Welfare Reform

Bob Russell Excerpts

Thursday 11th November 2010 Commons Chamber

[Mr Duncan Smith]

Actually, we are not cutting the access to work grants—[Interruption.] No, they are being refocused on larger employers. More people will get back to work as a result of what we are doing, so it will be of more benefit than the previous system.

[Bob Russell (Colchester) (LD)]

Let us be clear. I do not want a higher welfare bill, and I do not support those who cheat the benefit system, but I do encourage the Government to take equal measures against those who cheat on their tax. The statement of about 1,200 words mentioned children only twice, in acknowledging that more than 3.5 million children will still be left living below the official poverty line. Where does the statement:

“We are developing…sanctions for those who refuse to play by the rules”

place households with babies, infants and children of school age?

[Mr Duncan Smith]

A variety of programmes affect some of those groups, and the hon. Gentleman will know that extra money has been refocused on early years. The hon. Member for Nottingham North (Mr Allen) and the right hon. Member for Birkenhead (Mr Field) are producing reports on this. We are looking at dealing with those areas separately. If the take-up improves, which it will because it will be automatic, it will directly affect a significant number of people. We genuinely believe that even in a static state about 350,000 children will be lifted out of poverty. That has to be a pretty good start compared with what happened before.

Housing Benefit

Bob Russell Excerpts

Tuesday 9th November 2010 Commons Chamber

[Mr Alexander]

I do, which is why I wish those on the Government Benches would spend less time reading our manifesto and more time changing their proposals.

Let me deal with the substantive points. [Interruption.] Hon. Members should have just a little patience—one of the virtues that I wish the Secretary of State had learned in relation to these changes. Two arguments are being advanced in favour of the changes, the first being that the housing benefit bill is out of control and the second being that reform will lower the rent levels paid by the state for private sector accommodation available through housing benefit.

Let us start by examining the facts and the merits of those arguments. First, as the Building and Social Housing Foundation points out:

“Housing benefit has remained remarkably consistent at around 14% of the benefits bill for many years and most of the increase over the last 18 months has been down to an increase in the number of claimants, which is exactly what we would expect to happen in response to a recession.”

[Bob Russell (Colchester) (LD)]

rose—

[Mr Alexander]

I will give way in a moment or two. Next, it is stated that in the past five years housing benefit has risen by £5 billion and it has been suggested that the cuts are necessary to stop a soaring housing benefit bill. Housing benefit did rise by about 21% during the recession—that is undisputed—but that was driven by a case load that increased by 18%, including a 26% increase in respect of those of working age; it was not driven by a few rents.

[Mr Alexander]

I am happy to come on to deal with exactly those points, which echo some that we have heard.

[Bob Russell]

rose—

[Mr Alexander]

I shall seek to let the hon. Gentleman in as soon as I can. Housing benefit bills—

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[Mr Alexander]

I feel that I should give way first to the hon. Member for Colchester (Bob Russell).

[Bob Russell]

The right hon. Gentleman was a Minister in the last Government. He started his speech with a brief mention of “housing provision”, but he has not said anything about it since. Will he inform the House how many council houses were built and how many were sold by the last Labour Government?

[Mr Alexander]

The hon. Gentleman made that point in the debate in Westminster Hall. I will not pretend that our priority was council housing as distinct from social housing, because for Governments over many years there has been a move away from direct provision by local councils to broader social housing, principally provided by housing associations. We will happily stand comparison between the number of social houses that we built during our time in office and the number being trumpeted by those on the Government Front Bench. Incidentally, almost half of the 150,000 in the figure that is now being used by the Conservatives are houses that were initiated by the Labour party when it was still in office. Notwithstanding the fact that I do not think that that was a point worthy of the hon. Gentleman’s genuine concern, I hope that he will back up the words of the early-day motion with his actions this evening and join the Labour party in the Division Lobby.

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[Mr Duncan Smith]

I give way to the hon. Member for Colchester (Bob Russell).

[Bob Russell]

Will my right hon. Friend clarify a point? Is he saying that rents are too high in the private sector? If that is the case—I am sure that is what he said—should there not be, in the interests of fairness, other measures to deal with landlords whose rents are too high?

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[Mr Nick Raynsford (Greenwich and Woolwich) (Lab)]

Let me draw attention at the outset to my interests as declared in the register.

It is clear that the Government are pursuing a policy not of housing benefit reform but of housing benefit cuts—a policy based on assumptions that are wholly untested.

[Bob Russell]

Will the right hon. Gentleman give way?

[Mr Raynsford]

No, I have only just started. I will give way in due course, but the hon. Gentleman is perhaps being a little impatient. He might benefit from listening for a moment before interrupting.

The policy is based on assumptions, many of which are wholly untested, premises that are, frankly, incredible, and an absence of detailed impact assessments of how the eight different cuts will cumulatively affect the 4.75 million households that currently receive housing benefit. In my view, it is that absence of a detailed and thorough appraisal of the impact of the cuts that is the most serious indictment of the Government.

We have heard the Secretary of State’s claim that the effect of the changes will be to reduce rent levels in the private rented sector. His noble Friend Lord Freud made a similar claim last week when, according to a report in The Guardian, he said:

“We are expecting a large number of people who see less housing benefit to be able to negotiate their rents downwards, and the landlords will move to the new lower rate.”

As the Secretary of State and Lord Freud are clearly not totally familiar with the rented market, let me remind them and their colleagues on the Front Bench what is actually going on. Yesterday’s Evening Standard reported:

“Widespread rental ‘gazumping’ has hit London for the first time as desperate tenants fight to secure homes. Rents have soared by up to 35 per cent this year, with as many as one in four landlords asking for sealed bids from applicants, according to one agent.”

The director of a lettings agency is quoted as saying:

“The exceptional demand for rental properties which we saw earlier in the summer is showing no signs of slowing down. If anything, the rental market is now more red-hot than a month ago.”

He said that

“one four-bedroom ex-council home was recently let in Camberwell for £500 a week—£150 above the asking price and more than 40 per cent higher than the previous rent.”

A partner at Cluttons is quoted as saying:

“occupancy rates stand at an unprecedented 95 to 98 per cent, as tenants opt to stay put rather than move and risk being frozen out,”

adding that

“the stampede for homes was at all levels of the market, from studio to family homes and is in all areas of London.”

She said:

“We had a studio let at Cinnamon Wharf in Shad Thames that had been on at around £225 to £230 a week. I suggested putting it on at £305 and we got that within half a day.”

The director of another agency said:

“The demand for rental property will heat up even further in the medium-term and gazumping will become even more common as tenants look for any way in which they can get ahead of the competition.”

[Bob Russell]

I was going to ask the right hon. Gentleman what interest he was declaring, but my question to him now is this: is he not talking about supply and demand? If the issue is supply and demand, why did the previous Government, in which he played a leading role for 13 years, fail with the supply?

[Mr Raynsford]

Let me say to the hon. Gentleman what I have said in many previous debates. When we came into government in 1997 we inherited a very serious problem caused by the condition of the existing housing stock, as he knows. He also knows that a great deal of money was put into the decent homes programme to improve the condition of millions of social homes throughout the country. Because that was a priority, perhaps not enough was spent on building new homes, but if he looks at the figures, he will know that during the later years of the previous Government, until the recession hit, there was a rising trend of new house construction in all tenures, including social housing. Had that been sustained, we would now be seeing levels approaching those set out by Kate Barker in her report.

Obviously there has been a recession in the meantime. It has hit the world—it has hit this country and everywhere else—but given that situation, we want to see policies that will improve prospects rather than make things worse. The problem is that the present Government have managed to destabilise every part of the housing market. House builders are in shock because of the ill-considered planning changes. The private rented sector is in difficulty. Landlords are worried about the proposed changes to housing benefit. The social housing sector has been pulverised by the Government’s proposal to remove security of tenure and to jack up rents to near market levels. That has created a serious problem of anxiety and lack of confidence in all sectors of the market. Not surprisingly, as the hon. Gentleman highlighted, there is therefore a problem with shortage of supply. That is precisely what is driving rent levels.

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[Bob Russell (Colchester) (LD)]

The debate so far has made only fleeting reference to child poverty. The previous Government left 3.9 million children living below the official poverty line, so we need to think long and hard about whether this Government’s measures are going to make that figure worse.

