities, and more than double the area average are unemployed. Almost 10 people in every 100 live their life as a carer, including young people under 20 looking after a sick parent or relative. It is no surprise that those areas show deprivation that is more familiar in some inner-city boroughs, when as children living in Neithrop and Ruscote they are unable to get the qualifications that they need and as young adults they simply fall into the poverty trap, only to be faced with the huge task of climbing out.
Although I agree with the Committee that child poverty is often widespread in London, it can be as acute, if not as frequent, in some rural areas. I would have welcomed a conclusion that highlighted hidden child poverty in other areas, particularly rural areas, 147WH rather than reinforcing the notion that it is primarily—or only—an inner-city phenomenon. It most certainly is not.
The Government usually allocate funds on the basis of formulae, which often do not take sufficiently into account the fact that there can be pockets—wards—within districts where there are serious social concerns. That is not necessarily reflected in the formulae for allocating local authority grant, money through the health authorities, or other funds. I hope that the Minister will recognise that fact when drafting the national strategy on child poverty.
The idea of a national strategy will, I suspect, be given added thrust if, as expected, the Prime Minister appoints a new children's Minister or commissioner—it has been mooted that there may be another seat at the Cabinet table—as part of the forthcoming reshuffle. The Select Committee points out in its report how the Governmentshould increase its attempts to tackle child poverty via all Departments whose responsibilities touch on child poverty.I agree. Indeed, the Government agree. However, the reality has been different. Even with the earlier appointment of a Minister for Children, albeit one outside the Cabinet, there has not been much joined-up government to reduce child poverty.
One need only consider the experience of the Sunshine centre in my constituency, which helps 1,200 children and parents—that is a lot of children and parents. The centre is doing everything that the Government set out in the Green Paper, "Every Child Matters". It was set up in early 1998 and its purpose has been to help parents, carers, families and children living in the areas of north Oxfordshire that I have referred to: Neithrop, Ruscote and Grimsbury.
The Sunshine centre has been extremely good in bringing together large numbers of statutory and non-statutory stakeholders, including the Community Fund, the Basic Skills Agency, the Children's Fund and the two local authorities—Oxfordshire county council and Cherwell district council—as well as private benefactors. However, the mind-boggling range of organisations that the centre has to juggle to help those less fortunate who live in north Oxfordshire means that, were it not for the excellence and dexterity of the management team at the centre, not nearly so much might be achieved.
The centre does an amazing amount and is an enormous benefit to local people. It necessarily has to involve a lot of different people and organisations. It provides personal support for children and families, does outreach work, supports local schools facing specific challenges, encourages volunteers, promotes health clinics and health and well-being locally, and provides a range of activities, from Tots-R-Us to after-school clubs. In fact, the initiatives that it undertakes are almost too numerous to set out. If one centre in one constituency has to juggle that much to gets its funding and fulfil all the roles necessary to reduce child poverty, as outlined in the "Every Child Matters" Green Paper, there is clearly a need for a genuine children's Minister, with the genuine authority that would be indicated by a Cabinet seat to promote the joined-up thinking that will be necessary if we are to halve child poverty by 2010 and eradicate it by 2020. Therein, I suspect, lies the problem.
148WH I join the Committee in congratulating the Government on meeting some short-term child poverty reduction targets—notably those for this year—but meeting the 2010 and 2020 targets will be far more challenging than the Government realise because it will involve helping the most disadvantaged children. Employment will make a major contribution, which, in turn, will necessitate ensuring that there is even greater availability of affordable child care, on top of that already announced by Ministers. Indeed, making accessible and affordable child care available to all by 2010 should he the Government's goal.
Furthermore, if we are to halve child poverty by 2010, the poorest and most desperate families must be given an extra £10 every week for every child. That is the very least that they require. Departments are now working out how to spend the money that the Chancellor has given them, and Ministers will need to fulfil the commitment to provide £10 every week for every child if we are to halve child poverty in just over five years.
Clearly, the national framework on child poverty will have to look at the employment and child care on offer to parents, the education available to the disadvantaged and the provision of basic benefits to help to lift children and parents out of poverty. That will involve working with a wide range of age groups in a wide range of areas. Given what is happening in north Oxfordshire, the Children's Fund will be one of the bodies best placed to help. Indeed, when the Cabinet Office set it up in 2000, it made it clear that it would act as a bridge between Sure Start, much of whose work is aimed at very young children, and Connexions, which is aimed at people aged up to 19. I have seen a good number of local Children's Fund projects, including the Sunshine centre, the Carers centre and the Fritwell centre.
The Children's Fund works in areas such as Ruscote, Neithrop and Grimsbury, where poverty is deeply rooted, starting with parents and finishing with children. Only four months ago, however, it issued an SOS to all Oxfordshire Members of Parliament. That was pretty brave for a Government agency. It openly said that it was fighting Ministers over plans to withdraw almost half its funding for this year. In fact, Ministers relented and did not cut anything from its budget this year. Crucially, however—this cannot be stressed enough—they were unable offer any assurance that those cuts would not be made next year. In Oxfordshire, that means that the 50 per cent. cut could simply be made in 2005–6. It goes without saying that losing such a huge amount of funding would create huge problems locally.
As things stand, Oxfordshire has £3.3 million in funding until 2006 to help children aged between five and 13, and their families. The money is intended to help children who are often socially excluded and disadvantaged, including those who are disabled or who live in rural areas or in poverty, as well as isolated parents and parents with mental health difficulties. With no assurances to the contrary from Ministers, there is a suspicion locally that the original plan of making cuts in the total budget of 15 per cent. in the first year and 30 per cent. in the second year is still looming large over the Children's Fund and its projects and that it has simply been delayed.
A 15 per cent. cut in funding by 2006 will almost certainly affect a number of projects in Oxfordshire, including the youth offending team, which receives just 149WH £20,000. Almost all its work would be reduced. A 30 per cent. cut in 2005–06 would, in the words of the chair of Oxfordshire's Children's Fund, result inabandoning much of our programming in order to meet the government's target.Given that the Select Committee points out throughout its report that the Government are not on track to halve child poverty by 2010, why are the Government still threatening a cut of almost 50 per cent. in Oxfordshire's Children's Fund? Why, indeed, are the Government threatening any cut to the Children's Fund? Why is the Children's Fund seemingly not part of the national strategy to reduce child poverty, when it is meant to bring together all the disparate groups involved in child poverty, which are currently not sufficiently joined up?
§ Rob Marris (Wolverhampton, South-West) (Lab)
The hon. Gentleman is making an impressive and helpful speech. I would like to find out how much cross-party consensus there is in the House about measures to tackle child poverty. Implicit in what he has been saying is that he supports the goal of halving child poverty by 2010, that he wants the Children's Fund at least to be maintained, and that he agrees with the Select Committee about the £10 a week for the poorest children. I also understood him to say that he would like an expansion of support for child care as it relates to employment particularly.
That is all very helpful. What the hon. Gentleman is saying is at odds with what Labour Members perceive his Front-Bench team to be saying about Government spending. Could he clarify that? Does he perceive his Front-Bench team's view differently, or does he hold a different view from that team?
§ Tony Baldry
I take responsibility in this House for what I say, but cannot take responsibility for what anyone else says. This week, I have gone through a different Division Lobby from the leader of my party when voting on Iraq and other issues. The hon. Gentleman will have to listen to my speech, and if he wants to ask about Conservative Front Bench policy, he will have to ask the Conservative Front-Bench spokesman.
Why do Ministers state in the "Every Child Matters" Green Paper that the emphasis should be on the work that voluntary groups undertake with local social services, when that involves exactly the group of children that will be most affected by the cuts? Uppermost among the needs of children who are vulnerable is stability, and charities need stability to help children. Removing funding removes the stability that charities can offer children. One need only attend to what the Children's Fund has been saying throughout the country, not just in Oxfordshire. It is obvious what problems local charities and NGOs will face in dealing with the Government's cuts.
The Carers centre, for example, has employed much-needed additional staff on the basis of funding provided through the Children's Fund. What is likely to happen to those staff, the projects that they run and the children who benefit from the projects? The Carers centre is just one of the many NGOs in north Oxfordshire that might be adversely affected.
150WH It will not be possible for local authorities to make up the shortfall. Oxfordshire county council social services are already under intolerable pressure, and the county council has had to increase council tax by 6 per cent. again this year to cover its budget. Council tax in Cherwell has increased by almost 30 per cent. since 2001. Social services, therefore, are not in a position to help the children whom Ministers have recently identified as being in particular need.
I ask the Minister to visit some of the excellent projects such as the Sunshine centre and the Carers centre and witness the superb work that they do, before he even thinks about pulling the rug from under them early next year. Because the Sunshine centre just happens to be in Prescott close, I wrote to the Deputy Prime Minister asking him to visit it. That was not least because I should genuinely welcome more visits from Ministers to my constituency. I perfectly understand why Ministers might visit only constituencies where there are by-elections, or those of their Labour parliamentary colleagues, but if they do not visit the full range of constituencies in the country they may sometimes gain a stereotypical view of what a seat such as Banbury is like. That applies to many other constituencies, too. I would very much welcome a visit to the Sunshine centre in Banbury by the appropriate Minister.
Many of the systems to tackle child poverty are already in place, but there are only five and a bit years to go until the 2010 target date for halving child poverty. There is simply not the time or the will, among the people who have built up infrastructure locally to tackle child poverty, to do it all again and introduce wholesale changes. The structures and systems already exist. What is needed is a Minister with influence in the Cabinet to get the infrastructure working in the parts of the country where it is not working now. To lose the Children's Fund and have it replaced by an unknown body—or, worse still, to expect other parts of the system to bear the strain—simply will not work, and will most likely result in areas such as Oxfordshire, which are already perceived as prosperous, losing out even more to the inner cities.
I ask the new children's Minister, or commissioner, if and when one is appointed, to commit to the continuation of the Children's Fund, so that areas such as Oxfordshire do not feel marginalised from the child poverty debate, but can continue the good work that they have been doing over recent years. Such a commitment, as part of the national strategy on child poverty, would be welcomed by everyone and would mean that we could all help to ensure that there are no areas of hidden child poverty left in Britain.
