Children Living in Poverty
Baroness Jenkin of Kennington Excerpts(5 years, 4 months ago)
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Baroness Buscombe
My Lords, again, we are doing a huge amount, quite a lot of which is not reported or reflected in the additional support we have injected. I have just returned from the G7 in Paris, where we focused on labour. There is no question that, across the world, the changing world of work presents challenges. We are at the forefront on this issue; other countries look to us. Our living wage is way in excess of what other countries afford their citizens. We are setting an example and achieving a huge amount in having a transformational system that helps people into work, pays them to work and gives them in-work progression. Let me give an example: a couple with three children need to work for a total of only 24 hours per week to be exempted from the benefit cap; they can then receive from the state the equivalent of a £35,000 gross salary a year, plus housing support. That is not ungenerous.
Baroness Jenkin of Kennington (Con)
My Lords, does the Minister welcome the recent weekly earnings increase?
Baroness Buscombe
Absolutely. The increase in weekly earnings makes a huge difference. Tackling poverty will always be a priority for this Government; they have lifted 400,000 people out of absolute poverty since the party opposite was in government. Inequality has fallen. Our reforms have made sure—this is important—that our welfare system encourages people into work, but is also fairer for the taxpayer and sustainable for the future.
Benefits: Reductions
Baroness Jenkin of Kennington Excerpts(6 years ago)
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Baroness Jenkin of Kennington (Con)
My Lords, I start by putting the current benefits system in context. Welfare spending has increased fourfold in cash terms over the past 30 years and has more than doubled in real terms after adjusting for inflation. In 2016-17 about 25% of GDP—around £484 billion—was spent on the welfare state, which includes health, education, social services and housing as well as social security and tax credits. Some £217 billion of this was spent on benefit payments, equivalent to 28% of total public spending. At any one time, over half of all families receive income from at least one benefit; most people will receive one or more welfare payments for well over a third of their lives, including child benefit when young and the state pension when retired.
These are vast sums of money. The Government have a duty to the taxpayer to ensure that the money is well spent and properly targeted, and provides support to those most in need; this is what the welfare reforms are designed to do. Since 2010, the minimum wage has risen and we have seen the introduction of the living wage. Thanks to the national living wage, full-time minimum-wage workers have had an annual boost of £2,000 since 2016. Seven years ago the personal allowance—the amount people can earn before paying income tax—was £6,965. Since 20l5, 1.7 million people have been taken out of paying tax altogether and taxes have been reduced for 32 million people. The typical basic rate taxpayer now pays £1,075 less in income tax than in 2010. People have been helped to keep more of the money they earn.
The key to all this is jobs. The UK is currently experiencing record employment levels—3.3 million jobs have been created since 2010, three-quarters of which are full-time and permanent—and wages are set to rise above inflation for each of the next five years. Fewer than 3% of current jobs are on zero-hours contracts. The number of women in work has broken records to reach 15.26 million and youth unemployment has fallen by over 40% since 2010.
I am sure other noble Lords will talk in greater detail about universal credit, which is designed to make work pay; once fully rolled out, it will pay more than £60 billion a year to around 7 million claimants—again, a very substantial amount of money. Any massive change of this kind leads to rollout problems, as we experienced with the introduction of tax credits, but those calling to dismantle UC risk throwing the baby out with the bathwater. I have asked colleagues in the other place about their constituents’ experiences and they tell me that many of the teething problems are due to human error—a work coach has not offered an advance or a claimant has forgotten to sign the claimant commitment.
For the most disadvantaged, financial support is available through UC on day one; we need to invest in better training for jobcentre and DWP staff, as well as organisations like Citizens Advice, who offer support to claimants. Noble Lords will welcome the additional support announced in the Budget. As the chief executive of the Trussell Trust said:
“These are significant improvements that will make a real difference to many people supported by universal credit in the future”.
Although UC pays up to 85% of childcare costs regardless of the number of hours worked—compared to 70% under the legacy system—the cost of childcare is still too high and the provisions within UC do not go far enough to cover that cost. So when a parent who has childcare costs gets a job and increases their hours, the cost of childcare eats into their income. This problem is particularly acute for single parents.
The best way to support families is to reduce the number of households where no one works. Children living in couple households where no adult works have a more than 64% chance of living in poverty, compared with just a 1% chance for those living with two adults in full-time work. Having one parent in work compared to no parents in work is linked to better educational outcomes and a higher probability of employment for children in the long term. Unemployment can lead to family breakdown, which can mean dire consequences for family finances and increased risk that a child grows up in economic hardship.
