(7 years, 5 months ago)
Lords ChamberRead Hansard Text Read Debate Ministerial Extracts
Lord Bird (CB)
My Lords, I remind noble Lords, if they were not aware of it or have forgotten, that I came into the House of Lords because of my work in and around dismantling poverty in people’s lives as much as possible. I am back here again banging the old drum on what we can do about poverty. The longer I am in the House, the more I realise that poverty is at the base—I hazard a guess here—of about 70% of our work, perhaps even more. The laws of unintended consequences mean that changes we made in the economic system 10, 20 and 30 years ago are coming back to bite our posterior.
I say once again that I am here to dismantle poverty. When I am approached by many noble Lords to get involved in defending the poor and tackling the problems that they face, I say, “I am sorry, you are doing a pretty fine job, but I do not see many people wanting to prevent Johnny, currently in school, from selling the Big Issue in 20 years’ time”. I do not see many of the difficult issues of finding the roots of poverty and ways to dismantle its sources and causes being tackled. One of the reasons for that is because there is a lot of confusion around poverty. The biggest confusion arises from the fact that people do not realise that there are two kinds of poverty. There is a poverty of spirit and opportunity, a material poverty and a poverty of social literacy—all those sorts of things. However, there is another kind of poverty. My uncle, an Irishman, who died at the age of 102 in Notting Hill, came over here in 1936 and worked as a postman and a fireman and lived all his life in a kind of poorness. When he came over, he did not have two pennies to rub together. He looked after himself, his wife and his children and has endowed his grandchildren in some senses. He was poor but he never lived in poverty. He went to church and participated in the British Legion, went on holiday and did all sorts of things. He was a poor man who developed the ability, at home in Ireland on the farm, of making a very small amount of resources go a long way. That is poorness. Then there is poverty. Unfortunately, we have seen the demise of poor people who know how to make ends meet, as opposed to the people who are lost in the fog of poverty.
I am being very personal here. My uncle, Paddy O’Regan, had one child, and that child had one child. He lived within his means. If he could not afford something, he did not have it. We mistake that for poverty but it is really just a question of being poor. Unfortunately, his sister-in-law—my mother—had six children and always lived beyond her means. She lived in a miasma of poverty, never participated in democracy or did anything other than her job as a night cleaner, and her day job, and take her six children to school. She lived in absolute poverty, which was made even worse by her inability to cook. She was one of the world’s worst cooks; she could make nothing out of something. Those are the two sides of an Irish family who came over here.
In this debate about dismantling poverty and finding the roots of poverty, I want to focus on the dignity of people who get out of poverty. A friend of mine from Jamaica came over with his mother on the “Windrush” and now owns enormous tracts of Norfolk. He educated all his children and knew how to live within his means. He was an example of the old-fashioned poor. We have created an enormous number of problems through destroying people’s ability to get out of poverty. If the parents of Mr Ed Miliband, who arrived here in 1944 as refugees from Nazi Germany, Poland, or wherever it was, had been given a council house and money on which to live, would he have ended up running the Labour Party? Generosity can cut off people’s opportunity to morph their way out of poverty. That is one of the reasons why we need to look very carefully at what we can do to help the poor. We need to help them by enabling them to get out of poverty. However, there are too many stumbling blocks to doing that, the biggest of which is the fact that 30% of our schoolchildren go through school and come out the other end but you would never think they had been to school. There are people like myself— I learned to read and write in a boys’ prison, as I have said before. Those children go on to form 80% of our prison population and 50% of our long-term unemployed, fill up the hostels and sell the Big Issue. Some 80% to 90% of them come from a failed background of poverty because they failed at school.
We need to do something about the roots of poverty rather than deploy a scattergun effect of initiating a wonderful project here and a wonderful project there which do not converge to dismantle poverty. If we do not do that, we will be having this discussion for many decades. When nearly 3 million children in this country live below the poverty line, we have to do something about poverty, but we must fight it philosophically, culturally and socially. We need to measure the effect of social security in enabling people to rebuild their lives. Social security is one of the most wonderful ways of helping people through difficult circumstances and enabling them to move on but we must not put them in warehouses, as it were. We should not do what was done to some members of my own family—I will not mention them because they will probably get their lawyers on to me—some of whom have not worked for 30 years and whose lives are getting worse and worse because somebody decided way back in the time of Margaret Thatcher that it was all right to open the sluice-gates and allow people to get benefit without checking whether it was any good for them. Those are the kind of things that we need to talk about.