§ Miss Anne Begg (Aberdeen, South) (Lab)
I should point out to the hon. Member for Banbury (Tony Baldry) that, because Labour has done particularly well in Scotland, and indeed across England, in winning non-traditional Labour seats, when Ministers visit Labour-held constituencies they often get a picture of a full range of different socio-economic groups. My constituency, according to most definitions, is affluent. It scores very well on all of the indicators, such as high employment, low unemployment and high wages. Housing costs are high by Scottish standards, but 151WH certainly nothing like the high housing costs in London. It is a measure of how well the Labour Government have been doing, or how badly the Conservatives are doing, that Labour holds a full range of constituencies, including many rural ones, in Scotland as well.
However, that was not what I had intended to say. As a member of the Select Committee, I am delighted to be here this afternoon to discuss the report on child poverty in the UK. The Committee is hard-working and tribute has already been paid to its Chairman, the hon. Member for Roxburgh and Berwickshire (Sir Archy Kirkwood). The fact that he and two thirds of the members of the Committee are present, on the last Thursday before the summer recess, is also a testament to how hard the Committee works and how seriously it takes this subject. It was an important subject for the Committee, not least because child poverty is at the heart of any issue relating to social equality. It is a cross-cutting issue and will not be solved by one Department—the Department for Work and Pensions, in the case of what our Committee is charged to do.
Child poverty is also a cross-Parliament issue. In Scotland, and indeed in Wales, many of the measures that need to be put in place to help to end child poverty will be delivered by the devolved Parliaments, rather than necessarily just by Westminster. However—it is worth making this point for any members of the Scottish press who happen to be present—there are still important decisions to be taken at Westminster with regard to Government spending in Scotland. Indeed, 55 per cent. of all Government spending in Scotland is still determined by UK Ministries, and the DWP is one of them. If Scotland is to deliver on the promise to end child poverty in a generation, it is not just what the Department for Work and Pensions in Westminster does that is important, but what the different Ministries in the Scottish Parliament deliver.
I congratulate the Government on what they have done. Often in debates such as this, because we consider what still needs to be done, the balance can appear negative. However, from what has been said already this afternoon, Mr. Deputy Speaker, you should have gathered that most of us on the Committee are pleased with what the Government have done to date and the enormous strides that they have made. We found that they were on track to hit their target for the end of this year, which is to reduce child poverty by 25 per cent. We know that, in the case of 2010, things will be much more difficult.
As my hon. Friend the Member for Regent's Park and Kensington, North (Ms Buck) said, the thrust of the Government's promise to end child poverty in a generation is bold and ambitious. It is extremely easy to say, and many people say it and have said it. However, what is easy to say and what is easy to deliver are two different things. I was reminded during the contribution of the hon. Member for Banbury and the intervention by my hon. Friend the Member for Wolverhampton, South-West (Rob Marris) that fine words are extremely easy to say, but that it is much harder to put the hard cash or the commitment in policy behind those fine words to make a difference. I believe that the Government are committed to making a difference and ending the scourge of child poverty that we have suffered in this country.
152WH These days, I keep referring to the hon. Member for Roxburgh and Berwickshire—our blessed Chairman—as my hon. Friend, which perhaps shows that we have become a bit too friendly on the Committee. However, I have just forgotten what he said—perhaps I should not have gone off on a tangent.
§ Rob Marris
Does my hon. Friend recall that the hon. Gentleman said in his opening remarks that when the Government took over in 1997 the United Kingdom had the worst child poverty figures in the European Union? He made the point that although we have edged up the table, from 15th to 11th, those figures are from 2001 and are out of date.
§ Miss Begg
I told you that we were close on the Committee, Mr. Deputy Speaker—my hon. Friend read my mind and knew exactly what I was going to say, even though I myself had forgotten it. His point is exactly correct: we had a dismal record in the past and although we are beginning to improve, we still have a long way to go.
The problem with using relative measures, which we will continue to do, is that as a country becomes more prosperous they become moving targets and harder to achieve. However, I still believe that we still should try to ensure that everyone is above 60 per cent. of median earnings. That should be the measure to strive towards, not only because of the cash that it would put into the pockets of families, but because it would help to address the equality issue to which my hon. Friend the Member for Regent's Park and Kensington, North alluded. If we are to break the cycle of deprivation and poverty, the goal must be equality and giving young people life chances, not just putting cash in people's pockets. Too many families have been thrust in to that cycle, but have not been able to climb out of it, because the life chances of the next generation have not been materially improved, as compared with those of previous generations. I shall return to that point at the end of my contribution.
Our Chairman made a number of points about making work pay, which is, rightly, the basis of the Government's anti-poverty strategy. As a disabled person, I am often accused of perhaps over-egging the importance of work, but it is important, not just in terms of the money that it earns for a family, but in terms of family self-esteem and the well-being that families feel in contributing to society, rather than necessarily being just a recipient.
The Government have done a great deal to make work pay, which is also important, in ensuring that people have the incentive to come off benefit and go into work. The child and working tax credits have played a large part in that, although I have some concerns about them. I am aware that the Minister is not directly responsible for tax credits, which are obviously a Treasury matter, but the way in which the system has worked and the problems involved in its implementation last year have affected the income of many families and will continue to do so. I will not go into too much detail, but I hope that the Minister will take the issue seriously and look into how tax credit overpayments and clawbacks are working—they are probably leaving some families on an income below that 153WH which the Government have deemed necessary for a family to survive on. It is from that angle that I would like him to consider the matter.
I would like the Minister to give an assurance that he will look into what is happening as a result of last year's problems, which are compounded by the fact that the system is not working as smoothly as it could this year. Sometimes there has been a double clawback—there is the in-year clawback as well as the problem from last year.
I have organised an early-day motion asking that the Treasury consider writing off all overpayments made through the Department's error. I am afraid that I have not got particularly far in asking the Inland Revenue to do that, but I always live in hope. Writing off overpayments would have made life easier, because it would have meant that families could have started this year with a clean slate and would not have had the burden of paying back overpayments from last year.
Part of the problem is that the tax system is so generous that overpayments have sometimes been very high, particularly if there were various add-ons because of a disabled child, or extra child care costs, and so on. The very generosity of the system has created problems for, or made things slightly more difficult for, families living close to the breadline who received overpayments.
§ Mr. Steve Webb (Northavon) (LD)
On the issue of tax credits, does the hon. Lady share my concern that, as most of the support for poor children will now be delivered through tax credits and not weekly social security benefits, the system may be much less responsive than it needs to be? As she has intimated, tax credits try broadly to get things more or less right over a year or so and make clawbacks the next year, but poor people need money today. Leaving aside the generosity of the system—and I accept that it is generous—is she satisfied that using tax credits as a key way of getting financial help to children is structurally the best method of doing so?
§ Miss Begg
If the tax credits were working absolutely as they should, and if the in-year calculation could be adjusted in under a month in order to ensure that, things could work; but that: depends on people telling the Inland Revenue of the change of circumstances, the calculation being done and people being told of that quickly. That is assuming that everything goes smoothly, and that is not happening at the moment. That is why I ask the Minister to look into the underlying principles of the tax credit system and consider whether it can deliver for the poorest families.
I know that those on income support have not yet migrated on to the new system, but there are people who have fallen out of work and are coming under the new system. Perhaps the time has come for the DWP to consider the impact of the workings of tax credits on the whole system of family support, for which that Department is responsible. I know that the issue belongs with the Treasury, and it is unfair to put everything on to the Minister, but this is an important matter, because all the issues will impact on the final income of the families we are trying to help.
154WH It is interesting that the Select Committee today published another report, on the use of IT in the DWP. We are very critical of the workings of the Child Support Agency and the failure of the IT system to deliver the new, slimline, easier, more transparent payment system for child support. Child support is an important part of the equation for ensuring that families with children get the money to which they are entitled and that they share in the prosperity of the parent without care. If the parent without care is on a reasonable income or is a high earner, the children should get the benefit. Much of the report that we are discussing today is important, but there is a range of other policy areas that impact on families' incomes.
I want to consider a couple of the difficult groups that will pose a real challenge for the Government if they are to meet their target to halve child poverty by 2010 and eliminate it by 2020. One group is families in which there is either a disabled adult or a disabled child. Things have changed dramatically in recent years. Because of advances in medical science, disability is not a thing of the past, as some people might have thought it would be—they might have thought we would be able to cure everything—but more disabled people are living longer and have life aspirations that were undreamed of 50 years and even 20 years ago.
In some families, therefore, a severely disabled child is cared for at home, not in an institution, as would have been the case 20 or 30 years ago. They will be expected to go to a mainstream school and participate in family life. However, that can put an enormous strain on the family, and it has implications for whether one or other parent can work. There is extra help with child care, such as the premiums on the child care tax credit, but sometimes it is very difficult to source child care. My hon. Friend the Member for Regent's Park and Kensington, North talked about the difficulties in that regard. Things have improved enormously, and I have no quibbles with the Government's basic policy direction on child care, but it is still difficult for all people at all times and with different family needs always to be able to access child care.
The problem of supply is particularly acute when a child has especially difficult needs. In addition, a child with a severe disability may live at home much longer than other children. Although there is often an aspiration that they will be able to move on to independent living, the family's commitment will go on for years beyond what is usually regarded as the childhood years.
Of course, there are also families in which a parent has a disability. I am keen that as many disabled people as possible should work and that disability should not rule work out. Indeed, in some cases, including this job, it can be an advantage; it is quite nice to stand out in a crowd occasionally. However, work is not an option for some people with disabilities, and it is important that the children in those families do not suffer the negative life chances that may result from having a parent who is not as active and cannot take them out as much as other parents.
Some people will never work. They may not have obvious disabilities, but for a range of reasons and with the best will in the world, we will never get them into the work force. However, child care is very important for them, too, simply because it may be the one chance that 155WH the children have to experience life outside the home. It may be their one chance to be taken out and to have the interrelationships that children need. As my hon. Friend said, child care should not be just for those who are in work. In some family circumstances, because extra help is needed with parenting skills and all sorts of other things, child care is important if we are to ensure that the child or young person is given the same life chances as children in other households.