According to Shelter, the average loss per family in my constituency will be about £9 a week. For a low-income family, that £9 now has to compete; if the rent is not paid, and a family lose their home, they are, in law, deemed to be intentionally homeless. Whatever faults there are in this country, one thing is for sure: the children of this country are not responsible. They must not be allowed to lose their homes. For that family in my constituency, having to find another £9 a week for rent means £9 a week less on food, clothing, shoes and utility bills. We know that fuel poverty has an adverse impact on low-income families. Others have mentioned pensioners and their points have been well made, but I am going to concentrate on the families.

The loss of £9 from such a family’s disposable income will mean that the local economy will lose out. That could affect what else is going on. Incidentally, I have come up with a novel saving for middle-England households. It is not compulsory to buy the Daily Mail or The Mail on Sunday, and not buying them will produce a saving of about £500 a year to a middle-England household. I recommend it.

The Local Government Association has kindly provided the following suggestion:

“a full and robust new burdens assessment should be made of the extra local authority costs that will be incurred as a result of these changes. This should not just include the expected homelessness costs, but also community safety, physical and mental health, social care, child protection and other services.

The wider impact of these costs should not be underestimated and will result in increased costs for councils.”

The LGA has suggested that local authorities should have more flexible powers, so that they can work with local landlords to negotiate rents downwards. That would fit in with the Secretary of State’s view that the object of the exercise is not to penalise families, but to force rents down. In a spirit of collaboration, coalition and fairness, I think that the Government should take equal measures—put a cap on the rent as well as on the housing benefit.

The problem is that we have had 30 years of successive Government failures to provide sufficient housing for rent. The last Government were as guilty as the previous Conservative Government, building fewer than 7,000 council houses in 13 years; even the dastardly Thatcher Government managed to build more than half a million. Indeed, the last Labour Government sold half a million council dwellings. I intervened earlier on the question of supply and demand because of the simple fact that for 30 years supply has not matched demand.

[Mr Betts]

I welcome the hon. Gentleman’s commitment to increasing the number of social houses built, but does he accept that under the comprehensive spending review the expenditure plans for new social homes have been cut in half? The only such homes that will be built on the current tenures and rents will be those to which the previous Government committed? All new homes built after that will cost 80% of market rents, and that building will be paid for by increasing the rents on re-let tenancies to that level as well, so this Government are committing to no new social housing at all.

[Bob Russell]

I was praying for an Opposition intervention because it gives me an opportunity to pick up and wave these pages containing the more than 50 questions on council housing that I have put in the last decade, including to former Prime Minister Blair, his successor and former Deputy Prime Minister Prescott, all of whom failed the Labour party. We should contrast what the last Labour Government did with what the real Labour Government of 1945 led by Clement Attlee did in the aftermath of the war.

[Chris Ruane]

I concur entirely with the hon. Gentleman. In my constituency I visited a lady who had an 18-month-old child and who lived in a house of multiple occupation. She had one bedroom. That cost £85 a week in housing benefit, topped up with £20 a week from her own dole money. That is £105 a week for a one-bedroom rat hole, whereas the council charges £60 for a three-bedroom council house with both a front and back garden. It makes both economic and moral sense to spend money on building new council houses and social housing, and that would also penalise the Rachman landlords and reward the local authorities and social landlords.

[Bob Russell]

I agree with most of that; and, of course, if the last Labour Government had taken note of what I said in those 50-plus parliamentary questions—if two successive Prime Ministers and a Deputy Prime Minister had listened—we would not be in the pickle we are in now. I might add that all of us know of former council houses in our constituencies that were sold and are now being let out at higher rents than those for the council house next door, and where the housing benefit tops that up. The coalition Government should address that.

“When social historians write the history of the 20th century, they will contrast the huge advances made in the living standards of the British people between 1900 and 1999. Even allowing for two bloody world wars and the years of economic depression, by the end of the century the quality of life had improved dramatically for the mass of the population, beyond the wildest dreams of those doughty pioneers of social change who sowed the seeds in Victorian Britain for better health, higher standards of education, longer life expectancy, improved working conditions, wider opportunities and vastly superior housing conditions for most people.

While the improvements in the overall quality of life spanned the 100 years, for millions of people it was in the middle 50 years or so of the 20th century—the second and third quarters—when the great advances were made in housing. Council housing did it.”—[Official Report, 11 June 2003; Vol. 406, c. 237WH.]

I know that Members are fascinated by what I have just said, and they can read the 2003 speech I made in Westminster Hall on the subject of council houses. Again, had the Labour Government listened and taken note seven years ago, things would have been much better.

For most people, the aspiration to home ownership cannot now be fulfilled. The resumption of council house building would have the twin outcome of supplying good quality houses for families to rent and lessening demand in the house buying market. There would be another bonus too: it would give a boost to employment in the building industry.

The conclusion of my speech is aimed at my coalition partners. When I was leader of Colchester borough council between 1987 and 1991, I attended a meeting of the Essex branch of the Association of District Councils at which I told the then Member for South Colchester and Maldon, now Lord Wakeham, that a combination of the large-scale sale of council houses and a failure to build replacement houses would result in thousands of people being forced into the property owning market who would not otherwise have been, and that the demand for lower priced houses would therefore be greater than the availability, and that that would lead to an increase in house prices throughout the housing market. I suggested that that policy did not make economic sense, and that it was not fair on those who would be deprived of a decent home in which to live. I have been proved right, but, tragically, the problem is considerably worse than I ever thought it would be.

For the homeless and those in accommodation that is less than ideal for their needs, there is no such thing as the dream of being part of the property owning democracy. Instead, there is the 24-hour nightmare of housing despair. That is particularly the case for the children involved. Big cities, towns and villages all have residents who are suffering because of the lack of council houses. In rural areas, young people are being forced to leave the villages in which they were born, and where their families may have lived for generations, because there is no housing for them, or none that they can afford.

I urge the coalition Government to think again. They are right to tackle the higher rents, but that has to be done with fairness. At the moment, however, their proposals are being aimed only at the tenants, and I am particularly concerned about the children of the families who will be affected.

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[Mr Umunna]

I want to make some progress, but I may give way later.

Today, we read that the Department has released figures showing that every family will have to pay more than £1,500 a year in taxes to fund the housing benefit system. As ever, it seems that a particular section of society has become a target. Has the Treasury released figures to show how much each family in this country loses as a result of tax evasion and avoidance by wealthy individuals and companies? It is extremely important that we do not allow the tactic of divide and rule to succeed.

This is particularly pertinent to my community. The constituency that I represent is diverse not only ethnically but in regard to the socio-economic demographic of the people who live there. I spoke to one of my constituents about these issues last weekend. He and his wife live in one of the more leafy parts of Clapham common, an area known as Abbeville village, and he works for a private equity company. He is undoubtedly in the top 1% of earners. I asked him what he thought about the Government’s changes to the housing benefits regime. Given that they will not have a direct impact on him, I was surprised to find that he had strong views about them, and that he was horrified at their likely impact on his community. One of the reasons that he likes living in my constituency is the diverse nature of the streets and the different parts of the area. He said that he did not want to live in a street where all the people were like him. He liked the fact that there were different people living there.

I mention this because it is important to understand that these changes will be an issue not only for people claiming housing benefit but for the community as a whole. Given the impact that the changes will have on my constituents, I do not feel that I am whipping up hysteria or unduly disturbing my community. I am simply looking at the facts. There are 5,470 households in Lambeth that will face huge cuts in housing benefit next year. For example, 1,520 households in two-bed properties in Lambeth will see the contribution to their rent reduced by an average of £25 a week. That is £1,300 a year, and those people simply cannot afford it. The changes will undoubtedly cause an increase in poverty in my constituency. Shelter is predicting that they will affect many of the claimants who live just above the poverty line, and they will undoubtedly lead to deep anxiety and stress among people who are already struggling to get by.

[Bob Russell]

Does the hon. Gentleman agree that an unintended consequence of the measures will be that, if people have to spend more of their income on rent, they will have less to spend in local shops and on local services?

[Mr Umunna]

Absolutely; I would not disagree with the hon. Gentleman.