My final point is on the couple penalty. Under UC, as under the legacy system, parents are better off separated rather than married or cohabiting as a couple under the same roof. This is madness. Women are 40% more likely to enter poverty if they divorce than if they remain married. Lone-parent families are twice as likely to be in the bottom income quintile as two-parent families. Children in lone-parent households are twice as likely to be in the bottom 20% of child outcomes as children in married families. I urge the Government to focus on policies which ensure that families are supported and that there is no disincentive to creating and maintaining a strong family unit.
Universal Credit
Baroness Jenkin of Kennington Excerpts(7 years, 10 months ago)
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Baroness Jenkin of Kennington (Con)
My Lords, I remember visiting the Hammersmith Jobcentre Plus three or four years ago, with other noble Lords, including the noble Lord, Lord Kirkwood, accompanied by my noble friend Lord Freud for a briefing on universal credit and to see the new system for ourselves. We spoke with frontline UC advisers, most of whom had previously been jobseeker’s allowance advisers, to find out more about their experiences of the new system. We were all impressed by what we saw and heard.
The coaches whom we talked to felt that universal credit fostered a more positive relationship with their customers, that it gave advisers more flexibility, and that it was already changing the culture of Jobcentre Plus away from a focus on off-flows to employment outcomes. These front-line advisers in Hammersmith said simplification works in practice, and that UC has helped to remove what they called the “drama” of the benefits system. The existing benefit system is complex, involving multiple agencies, applications, processes and rules, and affects the relationship between the adviser and the recipient. Rather than spending a lot of time trying to explain different elements of the system, advisors have time to support their customers to find work. This led to much more positive relationships and more rewarding work for advisers. They had far more flexibility and job satisfaction than when working on jobseeker’s allowance, and the new claimant commitment is bespoke and customer-led and it allows them to include a range of activities not traditionally classed as job-seeking but which help to remove barriers to work. Examples included attending an appointment with the local authority housing team, co-located in the building, to deal with the problems of rising arrears and avoiding homelessness; it also included watching a YouTube video on interview techniques.
My other memory of that visit is of my noble friend’s incredible grasp of the detail, something which we in this House are so well aware of, and his genuine commitment and care for those who find themselves struggling to navigate the complexities of the old system. I bumped into the noble Baroness, Lady Hollis, yesterday who said how sorry she was not to be able to speak in this debate today. I expect that my noble friend wishes that she had not been available to speak in a number of previous debates during his six and a half years in the job. I know that many of us have felt intimidated by her detailed knowledge of the brief. I, for one, have felt on occasion like a 16 year-old First World War fighter pilot up against the Red Baron—or the Red Baroness on this occasion—but I was struck by her comments to me. She said, “I am a fan of the noble Lord, Lord Freud. He has always been available to talk things through, and his door has always been open”. We have been lucky to have him as Minister and we will miss him enormously.
Life Chances Strategy
Baroness Jenkin of Kennington Excerpts(8 years, 5 months ago)
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Baroness Jenkin of Kennington (Con)
My Lords, follow that. I start by thanking my noble friend for introducing this debate so ably and for his very inspiring introduction. The life chances strategy is a crucial step towards the Government’s goal of achieving social reform. True social reform cannot be achieved just by good GDP statistics, nor by binary targets on relative income poverty. What social reform needs is a holistic approach to tackle all the roots of poverty, as set out so clearly in the Prime Minister’s speech in January. I heard him earlier today confirming that this will be a top priority for the rest of his period as Prime Minister.
The speech in January and the White Paper to follow are about making sure that children who simply happen to be born into poorer homes are not condemned to poverty but have opportunities to advance themselves that more closely resemble the chances enjoyed by those born to more privileged parents. Issues of addiction, mental health, educational attainment and, above all, family stability all need to be addressed as well as the economy. We need to start a conversation about soft skills and their role in social mobility. Privately educated children do not do well just because of their exam results or social connections but because they learn the confidence and social skills to fit in to professional environments and top universities.
We have to start with the fact that the early days and a stable and loving family are crucial to later success. It is tempting for politicians of all parties to treat social mobility as primarily an education issue, suggesting that all that is needed is better schools for poor kids. Of course, those things are crucial, but we need to accept that what also matters is things such as social networks—who you know and grow up with—and role models, as well as parental ambition.
