Welfare Reform and Work Bill

Lord Lawson of Blaby Excerpts

Monday 7th December 2015 Lords Chamber

[Baroness Hollis of Heigham]

My Lords, I think the Minister must by now be feeling pretty miserable at the wretched nature of this two-child policy. It is quite striking that there has not been a single voice in support of these propositions from his own Benches. There are Members here with the expertise to offer that, but they are not giving the Minister the support one would normally expect. We all understand how wretched this policy will be as it plays out—and I am sure the Minister, who is a good man, also understands that.

This is a broad set of amendments, so I will pick up something which perhaps covers almost all the people who have been mentioned as exemptions so far in these amendments today. Poverty has been well researched by the DWP itself, in its evidence review of January 2014. Has the Minister read—I am sure he has—and accepted his department’s Evidence Review of the Drivers of Child Poverty for Families in Poverty Now and for Poor Children Growing up to be Poor Adults, which is at the centre of these child-related policies in the Bill? If so, would he explain to us why not one of the 323 pieces of research that this review analyses supports his policy? Indeed, in my view, they destroy it. Are we dealing with evidence-based public policy or private ideology offered as moral and financial rectitude?

The Minister knows better than anyone—but I will remind him—who are most at risk of serious long-term poverty. They are the third and subsequent children of lone parents. Three-quarters of such children will be in either persistent or recurrent poverty for four out of any seven years. One family in seven has three or more children; within that group, lone parents are twice as likely as couple families to be in poverty, and three-quarters of their children will be in persistent or recurrent poverty.

It is not temporary or transient poverty, deeply unwelcome though that is, which scars families. After all, one-third of the UK’s population falls into poverty at some point over a four-year period, usually when they have lost their job, their health or, desperately, a partner. Many will leave poverty within a year, perhaps to enter work. But the poverty that comes with additional children is not temporary or transient poverty; it is persistent poverty, because those children, for whatever reason, do not conveniently disappear. Yet it is long-term poverty that most damages families. Poverty builds upon itself: the longer you are in poverty, the harder it is to escape from it—and if you do, you have one or, at most, two deciles, and too often, with a year or two, you fall back to the bottom. Any mobility is short-distanced and short-lived. Such children, because they are in larger families, and thus even now facing long-term poverty, have unhappy childhoods, more strained relations with their parents, are more likely to be in contact with the police, and so on.

What does the review last year by the DWP tell us about the drivers of poverty, and how consistent is this Bill with its research? The answer is: not at all. The DWP report says on page 19 that the strongest driver is worklessness, which I am sure we all accept; though even that is a diminishing problem, and of course conceals the unwaged work of caring. Yes, two-thirds of poor children are in a working household, which is a shocking statistic. That is of course because most children are in working families. Proportionately three times as many children in workless families are in poverty as children in working families, so we need to address poverty both in and out of work.

After worklessness, what is the second biggest driver of poverty, according to the DWP? According to the Government in this Bill, it is educational attainment. But that is not so: it is family size. Some 25% of all children are in families of three children or more, and 38%—nearly 40%—of those children in poverty live in larger families. According to the review, other drivers include family instability, parental ill health and lower parental qualifications, but none of those matters anywhere near as much as family size. The DWP’s review concludes on page 30 that other possible drivers—much quoted by the Secretary of State—such as substance abuse and child educational attainment have only limited, indeed marginal, effect.

I repeat: what counts, from the DWP’s own research, are worklessness and a family size of three or more children. Obviously, poverty results from a combination of too low income and family need. Larger families are hit on both counts, because additional and younger children take the single parent or the potential second earner out of the labour market at just the point when family need increases. Research shows that families not in poverty are more likely to enter poverty when they have a third child and not be able to climb out of it.