In my time in the House of Lords, I am desperate to get to the roots of poverty. However, if you scratch the surface of the average Member of the House of Lords, you will probably find that earlier generations of their families had to work very hard at the coalface. Somebody suffered and burned the candle at both ends. I have a problem in that I sometimes think that we do not want the poor to burn the candle at both ends because it is a safety risk.
The Earl of Arran (Con)
My Lords, children sleeping on the floor, sharing a mattress and not having enough food to eat—this is not a case history from Victorian times but a description of the very real lives of many children living in 21st-century Britain. Our rich and affluent capital city has one of the highest child poverty levels in the UK, along with Birmingham and Manchester. Currently 3.9 million children live in poverty in the United Kingdom. This means that children are considerably more likely to live in poverty than adults. It is not necessary and not acceptable, and we can do something about it.
Growing up in poverty can blight children’s well-being and their future life chances. For example, children living in poverty are more likely to have poor physical and mental health and are less likely to achieve their potential at school and in employment. Children experience poverty differently from adults. An adult can temporarily fall into poverty, but poverty in childhood can last a lifetime. Child poverty and inequality can be passed on to future generations and lead to a cycle of deprivation for many families.
The effects of child poverty are enormous. Poverty damages: it damages childhood, it damages life chances, and it damages us all in society. We all want our children to be able to enjoy their childhood and have a fair chance in life to reach their full potential.
Children from poorer backgrounds lag behind at all stages of education. According to Department for Education statistics, by the end of primary school, pupils receiving free schools meals are estimated to be almost three terms behind their more affluent peers. By the age of 16, children receiving free school meals achieve 1.7 grades lower at GCSE.
Poverty is also associated with a higher risk of both illness and premature death. Children born in the poorest areas of the United Kingdom weigh, on average, less at birth than those born in the richest areas. Children from low-income families are more likely to die at birth or in infancy than children born into richer families. They are also more likely to suffer chronic illness during childhood or to have a disability. Poorer health over the course of a lifetime has an impact on life expectancy: professionals live, on average, eight years longer than unskilled workers.
Children living in poverty are almost twice as likely to live in bad housing. This has significant effects on both their physical and their mental health, as well as their educational achievement. Fuel poverty also affects children detrimentally as they grow up. Low-income families frequently have to make a choice between food and heating. Children from low-income families often forgo events that most of us would take for granted. They miss school trips; they cannot invite friends round for tea; and their parents cannot afford a one-week holiday away from home.
My family has had the great privilege to be involved with a wonderful charity, the Children’s Country Holidays Fund, since its inception over 130 years ago. Like many other charities, we aim to give disadvantaged children the opportunities and experiences that they would not normally have access to. It is very humbling that over those years we have been able to send away more than 2.5 million children from the Greater London area. It is a sad indictment on society that the plight of many of the children whom we support echoes that of the children whom the charity supported in Dickensian London.
However, charities cannot do it all and, with commitment and action, child poverty can be ended. We need a benefits system that recognises the cost of a child; a childcare system that enables parents to work and children to thrive; a labour market that makes work a route out of poverty; and adequate support for families when parents cannot work. We need to demonstrate very clearly that, in spite of being a materialistic society, we are still a country of compassion and understanding.
Lord Mawson (CB)
My Lords, I thank my noble friend Lord Bird for introducing this important debate.
I grew up in Bradford, delivering milk in the early morning with my father, who was a milkman on the Thorpe Edge housing estate—one of the largest housing estates in the city, with all the high statistics you would expect in one of the most challenging communities in this country. As a young person I got a nose for what poverty was about—I could smell it, often literally. Over the last 30-plus years, I have been working with challenging families in East End housing estates and, now, in towns and cities across the north of England, where we have had some success in addressing the causes of child poverty and creating an entrepreneurial culture within which families embrace the world of work and take more personal ownership of their situation. From within an entrepreneurial culture focused around activity and practical action, not policy discussion and political agitation, wealth creation has begun to take root.
