Child Poverty

Lord Freud Excerpts

Thursday 17th November 2016 Lords Chamber

[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.