That leads me to my final point, which is that we must ensure that we do more than just give out cash. I am not saying that cash is not important—of course it is—and it is important to have the measure of income levels, but as our report says, that can be somewhat mechanistic at times. We can measure how much money comes into a household and material deprivation, but it is also important to find a way to ensure that the individual's life chances are improved, and that is not down just to the Department for Work and Pensions. With the best will and all the money in the world, other policy measures must be put in place. Money alone will not ensure that some children are lifted out of a life of poverty and deprivation.
It is not just about the obvious things: it is not just that there has to be a good education system, so every school in every area is good; it is not just about good, affordable housing and ensuring that we take young children out of damp tower blocks, where it is impossible for them to go out to play; it is not just about ensuring that children have healthy, nutritious food; it is also about making sure that a drugs policy is in place, under which the children of two parents who are both heroin addicts are given help to kick the habit, so that they can be competent, good parents. I have never met a drug addict yet who does not feel strongly that their children should be given the best, but it is often difficult for them to get out of the cycle that they have got themselves into and help their children. We need to consider those groups, too.
We are talking about policy beyond the Department for Work and Pensions, but it has the challenge to solve the more difficult cases and go from a good start to ensure that we meet the targets and, for the first time in history, end the scourge of child poverty.
§ Andrew Selous (South-West Bedfordshire) (Con)
As a member of the Select Committee that produced the report, it is a pleasure to take part in this debate and to hear about the perspective of other hon. Members who did not serve on it.
The report focused on child poverty, following the Government's objective to eradicate it within a generation. However, on some of our overseas trips during the course of our studies, we were met with a little surprise that the UK was focusing so much on child poverty. The comment was made that other countries, including France and Denmark, were focusing on poverty within families and that that was being considered across the scene. Although we have heard a number of times this afternoon that there are 3.6 million children in poverty, as the Government define it, it is worth remembering that, by the same definition, some 13 million people in the UK are living in poverty. Some of those people, particularly pensioners, have been the 156WH subject of a lot of focus, but if the children and pensioners were taken together, we would still be short of that 13 million figure. Let us not forget the other people who deserve a chance to fulfil their potential.
Definitions always bring their own problems and with a relative target there is always the slight danger that, as the economy does well and there is economic growth, it is more difficult to achieve. The Government are right to have both a relative and an absolute measure of poverty, because it is not healthy in society if income differentials get too far apart. However, by the same token, it would be perverse if any Government were to be hit over the head because the economy was doing particularly well and that happened to make the target harder to achieve.
On the definition, there was strong concern in the Committee about the change from an after housing costs basis to a before housing costs basis. That was met with considerable puzzlement by Committee members. Our constituents do not have a choice whether to pay their rent every month and, particularly in high-cost areas, rent is such a significant part of people's weekly budgeting. The hon. Member for Regent's Park and Kensington, North (Ms Buck) has already spoken about her area. The area that I represent is in the south-east of England. It has similar problems that are not so pronounced, but it would make a large difference to my constituents if these matters were just considered on a before housing costs basis, because that would not be a true reflection of their financial situation.
It is important to state at the outset that a sound economy and strong economic growth underpin a Government's chance to reduce poverty, whether child poverty or other types of poverty. That is the basis on which everything rests. Since about 1993–94, there has been a consistently good economy in this country. We turned around some rocky economic problems and many improvements to the child poverty statistics were founded on that.
As the hon. Member for Aberdeen, South (Miss Begg) said in her contribution, which I much enjoyed, it is important to ensure that people have the greatest potential not only to get a job, but to maximise their earnings when they are in work. I am struck, as is the Chairman of our Committee, by the American approach to such matters, which they often call ABC—getting a job, obtaining a better job and looking at a career. It is an excellent first step to move people from the unemployment queues into work, but for many people there is much in-work poverty. A permanent life on tax credits lifts them, hopefully, beyond the poverty level. However, many people are not lifted beyond the poverty level even with tax credits. None of us is happy about that and we need to pay attention to such matters.
When preparing for today's debate, I noted that, within the United Kingdom, 8 million people still lack basic skills; 28 per cent. of Britons are qualified to apprentice skill craft and technician levels compared with 51 per cent. of people in France and 65 per cent. in Germany. Furthermore, to pick up some of the comments made by the hon. Member for Aberdeen, South, 36 per cent. of adults of working age—more than 30 million people—lack basic school leaving qualifications compared with 28 per cent. of people in France and 17 per cent. in Germany. To put the debate in a broader context, unless we keep the economy sound and ensure that we continue to invest in our work force, 157WH so that they have the potential to earn money to enable them to get out of poverty for a lifetime, everything we try to do in the Department for Work and Pensions will always be much harder to achieve.
Within my constituency, I am delighted to see the co-operation that exists between the learning providers, the student population and mature students. The hon. Member for Luton, North (Mr. Hopkins) and I frequently attend the learning partnership meetings between the parties concerned in Bedfordshire and Luton. It is excellent to see what is happening to help people to gain the skills that they currently lack.
I commend the work of the Learning Warehouse in Leighton Buzzard in my constituency. It is a collaborative venture that brings together for the first time in the United Kingdom different learning providers from many further education colleges to run varied courses. It is wonderful to see young people full of confidence as a result of that organisation. It is a great credit to Bedfordshire county council, which set up the project.
One of the reasons for poverty that did not receive as much focus in the report as it should have done is debt. Like many other hon. Members, I am extremely worried that UK personal debt has now passed £1,000 billion, the results of which I frequently experience in my advice surgery. I refer to people who have mortgage problems and those who have borrowed too much on credit or store cards. Perhaps they were forced to do so against their better judgment, or prompted more strongly than they should have been. Such matters lead to real problems that result in a great amount of child poverty. It is important to consider what we can do in practical terms to remedy such problems.
I was impressed by the work of the excellent charity Credit Action which visits many schools throughout the country; its excellent director, Keith Tondeur, is a frequent visitor throughout the country. It is particularly important to provide our young people with basic and sound money management skills, particularly with regard to debt—credit is too easy a term; let us give it its true name—as they leave school and before they enter the world of work.
I salute the work of credit unions, which do an excellent job. The hon. Member for Luton, North and I share an interest in that the Chalkhill Blue credit union in my constituency has just merged with the Money Matters credit union in his constituency. The merged credit union does excellent work in Dunstable and Houghton Regis. This is very basic work at grass-roots level, which we need to do to ensure that we build a savings culture and that people can borrow at rates that are less exorbitant than those charged by many people in this business. The "sub-prime market" is a horrid term—I particularly dislike it. It refers to the extra-loaded interest rates that people who have no security are very often charged. We need to monitor that and to encourage the extremely important work of credit unions. Many surveys show that debt is the major cause of relationship breakdown.
When we examined the data on children in poverty, we discovered that, of the 3.8 million children living in poverty in 2001–02, some 1.7 million were in lone-parent 158WH households and 2.1 million children were in couple households. That is significant. Roughly a quarter of all British children in the whole of the United Kingdom are in lone-parent households, yet that one quarter of British children are disproportionately represented in the overall number of children who are poor: 45 per cent, of all children who are poor come from that 25 per cent, segment.
We also know that the 80 per cent, of children in poverty with lone parents live in households in which no one is in work. Surprisingly, by contrast, of the 2.1 million children in couple households who are in poverty, some 70 per cent, of the parents are in work. That means that nearly 1.5 million children whose parents are in work have not been brought out of poverty by the tax credits that the parents receive. I mention that because so many commentators on both sides of the House agree that we need to address that issue.
In paragraphs 187 and 188 of the report, the Committee commented on the fact that in February this year the chief executive of Sure Start, Naomi Eisenstadt, commended the preventive work that several voluntary organisations have started to do to ensure that couples stay together. Too often, we in this country intervene when things have already gone too far, and it is excellent that Naomi Eisenstadt picked up on that point.
I was particularly pleased to hear of a meeting in my constituency that was convened by a group of people concerned about youth homelessness. When they looked into the issue, they realised that relationship breakdown was the major cause. The group is committed to setting up a community family trust to work with schools, registrars and health visitors. Given what has happened elsewhere in the UK, the group genuinely believes that such a trust will make a significant difference in helping couples to stay together. We know from all the data that, where there are opportunities for both parents to work, both the mother and the father can help to provide child care. It is worth remembering that recent surveys show that men now provide a third of all child care. We also know from a study by the Joseph Rowntree Foundation that, in a trial in which a large number of couples were given a money no object chance to mix work and lifestyle, the majority of mothers and fathers wanted to work and care for their children.
Therefore, there are all sorts of reasons for encouraging community family trusts. Over time, spreading the work that they and other such organisations do will play a crucial part in helping the Government to fulfil their child poverty objectives.
§ Rob Morris
In the light of what the hon. Gentleman has said, does he, like me, think that, although very welcome, the £5 million of Government support for the marriage and relationships support grant, which is referred to in paragraph 55 of the Government's reply to the Committee's report, is somewhat low?
§ Andrew Selous
I completely agree with the hon. Gentleman. I fail to understand why, as a nation and as political parties, we happily write out the cheques for the costs of social failure, which are estimated to be £12 billion, £15 billion or £30 billion, depending which 159WH study one considers. However, they are universally agreed to be very high and to cause an enormous amount of emotional and personal upset, yet we spend only a tiny amount on prevention. We have got it completely the wrong way around. If I were in charge of my party's future financing, I would ensure that we put the money into prevention. I would find the money from somewhere and ensure that we focused on prevention. It is the sensible thing to do, and it need not cause any division between any of us. Frankly, however, until we and the Government take it seriously, we will not make the progress that we all want to see towards the child poverty targets.
As some of those who gave evidence to the Select Committee pointed out, it is a little puzzling that, welcome as the tax credit system is for many of the excellent things it has done, there are those who lose out because they are a couple family rather than a lone-parent family. Some 1.5 million children are in receipt of tax credits, but couple families—on the Government's own equivalised income measure of child poverty—are receiving less.
I will provide the Committee with a brief example. For 2003–04, where the 60 per cent, median is £181 a week, a two-parent family with two young children on a pre-tax income of £150 a week would be £17 below the poverty threshold that the Government have set—they would be on £164. A lone parent in the same position with two young children would be £37 above the poverty threshold—a gap of £54 between those two family units.