We have taken the long view. Change takes time. These families are not our clients; they are our friends—people with names, addresses and family histories. It has been about growing a can-do culture and building relationships. We have broken open the traditional silos of government, which, from where we stand, seem incapable of ever learning anything from experience. When you stand in a housing estate and look down the telescope at yet another government policy and programme coming down on these children and challenging families, and if you stay around long enough to gain perspective and watch the cumulative effect of all this political and government activity, what you see is a winding snake.
We have lived through Mrs Thatcher’s policies coming down upon us, as well as John Major’s, Tony Blair’s, Gordon Brown’s, Dave’s and Nick’s, Dave’s and, now, Theresa’s. When you watch carefully, you see the latest well-meaning politician with their policy advisers, often with little practical experience, and their latest bright idea coming down from above with all the unintended consequences. No one stays around long enough to watch the cumulative effect over many years, as we have done. People become trapped in a dependency culture created often by the well-meaning state with all its attendant theoretical “liberal” ideas, often based upon ideology rather than practice.
In the last year I have been asked by the CEO of Public Health England to lead Well North—10 pathfinder projects in challenging communities in the north of England, many of them in housing estates with children and families who have been failed by successive Governments. I have been asked to take our many years of experience in east London and to share it and work with the people there. Of course, I must declare an interest as chairman of Well North. Even after just a year’s engagement in 10 communities, I have found families and individuals who get what we are talking about, and who feel trapped and want to do something very different. They are real people with names and addresses, living in real places called Oldham, Bradford, Skelmersdale, Whitehaven, Bootle, Sheffield, Rotherham, Newcastle and Gateshead, Halton and Widnes. The challenge is: will we be given enough time and space by the system to innovate and build the kinds of long-term relationships with these local families and communities that can be sustainable and make a real difference—relationships within which families can be supported to take hold of their own destinies, escape from a tick-box culture and break open the silos that hold them firmly in their grip?
There is not enough time in this debate to really open up the detail for the Minister of what a more entrepreneurial approach to these challenging issues of poverty means in practice, but I thought I would share some initial radical thoughts to encourage us to think outside the box. Here are three practical, if radical, ideas that challenge the liberal consensus.
First, we should make it a requirement for any programme addressing social issues that 70% of the employees, or self-employed contractors, should live in the wards with the highest unemployment in the area where the programme is working. This would give a real advantage to genuinely locally based and embedded organisations, and a boost to the local economy, and might achieve more than anything else.
Secondly, we should take the “personalised budgets” approach to the next level. We should look at all the money being spent across government on a family or child. We should not, as now, just get government agencies to decide how they might spend the money but co-create something with the family, with a particular emphasis on the children. We frequently forget to listen to children, but in my experience they often have real insights into what is needed. We should be radical. For instance, a place at Eton costs £40,000 a year—a lot less than being in care—and I have found some very talented children on some of these estates.
Thirdly, we should focus on the children themselves. We should learn from the Big Issue and set up enterprise programmes so that the children can start to earn real money themselves. We have done this to some effect. We should support them if the parents try to take the money—for example, parents who have addiction issues with alcohol, drugs, gambling and so on. In this way, the children will become more self-confident and self-reliant in their heads but they will also be helped by having a bit of cash in their pockets. It is simple. I have a good friend who is a very successful business entrepreneur in the north of England and who came from one of these communities. He always tells me that the difference between him and his friends at school was that they had one paper round and he had two. Start ‘em young.
It is time to be radical and to create a learning by doing culture locally that sees the children and families caught in poverty as part of the solution, not just the problem. There is great opportunity awaiting us on our housing estates. There are talented people there—I am meeting them and working with them—who want to be radical and do things differently. They want to take hold of their lives and the life of their community and its future generations. The question is: will we, the well-meaning here in Westminster and Whitehall, allow them to do so? I ask the Minister: what space will be created in the Government’s thinking for innovation in this field that moves beyond the usual structures of government and local authority silos and gets behind local leaders and communities? I would suggest that quite a number of successful entrepreneurs who grew up in these communities want to do more now than just give cheques; they want to use their business skills to help with these issues.
The Lord Bishop of St Albans
My Lords, my thanks go to the noble Lord, Lord Bird, for tabling this important debate and for the challenging and spirited way in which he always makes his speeches, which not only entertain but very often get to the heart of many of the crucial issues. This debate is particularly timely because of the figures recently released by the End Child Poverty Coalition, which show that child poverty levels continue to rise steeply, reaching 47% in some areas. In his maiden speech the noble Lord, Lord Bird, spoke of the need to give those in poverty a hand up and not a handout. He focused on the importance of creating opportunities, rather than dependency. This of course has been one of the great themes of his life’s work. I believe that that is a crucial message.
