Welfare Benefits Up-rating Bill

Baroness Massey of Darwen Excerpts

Monday 11th February 2013 Lords Chamber

[Baroness Massey of Darwen]

My Lords, speaking at this point is always something of a challenge as most things have already been very effectively said. I shall be brief but I wish to build on the many brilliant and incisive speeches that have made reference to child poverty. I shall focus my remarks on the potential impact of the Bill on children and I shall conclude that the Bill needs a complete reworking.

I am aware that the Government wish to deliver a new welfare system. The question is: why punish children? Have we not learnt from all evidence, including recent significant reports, that every intervention with young children is the greatest safeguard we have for saving money in the long term, with reductions in criminal and other risky behaviour and greater achievement by children as they grow up? The noble Baroness, Lady Gardner of Parkes, mentioned economic sense. Surely giving children all the help they can get is economic sense. I submit that it is inaccurate and disrespectful to blame child vulnerability on parents who are deliberately out of work or addicted to drugs and alcohol. These are not the majority of parents.

I recall the responses to the Autumn Statement and to the Bill by charities, particularly those engaged in fighting child poverty. The Children’s Society urged the Government to reconsider the Bill, stating that, if it were passed, millions of children and families would suffer. The Child Poverty Action Group has said that the Bill will increase both absolute and relative child poverty and that the precepts of the Bill are “indefensible”.

I remember, too, as a trustee of of UNICEF UK, report cards on child well-being across the world’s richest countries—the result of research carried out for UNICEF by the Innocenti Research Centre. Report Card 7, published in 2007, provided a picture of child well-being across six dimensions, including material well-being, health and education. Britain did badly across the board. Report Card 10, on measuring child poverty and which covered the period up to 2009, indicated the relationship between the proportion of GDP spent on children and its consequences, and showed that policy choices by Governments significantly affected the lives of the poorest children. As to the UK, the report concluded that even though the UK had missed its own targets to reduce child poverty to 1.7 million by 2010, it had one of the largest reductions in child poverty. This was attributed to the previous Government’s focus on increasing household income.

The research and concerns that I have mentioned, and there are many others, speak for themselves. Why are the Government seemingly ignoring the evidence base for child poverty, ignoring those organisations that work with children and families, and ignoring the calls of families themselves who are worried about how they will feed, clothe and maintain the welfare of their children? Are all these people wrong? I think not.

Barnardo’s, as noble Lords will know, works directly with young people and their families through a network of services across the UK. Barnardo’s states that the Bill will impose real-terms cuts to the incomes of highly vulnerable and disadvantaged families who are receiving in-work or out-of-work benefits. Many such people are in work but on low incomes. The policy will punish children by trapping them in poverty. It is naive to berate certain groups for pushing children into poverty. We need to look at the true, broader picture. For young people aged between 16 and 24 who are seeking jobs, the allowance is £56.25 a week, and many vulnerable young people, including those leaving care, have no family to support them. How are they to cope?

It has been estimated and admitted by the Minister after the Second Reading debate in another place that 200,000 children will be pushed into poverty by the impact of this Bill—a figure mentioned in previous speeches. This is despite the fact that the Government are legally committed to meeting the targets set out in the Child Poverty Act, as my noble friend Lady Lister of Burtersett, has said. If we take the policies introduced by the Government since they came into office, it can clearly be shown that the poorest half of the population has become poorer, with the poorest losing out the most. At present, 3.6 million live in poverty. The Child Poverty Act places a duty on the Government to end child poverty by 2020. The Institute for Fiscal Studies, however, predicts that by 2020-21 absolute and relative child poverty will be 23% and 24% respectively; therefore, a further 1 million children will have been pushed into poverty by 2020.

The Government decided to cut benefits by linking them to consumer price index, rather than retail price index, inflation. If the Government were to introduce the second of these—the RPI—the poverty figure would grow. Families are suffering from the changes to the hours rules for working tax credit, from recent cuts to housing benefits and from the time-limiting of employment and support allowance for people who are too ill to work—to name but a few issues. In addition, the localisation of support for people on low incomes who pay council tax will be introduced. This will reduce the budgets of many families on out-of-work benefits. The abolition of the Social Fund and its replacement with local schemes seems very likely to be damaging to vulnerable families.

I could go on about reductions in childcare tax credit, increases in VAT, the tax credit for babies under one year-old, the increase-in-earnings taper of working tax credit, caps in housing benefit and the family element of child tax credit, which has been abolished for middle earners. Others have discussed other inequities very comprehensively.

I return to my primary concern about the Bill: it will be detrimental to the well-being of children, especially vulnerable children. The link between benefits and inflation should be preserved; benefits should increase by at least the level of the consumer price index; or the most vulnerable children should be protected by removing from the Bill child benefit, child tax credit and the child elements of universal credit.

The Bill needs a complete reworking. Let us hope that we can do that in Committee. I do not think that children should suffer the potential for greater child poverty. As I said earlier, any deterioration in child health and well-being will cost us dear in future. All children are the future and we jeopardise that at our peril.