I have outlined some of the effects on my community that we are able to discern, but there will be others that it is difficult to quantify at the moment. We are going to be faced with people moving from inner London to our part of Lambeth, seeking private rented accommodation.

--- Later in debate ---

[Caroline Flint]

I assure the hon. Gentleman that I will come to that.

Those colleagues—I call them colleagues because the substance of their speeches suggest that they may join us in the Lobby tonight—may be interested to know that the Minister for Housing referred to the Hull city council leader, Carl Minns, who is a Liberal Democrat, as a “motormouth” when he raised concerns about the impact of some of the Government’s policies on people in Hull. Lord Shipley, a former leader of Newcastle city council, said that the private rented sector had been a “cornerstone” in stopping the use of bed and breakfast in Newcastle and that he did

“not wish to return to the days when we did…My concern is that the local housing allowance changes may restrict access to private rented accommodation and therefore limit the capacity of councils generally to resolve future housing need.”

Those thoughts echo many of the comments that have been made.

It is a shame that not one Minister from the Department for Communities and Local Government is on the Benches at the end of these proceedings. Clearly, the Minister for Housing does not believe that it is worth while sitting alongside his colleagues from the Department for Work and Pensions to consider how to address reform of housing benefit and housing supply, which many of my hon. Friends and a few hon. Members raised. That is a great shame.

We are not opposed to reform. My right hon. Friend the Member for Paisley and Renfrewshire South (Mr Alexander) made that very clear. We are not against caps in the housing benefit system, as long as they do not make people homeless or cost us more in the long run. We do not have an objection to asking younger single adults on housing benefit to live in a shared house or flat, but we must be sure that there is enough supply to accommodate everyone, and to recognise that some single people may have particular needs that require them to be accommodated in a different way. We will look at how non-dependant deductions can be made, provided they do not result in people suddenly finding themselves unable to live in their homes with an elderly relative, for example. We are willing to consider some temporary changes to the uprating of benefits so long as that does not permanently break the link between the rent that people pay and the help that they receive.

We also believe that cutting the local housing allowance to the 30th percentile will have a huge impact, which is not to be desired. About 700,000 of the poorest people, in work and out of work, will be on average at least £9 a week worse off. We recognise the need for reform but, as in other areas, such reform should be staged over a number of years and be more limited.

[Bob Russell]

During the 13 years of the previous Labour Government, I put forward various proposals to them in more than 50 parliamentary questions. Does the right hon. Lady accept that, had the Government in which she served listened to and acted on those proposals, we would not be in this situation now?

Housing Benefit

Bob Russell Excerpts

Wednesday 13th October 2010 Westminster Hall

[Margaret Hodge]

I bow to the huge experience and knowledge of my right hon. Friend and I agree entirely with his analysis of the likely impact of the changes that the Government are proposing to make.

In my constituency, all 3,810 households that currently receive local housing allowance will already lose out because of the housing benefit cuts that will come into effect next year, so they will experience additional hardship as a result of those cuts. Because rents in Barking and Dagenham are currently lower than in the inner-London boroughs, private tenants in the borough will not be hit as badly as those in central London, where rents are the highest in London. but as inner-London private tenants are forced to find a home in outer London, rents will inevitably be driven up in the outer-London boroughs. More demand on limited supply will be a double whammy for the people of Barking and Dagenham. Has the Minister commissioned any research to understand better the potential impact of his proposals on rents in outer-London areas such as Barking and Dagenham? If so, will he place that research in the Library?

We know from anonymous quotes in the press that civil servants are telling Ministers that the proposals, as my hon. Friend the Member for Hammersmith (Mr Slaughter) said, will lead to the biggest population movements experienced since the industrial revolution. Even at her worst, Shirley Porter deported only 1,000 people out of Westminster, yet this Liberal Democrat Minister is deliberately forcing tens of thousands of families out of inner London, in a shameful act of social engineering and political gerrymandering that will damage our communities irreparably.

[Bob Russell (Colchester) (LD)]

The right hon. Lady rightly draws attention to the problems. Does she agree that the provision of council housing is one way to address supply and demand, and can she inform us how many council houses were built during the 13 years of Labour Government?

[Margaret Hodge]

I accept the point that insufficient priority was given to the building of council houses under the Labour Government, but we must deal with the situation in which we find ourselves. Making the position worse by deliberately forcing the poorest families out of the only homes that they can find is an outrageous and cruel act of public policy.

Does the Minister accept or even understand that if the reforms proceed, inner London will become a no-go area for the poorest people in our communities? What will be the further impact on my constituency? He knows well that changes in housing tenure over the past 20 years, since the introduction of the right to buy, have created deep social tensions in Barking and Dagenham as new people have moved into the borough and established residents have become unable to secure homes for their sons and daughters. The extreme right and the British National party tried to exploit people’s legitimate frustrations for divisive and evil political ends. We saw them off, but this Government’s housing benefit policies will inevitably reignite those tensions as private tenants from inner-London boroughs compete for homes with established residents of Barking and Dagenham. Has he considered at all the implications for social cohesion of his short-sighted reform proposals?

Has the Minister also considered his policies’ impact on local authority services? If Barking and Dagenham suddenly experiences an influx of literally thousands of families, what will that do to local schools and hospitals, to special educational needs provision and to child protection services in the borough? The proposals will place an unacceptable strain on local authorities in the more deprived outer boroughs—authorities that are already struggling to meet their communities’ needs in areas such as housing and education while planning to meet the 25% to 40% cuts that will be forced on them by the comprehensive spending review announcements next week.

In education, for example, Barking and Dagenham is already facing the huge challenge of keeping up with the pace of demographic change. Demand for primary school places is a particular problem not only for my constituency but across London. As it is, the local authority is having to create hundreds of new reception places every year—337 extra primary school places are needed in 2011 and 247 in 2012—and does not have sufficient funding to meet projected demand. The borough simply cannot cope with further significant levels of inward migration.

Barking and Dagenham council already has a housing waiting list of more than 11,000. That waiting list will only grow longer as more people move into the area and more households seek to be housed by the local authority because they have been priced out of the private sector.

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[Bob Russell (Colchester) (LD)]

I congratulate the right hon. Member for Barking (Margaret Hodge) on securing this debate. I am not here to defend the proposals, but I will be consistent with my position during the 40 years of my public life, the past 13 of which I have spent as a Member of the House. If only the present Opposition had been consistent with the views that we are now hearing during their 13 years of Labour rule, perhaps we would not be in this situation.

The right hon. Lady and her colleagues might wish to know that in 13 years of Labour Governments, 6,470 council houses were built. In the first 13 years of the previous Conservative Governments—I am using the same number of years—the figure was 507,200. Labour’s total, as I said, was 6,470.

[Jeremy Corbyn (Islington North) (Lab)]

How many social houses were built?

[Bob Russell]

The hon. Gentleman has asked how many social houses were built. If we factor those figures in, the number is still considerably lower than that achieved during the 13 years of the previous Conservative Governments. Presumably, the right hon. Member for Greenwich and Woolwich (Mr Raynsford) can give us chapter and verse about how successful the housing association sector is, an issue on which the Government in whom he served failed so lamentably.

[Mr Raynsford]

Will the hon. Gentleman tell hon. Members about the state of the social housing stock in 1997, the condition of the properties in which people were living, the extent of the backlog of disrepair that had to be dealt with and the scale of the renovation programme—the decent homes programme—that was put in place by the previous Government, which has improved the living conditions of millions of people in this country? Why is he being so churlish about that?

[Bob Russell]

The right hon. Gentleman is correct about the inheritance of the new Labour Government, but that makes their concentration on one aspect of housing just as bad. I am not saying anything new; these are points that, as Hansard will confirm, I put to the then Prime Ministers Blair and the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown), as well as to Prescott when he was in charge of council housing—or rather non-council housing.

In the years of plenty when the economy was thriving, new Labour should have emulated what Clement Attlee did in 1945 after six years of war: introduced a house building programme to house the poorest people in the land. It did not do that. The poorest people were among those the party turned its back on, which is why it lost 5 million votes at the last general election.