One of the fundamental areas that I and others in the Church of England have sought be involved in is ways to empower the poor and challenge structural injustice. The Church was and is at the heart of the Fairtrade movement, seeking to ensure that workers are paid a wage reflecting the true value of their work. Across Britain, churches continue to organise with workers for a living wage. Organisations such as Christians Against Poverty are working to help those in the grip of debt take control of their finances, while countless Christian charities are working tirelessly to help, for example, ex-offenders reintegrate into society.
There is, of course, occasionally the need to give immediate relief where it is appropriate—for example, food banks—but that is not a long-term solution. However, one thing strikes me again and again when I visit food banks. I am so often told of the surprising number of families who, having been given food for a few weeks, get back on course and, far from becoming dependent, come back a few months later with gifts of food because, having received help, they want to help others.
The two priorities should run together. The Christian social ethic is, after all, one of neither dependency nor independence but of mutuality, in which both parties have something to give and so both receive something. An anti-child-poverty strategy must neither breed dependence nor hold the individual solely responsible for their circumstances, but seek to bring sustainable change through working in partnership for those who live in poverty.
Part of the answer lies in the education system. A quality education can empower children and is one of the most important routes out of poverty. However, it is not just about good schools. As the book Improving Children’s Life Chances, from the Child Poverty Action Group, points out, family poverty remains the strongest predictor of educational attainment. It says that around only one-tenth of all variations in exam results at 16 can be accounted for by factors relating to schools. Elsewhere it says that low-income families are much less able than others to afford items and activities that many more affluent families routinely pay for in order to boost their children’s educational attainment. Clearly, we should be doing all we can to improve our schools and close the educational attainment gap, as the Social Mobility and Child Poverty Commission’s State of the Nation report, published yesterday, makes clear. Re-establishing funding for local authorities to invest in early years education is also crucial if we are to close the income-based educational attainment gap that exists even before pupils set foot in a school.
However, the fact remains that as familial poverty inhibits educational attainment, it creates a vicious cycle. If we are to break that cycle, we must focus not on handouts but on economic empowerment—on income, in other words. We can talk about all the life chances indicators that we want, but if we lose sight of the centrality of income to a child’s life chances, we will not see children reach their full potential. This is not just the sole responsibility of government. As consumers we need to be relentless in our support of ethical businesses, and as neighbours we need to stand alongside those on poverty pay and support their campaign for a living wage—although policymakers clearly have a crucial role to play.
Improving economic empowerment means creating the conditions in which low-income families can flourish. It means making sure that those in poverty have access to adequate and affordable housing that conforms to the standard of Shelter’s new living rent campaign—something I fear may not be achievable given the present Government’s current focus on homes to buy at the expense of social rents. It means helping low-income families to manage their budgets and encouraging them to save when they are able, removing the poverty premium that means that such families pay more for fuel and other essentials. It means tackling low pay to ensure that working families can provide their children with the resources and experiences they require to flourish at home and at school. Crucially, on that last point, I want to join with the Centre of Social Justice and the Children’s Society in calling on the Government to reverse cuts to in-work allowances under universal credit. To confront child poverty, we must make work pay.
It is precisely because of concerns about creating dependency that we must ensure that the welfare system protects children from poverty. If we are to tackle the perennial problem of child poverty, we must give those children a secure platform from which they can thrive, both at home and at school. I hope that Her Majesty’s Government will give greater consideration to the role of income in establishing that platform.
The Earl of Listowel (CB)
My Lords, I am grateful to my noble friend for calling this important debate. I am also grateful for his life experience, both of working in this area and, on a personal level, of growing up in poverty, which he brings—uniquely, perhaps—to this House.