The Chancellor said recently that support should be based on family need, not structure. I broadly agree with that, but the evidence of the workings of some of the tax credits is that there are differential effects. I am particularly concerned that a man and a woman, who are essentially a couple and would like to share a home together for the sake of each other and their children, become much worse off if they move in together.
Without going into an over-detailed explanation, for those who want to follow it I refer hon. Members to page 114 in volume III of the report and the example of a typical couple on low earnings that shows how, if they moved in together, despite the reduction in expenses from not having to pay two lots of council tax and two lots of rent, the offsetting by the loss of their tax credits would be so much more that they would end up with £54 a week less.
By way of illustration, a couple came into my surgery recently. The man was carrying the child of the woman. The first thing that she said to me was, "I'm a single mother". I talked to them for a while. There was a problem about a gas bill that they could not sort out and a problem about some repairs to the woman's council house. The gentleman carrying her child was familiar with her problems—in some ways he knew more about them than she did—and it was obvious that they were a couple, yet they were living apart and the woman regarded herself as a single mother. If we are serious about trying to help couple stability and to help couples to stay together, we need to consider a tax credit system that causes such a big gap—£54 a week is a lot of money for many people—if we are to make progress on child poverty, which is what we all want to do.
As was said earlier, it is particularly important that the Child Support Agency does far more to get money through to those parents with care it is failing to reach.
160WH We know that, where couples are separated, 70 per cent, of parents with care are not getting all the money that the CSA has said that they should get. They either get none at all or not what they should get. There is more work to do on enforcement. Our Committee is considering the matter and I hope that we can do something that will make a big difference.
Time is moving on. The last area that I will mention is that of social enterprise. As we get the remaining children out of poverty, we know that we are going to be tackling those families who are furthest from the labour market and are the hardest to reach. I believe that social enterprises will have a big part to play in helping us to reach those families.
I think of the work of an excellent social enterprise employing some of my constituents called Recycle-IT. It is based in the constituency of the hon. Member for Luton, North but it employs a number of my constituents. It has had fantastic success at getting people into the labour market, keeping them there and providing them with skills, which conventional businesses would not have been able to do. It is excellent work. It is very seed-corn and quite small-scale at the moment, but I commend it to both the Committee and to the Minister for further study because I think that it is an area that can make a big difference.
§ Mr. Hopkins
I am pleased that the hon. Gentleman mentioned Recycle-IT. Is it not significant that the people who run Recycle-IT came from youth work and are aware of social problems? They are not simply business people.
§ Andrew Selous
The hon. Gentleman is right. Those people came from youth work, but they also had a high level of business awareness. Their business does not rely on grants. When I spoke to the founder of the firm earlier in the week, he was a bit disparaging about those social enterprises that just receive grants. A large one in Tottenham that did just receive grants has gone out of business. Recycle-IT is run on a business model as well but they manage to employ people who are far from the labour market. That is the crucial point.
§ Vera Baird (Redcar) (Lab)
I am indebted to my right hon. Friend the Chancellor's recent Joseph Rowntree Foundation centenary lecture "Our children are our future" for teaching me that it was as long ago as 1904 that Rowntree identified, for the first time, a life cycle of poverty: poverty during childhood, poverty for parents when they had children and poverty during old age. That life cycle of poverty was broken only for short periods—when an adult before one's children were born, or after they had grown up and left home.
The striking truth about what existed in the UK when we came to office in 1997 is that that life cycle of poverty had firmly and widely returned. The facts are that during the two decades before 1997, the number of children growing up in workless households rose to almost 20 per cent,—one of every five kids did not have a parent earning any income from work—and the number of children in low-income households more than doubled to 4 million. 161WH I, too, pay tribute to the Chairman of the Select Committee. As he said, we must never forget that the UK—one of the richest countries in the industrial world—suffered worse child poverty than nearly all other industrial nations. Indeed, anyone reading the reports on the condition of Britain in 1997 would be shocked by one straightforward but disgraceful fact: when Labour came to government, one in every three babies in Britain was born into a low-income household. They were born not into opportunity, but into poverty.
§ Mr. Paul Goodman (Wycombe) (Con)
The hon. and learned Lady has given some figures about relative poverty, which, as far as I know, are correct, although they are not all the figures. Can she confirm that expenditure figures are sometimes considered more reliable than income figures where absolute poverty is concerned, and that the living standards, as measured by expenditure figures, of all groups rose under those Conservative Governments?
§ Vera Baird
I will come to absolute and relative poverty and comparators in a moment.
In the context that I have just set out, as well as that of the importance of every child having the right to realise their potential, which was simply being denied by poverty, the Government set their ambitious long-term goal to halve child poverty by 2010 and to eradicate it by 2020. They started from a very low level. On the basis of absolute low income, 2 million children have been lifted out of poverty. It seems self-evident that they must have been in it when the Conservatives were in power. As measured by relative low income, 500,000 children have been lifted out of relative poverty, so they must have been in it when the Conservatives were in power. I believe that there is general agreement, which has been reflected in this debate and in the report, that the Government are on track to meet their target of reducing child poverty by a quarter by next April.
I wish to refer to two specific concerns arising from the report and the Government's response and then to make two extra points. First, I want briefly to add my voice to those of several members of the Select Committee who spoke about the adoption of the new measurement. The Government admit that the target on an after housing costs measure is much more challenging. The Institute for Fiscal Studies has done research on the impact of the change and shown that between 700,000 and 900,000 children who are counted as poor under the after housing costs indicator will not be counted as poor under the new measure. The risk is that the link with the old measure of 60 per cent, of median income after housing costs will be lost by moving to the new measure.
I appreciate that the Government make it clear in their response that the after housing costs measure will still be published in the households below average income figures, but it will not be in the headlines. The comparator will be more elusive in future years, which is undesirable. I would wish to persuade the Government of that, not only because of the scepticism that will inevitably be engendered, but because it genuinely will be more difficult to hold the Government to account.
162WH Secondly, the report recommended that the national strategy on child poverty should develop policy initiatives to assist children living in severe and persistent poverty, consider such problems explicitly and create an indicator against which progress could be measured. The Government's response simply says that a general strategy is already in place and that it will help children living in severe and persistent poverty. By the way, the new child poverty measure tackles the causes as well as the symptoms of child poverty and also will measure the depth and severity of poverty and its persistence. It is a triple-decker measure, which I have simplified for the purposes of my argument.
I am not completely satisfied that the Government are placing sufficient focus on the Committee's concerns about the extent to which the anti-poverty strategy is reaching the very poorest children; they seem to be unclear about how far it is reaching in respect of those in severe poverty. We were not alone in thinking that; the Child Poverty Action Group and Save the Children also believe that it is vital that the Government develop a range of specific policies for those children and create an indicator against which their progress can he measured.
Last year, Save the Children published research that estimates that about 1 million children in the UK are living in severe poverty. We made two suggestions about how to deal with that. We think that the Government should consider a large-family premium or an additional premium for more children, thereby weighting support towards large families. There is a strong case for such a premium, because larger families are at higher risk of experiencing child poverty and of being in severe and persistent poverty.
We also recommended expanding the social fund to help to tackle severe and persistent child poverty, and considering paying child development grants. In the past, the CPAG among others recommended that for times of particular financial stress—for example, when children have growth spurts and grow out of their clothes or when they move school and need new sets of clothes. The Government have not really said yes or no to those steps, particularly to the last one. Although they are relatively small steps and this is a very big issue, the Government should place greater focus both on them and the issue.
There has been substantial recent publicity about the difficulties of getting adequate nutrition for children in poor families. NCH—the National Children's Home—recently published an interesting report called "Going hungry: the struggle to eat healthily on a low income". It surveyed 55 families living on low incomes from across Great Britain; three in five were on income support, and two in five were employed but on a low income. It also looked at two focus groups—one in an urban area and one in a rural—and at a regional survey of the costs of eating more and less healthily.
Almost half the parents in the surveyed group had gone short of food during the previous 12 months to meet the needs of someone else in their family. Over a third of parents had gone without food in the past month so that others in the family could eat. One in five families said that they did not have enough money for food, and a further two in five said that they only just had enough money for food. Five of the families on 163WH income support said they had been so desperate for money in the past 12 months that they had considered doing something unlawful.
The diets of the children in those families were nutritionally poor. Only a minority of children in the survey regularly ate vegetables. More than a quarter never ate green vegetables or a salad. Most children ate some fruit, but a quarter ate it only occasionally, and a further one in 10 never ate fruit. In contrast, nine out of 10 children ate sweets and chocolate, and one in five ate them every day.
The report comments on marketing to children and how, nutritionally, that usually influences children's diets for the worse. However, the report's overwhelming point is that low income is the reason for the children's poor diets—and for that of their parents, because they had poor diets, too. Despite our best efforts, some parents just do not have the funds to provide a nutritionally adequate diet for themselves and their children. The figures were checked out and, significantly, on average, families were not spending enough on food to enable them to eat healthily.
The focus groups that were interviewed confirmed that the reason for that is that food is one of the few flexible items in the budget of a family on a low income. If there are debts, the food budget suffers; many costs are fixed, and food is the only flexibility that they can find. The old image of parents going without so that their children can eat well is not just historical but remains a reality in the UK today.
We made a specific recommendation in relation to an old problem: it is essential to ensure that nutritionally balanced school meals are available, and available stigma free. We noted first that there were problems of meal quality even on current nutritional standards. Clear research, which the Government acknowledge in their response, shows that comparatively cheap options, such as swipe cards, can overcome the problem of low take-up of school meals, which continues. If a child is getting one good, nutritional meal a day, that is a step forward. This old problem has been given extra importance as a focus for Government action because of the NCH research.
I am indebted to Women's Aid, which briefed me today about the poverty experienced by children who have lived with domestic violence. Women's Aid makes it clear that it is not aware of any research on the financial hardships suffered by survivors of domestic violence or their children. It urges the Government to commission such work. When women and children flee domestic violence, they often suffer repeated hardship and poverty, and, of course, the uncertainty of homelessness. Often, survivors have to leave behind all their possessions, or most of them, and start again with next to nothing.