That is not rocket science, but is recognised across the whole of the OECD—except in this country. Many countries rightly increase financial support for additional children: the rates go up with three, four or five children. Any Government who cared about child poverty, and therefore child life chances, would do the same. Instead, the Government are going to do exactly the opposite, making each child in that family poorer, because the money for two children will now have to be spread over three or four, making their poverty cumulative and inescapable. What a dowry to give to a child: not only are you as a third child not going to be financially supported or helped by tax credits, but your very existence will make your brothers and sisters poorer as a result. You will bring them sliding down the slope of poverty with you.

Every child matters except to the DWP, yet the DWP’s own research shows that families with more than two children, whether through kinship care, through reformation or more generally, will be locked into persistent poverty from which many will never escape, and which will play out for some of them, alas, in troubled lives. The DWP will then piously moralise at them about the very situation that it has itself constructed in this Bill, along the lines of the Reverend Thomas Chalmers in 1819, almost 200 years ago, who said that,

“character is the cause, and … comfort is the effect”.

Today the DWP, just like the Reverends Malthus and Chalmers before it, bleats about poor, large families’ lack of moral or financial continence. This policy is no better than early 19th-century class-superior sermonising, and with little respect for the facts as evidenced in the DWP’s own report. But Malthus and Chalmers, clergymen both, at least had the excuse that they did not have the evidence of statistics, which were not collected then. The Government have no such excuse. They have nowhere to hide. The Minister’s policy today—I cannot believe he wants this at all—is the exact opposite of his department’s own research findings, and will lock large families into persistent poverty.

We know whom the Bill will hit. I have no doubt that it will, directly or indirectly, discriminate against faith and ethnic minority groups. One last thought: we are all living longer, with fewer workers to support pensioners who are living much longer. We need children and, if they are not born British, we will be encouraging Mrs May to bring in immigrants instead.

I ask the Minister again: has he read his own department’s research of last year? If so, or indeed if not, why is the DWP so flagrantly ignoring it? It is abundantly clear that removing financial support, not just from these exempted groups but from the third child and beyond, is the single most powerful way for the Government to increase child poverty and to increase persistent poverty. It is the very worst thing that the Government can do, and they are doing it. Why?

[Lord Lawson of Blaby (Con)]

My Lords, I had not intended to take part in this debate but it seems to me, listening to the noble Baroness who has just sat down, who spoke with her usual eloquence, that she has given only one-half of the story. Government is a matter of making difficult choices. There are always good points on both sides, so it is right that another point of view should be expressed. I speak, incidentally, as the father of a very large number of children.

The late Dick Crossman was a friend of mine; he was Secretary of State for Health and Social Security, as I think it was called then, in the 1960s. He told me how surprised he was when he discovered that the family allowance, which was the precursor of child benefit, was unpopular. Whenever he increased family allowance he expected it to be very popular, but it was not. He set out to discover why. The reason why it was unpopular, so he told me, was that the great majority of people in this country felt it was unfair to those parents who had decided to limit the number of their children—having children is an expensive business, what with clothing them and looking after them and so on—that improvident large families were getting all this family allowance. That sense of fairness is very acute among the people of this country, and that has to be weighed in the balance on the other side of the totally one-sided evidence that the noble Baroness presented.

--- Later in debate ---

[Lord Lawson of Blaby]

Is the noble Earl, whom I greatly respect, aware that Professor Deaton received earlier this year the Nobel prize for economics? His subject is global poverty and one of his important findings is that official aid does more harm than good.

[The Earl of Listowel]

I thank the noble Lord for drawing that to my attention and I shall make it my business to read that finding.

Perhaps I chose a poor example, but often decisions that are unpopular can be the right decisions to make. Governments have a little more time to reflect and can decide that the cost of bringing children up in poverty has such long-term problems in terms of poor educational outcomes, imprisonment and later dependency on the state that despite such a policy being unpopular it is worth while investing in large, impoverished families to prevent their offspring becoming dependent on the state later on.

The Minister said that the average size of families was 1.7 children. What is the average size of families on benefit and the average size of a family in poverty? My sense is that they tend to be larger families and that this particular legislation will penalise larger families.