Over the past 12 months, I have been following the journey of a mother living in temporary accommodation. I had been acquainted with her for several years before she became homeless. We have spoken on the phone on 10 or so occasions since she became homeless, and she has sent me photographs of the various rooms that she and her two daughters, aged 16 and one, have lived in. Over the years, I have seen her physical and mental health gradually deteriorate, but the period in temporary and bed-and-breakfast accommodation has accelerated that decline. Finally, a fortnight ago, I learned from her that she has been settled in a central London borough and, although she and her daughters all still share the same room, they now have a bed apiece, a large kitchen and a bathroom. She is overjoyed that, at least for the next six months, she has a decent home. A month ago, when she was living in a bed and breakfast, she expected to be whisked away to Manchester at any time. More and more, London local authorities are moving homeless families away from London, sometimes as far afield as Manchester, to places where they know nobody and nobody knows them. It was difficult enough for this mother to share a room and a bed with her 16 year-old daughter; I cannot imagine what stress it must put on a couple when they live in such cramped conditions with their children. I wonder what effect housing and income poverty is having on the relationships of couples with young children.
I began working with children in my teens, worked with children in inner-city housing estates in my 20s and have worked with children and young people intermittently since then. Often, when working with boys and young men, I have thought that it would be far better if their fathers were doing for them what I was doing. I remember taking a nine year-old ice skating for the first time and wishing that his father might have been there teaching him to do that. Whether it was taking boys to Chessington World of Adventures or skiing on a dry ski slope, I often wished that it was their fathers, rather than me, introducing them to these experiences. Of course, some of them did have a father teaching them to ride a bike, kicking a football around with them or taking them swimming. But for many, there was no such man. I could feel the ache of some of these boys and young men for a father. That ache might manifest itself in gifts to me. I particularly remember one boy gave me presents of the crickets that he bred on a daily basis.
The OECD research from 2011, led by Professor Melhuish at Birkbeck, University of London, highlighted that one in five of our children were growing up without a father in the home. That was significantly worse than in France or Germany. The United States stood at more than one in four, but the research projected that we would overtake the United States and in a couple of decades a third of our children could grow up without a father in the home.
I am most concerned that austerity, rising numbers of families living in temporary accommodation and cuts to benefits may contribute to this family breakdown. While many single parents cope admirably and there are means of mitigating the loss of fathers, or mothers, and while some fathers may be violent or have difficulties with alcohol or drugs and are best out of their child’s life, at least until they have received help and are reformed, I am sure that the Minister—who takes these issues of family support and stability very seriously—will want to take all steps to minimise the risk of exacerbating couple breakdown.
I note the helpful report from the Centre for Social Justice in 2013 looking at this particular issue and highlighting the large numbers of children growing up without fathers and family. I am concerned that this matter is not often talked about. I recognise that it can be difficult, but I ask the Minister: is the effect of poverty on family breakdown being monitored? I know that a lot of poverty arises from family breakdown, but I am interested to know how far poverty—income poverty and housing poverty in particular—is leading to family breakdown. Have Her Majesty’s Government modelled rates of family breakdown with different rates of poverty? Have they examined the relationship between family homelessness and living in temporary accommodation—120,000 children will live in temporary accommodation this Christmas—and family breakdown? What is the current rate of children living without a father in the home in this country? What is the rate anticipated in 10 years’ time?
I look forward to the Minister’s response.
Baroness Pinnock (LD)
My Lords, I thank the noble Lord, Lord Bird, for initiating this very important debate. I agree with him that we need a strategic approach to tackling child poverty. However, I disagree with him on this point. Not everyone is endowed with the characteristics that can get them out of poverty by their own endeavours.
I will describe a local picture of child poverty. Kirklees Council, where I live and where I serve on the council, serves 420,000 people. It produced a report on poverty in the district this year and these are some of the facts included in that report. There are 20,840 children living in poverty in Kirklees—one in five—and almost two-thirds of those live in lone-parent households. Some 24% of all households have an annual income of below £10,000. That describes the scale of poverty in the district where I live.
The impacts on people’s lives are profound and long-lasting. The inequalities in their lives start at birth, when babies whose mothers are poor tend to have a low birth weight, which can lead to preventable physical and mental health disabilities. Poor health for children growing up in poverty is also a feature. They are more likely to be taken to A&E before they are three years old than their peers. They tend to suffer more persistent, frequent and severe health problems throughout childhood. At school, deprivation tends to result in lower levels of attainment at both key stage 2 and key stage 4. The quality of housing that they live in is also often poor. In Kirklees, over one-third of the properties do not meet modern standards and can be damp and difficult to heat. The result is children suffering from respiratory problems. Often, too, their homes are overcrowded, which adds to family stress and restricts the ability of children to do homework. Statistics show that children who grow up in poverty tend to have poor outcomes in life. They tend to die at a younger age, suffer from chronic ill-health, end up as unskilled workers and have long periods of unemployment. Their aspirations are limited.