The social fund system is far from generous. If a loan is granted, repayments will be deducted from the mother's income, and it might take her years to obtain suitable accommodation and get the basic essentials that many of us take for granted. These women need special consideration. They may experience more than one move—unfortunately, many parents and children have to move home and school several times.
Persistent perpetrators of domestic violence often find ways of tracking down their victims. Last year's briefing from the Office of the Deputy Prime Minister on 164WH homelessness and domestic violence referred to the case of a woman with three children who had moved 23 times. That can obviously be a cause of persistently low income. Every move is likely to involve fresh losses and additional expenses, so it is important that the needs of this group are not overlooked and that we find better ways of ensuring the safety of abused women.
To give some indication of how prevalent this problem might be, domestic violence is involved in at least 16,000 contested contact or residence cases every year. It is not a small issue. There is a further element that, as a lawyer, I feel a little shy about mentioning: legal costs. Women's Aid briefed me that for abused women involved in family proceedings, legal costs often exceed £20,000. It is not unusual to have as many as 15 or 20 court hearings during constantly contested custody and access disputes. With continual litigation and mounting costs, a woman can end up with a statutory charge from the legal aid fund on the family home and unable, because of poverty, to get rid of it and move to a safer place if her partner catches up with her.
If an abused woman fears that she or her children will suffer harm if a child support assessment form is sent to her former partner, she can ask that the Child Support Agency does not act to collect maintenance from him. However, in those circumstances, she will not get the £10 a week child maintenance premium that she would otherwise have been allowed to keep from any child support payments made by the child's father. That means that she will be £10 worse off than other single parents who do not have a reason to fear their former partners. In other words, to be safe, an abused woman is likely to be living below the basic state minimum, inevitably leading to long-term hardship.
I envisage that the next stage of the anti-poverty policy for children will involve continuing current drives while reaching out to those in severe and persistent poverty and those with particular reasons—often life transitions—for falling into poverty. That is my thought for the future. None of that detracts, however, from the fact that we have a lot to celebrate in the considerable progress that our Government have made in tackling child poverty during the past seven years.
§ Mr. Kelvin Hopkins (Luton, North) (Lab)
I am pleased to have the opportunity to contribute to the debate, but making a speech is only one of my reasons for attending this afternoon. I also wanted to listen to other Members and learn from their wise words and good thoughts. I have listened with great interest to what they have said and commend the many fine speeches, as well as the report.
I have a specific interest in child poverty. Nine years ago, there were more children under five in my constituency than in any other—that is quite a statistic. My constituency also had the largest number of housing repossessions and people losing their homes. Even now, despite being in the south-east, there are severe pockets of poverty there. Another factor behind my speaking today is that there are a large number of single parents in my constituency, and I gave them the specific commitment that I would fight their corner when I came to Parliament. I have tried to do that as best I can.
Housing is a major part of poverty, and in my constituency there is a desperate shortage of decent houses to rent. Rents are high, but there is no decent 165WH housing available. Although many people's poverty in terms of income and other measurements may not be as severe as other people's, where they have to live is a part of their poverty. The last-resort housing of young single mothers with children in tower blocks with people who have serious social problems is a measure of how far we have gone downhill in housing provision.
Some 30 years ago, housing provision in my constituency was infinitely better than now; we could provide houses with gardens for families in those days. We can no longer do that because there is such a desperate shortage. I have severe criticisms not only of previous Governments, but of our own Government because of their failure to provide council housing. We have spoken about such matters on many occasions in this Chamber, and I feel strongly about them.
I was involved in the decision to build Marsh Farm, which is the major council estate in my constituency. The hon. Member for South-West Bedfordshire (Andrew Selous) will know it. The houses on the estate are still decent today, and there is a wonderful and warm community there, but people would not have had those houses had we not forced through the decision to build. Effectively, such decisions have been taken away from us, and I am concerned about that.
Housing costs play a large part in policy now. Another factor behind poverty is that in 1972 the Conservative Government pushed through the Housing Finance Act, in which they switched subsidy from housing to tenants. So, rather than the housing being subsidised, and having the historic subsidy from the stored equity of council housing, the tenants were subsidised in a means-tested manner. That led to a strange situation, especially in housing association homes with higher rents.
In 1997, I was canvassing in one such area in my constituency and people were asking what a Labour Government would do for them. I said that for one thing we would create jobs and bring people back into work. A Labour councillor friend took me aside and said, "Kelvin, do not talk about jobs; they do not want them. They would be terrified of losing their benefit." Those people were so deep in the benefit trap that they could not afford to get a job. That situation has got worse, simply because we chose to go for a means-tested system of subsidising people in housing rather than the historic system that we used previously. Even now, I would want, if we could, to revert to the previous way of subsidising housing for those who desperately need it.
At least a third of the population—the number gets bigger every year—will always need decent, socially provided, rented homes. Such people will not be able to get into owner-occupation, and it is becoming impossible for people to move from one sector to another. Parents such as me subsidise their children to get them into owner-occupation; we can afford it because we were in owner-occupation. There are two separate classes of home occupier: home owners and tenants. The idea that we can swap sectors and choose sectors has, sadly, been lost. That was a choice in the past.
166WH We have talked about the figures, saying that we started from a low base for improvement. That is fair enough, and one can make much of the figures, but they need to be uprated.
§ Andrew Selous
Does my constituency neighbour feel, as I do, that the avenues of shared ownership could be further explored? We have had some good schemes, under which people could get on the housing ladder by owning only a proportion of their home. Would the hon. Gentleman welcome moves towards shared equity schemes to try to bridge the gap that he rightly identifies?
§ Mr. Hopkins
Yes, if they were realistic, but with surging house prices that is becoming more and more difficult. However, this could be considered the other way round. If an owner-occupied house was falling into disrepair, the local authority could take an equity share, repair the house, keep it in good condition and, when the occupier died, buy out the house and use it for social housing. That, too, is an excellent idea, but such suggestions would work only at the margins; they would not make a massive difference.
Chapter 3 of the report, headed "Background", contains a simple graph showing that 14 per cent, of children were in low-income households in 1979, and that that figure had risen to a peak of 34 per cent, by 1997. Without wishing to be partisan, that is an indictment of the Thatcher and Major era. After nearly eight years of Labour government, we have managed to bring the figure down a little, but we have not returned to anything like the 1979 level. I think that the figures are about right—the target suggests that we will return to 1979 levels by 2010—but that means that, 31 years on, we will have the same child poverty. That is not good enough.
I talk a lot about Scandinavia, because I think those countries do things well and I believe that we ought to imitate them. At the extremes, Sweden has 10 per cent, of children in poverty, Finland about 7 per cent, and Denmark about 5 per cent., but we still have about 25 per cent. We keep saying that we have the most successful economy in Europe, and certainly in the European Union. We do, except for Scandinavia. We are doing extremely well, yet we seem to be unable to deal with poverty. I think we can deal with it.
I have heard many warm words spoken about the Government and what they have done so far. My Government have made some progress, but not enough, and my criticisms will be sharp. If we wanted to bring those figures down quickly, we could. It is a matter of political will. I do not want to give my hon. Friends heart failure, but if I occupied No. 10 Downing street—I have no illusions about that; I am also aware that pigs do not fly—I would say that we should try what they do in Denmark.
We choose not to do what is done in Denmark, Sweden or Norway. Norway is the third most equal society in the world, the first two being so poor that the people have nothing to share and are equal by virtue of their poverty. Norway is the most equal society in the developed world; I am a member of the all-party group and I have been to that country, which has a wonderful society. We should imitate Norway, Denmark and Sweden. Why can we not do that?
167WH The statistics are of interest. That is what prompted me to come along this afternoon and say my piece. I want to ask my hon. Friend the Minister to take what I say seriously. I would set the zero figure to one side as what it represents is so far ahead and difficult to achieve that I do not want even to think about it. If we are to reduce poverty, we should bring it down to the Scandinavian level, and we could do that quickly if we had the political will. I am fully aware of the implications for taxation and redistribution, but if the Government were to go ahead I would vote for them with a will. I think that many would support them. Indeed, I doubt whether there would be a single rebel on the Government Back Benches.
The problem is one for the Government. They have to be told that there are ways of solving the problem of child poverty, and it is they who have to change. They must listen. They should look at what is done in Scandinavia and start to imitate it. It will take us 31 years to get back to where we were in the time of Jim Callaghan and Denis Healey—now our noble Friends in another place—which now looks like a golden age of socialism. I did not think it was at the time, and I am old enough to remember it very well. We had serious economic problems then, but we still managed to have much less child poverty than we have now, when we are much richer and more successful.
There is a logical problem with saying that we can do difficult things when we have a really serious problem with our economy, but we cannot do them when we have a very successful economy. I do not think it is true that we cannot do those things. We can and we ought to.
§ Mr. Steve Webb (Northavon) (LD)
This has been a wide-ranging debate. One of the interesting things, thinking back to when I worked for the Institute for Fiscal Studies and spent many happy years churning out statistics, is how the debate on child poverty has broadened. I welcome that very much. I was looking at the Government's executive summary of their child poverty review and I was quite staggered by the breadth of the subjects, which include women prisoners, drugs, large families, social housing, decent homes, the social fund, child care and children's centres. The breadth of the issues raised is extraordinary and hon. Members have rightly mentioned many of them in the debate.
I congratulate the Select Committee, many members of which are present today. Many of them are very knowledgeable about the subject, which means that the Committee is of a high calibre. Not least among them is the Chairman of the Committee, my hon. Friend the Member for Roxburgh and Berwickshire (Sir Archy Kirkwood), who was on the radio this morning talking about a different Committee report and managed to work the words "obfuscate" and "concomitant" into his response, which must have been a first for the "Today" programme. I congratulate him on his erudition.
More seriously, I congratulate my hon. Friend and his fellow Committee members on ensuring that this vital topic is studied in depth. I cannot help feeling a twinge of sadness that it is being debated at the fag-end of the summer. I mean no disrespect to the Minister who is with us today, but the fact that the most junior Minister in the Department has been sent to respond to the 168WH debate, and that we are debating the issue not in Government time but in the House's time on the Adjournment is rather sad. I have said this before and will say it again: although I welcome the fact that the Government have a target to abolish child poverty—that is entirely laudable—the issue still never quite gets the attention that it deserves. The slot that we have been given this afternoon perhaps indicates that as much as anything else.