Those are things that cannot be changed by pulling one lever in the government machine room, passing a new law or increasing a budget. Instead, it is about changing culture and outlook, the way people think and feel, the ambitions kids grow up with and the dreams parents give their children. Delivering such culture change is very hard for government to do, but the Prime Minister and the Government deserve credit for at least starting the conversation.
Although it is difficult, we need to talk about parental ambition. Perhaps we should go further and look at how parental ambition differs by race and background. Are poor black parents more ambitious for their kids than poor white ones? What about immigrants? There is evidence that they aim highest for their children—look at the tiger mum, for example. How do we share that ambition with native British children? Likewise, a new mentoring scheme and better careers advice and work experience all provide really worthwhile opportunities.
How do we tell poor kids that they can grow up to be doctors, lawyers and engineers if no one they know, no one who looks and sounds like them, is a doctor, a lawyer or an engineer? Those of us who travel in very poor countries are always struck by children’s ambitions to become doctors and lawyers, despite the fact that they, too, are unlikely to have ever met one.
Role models are also crucial, and I very much hope that the White Paper will expand on that. Let us take a look at British culture as a whole. Where are the role models for poor children to emulate who do not involve football or show business? How do we ensure that more white working-class boys dream of becoming Richard Branson, James Dyson, the noble Lord, Lord Sugar—or, more importantly, my noble friend Lord Holmes—as well as David Beckham; Karren Brady—my noble friend Lady Brady—rather than Kim Kardashian? My noble friends the Leader of the House and the Minister are great role models. I am sure I will have unleashed a Twitter storm of outrage by venturing into this controversial space.
Political role models, too, are important. Although things are changing with, in my party, a postman, a cancer nurse and a medical doctor in the NHS all elected as Conservative MPs last year, all parties need to do more to reach out and attract more candidates and politicians from all kinds of backgrounds.
These are all difficult issues to talk about and difficult for a Government to act on, but I congratulate the Prime Minister on starting the journey and look forward to seeing where it goes.
Children: Parental Separation
Baroness Jenkin of Kennington Excerpts(8 years, 6 months ago)
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Baroness Jenkin of Kennington
To ask Her Majesty’s Government what steps they are taking to prioritise the wellbeing of children when their parents are going through separation.
The Minister of State, Department for Work and Pensions (Baroness Altmann) (Con)
My Lords, we are prioritising the well-being of children by helping parents resolve conflict during separation. We have doubled funding for relationship support for couples to £70 million during this Parliament and our innovation fund has worked with around 30,000 separated families to help them collaborate in the best interests of their children.
Baroness Jenkin of Kennington (Con)
My Lords, we are all aware that post-conflict separation is very harmful for children and is often exacerbated by disputes over child maintenance payments, especially when government agencies are involved. Will my noble friend update the House on how the 2012 child maintenance reforms are working as regards payments made within family arrangements?
Baroness Altmann
My Lords, I am delighted to report that our 2012 reforms have been a huge success so far. They have incentivised separating families to make their own arrangements rather than using the statutory system as a default option, as co-operation between parents is clearly better for their children. Seventy per cent of clients using the service are choosing direct pay.
Employment: Job Creation
Baroness Jenkin of Kennington Excerpts(8 years, 7 months ago)
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Baroness Jenkin of Kennington
To ask Her Majesty’s Government how many net additional jobs have been created in the United Kingdom since 2010, and what assessment they have made, if any, of how that figure compares to those of the 19 nations of the Eurozone.
The Minister of State, Department for Work and Pensions (Lord Freud) (Con)
Since 2010, employment in the UK has risen by more than 2.3 million people. Comparable international figures for this period are not available, but over the last year the UK has seen the second largest rise in employment in the whole of the EU, after Spain.
Baroness Jenkin of Kennington (Con)
I thank my noble friend. Youth worklessness is still too high in this country. Will my noble friend tell us what the Government are doing to tackle it?
Lord Freud
We have had youth obligation programmes and we seem to have turned the corner here. The figure that I have consistently given to this House over the past nearly six years has concentrated on the workless number—those unemployed or inactive in the 16 to 24 age group. In recent months that figure has been at an all-time low. It is 14.3% of the population and has come down to just a shade over 1 million. It is very interesting that even through the boom years the figure was going up. There was a structural issue. We seem now to be getting at the roots of that structural problem and are beginning to see the figure come down, as I said, to an all-time low in recent months.