[Sheila Gilmore (Edinburgh East) (Lab)]

I agree that we should have built more houses—I have always said that—but is the solution to this problem to introduce changes to housing benefit that will affect current tenants and will not result in any more houses being built? The savings generated by the cuts will not be ploughed back into building housing, which might have made such cuts more tolerable, so how can these changes be justified on the basis that not enough houses have been built?

[Bob Russell]

If the hon. Lady had been paying attention, she would have noticed that I opened my remarks by saying that I am not speaking in defence of the coalition Government’s proposals—anything but. I am just setting the scene by pointing out that the problems are inherited. I do not agree with how the matter is being dealt with, but Her Majesty’s official Opposition should not come here today and pretend that they are the saviours of the social housing market, given that the record shows that they built only—let me repeat the figures—6,470 council houses in 13 years, in contrast with the previous Conservative Government, who built 507,200 in their first 13 years.

Let me now say that I do not agree with the proposals on housing benefit. I know that the Minister will be aware of them, but I draw his attention to the gospels of Matthew, Mark and Luke—particularly Matthew chapter 19, verses 13 to 15, Mark chapter 10, verses 14 to 15, and Luke chapter 18, verses 15 to 17, which includes the phrase “suffer little children.” I do not want this coalition Government to make children suffer, but that is what will happen as a result of the proposals on housing benefit. I wish to put it on the record that I have already initiated one debate on child poverty in this Chamber since the general election. Another record for the previous Labour Government is that they left 3.9 million children living below the official poverty line. What an appalling legacy. I do not want that figure to increase; I want it to be eliminated.

I am grateful to the Local Government Group, particularly Mr Ben Kind—the public affairs and campaigns manager—for sending me a briefing in advance of today’s debate. That document states:

“The housing benefit measures announced in the June 2010 budget, including capping local housing allowance rates, paid to tenants in the private sector, and setting them based on the 30^th percentile of local rents, are likely to increase homelessness costs, since they will diminish the willingness of private rented sector landlords to let to housing benefit customers. This will have hugely variable and disproportionate effects on different parts of the country.”

On the local housing allowance, the briefing points out:

“Councils will continue to have a duty to house those who are homeless and this will be a challenge to council homelessness budgets. Although the precise extra cost is still hard to estimate, temporary accommodation costs seem certain to be higher.”

I know that from my own constituency of Colchester. It is a relatively prosperous town in a relatively prosperous part of the country, but there are pockets of deprivation. The simple fact is that housing a homeless family is far more expensive for the public purse than putting them in a proper, decent house.

I refer colleagues to the full debate that I had on child poverty, in relation to which I was contacted by the Child Poverty Action Group. In that debate, I pointed out that it is no good for any Government, either this Government or the previous Government, to come up with wondrous schemes and policies for the betterment of people if the basic pieces of the jigsaw—the framework and the corners—are not in place. Such a basic building block is a house. If children do not have decent housing, the rest of the Government’s proposals are almost meaningless.

Social housing is already extremely scarce—I have mentioned the failures of the previous Labour Government—and an increase in the number of people who are priced out of privately rented housing will place additional demands on housing stock. Meanwhile, the increase in the non-dependant deduction could have a negative effect on family and community stability to the extent that young adults feel that they have to move out of the family home. That could have the adverse effect of encouraging the concealment of the presence of and incomes of some family members, which will add to the level of fraud and error in the system.

I do not wish to defend the relatively small number of people in society who abuse the system. Unfortunately, the Daily Express and the Daily Mail think that everybody on housing benefit is abusing the system. The minority who do are destroying the case for genuine people who are not defrauding the system, but who are depicted as scroungers. Of course, we need to tackle that problem, but we must not alter the whole system to deal with just a few scroungers.

[Jeremy Corbyn]

I am interested in that point. Does the hon. Gentleman accept that the biggest scroungers are the private landlords who are charging absolutely exorbitant rents for appalling properties that they do not maintain? We—the public—are paying for that. Is it not time that we got real and dealt with the issue of the conditions of the private rented sector and the rents that are charged? We should start bringing in controls. Attack the landlords, not the tenants.

[Bob Russell]

Let us put on the record that there are some very good landlords. Good landlords would endorse the points that have just been made. It is the rogue landlords—those who exploit their fellow human beings—who we need to deal with. Successive Governments have failed to address that matter.

I come back to the question of supply and demand. Thirty years ago in Colchester, there was no such thing as homelessness. People could be guaranteed a council house within six months to a year, depending on their location of choice. The right to buy was not the real problem; the real problem was the failure to replace with new stock the houses that had been sold. Successive Governments failed to deal with that.

It has been said that we must not use extravagant language and say that the proposals will result in the biggest forced social movement of people since the highland clearances because that is emotive and there is no comparison with that situation. I do not wish to give any comparisons of that sort; it would be wrong to do so. However, it is a fact that if there are benefit changes and the housing cap goes through, the forced migration of whole communities—or a large number of people from a particular community—will take place. Families, pensioners and children will be removed from the communities in which they grew up. That will have a devastating effect on their lives. I want to concentrate on the effect on children because, as I am sure colleagues have realised, I have been picking up on that angle since the general election.

[Emily Thornberry]

I agree with the hon. Gentleman that it is unfortunate when extreme language, such as the reference to the highland clearances, is used. However, did he read in the papers at the weekend that a senior Conservative Minister in the Government described the policy as exactly that? They said that we will not have seen anything like it since the highland clearances. Such references are emotive, but they may be entirely descriptive.

[Bob Russell]

I do not think that our Scottish colleagues would accept that comparison, but the point being made is that people will be forced from their homes against their will. In the previous debate that I secured, I referred to that as economic cleansing. Of course, those families that stay put in their houses and struggle on with higher rent will have less disposable income to spend in local shops and on local services, which will have an impact on their local economies.

Children will be forced out into the suburbs or elsewhere, and it is important to remember that this is not just a city phenomenon, but one that can have an impact in rural areas. It will also have an impact on schooling, as there will be depopulated schools in some areas, because of the forced removal, and overcrowded schools in others, assuming that parents can find the places.

I know that other Members wish to speak so I conclude by quoting from one section of the excellent briefing that I was sent by Scope:

“An unemployed or low-income lone parent or couple with one child (or two children who share a room) is likely to lose around £500 a year once this reform takes effect…These reductions are likely to have a disproportionate impact on disabled people…those living in cities and urban centres with higher property costs—especially London—will be particularly affected…a reduction in the financial support that Housing Benefit provides will further reduce the number of suitable properties disabled people can afford, increasing the risk of them having to live in inappropriate housing, exacerbating their social isolation and dependence on other forms of support.”

I recognise that the coalition Government inherited serious financial problems that they need to tackle, but nowhere in the coalition agreement does it say that poor families should be forced out of their homes or that children in disadvantaged families should be further disadvantaged.

Low-income Households

Bob Russell Excerpts

Tuesday 14th September 2010 Westminster Hall

[Ms Buck]

I am grateful to the hon. Gentleman for his comments. I will not shy away from it: there was internal debate within the Labour party, both in the run-up to 1997 and subsequently, on what reform agenda was needed and how it would be carried forward. As can be traced through numerous speeches in Parliament and elsewhere, I was not always in agreement with the priorities of either Tony Blair or Peter Mandelson. It is historically inaccurate to claim that the welfare state was not subject to significant reform throughout the 13-year period. One of the earliest, and fairly controversial, proposals was on incapacity benefits; it was voted on in 1998. The first clash that took place after the 1997 Government were elected was over lone-parent benefits. Housing benefit was subject to a number of changes. My hon. Friend the Member for Bishop Auckland (Helen Goodman), who was a Minister at the time, will confirm that I beat a path to her door to exercise my concerns about what the Labour Government were proposing on housing benefit reforms, which I felt then and feel now were wrong, but which have been picked up on and exaggerated by the Government.

On the more positive side, the whole tax credits agenda was clearly designed and had an impact on work incentives. The idea that there was no reform agenda is complete nonsense. The reason why welfare reform, particularly in relation to work incentives, has not satisfied the incoming Government is that it is extremely difficult to achieve reform that both makes it easier to work and does not increase poverty. Clearly the new Government have come down on one side of that equation. The simple facts are that inequality soared under previous Conservative Governments. As measured by the Gini coefficient—I do not think that we can argue against this—there was a very sharp upward curve on inequality throughout the mid to late 1980s; it levelled off a little during the 1990s. During the first two terms of the Labour Government, real progress was made on turning the curve down again. Levels of inequality flattened out and then turned up again in the last term of the Labour Government, not least—but not solely—because of the impact of the financial crisis.