We should pay tribute to the End Child Poverty Campaign, which has helped to put pressure on all the political parties by saying, "Well, what are you going to do about the issue?" I think that it gave evidence to the Committee—I am certainly aware that written evidence was given. It has done an important job in keeping the issue high up the political agenda.
I welcome the fact that there is a future strategy: the child poverty review. Much of it is aspirational. We need many more timetables and details about when things will happen, but there are many important things in the strategy. I also welcome the fact that, finally, the Government have accepted that child poverty is about more than income below a certain threshold. I welcome the fact that, in measuring progress towards their goals, the Government will consider material deprivation. That is an entirely positive step.
I cannot help noticing in passing that the Government have drawn up a list of items of material deprivation at the back of their "Measuring child poverty" report. They are important things—the sort of things that we would expect. They include children not being able to go swimming and people not having enough money to keep their home in a decent state of repair and replace worn out furniture. Including such things is welcome and sensible.
However, bizarrely, the Government will collect the data, do the counting and then decide the definition. They will not say, "Hang on, we can say now that surely anybody who fails to tick off three items on the list is poor." Instead they are saying, "We'll look to see what the answer is, and then we'll work out what the question is." I cannot help feeling that that is the wrong way around. Surely we ought to agree now. We could sit round when we finish at 5.30—I am happy to stay if anyone else would like to—go through the list and say, "Surely if there are three things on the list that someone lacks, in any common decent sense they are poor." We do not have to wait until we have done the counting to decide that that is the case. However, the Government state:Analysis of these data"—on deprivation—will determine the…measure…used, for example, the number of items a family must lack to count as…deprived.I feel that that is the wrong way around, but it is good that it is being done at all. That has to be a start.
We have had some well informed contributions and one theme that has come through in practically every contribution is housing. The hon. Member for Regent's Park and Kensington, North (Ms Buck) made a powerful and effective contribution, giving a regional dimension and making some general points. If anybody in this Chamber should be sitting by a telephone later this afternoon, it should be the hon. Lady. I wish her well.
169WH I represent a relatively prosperous constituency, and the poor children whom I meet are the ones I see almost every week because their parents are about to be homeless. On page 41 of the Government's child poverty review, published this month, there is a chart showing the number of households in temporary homelessness. I was staggered by how stark it is. At the start of the 1980s, barely 10,000 households fitted the category. That rose steadily to about 60,000 at the start of the 1990s—I think that that reflected the repossessions crisis of the early 1990s. The number decreased in the mid-90s. It happened to turn at 1997—I do not know why it should be that particular year—and then rocketed. That is shocking.
We all know about the knock-on effects. We have heard of some of them in this debate. The hon. Member for Luton, North (Mr. Hopkins) mentioned some of them. Shelter says:
There is no more shocking manifestation of child poverty than homelessness. Since 1997 the number of homeless households in temporary accommodation has more than doubled…and the average length of time they spend there before getting a permanent home has almost trebled.The hon. and learned Member for Redcar (Vera Baird) rightly pointed out the problem for women who suffer domestic violence of being constantly moved around. She gave some powerful and extreme examples. The children, who are in one of the bigger groups of people in temporary accommodation, have their lives messed up. One finding from Shelter's survey of 400 homeless households with children is that, on average, the children were missing 55 school days—the equivalent of a term—per year. If they are missing a whole term out of every year, the Government have failed them and it is one of their biggest failures. That chart shows the shocking figures. Thousands of children and their parents are having their lives, health and education messed up, and they are becoming depressed. It is awful.
While we welcome the fact that the Government have got the numbers down by a quarter in the first phase of the anti-child poverty target, which has to be a good thing, there are still far too many children living in abject conditions, as the hon. Member for Luton, North said. Unless the housing issue is sorted out, child poverty will continue to be a serious problem.
§ Andrew Selous
I was particularly pleased that members of South Bedfordshire Women's Aid attended the pilot meeting for the community family trust being set up in my constituency. Given that he has talked about domestic violence and its terrible effect on children, would the hon. Gentleman welcome it if that sort of preventive work were done on a more widespread basis?
§ Mr. Webb
Indeed. As the hon. Gentleman says, prevention is critical. I shall come on to that. Let me return to housing, because it is the central issue on which the Minister needs to respond. If the Government are going to switch to a before housing costs basis for every income measure, the deprivation measure must have a housing element to it. They say that they need to use before housing costs for international comparison. 170WH However, if it is a bad measure, let us do things properly for our country. If we must use it, we must, but let us consider housing and material deprivation. The Government, in the usual vacuous manner of Government responses to Select Committee reports, say that they will stick an extra page in "Opportunity for All". Whoopee! It is a thick document, full of statistics, and now there will be another one in there. That is not going to help a single child. However, if the Government were accountable—they are accountable for their targets; the ones that they measure, not just the telephone directory of statistics that is "Opportunity for All"—they would possibly do more about it.
The Government will have no incentive to tackle the problem of children living in temporary accommodation if there is nothing that directly relates to that facet of poverty in their material deprivation measures. I would far rather that housing costs were taken into account as well, but if the Government insist on not doing that, they should include housing in the material deprivation measure.
There is a raft of other issues on which hon. Members will want to hear the Minister's reply, so I shall go through them as quickly as I can. The hon. Member for South-West Bedfordshire (Andrew Selous), a humane member of his party—I hope that I do not embarrass him by saying so—mentioned the community family trusts, which do an important job on a small scale. We should all like a lot of what they do to be supported on a much larger scale. The exchange that he had with the hon. Member for Wolverhampton, South-West (Rob Marris) indicated that the cost of what is done on parenting and on helping families who want to be together to stay together is miniscule compared with the potential benefit that could be achieved by going down that route.
On the welfare of children, the Government have a target of ensuring that 70 per cent, of lone parents are in work. That is a very bad target because it is not about the welfare of children. Individual lone parents should be encouraged and enabled to make the right decision for their child and for their circumstances—for example, the particular local situation they are in, what caused them to be a lone parent; they may have just divorced.
If, when all those choices are added together, they happen to add up to 70 per cent., whoopee. If they do not, the Government should not then try to lean on people to make a different choice if it is not necessarily in the child's interest. They should not set arbitrary targets of that sort and then apply pressure to reach them—what is the point of a target if the Government apply pressure? They should be enabling and encouraging individual lone parents to make the choice that is in the best interests of them and their children.
§ Mr. Webb
If the hon. Gentleman will forgive me, I had better not, because I do not want to take up too much time.
We talked about the Child Support Agency. The hon. Member for Aberdeen, South (Miss Begg) mentioned it and the Committee has published an excellent report on it today. The CSA is a mess. It is a shambles. I do not doubt that the Minister will tell us how wonderful it is, 171WH but the Department's own report on the CSA shows that the new system is worse than the old one. It is not working and it is over budget—it is over everything. In the interests of children's welfare, the Government must come clean on this matter at some point and come up with a plan B. I do not know what that is at the moment. Plan A is just many more lone parents not getting their maintenance premium because they are not swapped over on to the new system, which means many children in deeper poverty because of the Government's incompetence in delivering the new system.
We have talked about the social fund. The hon. and learned Member for Redcar mentioned it. There are some shocking statistics about the number of people who are too poor to be helped by it. The most recent social fund report shows that more than 400,000 applicants were turned down for budgeting loans—more than half of them because they were too poor. They had too much debt to borrow any further. I do not suppose that their social fund debt was the only one that they had. Many of those were families with children, and 87,000 lone parents were turned down because they were too poor. How can there be a welfare state that one can be too poor to be helped by?
In a sense, some of the aggregate headline stats are fine. As we have heard, the people who are near the labour market and who are near the poverty line have been helped over, and that is great. However, there is so much serious, deep, complex poverty that just has not begun to be addressed.
We have talked about the tax credits. The hon. Member for Aberdeen, South mentioned them. I remain concerned about an annual system, even one working as smoothly as she hypothesised it might. She referred to a month, but people need the right amount of money each week when they have children and they are in poverty. Hoping that the Inland Revenue will deliver in a month is, in my judgment, talking about three weeks too long. The whole issue of annual assessment of tax credit needs reconsidering.
I want to raise the issue of benefit sanctions, which I do not think has yet been discussed. In a sense, the Government are becoming prouder of sanctions. The Chancellor in his Budget speeches says that the use of sanctions is part of the reason why claimant unemployment is falling. Well, it is falling but inactivity is not. For as long as the Government rely on them as a central plank of their policy and use them massively, there will be children in poverty—the Government will never get rid of child poverty if there are lots of children whose parents are facing sanctions from the system. I know that the point of sanctions is that one does not use them. However, the statistics show that they are being used and that there are children in those families who are living well below the poverty line. For as long as that is a central element of Government policy, they will never abolish child poverty.
There are people below the poverty line because they are facing sanctions and there are people below that line because they are repaying social fund loans. Three-quarters of a million income support recipients are paying back an average of £10 a week from their basic benefit in social fund loan repayments. They are living below the poverty line because they had a need. The 172WH social fund has its place, but while so many families live below the poverty line as a direct result of Government policy we will never eradicate child poverty.
I do not think that I have done justice to the breadth of issues that have been raised in this high-quality debate. The housing issue is central. I understand why Government Members, as well as praising the Government, have been balanced in their contributions and have been willing to criticise. I applaud that. Let us not be remotely complacent. In a sense, achieving a quarter of the target a quarter of the way through is behind schedule, because it is the easiest quarter. If the Government are really to achieve their goal in 20 years, we should be well ahead of schedule. At a time when the economy is doing well and lots of money has been put into tax credits, the proportion of the task that we have got through makes me think that the goal will not be reached on schedule.
It is good that the Government want to abolish child poverty. However, I fear that, unless momentum is renewed and the housing problem, debt and the benefit system are properly dealt with, we shall not achieve the goal that we want to achieve.
§ Mr. Paul Goodman (Wycombe) (Con)
The Chairman of the Select Committee, the hon. Member for Roxburgh and Berwickshire (Sir Archy Kirkwood), will confirm that before it began its inquiry into child poverty in the UK he received a small delegation—my hon. Friend the Member for South-West Bedfordshire (Andrew Selous) and me. We wanted to discuss with him, as members of the Select Committee, what inquiries we should carry out in the near future. I think he will confirm that near the top of the list—in fact, I think it was at the top—was child poverty.