The question that we should be asking ourselves today is what can be done to break this cycle of deprivation and stunted life chances, so I have a few suggestions. Housing desperately needs to be improved. Our existing housing stock will be where millions continue to live and some will have their lives blighted by its poor quality. Perhaps the Government could consider measures to cut the cost of home improvements for poor-quality housing. Perhaps they could give grants for housing improvement. That would be novel. In Kirklees, when I was council leader, we introduced the warm zone scheme, which offered free loft and cavity wall insulation to every home. It was mainly funded by an energy company. The result was warmer homes and consequent health improvements. Perhaps the Government would consider replicating that scheme.
The cost of childcare is a huge impediment to adults taking low-paid work. Continuing the funding for childcare of two year-olds in poorer families and not diverting it, as some media reports have suggested might happen, to support the more recent universal childcare offer, would demonstrate the Government’s commitment to supporting families out of poverty.
Another action would be to ensure that the pupil premium is spent on improving outcomes for these children. First, libraries should remain open. Too many are closing—21 of the libraries in my own district have closed, have restricted hours or are run by volunteers. They need to remain open and be available for children in overcrowded homes to do their homework, and to widen their learning and aspirations about what is possible. Above all, we need to raise the sights of young people who have had a poor start in life. They can be the first in their family to go to university, but only if the Government provide financial support for them to do so.
There is much that we can do to help children to have a fair start in life and help all reach their potential. There is a financial reason for doing so, because poverty is a cost on the national purse. Above all, there is a moral imperative.
Baroness Sherlock (Lab)
My Lords, I thank the noble Lord, Lord Bird, for tabling this debate and all noble Lords for their contributions. As I listened to the debate, I was struck not only by how many interesting ideas we have about poverty but by how many of those who spoke are directly involved in doing something. The noble Lords, Lord Bird and Lord Mawson, with their social enterprises and the noble Earl, Lord Arran, who is reaching out by giving holidays to poorer children. The noble Earl, Lord Listowel, is a braver man than I in teaching people to ski and to skate, which is amazing, and there is the work of the noble Baroness, Lady Pinnock, in her council. I am very inspired by this and I am grateful to noble Lords for sharing their experience.
As we have heard, the context of today’s debate is that child poverty in Britain is simply far too high. Whatever measure we use—I am old-fashioned and go with the international standard of 60% of median household income—we are talking about 3.9 million children living in poverty in the UK in 2014-15, and as the right reverend Prelate the Bishop of St Albans mentioned, the figure is rising by 200,000 year on year. Some two-thirds of children growing up in poverty live in a family where an adult is in work. That is one of the key things I want to talk about today. We heard from the noble Earl, Lord Arran, and others about the scarring effect in later life of poverty and I have been reminded by the North East Child Poverty Commission about the critical state of the damage being caused at the moment by, for example, food poverty and food insecurity.
In September the Joseph Rowntree Foundation published a detailed report entitled UK Poverty: Causes, Costs and Solutions. In her foreword, CEO Julia Unwin said:
“You can blame individuals for the bad decisions they make, and fool yourself into believing it could never happen to you. Or you can blame national structures—if only the system of tax and benefits could be fundamentally redesigned, and structural inequality abolished, then poverty could be ended”.
She goes on to point out that neither of these is the answer and that structures and choices must be considered together for policy to be effective. I am absolutely with all those noble Lords who talked about the importance of learning from people living in poor communities, looking at the assets they have and working with those assets—but I also think that there are structural questions which cannot be ignored. The JRF report highlighted five key causes that need priority action: low wages, insecure jobs and unemployment; a lack of skills; family problems; an inadequate benefits system; and high costs, including housing.
The Government’s strategy identifies—sort of—two and a half of those. They want to address educational attainment and family breakdown, although I do not think that they map fully on to these drivers, and they want to deal with workless households. They also highlight problem debt and addiction. All of those are important. But I worry that the Government’s strategy refuses to address the other half of the picture because they are the dimensions that relate to the structural causes of poverty and they cannot be ignored.