In its pre-election briefing, the IFS said:

“The tax and benefit measures implemented by Labour since 1997 have increased the incomes of poorer households and reduced those of richer ones, largely halting the rapid rise in income inequality we saw under the Conservatives.”

[Bob Russell (Colchester) (LD)]

Will the hon. Lady confirm that the gap between rich and poor is greater in 2010 than it was in 1997?

[Ms Buck]

I will not make a similar error to that being made by the Conservatives. I will not say that absolutely everything that the Labour Government did was perfect, and that they achieved every single goal and target that they set for themselves, whether on child poverty or on reducing income inequality; they did not. However, it is also nonsense to use the hon. Gentleman’s line to make the case that the Labour Government’s investments, whether in employment growth or in tax and benefit changes, did not slow down and flatten out the rapid rise in inequality that took place throughout the 1980s and into the 1990s. That would be to claim that all the investment in tax credits, increased child benefit and the national child care strategy failed, and it absolutely, clearly and demonstrably did not.

--- Later in debate ---

[Mr Field]

That is a fair point. To be absolutely honest, the core problem that we all face is a lack of any explicit mandate for anything that is being done on the issue. For we Conservative Members who have been warning about the deficit and levels of public debt for many years, at a time when conventional wisdom was that we would stick to the outgoing Government’s spending plans, that is obviously a matter of some concern.

During the run-up to the general election, a spurious debate took place in which all parties danced on the head of a pin. Apparently, the necessity for £6 billion in cuts was a matter of Armageddon on one hand or sunlit uplands on the other. As the political class, we all took a decision to keep the electorate away from some of the harsh choices that would have been inevitable whoever won the election. That lack of an explicit mandate will cause difficulties in making the necessary case for deficit reduction, a case that I have discussed many times in the House. It is of great importance that we reduce the deficit as responsibly and as early as possible, not just to impress the money markets.

I feel strongly that we will now face intergenerational conflict. Almost uniquely outside wartime, the children of the present middle-aged generation—I see several 40 and 50-somethings here—will have a less good financial situation than the one that we have taken for granted. In many ways, that is a terrible indictment of the debts that we are building up, and it is one reason why we need to reduce those debts. It will make this country a more acceptable place for our children to live in.

The hon. Lady and I both have sons. I worry for my son when he comes to adulthood at 20. I hope he will have the education and skills to make him a globally mobile citizen. He and many of the brightest and best of our young men and women may choose to vote with their feet. I fear that we are already seeing an element of that, given the huge levels of unemployment among our graduate population, many of whom have globally mobile skills that they may well use to go elsewhere. I took for granted the opportunities that were available to me when I left university in the 1980s. We need to bring back those opportunities as quickly as possible. Reducing the deficit and ensuring that debt is kept to a minimum will provide a level playing field for future generations.

I appreciate that others want to speak. I will say a bit about some things that are happening in central London specifically. Due to the grave financial situation inherited by the coalition Government, all of us, whether in business, in households or in local and national Government are, understandably, being forced to tighten our purse strings. My local authority, Westminster city council, is no exception. One clear priority in Westminster is the most vulnerable in our community. Hopefully, that is a benefit of having two Members of Parliament for Westminster, one on each side of the political divide, to make the case.

It is easy to characterise my constituency in particular as extremely wealthy. The hon. Member for Stretford and Urmston (Kate Green), whom I have not had a chance to meet, is an erstwhile constituent of mine, and indeed a former candidate for the Barbican in 1997. She will recognise that although the Cities of London and Westminster contain pockets of incredible wealth, there is a lot of poverty not far from the surface. An important part of my job has always been to provide a voice for the most vulnerable in my community.

[Bob Russell]

I thank the hon. Gentleman for drawing attention to pockets of poverty, which are different sizes in different parts of the country. If housing benefit is cut and people cannot afford to pay the rent, what happens to them?

--- Later in debate ---

[Bob Russell (Colchester) (LD)]

It is a pleasure to serve under your chairmanship for the first time, Ms Clark, and I congratulate the hon. Member for Westminster North (Ms Buck) on securing the debate. As the schools have just gone back, and as we are talking about low-income households, I would like to point out that for almost one in three families there was no holiday away from home—not even a single day trip to the seaside for one third of the nation’s children. That is the reality in the UK, one of the world’s richest countries, where the divide between rich and poor has widened over the past decade. That is where we are, and I sense that things will get worse. I am grateful to a charity called the Family Holiday Association for that information. The hon. Lady and the hon. Member for Cities of London and Westminster (Mr Field) may wish to get hold of a university of Westminster study published in April last year which can expand on it.

I intervened in respect of housing benefit because I believe that if people have to spend more money on rent—assuming that they have more money to spend on rent—they will have less money to spend on food, clothing and services. The knock-on effect—the downward spiral of less money churning through the environment—will have an impact on their local economy.

The stark fact is that, for the past 30 years, it has been impossible to tell the difference between successive Governments when it came to the provision of what we now call social housing, but which I still refer to as council housing. It is obvious that if housing stock is not provided to house the people, supply and demand will get out of kilter. That is why 30 years ago in Colchester there was no such thing as a housing crisis but there is one now. That is why local churches in my town have had to start a food parcel scheme to help desperate people who need something to eat.

A hallmark of a civilised society is that all its citizens are fed, housed and clothed, but the reality in the world’s fifth-richest economy—even in our great capital city—is that there are levels of poverty which will grow. It is to the lasting shame of the previous Government that they left office with 3.9 million children living below the official poverty line.

My role is to try to influence the coalition Government to make the situation better, not worse. The Minister will recall that we have already had a debate on this subject. On 9 June, I pointed out the high level of child poverty. According to Barnardo’s, if we take housing costs into account, 3.9 million children live in households that are below the official poverty line. I was shocked by a disturbing extract from the “Hard Times” report published by Save the Children in 2006—four years ago:

“One third of British children are forced to go without at least one of the things they need, such as three meals a day or adequate clothing.”

I raise housing benefit because, inevitably, the cuts will lead to low-income families being forced out of their neighbourhoods. That is not ethnic but economic cleansing. It has no place in civilised society, and the coalition Government must not take any measures such that they could be accused of it.

Barnardo’s stated in June, before any public spending cuts:

“The poorest families in the UK are struggling during the recent economic crisis and are very likely to bear the brunt of forthcoming spending cuts. Barnardo’s proposes pragmatic, cost-effective solutions to redistribute money to the poorest families without the Government spending a single penny extra.”

Save the Children stated:

“It makes financial sense to end child poverty—the Joseph Rowntree Foundation estimates it costs the taxpayer £25 billion a year.”

Putting to one side the obvious reasons why a civilised society should not tolerate child poverty, Save the Children made the financial case for ending it. It is obvious—“obvious” is not a word that the Treasury uses or understands—that, in the long term,

“huge amounts would be saved from not having to pick up the pieces of child poverty and associated social ills.”

I will end with the plea that I made to the Minister on 9 June, because it is probably more valid now than it was then:

“I therefore invite the Minister to have a meeting with Save the Children, Barnardo’s and the other charities that do so much work to help children, to discuss what needs to be done. Working together, as a big coalition of people with shared interests, makes sense. It would make further sense if there were a permanent standing committee, for example, involving Government and those organisations, to help with formulating policies and strategies, in the spirit of joined-up government across all Departments. I also seek a pledge from the Minister”—

for the second time—

“that there will be no delay and no dilution of the provisions set out in the Child Poverty Act 2010, including measures on the poverty reduction target and setting up the child poverty commission, which are a matter of urgency.”—[Official Report, 9 June 2010; Vol. 511, c. 31WH.]