It seemed vital to us that in Britain we should get as near as possible to equality of opportunity. I do not mean equality of outcome—that is for socialists. If I were a socialist I should sit on the Labour Benches, and if Labour Members were Conservatives they would of course sit where we do. I found the inquiry enthralling. I tabled numerous amendments, some of which, to my elaborately concealed astonishment, were accepted by the Committee. As I reflect on the inquiry now, I am wearing my usual two hats and, as usual, sitting opposite the Minister—to whom I thought the hon. Member for Northavon (Mr. Webb) was slightly unfair. Who knows, he may not be a junior Minister for much longer, but might be taken from us, so the hon. Gentleman should enjoy him while we have him.
The debate and the report fell into two parts. The first part was, to use the word used in the report and by the hon. Member for Aberdeen, South (Miss Begg), mechanical. It related to the Government's targets and to people's incomes. The second part, which the hon. Lady spoke about this afternoon, dealt, especially towards the end, with what I call the human dimension. It reached beyond targets and incomes to the human aspect of poverty and to wider challenges.
I must deal with the dry stuff first—targets and incomes. The Government's aim, as we know, is to eradicate child poverty. It has never been quite clear whether that means relative poverty, absolute poverty or severe and persistent poverty. It is a noble objective, 173WH but I have one reservation about it. To eradicate something one must set a target, and I am always worried about the gap between people's perceptions and hitting a target. A Government claim to have hit a target and eradicated child poverty may not be greeted with enthusiasm by people who still feel that they are living in poverty. That is my reservation about the word "eradicate".
§ Mr. Hopkins
With reference to the point I made, if the Government had referred to achieving Scandinavian levels of poverty, that would be an achievable target. "Eradication" sounds perhaps a little too difficult.
§ Mr. Goodman
I heard what the hon. Gentleman said about Scandinavia. I think that it would be difficult for us to become a Scandinavian society, for various reasons, but I do not want to go into that now or I shall lose my way, and we cannot have that.
The Government have set targets for reducing the number of children in poverty. The way in which Ministers measure poverty varies. Targets can be hit on a before or after housing costs basis; the basis used by Ministers varies. The Government's target for 2004–05 was to reduce child poverty by a quarter. To hit that target, they sometimes used "before" housing costs figures and sometimes used "after" housing cost figures. The Government's target for 2010 is to reduce child poverty by half, but to hit that target, as we have heard frequently, they are to use the "before" figures only, although the "after" figures will continue to be published. That, of course, makes the target easier to hit. That is why the Committee said:The Committee believes that the decision to adopt only the before housing costs measure is mistaken.The Child Poverty Action Group, which is of course not run by Conservative central office, has said:At a stroke, the measurement change in the relative low-income measure has 'removed' 900,000 children from poverty.The move is really a sleight of hand. The Government are coming very close to saying, "If you can't hit the target, move it a little bit nearer."
However, at least we know the basis of the figures: they are either before housing costs or after housing costs. The measure for 2010 is less certain. We know that there will be three measures: the relative income indicator that we have now; an absolute poverty indicator; and a material deprivation and low income combined indicator. It is still not clear whether all those will have to be moving in the right direction for the Government to proclaim that they have hit the target. The Committee recommended that the Government should state exactly which measures they will use to define the eradication of child poverty, and how they will use them. There is a danger of the Government saying, "Even if we can't hit the target with one arrow, we may be able to hit it with the other two, or at least one." That would be a curious change.
On severe and persistent poverty, the Committee recommended that the Government createan explicit indicator against which progress can be measured.174WH The Government's response was not to offer such an explicit indicator. The Committee recommended that Northern Ireland be brought into the poverty figure assessment, and the Government said that they would "take account" of the Committee's view.
The Chairman of the Committee suggested in his opening remarks that the Government's response to the Committee was not altogether satisfactory. Reading the response, I rather felt that we made a series of suggestions to the Government, and the Government then mostly told us what they were already doing, but perhaps it was ever thus under all Governments.
On targets and incomes, the conclusion of Conservative Members—I am now wearing my other hat for a moment—must be that there has clearly been some progress on incomes. If we redistribute money, we will raise people's incomes. There is no great mystery to that. The Government are likely to hit their child poverty target for 2004–05, but hitting the 2010 target will be much harder as the Government move towards addressing the needs of those whose needs are more and more difficult to address.
The Institute for Fiscal Studies argues that the child tax credit will need to rise in line with earnings beyond 2005 if the Government are to meet their targets on child poverty, but there is no sign that such a policy has been factored into the Chancellor's public finance projections. All that raises wider considerations. People do not live in a vacuum, in which the Government simply put money into people's purses and wallets; they live in the real world, in which the state of the economy, growth and profits put more money into people's purses and wallets than government ever could or should. I take the point that the hon. Member for Regent's Park and Kensington, North (Ms Buck) made about the IFS findings. I think it is very hard to separate how much of the progress made since 1997 is the direct result of Government policy, and how much the indirect result of the broadly continuing health of the economy.
Furthermore, although increasing incomes is necessary in reducing poverty, it is not sufficient—and I now move away from the subjects of incomes and targets—because if families are truly to escape poverty, the Government need to help not only to raise the incomes of those in need but to improve the outcomes for them. The hon. Member for Northavon addressed that point. As the Committee put it:The question has also been raised of whether the emphasis on the income measure of poverty means that anti-poverty strategies tend to focus the policy response on increasing parents' incomes … rather than, for example … on improving outcomes for children by improving public services or supporting stable parenting … it is necessary to look more broadly at other causes which … interact with worklessness, such as marital and relationship breakdown, unstable parenting, inadequate levels of educational attainment and healthcare provision, and involvement in crime.The Committee concluded:The national anti-poverty strategy must reach beyond raising incomes and address the human dimension of poverty, thus boosting"—to use the phrase of the hon. Member for Aberdeen, South—
children's life chances.It is obviously a truism that there is a link between family break-up, unemployment and poverty. This country has the third highest divorce rate in the 175WH European Union, the fourth highest rate of births outside marriage and the highest teenage pregnancy rate in Europe. Those issues concern my hon. Friend the Member for South-West Bedfordshire a great deal.
The Committee acknowledged the link between life chances and family break-up:The child poverty rate is … affected by the large-scale changes in family formation that have occurred in recent decades with a large increase in lone parent families".In fact, there was a bit of a tussle about that section of the report early on. The Committee also drew attention to the Government's 1998 Green Paper entitled "Supporting Families", in which a chapter headed "Strengthening families" said that the Governmentshare the belief of the majority of people that marriage provides the most reliable framework for raising children.In the light of the Prime Minister's attack on the 1960s earlier this week, I think that we can presume that that is still the Government's view, but perhaps the Minister will enlighten us.
Given that view, however, we think it a retrograde step that the Department has apparently decided to change the family and child study statistics, so that they will no longer report on married, cohabiting and step couples but will report simply on couple families and lone parents. I think the Committee felt that the Government were in a bit of a muddle on marriage. Perhaps part of the reason is that married couples, which I stress are no different from other two-earner couples in this respect, lose out under the tax credit system, as one organisation, CARE, argued in evidence to the Committee.
The Committee agreed that, although poverty among lone parents is concentrated among those out of work, poverty among couples is concentrated among those in work. It said:It is clearly desirable that the Government's view on the role that marriage plays in the quality of parenting, if any, should be clear".That implied that their view is not clear. The Committee also said thatrelationship and parenting support programmes and initiatives undertaken by the Government … should be assessed and evaluated.We concluded, in a famous piece of horse trading, by urging the Governmentto commission research into the factors contributing to stable parenting and life chancesand by recommending thatthe national strategy should consider new initiatives to strengthen family ties.Again, it is disappointing that the Government's reply simply said that further targeted studies, which I think was a reference to the Committee's suggestion, would be "considered".
I want to deal briefly with child care. The Committee welcomed Sure Start and the roll-out of children's centres. My view on the targets for lone parent employment is exactly the same as the one I think was expressed a few moments ago by the hon. Member for Northavon: we cannot have a model of choice and targets; it must be one or the other, because there is a direct clash between the two. Interestingly, the Committee's previous report on child care was consistent with a choice model.
176WH A key point of this report was the suggestion that the Government's strategy of reducing poverty by encouraging poorer people to work may have reached its limits. The Chairman of the Committee stressed that point earlier. We know that some groups find it especially hard to get and keep work and that poverty is concentrated particularly among ethnic minorities, people with disabilities and lone parents. We also know that some groups and individuals, such as parents with young children, older pensioners or pensioner couples, may not want to work. It is complex to address those groups and people who, for whatever reason, it will not be possible for the Government to get back into the marketplace.
I should like to suggest three principles, the first of which is simplicity. The Committee found in all its inquiries that there is a bewildering proliferation of funding streams for projects. That is a real problem for Governments, who like to have lots of initiatives to announce because that is good news for them. This Government are particularly blameworthy in that regard. We need fewer pots with more long-term funding. There is the famous example in Hackney, which was discovered to have been funded by up to 30 initiatives.
Secondly, the Government have a problem, with their continuing concentration on means-testing, in reaching the groups of people who are hard to get into work. There are huge non-take-up rates in the various pension policies that the Government have produced. Poverty cannot seriously be addressed in the groups we are talking about while the Government rely so heavily on means-tested benefits with low poverty rates.
My third principle is rather more ambitious and the Government are, to a degree, already interested in it. The final section of the Committee's report said:If child poverty really is to be abolished, the Government's anti-poverty programme must reach beyond raising incomes, and address the human dimension of poverty … increasing good parenting, aiding family stability, raising levels of educational attainment and healthcare and … boosting children's life chances.The voluntary sector and faith communities have an enormous amount to contribute, and so do the Government. The Government have announced that religious groups will be consulted as a matter of course. I should be grateful if the Minister could write to me and let me know how that is going, because we need to consider seriously in future years the contribution of faith communities.