The JRF report highlights the changes to the kinds of jobs available to many people in the UK, including the problems caused by firms,
“whose commercial strategies depend on low-paid, low-skilled, insecure work that does not provide a stepping stone to something better”.
If work cannot lift a family out of poverty, just tackling worklessness will not solve the problem. We have to accept that before we go any further.
The report then notes that the benefits system does not make work easy or safe and states:
“The level of welfare benefits for some—those in work, seeking work or unable to work because of health or care issues—is simply not high enough to avoid poverty, when combined with other resources and high costs”.
It is not surprising, given what has happened. Billions of pounds have been taken away from the pockets of low-income families. The Welfare Reform and Work Act alone, by reducing the benefit cap, has hit almost 250,000 children in low-income families and it has frozen the level of most benefits and tax credits for four years, which the Children’s Society estimates will affect some 7.5 million children in 4 million families, nearly two-thirds of them in work.
Then there are the high costs. The JRF report points out that between 2008 and 2014 the cost of essentials increased three times faster than average wages, adding to a widespread sense of insecurity. This is a toxic cocktail of high costs and rents, low wages, unpredictable and insecure jobs, unaffordable childcare and cuts to in-work benefits. Those are government failures. Ministers cannot just blame individuals for their poverty when they have set them up to fail by refusing to address these structural shortcomings.
I have no doubt that these benefit cuts were forced on a reluctant DWP by George Osborne’s Treasury, but now that we are living under a new dispensation I encourage the Minister to beat a well-worn path to the Treasury and urge his Government, as the right reverend Prelate said, immediately to reverse the drastic and counterproductive cuts to the work allowance and to universal credit which have stopped making work pay in the way it should. They should also return to increasing benefits and tax credits by the rate of inflation so that poor families do not simply get poorer year on year.
The other key change in the Act was to shift the Government’s focus from poverty to social mobility and life chances. I have read a great book on life chances published yesterday by the CPAG which makes some brilliant connections between money and non-financial issues in policy. I declare an interest as one of those terrible advisers to government whom the noble Lord, Lord Bird, berates, but when the Labour Government increased the spending capacity of low-income families in the early 2000s, they found that as income rose, spending patterns changed. Families spent more on fruit and vegetables, children’s clothes, toys and books, and less on alcohol and cigarettes.
Kitty Stewart and Kerris Cooper have looked at the impact of household income on children’s outcomes and found out, as the right reverend Prelate said, how much of a difference is made to educational attainment when income is increased. That means not only staying on at school but attainment levels in maths and reading, and in examination results. All of this improves as income improves. Likewise, parenting and family environment: there is very clear evidence of much stronger parenting where income can be increased.
The problem with social mobility is that, done properly in our economy, it is a game of snakes and ladders. If more poor kids do well, some rich kids will have to do less well. We cannot have a board with only ladders. We cannot all be QCs and surgeons; someone has got to be at the bottom and I am so grateful that they are because in our current environment we have people out there caring for disabled and older people, sweeping the streets and working as teaching assistants who are often being paid the minimum wage. That means that I do not just want social mobility. I do not want a country where our children are better equipped to fight each other for a spot at the top. I want one where all of our children can flourish wherever they end up on the board. They deserve no less.
The Minister of State, Department for Work and Pensions (Lord Freud) (Con)
My Lords, I join other Peers in congratulating the noble Lord, Lord Bird, on securing this debate on what is a vital issue and will go on being a vital issue for decades. I also thank him for drawing a distinction, from his family background, on the difference between being poor, as his uncle was, and living in poverty.
The evidence is clear that work is the best route out of poverty. Working-age adults in non-working families are almost four times more likely to be living on a low income, while the Child Poverty Transitions report published in June 2015 found that 74% of poor children in workless families that moved into full employment did exit poverty. I suspect that I do not have to draw the attention of noble Lords to the employment figures released yesterday. The record on employment is pretty compelling. The employment rate remains at 74.5% and now some 2.8 million more people are in work than in 2010. This is important because it is not just that being in work brings financial benefits; there are wider benefits as well. Clear evidence shows that good-quality work is linked to better physical and mental health along with improved well-being, and that better parental health is associated with better outcomes for children.