Capital Gains Tax (Rates)

Bob Russell Excerpts

Monday 28th June 2010 Commons Chamber

[Mr Duncan Smith]

It is not just the Government who are listening to them; it seems that the rest of the world is as well. I must remind the hon. Lady that if we are not careful—[Interruption.] Whatever she says, if the credit rating agencies downgrade our rating, we would, like Spain and Greece, be paying far more to borrow the money that we are borrowing as a result of the previous Government’s position. Whether or not we agree that the credit rating agencies got it right on the banks is irrelevant, therefore. In this particular case, the question is whether or not we would end up paying more as a result of their bad rating, and that is something we were not prepared to risk. This is a Budget to get the economy back on track. It is a Budget to support the recovery and drive down the deficit, and, most importantly, to get Britain back to work.

Despite facing the tough and unavoidable choices forced on us by the fiscal position left by Labour, we are increasing the threshold for paying the basic rate of income tax, and increasing the child element of the child tax credit by £150 above indexation next year. We are making sure that the most vulnerable do not pay disproportionately.

[Bob Russell (Colchester) (LD)]

On that point, will my right hon. Friend advise me whether the current level of 3.9 million children living below the poverty line—inherited after 13 years of failure by a Labour Government—will be increased or decreased by the end of this Parliament?

[Mr Duncan Smith]

Directly in terms of this Budget, there will be no increase at all; that figure is approved by the OBR, and it is our determination to drive the figure down. Let me say to my hon. Friend that he is right: we have inherited from Labour one of the worst records of household unemployment in western Europe and, worse than that, we have the highest number of children living in workless households in the whole of western Europe. That is a shameful record of the previous Labour Government, and although Labour Members go on about it, it is we who have to deal with it, and I promise my hon. Friend that we will deal with it.

--- Later in debate ---

[Yvette Cooper]

We have been through the greatest global recession for many generations. That has had an impact on economies across the world, pushed up unemployment across the world, and pushed up borrowing across the world. We think it was the right thing to do to increase borrowing in response to the recession. That is why unemployment in this recession has been about 5%, compared with 10% in the recession of the 1980s and 1990s. Helping more people back into jobs has saved us money and also helped to put borrowing in a stronger position.

Minister after Minister has tried to pretend that this is a fair and a progressive Budget. The Liberal Democrats are clinging to the fig leaf of their increase in personal allowances, despite the fact that it is more than blown away by the hike in VAT. The Prime Minister said last year about VAT that

“it’s very regressive, it hits the poorest the hardest. It does, I absolutely promise you. . . VAT is a more regressive tax than income tax or council tax.”

That, then, will be why the Government have cut council tax, cut income tax and increased VAT to pay for it. As the Institute for Fiscal Studies made clear, the Budget is regressive, no matter how many times Ministers try to pretend the opposite.

[Bob Russell]

Does the right hon. Lady agree with the study by the Fabian Society and the Webb Memorial Trust that shows that 20% of the population is living in poverty? Talking about betrayal and 13 years of Labour Government, the inequality in Britain today, on some measures, is at its highest since the early 1960s.

[Yvette Cooper]

As the hon. Gentleman knows, the level of child poverty is some 600,000 lower than it was in 1997 as a result of the action that the Labour Government took. He also knows that we deliberately made the measures of poverty by which we were judged relative measures. Of course, that makes matters harder as the economy grows, and of course there is always more to do. That is why we believed it was right to do more to help the poorest and those who were struggling—in contrast with this Budget, which does the opposite. Pensioners do not get the income tax cut, but they have to pay more in VAT. Those on the lowest incomes do not get the income tax cut, but they have to pay more in VAT.

The Ministers are like fraudsters in the fairy tale, telling gullible Liberal Democrat MPs about the beautiful progressive clothes that the emperor is wearing, if only they are clever enough and loyal enough to see them. Liberal Democrats are clinging desperately to shreds of invisible cloth, reaching deep into their Liberal and Conservative history to pretend that they can be progressive now. They are claiming that Keynes might have backed the Budget. They are calling on Beveridge for support, kidding themselves that they can call on their history and that they are following in the footsteps of great liberal Conservatives like Winston Churchill, who supported the minimum wage, but the truth is that the emperor has no clothes.

The truth is that if we look at the detail, the Budget is nastier than any brought in by Margaret Thatcher. Instead of Churchill, Keynes or the founders of the welfare state, the Liberal Democrats have signed up, with the Secretary of State for Work and Pensions and his Chancellor, to cut support for the poor. It is perhaps apt that in this week of World cup disappointments, it was a footballer who got it right. In 2002, after England were defeated in the World cup by Brazil, Gareth Southgate reflected ruefully on England’s performance and said:

“We were expecting Winston Churchill and instead got Iain Duncan Smith.”

That is the reality for the Liberal Democrats now. With all their high hopes, they have betrayed the poor and the vulnerable, whom they stood up to defend.

--- Later in debate ---

[Mr Geoffrey Robinson (Coventry North West) (Lab)]

It does seem strange that the House cannot debate the amendment in the names of the hon. Member for St Ives (Andrew George), the hon. Member for Chelmsford—

[Bob Russell (Colchester) (LD)]

Colchester, for God’s sake. [Laughter.]

[Mr Robinson]

The hon. Member for Colchester (Bob Russell)—I am so sorry—and other very distinguished honourable dissidents opposite, who are clearly being silenced for some reason or other; I cannot comment on why. I thought the amendment very apropos and exactly to the point in all respects. I am sure that it has not been withdrawn, so quite why it has not been chosen for debate I cannot think. It is a pity, because we could have probed even further the support of the hon. Member for Bermondsey and Old Southwark (Simon Hughes) for it and for the package as a whole, which he was trying to defend last Wednesday with as much discomfort as is evident amongst the Liberals who have not yet entirely been bought by, or who have not bought into, the so-called coalition policies.

It is very sad. There has been nothing sadder, in my opinion, than the right hon. Member for Twickenham (Vince Cable), who is now the Business Secretary, coming around to explain why he supports the Budget. One of the two reasons that he gave was essentially that he had been, belatedly—I think his leader got there first—to see the Governor of the Bank of the England, who had assured him that a crisis was imminent, that we were going to be downgraded and that we would be in the same position as Greece, all of which would happen in a matter of days or hours, if he and the Liberal party did not agree to every measure that the coalition subsequently put forward. All of that should have been entirely predictable at any point before or during the election, even as the bond market strengthened and the UK position strengthened during the election, and even as we learned afterwards that the funding requirement is going to be £20 billion to £30 billion less than expected. Apparently, the leadership of the Liberal party fell for the oldest trick in the book, the bankers’ scare, which has gone on for centuries—classically, of course, with Montagu Norman and all the rest in the 1930s taking that party and this country to the brink of collapse.

Tackling Poverty in the UK

Bob Russell Excerpts

Thursday 10th June 2010 Commons Chamber

[The Minister of State, Department for Work and Pensions (Chris Grayling)]

I beg to move,

That this House has considered the matter of tackling poverty in the UK.

Helping people in the UK to escape poverty is one of the key challenges for the new Government and something that we are passionate about achieving. Although this Administration face one of the biggest financial challenges in our peacetime history, we are determined that we will not act in a way that leaves behind some of the poorest and most vulnerable in our society. Before Labour Members contribute to this afternoon’s debate, I hope that they will think back to their 13 years in power in times when they felt able to spend money freely, and remind themselves just how little progress was made with so much money.

Within days of taking office we saw the release of official poverty statistics, and what a bleak picture of progress they painted: 18% of people in the UK today live below the official poverty line, defined as a typical family, comprising a couple with two children under 14, having an income before housing costs of less than £342 a week. Official research has shown the number of children who live in families where even the most basic needs cannot be met. Of children in households with incomes in the bottom 20%, more than half live in families who cannot afford to replace worn-out furniture or broken electrical goods, and about two thirds cannot afford to make a saving of £10 a month. Of course, families under pressure to meet their daily needs are likely to see making provision for their retirement as a relatively low priority, which adds further to poverty down the line.

We believe that the last Government went wrong because they simply did not understand the nature of the poverty problem in this country. With one or two notable exceptions—I shall return to the right hon. Member for Birkenhead (Mr Field) later in my speech—they seemed to believe that Whitehall knew best: they always talked about poverty simply in terms of money and seldom demonstrated a clear understanding of the far deeper problems that can leave so many people struggling. Behind the facts and figures—beyond the statistics and the measures of material deprivation—lie incredibly complex and challenging issues.

