Child Poverty: Greater Manchester

(Limited Text - Ministerial Extracts only)

Tuesday 16th January 2024 Westminster Hall

[The Minister for Employment (Jo Churchill)]

It is an honour to serve under your chairmanship, Sir Mark. I first thank the hon. Member for Manchester, Gorton (Afzal Khan) for securing this debate. I am sure we all believe that we represent the best place in the world, although I feel a little outflanked today, given the presence of the hon. Gentleman, the hon. Member for Stockport (Navendu Mishra) and my hon. Friend the Member for Bolton North East (Mark Logan), who is sitting behind me. All of them are probably fighting for the constituency they represent to be recognised as the best place in Manchester. As the hon. Member for Manchester, Gorton articulated, it is a wonderful and vibrant city with a huge number of positives driving its resources.

Obviously, I disagree with the picture that the hon. Gentleman has painted. I do not believe that any Member elected to this place wants to see any child living in poverty in our constituencies. I fully understand the passion that drives the contributions on this important issue. The hon. Gentleman himself has explained the complexity of the issue, and how the compounding of many factors and variables makes it an enormous challenge. I am very proud that it was us who introduced not only universal credit, which has transformed lives, to replace the old legacy benefits system, but free school meals for children in reception, year 1 and year 2. I gently say that we will probably agree to disagree at the end of this debate, but I will lay out what we have done. I always urge, in areas such as this, that we all work across the Floor to help all our children rise to fulfil their talents.

I start by reassuring colleagues about our commitment to a strong welfare system to support those most in need. That is reflected in the £276 billion that we will spend through the welfare system in Great Britain this financial year, including a £124 billion package on people of working age and their children. Having uprated in line with inflation this year, we have announced a further increase of 6.7% in working-age benefits for 2024-25, subject to parliamentary approval, and that is well ahead of inflation and its projections. On top of that, we are increasing the local housing allowance from April, which will give a further 1.6 million low-income households the support that they need.

I know that many people are concerned about the cost of living, as the hon. Gentleman said. The Government’s commitment to provide support is reflected in the further £104 billion provided in this area over 2022-23 and 2024-25. In particular, 8 million households across the UK on eligible means-tested benefits have received the first of three cost of living payments totalling up to £900 in this financial year. That includes over 400,000 homes in Greater Manchester, and I am very pleased to confirm that the final payment will be paid to most eligible households next month to further help ease the burden.

I think there is a small area of agreement on the household support fund. For people who require that extra support, we have provided an additional £1 billion of funding, including the Barnett impact, to enable the extension of the household support fund until March. As with all such issues, we keep these things under constant review in the usual way, and before the announcements in the spring, it is not right to say it has ended. This current household support package finishes in March, but it will be kept under review. The covid pandemic and Russia’s illegal invasion of Ukraine have put pressure on virtually everyone, and the household support fund has been a hugely important asset. It has been in existence since October 2021 and we have provided a total of £2.5 billion in that time. It was introduced at a time when the pandemic placed real pressures on the economy, and it has provided that support through these disrupted times.

I am sure that the hon. Gentleman knows that the 10 upper-tier local authorities that make up Greater Manchester have together been allocated £134.6 million since October 2021, including £32.3 million for Manchester City Council, with nearly £13 million allocated to it in the last round. I was really pleased to hear his great examples of local authorities, but the third sector, which is so important in this area, has spent that money in order to add value. Funding has been distributed broadly in the sector and includes financial support to recent care leavers.

While we remain committed to a strong welfare safety net for families who need it, particularly during challenging times, we have always believed that the best way to help children in families who are struggling with their financial circumstances is through work. The hon. Member for Manchester, Gorton said himself that levels of worklessness in his area are higher. Our approach is based on the clear evidence of the importance that work, particularly full-time work, plays in lifting children out of poverty. The most recent data showed that in the 2021-22 period, children living in workless households were five times more likely to be in absolute poverty after housing costs than those in households where adults worked, which shows how important work is.

The data also showed that there were 400,000 fewer children in absolute poverty after housing costs compared with 2009-10—hardly the glowing record that the hon. Gentleman painted. In the north-west in particular, in the three years to 2021, absolute child poverty reduced by 8 percentage points compared with the three years before 2010 after housing costs were accounted for. There are now over 1 million fewer workless households than in 2010. That is more people working and 680,000 fewer children growing up in a home where no one works. As of today, there are 934,000 vacancies across the UK, so our focus is to work with our work coaches across the Department for Work and Pensions family, holding people’s hands and giving them confidence to step into work and progress into financial independence.

I speak to families regularly, as we all do, and they tell me that the two biggest barriers into work are childcare and transport. Manchester is a thriving transport hub and the extension of the £2 bus fares by this Government provides affordable travel options for many. Furthermore, we are extending childcare support so that from September, eligible working parents in England will have access to 30 hours of free childcare per week for 38 weeks of the year from when their child is nine months old.

Universal credit can provide up to 85% of a parent’s childcare costs, and in June last year we increased that by almost 50% to £951 for a single child and £1,630 a month for families with two or more. Importantly, we can also help with advances to help people into work.

We are not stopping there. From April this year, subject to approval by Parliament, the maximum universal credit childcare amounts will increase further to over £1,000 a month for single children and over £1,700 for two or more children. We want to support people into work and allow them to progress. As I said, work coaches and those in our DWP centres stand ready. The national living wage has increased by some £6,700 since we first introduced it in 2016. This year, it has gone up to £11.44—an increase of 9.8%. That is not the record the hon. Member for Manchester, Gorton painted.

To conclude, we are committed to providing opportunities for parents, wherever they live in the UK, to succeed in work. That is the only sustainable way of tackling child poverty in the longer term. It balances the needs of families on benefits with the expectations of taxpayers who contribute to the system. At the same time, as we have done throughout this challenging time, we will of course continue to ensure that vulnerable families have the support they need through the welfare system—but that is a job for all of us. I thank the hon. Gentleman.

Question put and agreed to.