I am very aware that, since the last time we discussed this matter in a debate initiated by the noble Lord, Lord Bird, many things have changed. This country has taken on new leadership and a new direction, but what remains the same is that tackling poverty and disadvantage is a priority for the Government: a priority to deliver real social reform. The new Prime Minister—she is almost not new any more—has set out clearly that she is committed to building a country that works for everyone, not only the privileged few. To do that, she has set up a new social reform Cabinet committee which brings together nine government departments to oversee and agree social policy reforms and lead the Government’s work to increase social mobility, deliver social justice and make Britain a country that works for everyone. The Secretary of State for Work and Pensions has also said that he will make a number of announcements in the coming months.
Let me pick up some of the points made today. The central point made by a number of noble Lords, not least by the noble Lord, Lord Bird, was on the importance of tackling the root causes of disadvantage and poverty and not just the symptoms. That means tackling some complex social problems and it is why we rejected the narrow, income-based approach to poverty that focused on getting families above a notional poverty line. We now have two new statutory measures that will drive real action on worklessness and educational attainment. The right reverend Prelate the Bishop of St Albans talked about the importance of educational attainment in tackling this issue. We will have other, non-statutory measures for getting at the root causes.
I have spoken about the Government’s record, but it is worth putting the figures on the record: the number of workless households since 2010 is down by 865,000; there are 557,000 fewer children living in a workless household than in 2010; the number of households in the social rented sector where no one works has fallen by nearly 350,000 since 2010; and average household incomes have reached their highest ever level, growing last year by 3.4%, which is the fastest rate since 2001-02.
Clearly, there is much more to do. This Government are committed to ensuring that those in work are paid a fair wage and have opportunities to progress and achieve their potential. That is why we are getting people into employment and working to change attitudes. We are also introducing reforms to make sure that work always pays. We are cutting income tax for more than 30 million people this year and taking 4 million of the lowest-paid out of income tax completely. We are making sure that people working 30 hours a week on the national minimum wage do not pay any income tax and giving full-time low-paid workers previously on the national minimum wage a pay rise of more than £15 a week through the national living wage.
We cannot forget the importance of universal credit as it rolls out. To pick up a point made by the noble Lord, Lord Mawson, that new benefit system starts to break down the silo-ised legacy benefits system, which will allow some of the local initiatives that he and others are pursuing to happen. We already see the effect with the incentive structures of universal credit. For every 100 people who found work under the old JSA system, 113 universal credit claimants have moved into a job. Universal credit also gives the opportunity to tackle the poverty premium that the right reverend Prelate talked about. The reform increases support for parents. Universal credit now provides for 85% of childcare costs. The right reverend Prelate asked whether the work incentives are undermined by the changes to work allowances. They do not change the structure of the incentives. We retain the taper in UC at 65%.
One issue we face is getting services working together more efficiently to help support people with complex problems into work—it is the central issue in tackling poverty, in my personal view. Through universal support, we are helping universal credit claimants to address some of their barriers—in this case, their digital and financial barriers—and transforming the way that jobcentres work as part of their local communities to allow them to tackle barriers faced by people with complex problems. We are testing and learning in this area and have built up a lot of evidence on how people face multiple barriers. We are reviewing our universal support approach to see how best to expand it and address them. I had an interesting and valuable meeting with the noble Lord, Lord Mawson, recently, which got us thinking about how to put the community into that approach, so that it is not just done to people but people are part of the solution.
The noble Earl, Lord Listowel, asked about family breakdown. We do not monitor the impact of poverty on family breakdown, but we are clear that we cannot afford to overlook the importance of the family as the basic block on which we build a successful economy. ONS figures show that, of the nearly 2 million lone parents with dependent children in the UK in 2015, women accounted for some 90%. The evidence shows that what matters most is the quality of family relationships, not whether parents are married or separated. In particular, children have been shown to be at risk of poorer long-term outcomes if exposed to frequent, intense and poorly resolved conflict between parents—we are picking up some of that evidence in what we do.
On fuel poverty, mentioned by the right reverend Prelate and the noble Baroness, Lady Pinnock, cold weather payments are running at £25 per week between November and March and we have paid out £3.9 million in 155,000 individual payments. The warm house discount takes £140 off costs for 2 million households.
Let me reassure the House that this Government are absolutely committed to fighting against the injustices of society and ensuring that everyone has the right opportunities to fulfil their potential. Making work pay, supporting families into work and out of poverty, by tackling the root causes of poverty and not just the symptoms, and delivering real social reform will be a priority for this Government.