Poverty

Baroness Thornton Excerpts

Tuesday 15th June 2010 Lords Chamber

[Baroness Thornton]

My Lords, I realise that I am a mere stand-in for my noble friend Lord McKenzie, who I know would bring his usual incisive, knowledgeable and charming ways to the Dispatch Box, but he is unable to be in the House today, so I will do my best. I thank the noble Lord, Lord Kirkwood, for initiating the debate.

Many of the questions that I would like to ask have been put by other noble Lords. During the Queen’s Speech debate, I predicted that the noble Lord, Lord Kirkwood, would hold his Government's feet to the fire on the issues that are dear to his heart and about which he is an acknowledged expert, but I did not appreciate that the first foray would be quite so soon. I feel a little sympathy for the Minister as, during the debate, a large number of very important questions have been addressed to him. The Minister might take some comfort from the fact that this will be the first of many debates on these kinds of issues, so he might be forgiven for not having all the answers immediately—perhaps that is no comfort at all.

Yesterday, Dr John Philpott, chief economic adviser at the Chartered Institute of Personnel and Development, predicted that the coalition Government's deficit reduction measures will stall any recovery in the UK jobs market this year, resulting in a post-recession peak in unemployment close to 3 million, and slowing any subsequent return to low unemployment. He went on to say:

“Given what we know historically about the way in which the social burden of unemployment and stagnant average income growth is shared across individuals and communities, the prospects for those already suffering the most disadvantage seem particularly bleak”.

I turn to two issues to which reference has been made in the debate. I commend the noble Lord, Lord Sheikh, for his loyalty, but I thought I would add a few statistics of my own to his. Today there are 353,000 fewer people on inactive working-age benefits than there were in 1997. The number of people on incapacity benefit almost tripled under the Tories from 800,000 in 1979 to 2.5 million in 1997. At 5 per cent the claimant count is half the level it was in the 1980s and 1990s. The proportion of workless households is still lower now than in 1997, despite the recession and a big increase in the number of students. As a result of Labour’s welfare reforms, investment in childcare and family-friendly working policies, 365,000 more lone parents are in work than in 1997. Why have the Government announced that they intend to save £320 million by cutting some unemployment programmes, including the future jobs fund? How many jobs will not be funded through that and what will be the impact of the Government’s proposals?

I remind the House that under the previous Tory Government, child poverty doubled and the UK had the worst level of child poverty in Europe. Since 1999, we have made progress in tackling child poverty, halting and then reversing the upward trend. So I join other noble Lords—for example, the noble Lord, Lord Northbourne—in expressing my anxiety about the suggestion that the Government might drop our target for cutting child poverty. I join the right reverend Prelate the Bishop of Blackburn in his concern about the future of Sure Start.

The coalition agreement, which I draw to the right reverend Prelate’s attention, states:

“We will take Sure Start back to its original purpose of early intervention, increase its focus on the neediest families and better involve organisations with a track record of supporting families. We will investigate ways of ensuring that providers are paid in part by the results they achieve”.

How will they know, as Sure Start is intended to be a long-term investment in the future of those children, so the results of the success of a Sure Start programme are known not within a year, two years, or three years, but after 10 years, 15 years or 20 years? We know that from the experience of the United States. I also ask the Minister about the intention not to fund free school meals. Again, that is a direct investment in the health and welfare of our children.

Clearly, it is important that we take care to disentangle the causes and consequences of poverty, and some of what I have heard from those on the Government Benches during the Queen's Speech debate and last week during a debate on these issues in another place suggests not a little confusion on that front. As my honourable friend Kate Green MP—a new and very knowledgeable addition to the Opposition Benches in another place—said:

“It is certainly true that lone parents face an exceptionally high risk of poverty, but it is also the case that poverty and the stress of trying to make ends meet can contribute to family and relationship breakdown. It is important that we help to sustain relationships and keep families together, and ensure that they have adequate resources to remove that stress and concern”.—[Official Report, Commons, 10/6/10; col. 544.]

The Government must demonstrate that they have taken account, for example, of those who face a particular risk of poverty and why they do so—disabled people and people from black and minority ethnic backgrounds, with their unequal access to the labour market and unequal experience within it. Those are the structural drivers of poverty and it is important that public policy addresses them.

My concern is that both my honourable friend Frank Field, for whom I have the utmost respect, and the Minister, Mr Iain Duncan Smith, sometimes give the impression that they have a view of the “deserving” poor and the “not so deserving” poor, as already mentioned by the right reverend Prelate, which sometimes does not take account of the fact that life for those out of work and on benefits is not a life of luxury. I challenge the House to consider how any of us would manage on a disposable income of £65.45 a week. I suggest that when the axis of the noble Lord, Lord Freud, Frank Field and Iain Duncan Smith are creating their policy they learn from what has and has not worked in the past. I am sure that they will want to do that.

As I said, during the 1980s and 1990s, child poverty doubled, but since 1999, the number of children in poverty has been reduced by 500,000. That is not by accident. Child poverty reduced in the years in which the Government invested in family incomes through benefits and tax credits, and increased in the years in which Governments have not. The Labour Government's policy of seeking to reduce poverty through increases in tax credits and benefits is not a failed policy.

I therefore caution Ministers carefully to consider what the evidence tells them and to take careful account of the significant expertise that exists outside the House and on the Benches in this House. I refer to the noble Lords, Lord Kirkwood and Lord Adebowale, and my noble friend Lord McKenzie. I was pleased by the almost entirely cross-party support that the Child Poverty Bill secured during its passage through the previous Parliament. The Child Poverty Act 2010, as it became, put in place a recognition of the need to sustain the poverty reduction targets, confirmed the importance of the relative income poverty target and set it once more at the 60 per cent median line.

What are the Government going to do to redefine poverty? Will they, for example, be taking the definition of the Prime Minister when he said that he was concerned about a definition of poverty as,

“people with less than 40 per cent of average household income”,

or “severe poverty”? That definition excludes 2.5 million children from targets of child poverty. The independent Institute for Fiscal Studies has said that such a definition is “not particularly accurate” because some people might have low incomes but enough wealth to have a purchasing power well above the poverty line. Indeed, the Child Poverty Action Group called the statistic “dodgy” and pointed out that under that definition poverty increased by nearly 500 per cent under the previous Conservative Government.

The coalition Government appear set to water down our commitment to end child poverty by 2020 by changing the current definition of poverty. It is clear to us that this will be a disaster for low-income families who need help and support so that they are not left behind and will condemn some children to falling further and further behind their peers. The Government have already announced the abolition of child trust funds and have hinted that they may cut tax credits and other benefits further than was promised in their manifesto. Will the Minister comment on whether that is the case?

Everyone in this House is very concerned about the effect of the Government’s proposals on the most needy and vulnerable in our society so, along with many noble Lords around the House, I suspect we will be watching carefully and will be returning to this vital issue.