State Pension: Women
Baroness Jenkin of Kennington Excerpts(8 years, 11 months ago)
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Baroness Jenkin of Kennington (Con)
My Lords, I am extremely grateful to the noble Baroness, Lady Bakewell, for raising this issue—just in the nick of time for me, as it happens, as I have another four days left in my 50s. We can only just scratch the surface of the subject of many women’s perceived and actual financial insecurity, especially as they approach retirement, but this is a very good place to start. Much has been said over recent years about how the financial protection enjoyed by pensioners, despite fiscal consolidation, contrasts a little too sharply with that for young people, as my son, who is in his 20s, reminds me on an almost daily basis. Instead of Britain being “no country for old men”, it should perhaps be described as a pretty good country for old men. Final salary pension schemes, after jobs for life, are now very much consigned to history, but many male baby boomers and their families still benefit—and I do mean old men.
Research from the Centre for the Modern Family, whose support in helping me to prepare for this debate has been much appreciated, shows that women entering retirement seem to be in a very different place. There are cultural reasons for this, and it is not due just to state and other pension arrangements, as I hope to make clear. The Pensions Act 2011, which gradually equalises pensions ages, has affected a significant number of women. DWP figures suggest 2.1 million women will see their state pension age increase by one year or less, with a maximum increase of 18 months. This is, of course, relative to the timetable set by the Pensions Act 1995, which affected a group of women born over a three-year period whose state pension age was set at between 60 and 63. However, all women affected by accelerated equalisation will reach the stated pension age after the introduction of the new state pension, which is more generous for those women who historically did poorly under the current system because of lower average earnings and part-time working.
The 2011 changes responded to increases in life expectancy that were faster than projected, and the price tag for not revising the 1995 timetable was a cool £39 billion. Also, the Institute for Fiscal Studies has shown that the rise in women’s state pension age since 2010 has been accompanied by increases in employment rates for the women affected. Going with the grain of this, the Government have abolished default retirement age for all workers and extended the right to request flexible working to all employees. As we are all too well aware, time sovereignty can be incredibly important to women, perhaps particularly at this stage of life when they may be acting as sandwich carers to grandchildren, disabled adults and often frail elderly parents and relatives. Life may only “work” for them if they have this flexibility, as they often still have an enormous amount to contribute to the labour market but cannot fit that contribution into the traditional nine-to-five slot.
The Centre for the Modern Family research, analysing the changing relationship between the family and the workplace, found that working later is the new norm. Remaining in work past the current state pension age is now an established concept among the general public, but retirement planning is left late. The majority of workers over the age of 55 have either not planned their retirement or wish to continue working. However, there is a big difference between men and women in terms of this latter category; while more than one-third of men—38%—want to carry on working because they like their jobs, barely more than one in 10 women feels this way. Financial education and advice provided through services such as the Money Advice Service and Citizens Advice are crucial to encouraging people to engage with retirement planning. Employers could also play a greater role in advising staff on their pension options, if they do not fall foul of regulations by providing financial advice that they are not qualified to offer. Perhaps the Minister might have some advice on that.
Obviously, the Government must inform recipients of the state pension on when they will be eligible and what they can expect. I think that I am right in saying that letters were sent out from DWP to addresses, current with HMRC at the time, to reach women affected by the 2011 changes at least two years before they reached state pension age—although, as the noble Baroness points out, it has not been by any means perfect. While this advance notice is important, planning and saving for retirement have to start far earlier than research suggests is the current social norm. Scottish Widows, for example, has been studying women’s retirement prospects for over a decade and has consistently found, year on year, that women lag behind men in saving adequately for retirement. While there are a number of reasons for this—and of course the gender pay gap must bear some responsibility—a problem remains specifically with women’s understanding of long-term financial savings products. Again, research shows that 43% of women still say that they have little or no understanding of individual pension savings, while 71% of women do not know what pension pot they will need to secure the retirement income they hope for. Pension providers, employers and individuals themselves all have a role to play to address this issue; it must become the norm for everyone to consider the size of their pension pot and their financial aspirations for retirement at an earlier stage.