There has been some progress on incomes, but we must be legitimately critical of the extraordinary vagueness and sleight of hand about targets. More seriously, and non-party politically, people will in future look back and see that we are still in our infancy when it comes not to raising people's incomes, which is not too difficult, but increasing life chances. That task faces us all in the years ahead.
§ The Parliamentary Under-Secretary of State for Work and Pensions (Mr. Chris Pond)
I congratulate the hon. Member for Roxburgh and Berwickshire (Sir Archy Kirkwood) on securing this debate, even in the twilight hours of this Session, at a time that I understand was 177WH chosen by Mr. Speaker's office, not by the Department for Work and Pensions. That is no reflection of the importance that the whole House attributes to this issue.
I welcome the long-standing interest in these matters shown by the Work and Pensions Committee, on which I once had the honour to serve under the hon. Gentleman's chairmanship. I particularly welcome the Committee's most recent report on the subject, which is a constructive contribution to the debate. That has been reflected in some very fine speeches: I listened carefully to the points made by all hon. Members who contributed and I will do what I can to address as many of them as possible in the time available.
The hon. Member for Wycombe (Mr. Goodman) referred to the Child Poverty Action Group, to which all of us pay tribute for its long-standing role in these debates. It was set up in the late 1960s, as some hon. Members will remember. I am among them, and, having spent 20 years working on issues of poverty even before being elected to the House, to be described as a junior Minister is something of a compliment, although I know that it was not intended as such by the hon. Member for Northavon (Mr. Webb). At the time, the group did not feel it necessary to set up a bank account, on the basis that child poverty would soon be sorted out and eradicated. We have found that the problem is a little more resilient, which is why we are still debating it today.
When we came to office in 1997, nearly a third of all children in the UK were living in low-income circumstances, as hon. Members have reminded us. That was one of the worst records in the developed world. My hon. and learned Friend the Member for Redcar (Vera Baird) reminded us of the Chancellor's foreword to the child poverty review, in which he pointed out that each of these was a child
born not into opportunity but into poverty … a young child's chances crippled even before their life's journey has barely begun.The proportion of children living in households with relative low incomes more than doubled between 1979 and 1997. Early-years provision was patchy, variable and in some cases non-existent. Our need to act on that inheritance was, and is, beyond doubt, and that is what we are seeking to do. The Government are committed to halving child poverty by 2010 and eradicating it by 2020, although hon. Members have reminded us how ambitious those targets are. That means not just improving the well-being of children, but transforming their prospects.
Our aim is to ensure that, in future, all children are able to lead rich and fulfilling lives in childhood and to realise their potential as adults. That is underpinned by the public service agreement target to reduce the number of children in low-income households by at least a quarter by 2004–05. That, too, is an ambitious target. Achieving it means reversing a long-term trend. We have risen to the challenge and are on course to meet that target, as the Select Committee acknowledges, but we would be foolish to underestimate the task ahead. We have set ourselves a further challenge in the new public service agreement, announced on 12 July, to halve the number of children in relative poverty between 1998–99 and 2010–11, on the way to eradicating child poverty by 2020.
178WH The Treasury's child poverty review has reinforced the importance of the contribution of a wide range of public services in tackling poverty. That has been reflected in this afternoon's debate. The provision of financial support for families and getting parents into work must be complemented by mainstream public service interventions that meet the needs of poor families and children.
We are also committed to following the proposals laid out in the Green Paper "Every Child Matters: Next Steps" to ensure that every child has the opportunity to reach their potential and fulfil their ambitions. Action is required across a number of fronts if child poverty is to be reduced in a sustainable manner. Moreover, measures that help to tackle child poverty can help to achieve wider Government objectives: furthering the goal of employment opportunity for all, reducing social exclusion, improving the health of the nation and preventing crime.
The Government have demonstrated their commitment to tackling child poverty. We have set and extended challenging targets. We have directed unprecedented resources towards poor children. We are meeting the challenge of ensuring that mainstream public services deliver for poor children and we have responded to the growing coalition of support for action in developing the next steps.
I welcome the Committee's report and, because we are seeking to build a coalition against child poverty, the fact that Members from all parties have expressed their commitment to tackling the problem. I also welcome the Committee's recognition of the progress that we have already made.
The hon. Member for Roxburgh and Berwickshire referred to our strategy, described in the fifth annual "Opportunity for All" report in 2003, which also sets out the considerable progress that has been achieved against a range of indicators. The key elements of the strategy are to make work possible, provide financial support, break cycles of deprivation and improve public services. We will publish the sixth "Opportunity for All" report in the autumn.
I hear what the hon. Gentleman said about the scheme being a bit long in the tooth, but the information is published in a report so that the public can annually hold us accountable for our plans and achievements. We will continue to publish details of a range of indicators that relate to child, family and community outcomes.
The cornerstone of our strategy is to deal with the underlying causes of poverty, not just with the symptoms. That point was raised by my hon. Friend the Member for Aberdeen, South (Miss Begg) and, interestingly, by the hon. Member for South-West Bedfordshire (Andrew Selous). The key to the strategy is to ensure that employment rates are raised. Our labour market policies have resulted in the highest employment figures on record, with 1.9 million more people in work than in 1997 and the lowest unemployment rate since 1975. The lone parent employment rate rose to 53.4 per cent. in 2003 from 45.6 per cent. in 1997, and long-term youth unemployment has been virtually eradicated.
The hon. Members for Wycombe and for Northavon said that such targets as raising lone parent employment to 70 per cent. inhibit choice. However, those targets are not ours, but those of lone parents themselves.
179WH Compared with the aspirations of lone parents, the target of 70 per cent. is, although stretching in itself, rather modest. Some 90 per cent. of lone parents say that if they had high-quality child care, they would seek to take employment. Our policy is to provide them with that choice through the provision of child care and other necessary support.
§ Andrew Selous
It is my understanding from one of the Committee's recent visits to Brussels that the European Commission also has a target of 70 per cent. for lone parents in the labour force, which it is keen for all member states to achieve.
§ Mr. Pond
The targets established under the Lisbon protocol mean that all member states have sought to raise employment overall to 70 per cent. We are the only country so far to have achieved it, although the lone parent targets are obviously more stretching overall.
Creating employment, the establishment of a national minimum wage and the tax credits are ways in which we can seek to ensure that we can tackle the underlying causes of poverty. The tax credit is at the heart of the strategy, which is to ensure that we can make work pay. For too many years, people moving into employment found that they nevertheless remained in poverty. By setting up a seamless system of support for families with children and setting those tax credits at levels that hon. Members have acknowledged are generous, we are making a major contribution to dealing with child poverty.
However, my hon. Friend the Member for Aberdeen, South made important points about difficulties that have arisen from introducing a system that affects 6 million families—the biggest reform of family support since the establishment of the welfare state. She drew attention to the risk of tax credit overpayments and subsequent clawback pushing families below the poverty line. However, where the Inland Revenue makes a mistake of a sort that a family might reasonably think to be correct, the Inland Revenue code of practice on overpayments explains the criteria for deciding when either not to pursue an overpayment or to make arrangements to ensure that the repayment does not cause hardship.
One of the major issues in the debate has been measurement. I fully understand the potential for cynicism on that, which is why we undertook the review, at the outset, of how to measure child poverty. We wanted to ensure that there was a clear and credible set of indicators by which to measure our progress towards our long-term goals of halving and then eradicating child poverty. That is why we had a comprehensive consultation before emerging with the new measure, which adopts a tiered approach covering absolute low income, relative low income, and material deprivation and low income combined. Each tier has significance in its own right, and I can confirm for the hon. Member for Wycombe that our objective is to make progress on all the indicators, because child poverty will fall only when all three are moving in the right direction.
Some hon. Members were concerned about us using the before housing costs figure, not the after housing costs figure. We understand that, but we are doing so because we want to measure our progress against the situation in other countries. When we took over, this country had a shameful child poverty record 180WH internationally, and the before housing costs figure can give us an internationally consistent measurement. However, we give a commitment that we will continue publishing the after housing costs figures in the annual report "Opportunity for All" and that the deprivation measure will include housing costs.
The hon. Member for Roxburgh and Berwickshire referred to several pilots. He accepted that the return-to-work credit, the extended schools pilots and various of our other child care measures are valuable, but urged us to get on with rolling things out. We would love to do that, but we need to ensure that such interventions are effective in targeting the problem we face.
The hon. Gentleman also asked the "What then?" question: if we find that the employment route—work for those who can, security for those who cannot—is not appropriate, what do we do then? I must remind him, however, that child benefit is already more than 25 per cent. higher in real terms than in 1997. There have been even bigger increases in the income support rates for families with children, and, since 1997, we have been spending £10 billion more in real terms on financial support for families with children. That is an indication of our commitment to ensuring that we achieve that balance of work for those who can and security for those who cannot.
My hon. Friend the Member for Regent's Park and Kensington, North (Ms Buck) raised important issues about the situation in London, as well as asking about housing, and all hon. Members will want to pay tribute to her expertise in those issues. Unfortunately, I will not have the opportunity to respond in detail to those points in the few remaining moments. However, we are aware of the possible impact of rent restructuring, which is why we have built in safeguards to ensure that rent increases are not excessive for any individual household and why we are treading carefully in considering housing benefit reform to ensure that we do not make people still worse off.
We heard several points about the national child care strategy. I think that hon. Members acknowledge that we are making a major investment in child care as we move towards having children's centres in every community. That is essential to ensuring that children have the best start in life. We also want to give parents real choices, which is why we have made changes to employment rights.
I acknowledge the points made by my hon. Friend the Member for Regent's Park and Kensington, North about the greater impact on London, and the Government are doing what we can to ensure that we support people in London as far as possible in meeting child care and other such costs. However, my hon. Friend will have heard my hon. Friend the Member for Stroud (Mr. Drew) and the hon. Member for Banbury (Tony Baldry) say that child poverty in rural areas often hides behind a cloak of apparent prosperity.
My hon. and learned Friend the Member for Redcar mentioned nutritional standards. The problems that parents—particularly lone parents—faced in the past, when they may have had to let their children go hungry or go without themselves, underline why we are having this debate. We are all committed to dealing with child poverty. I very much welcome the Committee's report and the opportunity to debate it this afternoon.
§ It being half-past Five o'clock, the motion for the Adjournment of the sitting lapsed, without Question put.