Poverty is not just about income. Family breakdown, a lack of experience of work and education in the home, a lack of experience of parenting in the home—all contribute to a climate of poverty. Some children are brought up without even a single stable family home or in households that are ridden with the challenges of addiction. All of that shapes someone’s chances of getting on or not getting on in life.

[Bob Russell (Colchester) (LD)]

A debate on child poverty, which I introduced, was held yesterday in Westminster Hall. Will the Minister confirm that, according to Barnardo’s, at the conclusion of 13 years of Labour Government the number of children living in poverty totalled 3.9 million?

--- Later in debate ---

[Helen Goodman (Bishop Auckland) (Lab)]

Thank you very much indeed, Mr Deputy Speaker. May I say what a pleasure it is to see you in the Chair this afternoon?

I welcome the Minister of State, Department for Work and Pensions, the right hon. Member for Epsom and Ewell (Chris Grayling), to his new post. I know that on 5 May he thought he would become the Home Secretary, but the Department for Work and Pensions is a great Department, with excellent officials and a fantastic network of dedicated public servants throughout the whole country, and I hope he enjoys his time there as much as I enjoyed mine.

I have been trying to picture how the new ministerial team meetings are going, and I guess that the right hon. Gentleman has a pivotal role in mediating between the Secretary of State, who believes that family breakdown is a key issue that must be addressed, and their new colleague, the Minister of State, Department for Work and Pensions, the hon. Member for Thornbury and Yate (Steve Webb), who said:

“To hear Conservative Front Benchers suggest that they even care about this subject...is…unbelievable.”—[ Official Report, 20 July 2009; Vol. 496, c. 625.]

I was wondering why the right hon. Gentleman had been given that job, and whether it was because of his famed diplomatic skills, but then I remembered that it was in fact because he used to be a member of the Social and Democratic party—until he was swallowed up by the Conservatives. So he really is the prototype for the new coalition politics.

We have said that we want to be a constructive Opposition, supporting when we agree and criticising when we do not, and I must say that the Minister has not given a fair or accurate account of the Labour Government’s achievements in tackling poverty. Over the 13 years in which we were in power, we reversed the trend of rising poverty and lifted 900,000 pensioners out of poverty and 500,000 children out of relative poverty. On the statistics published only last month, we see that 2 million children were also lifted out of absolute poverty.

[Bob Russell]

Is the hon. Lady aware of early-day motions 61 and 62? The first is on the Joseph Rowntree Foundation audit of poverty, which shows that poverty is at the same level as it was in 2000. The second is on a study by the Fabian Society and the Webb Memorial Trust, which shows that 20% of the population lives in poverty. Is that really a triumph of new Labour’s 13 years?

[Helen Goodman]

The latest year for which we have figures is 2008-09, and the hon. Gentleman must take account of the fact that since then two things have been going on: first, we have had to face the global recession; and secondly, the Labour Government have put in train all the measures from the 2007 Budget. Our calculations were that they would lift a further 500,000 children out of poverty, so the hon. Gentleman slightly overstates his case.

[Bob Russell]

The hon. Lady suggests that the Joseph Rowntree Foundation, the Fabian Society and the Webb Memorial Trust, all of which are nominal supporters of new Labour, have got it wrong.

[Helen Goodman]

No, I do not suggest that at all. I suggest that those statistics are selective and that, if we take the decade as a whole, we see an extremely positive record on poverty across the board.

--- Later in debate ---

[Helen Goodman]

I am of course interested to hear about what is going on in Gloucestershire. I do not know whether DWP Ministers have yet had time to engage with their colleagues at the Department for Business, Innovation and Skills, but the regulatory issues mentioned by my right hon. Friend the Member for Birkenhead (Mr Field) clearly need to be addressed in conjunction with that Department.

I should like to turn to the issue of free school meals, on which I hope to be able to offer the new ministerial team some constructive advice. I do not know if they have seen the letter that the Secretary of State for Education sent to my right hon. Friend the shadow Education Secretary on 7 June, in which he says that he plans to discuss the whole issue of free school meals with DWP colleagues. Labour Members are disappointed that the Secretary of State has decided not to go ahead with extending the eligibility of free school meals to the 500,000 children in primary schools whose parents are on working tax credits. He says in his letter:

“I am sympathetic to the arguments for extending eligibility—though surprised that a decision to do so was taken before any evidence on the impact on attainment could be collected from pilots.”

That argument is not wholly unfamiliar to us. However, I would like the Minister to understand that we decided to go ahead with extending eligibility to those 500,000 children not only because we expected it to have a beneficial impact on their performance in school but because it is estimated that it would lift 50,000 children out of poverty and would be a serious improvement to the quality of work incentives. I strongly urge him to ask his officials if he could look at the analysis of the most cost-effective measures for addressing child poverty, because I believe he will see, as we did, that this is one of the most effective things that could be done. As the Education Department team are not here, I point out that another advantage of the measure is that it does not come off the DWP budget. This delay will be seriously disappointing for large numbers of families across the country. I urge the Government not to begin their tenure by repeating Mrs Thatcher’s snatching of the milk.

[Bob Russell]

I have considerable sympathy with the hon. Lady’s point, but I have to tell her—I researched this for an Adjournment debate that I had in the last Parliament—that it was the legislation of the last Labour Government that paved the way for the withdrawal of school meals services. Certainly, the Tories in Essex used that legislation to go down the route of removing the school meals service. Perhaps she should look at the Education Act 1944, and then she will see what a proper Labour Government used to do.

[Helen Goodman]

I suggest that the hon. Gentleman look at the Child Poverty Act 2010, in which we extended the eligibility of free school meals—that was a proper action by a proper Labour Government.

I said earlier that in our 13 years we had a political objective of decreasing poverty together with the policies to make it happen. I welcome the fact that the coalition has said that it will maintain the objective of ending child poverty, and that those living in poverty will be protected as the Government deal with the deficit. Indeed, the Prime Minister has said:

“The test of a good society is how…you protect the poorest, the most vulnerable, the elderly, the frail.”

The Deputy Prime Minister has even said that the cuts will be “progressive”. Labour Members will hold them to that, but I have to say that the omens are not good.

Child Poverty

Bob Russell Excerpts

Wednesday 9th June 2010 Westminster Hall

[Bob Russell (Colchester) (LD)]

Despite the current economic uncertainty, Britain remains one of the wealthiest nations on earth. It is therefore to the lasting shame of successive Governments that our country has one of the worst levels of child poverty in the developed world and one of the worst in Europe, with poverty rates worse even than those of the former communist countries of Estonia, Latvia and Lithuania—a point I have already made in an intervention on the Prime Minister.

According to the charity Barnardo’s, in the UK there are 2.8 million children living in poverty before housing costs are taken into account, which I gather is the previous Government’s preferred measure. However, Barnardo’s tells me that that figure soars to 3.9 million after housing costs are taken into account, according to the 2007-08 “Households Below Average Income” report, published last year by the Department for Work and Pensions. I was shocked by the following disturbing extract from the “Hard Times” report published by Save the Children in 2006:

“One third of British children are forced to go without at least one of the things they need, such as three meals a day or adequate clothing.”

What should the new Government do now? Well, here is one thought that Barnardo’s has put to me:

“The poorest families in the UK are struggling during the recent economic crisis and are very likely to bear the brunt of forthcoming spending cuts. Barnardo’s proposes pragmatic, cost-effective solutions to redistribute money to the poorest families without the Government spending a single penny extra.”

Save the Children told me:

“It makes financial sense to end child poverty—the Joseph Rowntree Foundation estimates it costs the taxpayer £25 billion a year.”

Putting to one side the obvious reasons why a civilised society should not tolerate child poverty, Save the Children then makes the financial case for ending it:

“In the long-term, huge amounts would be saved from not having to pick up the pieces of child poverty and associated social ills.”

I therefore invite the Minister to have a meeting with Save the Children, Barnardo’s and the other charities that do so much work to help children, to discuss what needs to be done. Working together, as a big coalition of people with shared interests, makes sense. It would make further sense if there were a permanent standing committee, for example, involving Government and those organisations, to help with formulating policies and strategies, in the spirit of joined-up government across all Departments. I also seek a pledge from the Minister this afternoon that there will be no delay and no dilution of the provisions set out in the Child Poverty Act 2010, including measures on the poverty reduction target and setting up the child poverty commission, which are a matter of urgency.