This year’s research is beginning to provide some reasons for optimism, as latest figures show that 52% of Britain’s women are now saving adequately for retirement, but projections suggest that many women will not have a comfortable and enjoyable retirement, and may spend their later years worrying about their financial situation. Some 28% of retired women say that the income that they received once retired was less than they had expected, and 25% of females aged 30 to 49 are non-savers, compared to 15% of men. This is not all down to uncertain working patterns; only 19% of women on permanent contracts are now non-savers. However, this number jumps to 35% of self-employed, or women who work freelance. More than half of the UK’s self-employed or freelance working women—56%—are undersaving compared with 45% of those on permanent contracts.
Ultimately, women need to be able to make better informed decisions. Information, whether from the Government, pensions providers or other trusted sources of advice, is indispensable, but many women feel defeated from the outset in understanding what is being given to them in this regard because of their antipathy to financial and, more broadly, mathematical information. I was recently interviewed for a publication called The Fear Factor, which aimed to highlight how otherwise educated women can feel ill equipped, by dint of their sex, to understand maths and money. Poor maths skills and inadequate financial management skills are linked, and women are peculiarly willing to admit to being not just bad at maths but also anxious about figures, and not very good with money. Such attitudes—I am afraid that I am speaking to myself, particularly about maths—need to be challenged.
The Fear Factor project is run by Shirley Conran OBE, who wants to liberate women from these fears in the same way as she aimed to liberate women from housework in the 1980s. She is arguing for a national campaign to expose the maths myth that it is natural for women to be daunted by maths and they need men to manage their money because they lack the necessary maths gene to make sense of it. Ms Conran has been engaging with the Department for Education, as her focus was mainly on young women, but I think that the campaign needs to reach right up into the age range we are discussing today. Will the Minister consider meeting Shirley Conran and her team to discuss how to help women of pensionable age to gain mastery over their fears in this area so that they are able to approach retirement with more confidence and foresight?
Personal Independence Payments
Baroness Jenkin of Kennington Excerpts(9 years, 8 months ago)
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Lord Freud
We are maintaining our spending on disability and disability payments and services are running at £50 billion a year. Indeed, our disability payments have been moving up right the way through this Parliament in real terms.
Baroness Jenkin of Kennington (Con)
My Lords, will my noble friend the Minister tell us how effectively the fast-track service for terminally ill claimants is performing at the moment?
Lord Freud
People who are terminally ill are fast-tracked through the process and the median end-to-end clearance time is now, as of this January, seven working days compared with 11 days in January last year.
Poverty and Social Exclusion
Baroness Jenkin of Kennington Excerpts(10 years, 3 months ago)
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Baroness Hollis of Heigham (Lab)
My Lords, we have a bedroom tax because the Liberal Democrats voted for it—
Baroness Jenkin of Kennington (Con)
Does my noble friend agree that employment alleviates poverty, and does he welcome yesterday’s unemployment figures?
Lord Freud
It is always a great pleasure to reflect on the fact that we now have the highest rate of employment that this country has ever seen. One of the most interesting figures that I have looked at lately is that which shows what has happened to workless households in the social housing sector. That figure has always been high. It was up at 48.7% when we came into government and never got below 46%-odd at the height of the boom. However, it is now right down at 42.7%. That reflects a major cultural change as we get this country back to work.
Universal Credit
Baroness Jenkin of Kennington Excerpts(10 years, 3 months ago)
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Baroness Jenkin of Kennington (Con)
My Lords, as my noble friend is aware, several noble Lords were able to visit the jobcentre in Hammersmith this morning to see for themselves how the programme is being rolled out. Perhaps I may take this opportunity to thank officials from DWP and those at the jobcentre who were able to brief us so fully and to say how impressed we all were by how it is working—in particular, we were impressed by the coaches, who were able to give so much care and attention to individuals. Can my noble friend confirm that other noble Lords across the Chamber will be able to visit the jobcentres where universal credit is being rolled out to see it for themselves in a similar way?
Lord Freud
One thing I want to ensure is that I can get as much information to noble Lords as I possibly can. I am pleased to say that I have extended an invitation, which has been accepted, to arrange for a group of opposition Peers—as many as the noble Baroness would like to bring; well, not quite as many as that; we could not fit them all into Hammersmith; but enough to fill the room with a little standing room—to go through what is happening on the ground and the process.
One thing that I am keen to show the noble Baroness, which we saw this morning with a small group, is access to the work coaches to see how they work with clients in an entirely different way—in particular, to try to help the most vulnerable, whether it is looking at how they budget or various other things that they will need to do under universal credit.