Child poverty issues are usually even worse for households with one or more children with a disability, and for single-parent families. Today, I shall combine strong criticism primarily of the last Labour Government with a reminder to the Conservative party that the situation has not arisen in the past 13 years but was inherited from when it was last in office. Successive Governments should hang their heads in shame. Generations of young people have been let down.

My message to the new coalition Government is this: quite simply, we must do better. Abolition of child poverty in the lifetime of the present Government must be the target. Whatever the economic issues facing the country, it simply cannot be right in a civilised society to have children living in conditions that are deemed to be below the official poverty line.

I recognise that this is all relative. What is described as poverty in the UK is not the poverty that can be found in third-world countries or in the slums of some overseas cities, where obscene wealth and grinding poverty are physically close to each other but worlds apart in terms of quality of life and life expectancy.

That said, I was deeply shocked by a poster I saw in a church in Colchester last month. It prompted me to table early-day motion 39, which states:

“That this House is deeply concerned at the content of posters issued by The Children’s Society and displayed on church premises which state ‘A vital project that is helping feed, clothe and assist in finding destitute children somewhere safe to live will close on 30th September due to a lack of funds; when it does, hundreds of poverty-stricken families will be left to fend for themselves’; and calls on the Government to hold urgent talks with The Children’s Society to avoid the closure.”

And this is Britain in the second decade of the third millennium.

Much was expected of new Labour in tackling child poverty. I do not doubt for a minute that it had sincere intentions, but the stark reality is that it failed, and failed big-time. I cannot speak of child poverty at first hand. I grew up in a family environment in which I did not want for food, clothing or housing. My wife and I were able to provide for our four children. I am now a grandfather and grateful that my two grandsons and my infant granddaughter do not experience the child poverty that so many children experience. However, I have been involved in political life in my home town for 40 years or so, and have experience of working on a local newspaper; and as every MP can vouch through work in his or her advice bureau, we know child poverty when we see it.

As word spread that I had secured the debate, I received considerable background briefing from different organisations concerned with tackling child poverty. That so many exist is proof of the seriousness of the situation. I cannot possibly in 15 minutes do justice to what they told me, but I hope I will be able to convey the importance of their concerns. I place on the record my thanks to those that have contacted me: Barnardo’s, Save the Children, the Children’s Society, the National Childminding Association and the Child Poverty Action Group.

The Children’s Society told me about the good childhood inquiry, the report of which was published last year. I shall quote one telling comment from its briefing to me:

“One of the most striking things about the evidence received from children was how frequently they mentioned their basic needs. Over 5,000 children filled in postcards about their lives and the three topics they talked most about were ‘friends’, ‘family’ and what was termed their ‘material needs’.

Their comments on this subject were mostly about the importance of having a home, a bed, clothes, warmth, food and water. Interestingly, far more children talked about material ‘needs’ such as these than mentioned material ‘wants’ such as money and possessions.”

I look at life as though it is a jigsaw—lots of pieces need to come together to complete the picture. It is not enough to talk in isolation about education, health, employment and so on. We must look at the whole picture, and if any of the pieces are missing, which tragically is the case for children living in poverty, that young individual will struggle throughout their life, with the guarantee that their life chances will be considerably less than those for a child from a household that is not lacking in the necessities of life; and they will have a shorter life expectancy as well. Why should nearly 4 million children be so grossly disadvantaged? It is not their fault.

As we know with a jigsaw, the first pieces that need to be put in place are the corners and the edges. For our children, the corners and the edges of their jigsaw of life are a decent home. Successive Governments have also failed to deliver that over the past 25 years, with the ending of the building of council houses for families. Oh for the return of the days when local councils built family houses—houses fit for purpose, built to Parker Morris standards—not today’s cramped dwellings with paper-thin dividing walls, which in any event are inadequate in number to deal with the worsening housing crisis. If we addressed the shortage of truly affordable family houses to rent by the resumption of the building of public housing, as was the ambition of successive Labour and Tory Governments for broadly the middle 50 years of the 20th century, excluding the war years of 1939 to 1945, that would help us dramatically on the road to the abolition of child poverty.

It is interesting that post-war Conservative Governments built more council houses than Labour Governments. Indeed, the Thatcher Government built more council houses than the Blair and Brown Governments combined. I contrast the last 13 years with the inspirational Labour Government of Clement Attlee, who in 1945 set about tackling the housing crisis after six years of war. If it can be done in those circumstances, why can it not be done today? After all, if new Labour could fund an illegal war in Iraq, then housing British families should have been affordable.

As a nation, we would do well to revisit the Education Act 1944. It was not about education only; it put forward an holistic approach to the health, welfare and general well-being of the child, of which the universal provision of school meals was an important part; its authors were determined that the child poverty of the 1930s should be a thing of the past. It is perhaps an indication of Britain’s divided society—the gap between rich and poor has widened since 1997—that even in a relatively prosperous town such as Colchester at least two primary schools have breakfast clubs, so that children who would otherwise start the day without a meal have one.

I hope that my debate will encourage the new coalition Government not to let their planned cuts in public spending further damage the life chances of another generation of children. Even in a recession and an era of cuts, expecting children from less well-off backgrounds to experience a further lowering in their living conditions is simply not acceptable.

I observe in passing what I consider to be the silence of the Church on child poverty. I sense that churches collectively, with notable exceptions, are too comfortable, and that the missionary zeal for tackling inequalities in society—and not only child poverty—is something they do not want to get involved in.

As a penultimate point, I pay tribute to the late Professor Peter Townsend, the joint founder of the Child Poverty Action Group, whose work over more than 40 years did so much to highlight the plight of children in this country. I knew him when he was at the university of Essex; from its inception in 1964, he was one of its first professors. Indeed, for a time he lived in the same part of Colchester as me. A tribute to him was published in June last year by the university of Bristol, where his name lives on in the Townsend Centre for International Poverty Research. That tribute included this observation:

“He had brief hopes when New Labour arrived, and especially after Tony Blair pledged to eliminate child poverty in 1999. In the end, however, he was left bitterly disillusioned”.

In conclusion, I trust that all Members will accept an open invitation from the Child Poverty Action Group to attend the launch of the group’s handbook on Tuesday 6 July at 10.30 am in the Jubilee Room. MPs will have an opportunity to discuss with folk from CPAG how to help end child poverty in every constituency in the land. Surely, ending child poverty is not asking too much of the new Government.

[Richard Graham (Gloucester) (Con)]

I congratulate the hon. Gentleman on securing this debate and on making so many valid points about the poverty of children. Does he agree that the Government’s commitment to providing an additional 4,000 health visitors through the Sure Start scheme would be a significant step in the right direction?

[Bob Russell]

I welcome anything that will help eliminate child poverty and promote the welfare of children. I also welcome the inclusion in the coalition Government agreement of the pupil premium, which will help children from disadvantaged backgrounds.

[The Parliamentary Under-Secretary of State for Work and Pensions (Maria Miller)]

May I say what a pleasure it is, Mr Betts, to serve under your chairmanship? This is the first of two debates this week on child poverty and poverty in general. In securing this debate, the hon. Member for Colchester (Bob Russell) continues with a subject that has been of interest to him for a number of years, and I thank him for giving us the opportunity to discuss this important matter today.

The hon. Gentleman is right that we must do better. Poverty is the most important factor in predicting a child’s life chances. Effectively tackling the causes of poverty and inequality in Britain is at the heart of our coalition Government’s agenda, and I welcome the opportunity to reiterate to him and the other Members here today our clear commitment to helping the millions of children who still live in poverty. I give the clear and I hope unambiguous assurance that there will be no delay and no dilution in our commitment, and I refer him to section 14 of the document issued by the coalition that pledged to end child poverty by 2020.

I know that this is an emotive subject. The hon. Gentleman raised a number of questions and I shall attempt to cover them in my response; however, if there is anything that he feels has not been dealt with properly, perhaps we can discuss it separately.

Over the past 13 years, we have seen ever more being spent on the benefits system, even outstripping inflation, in an attempt to move people above the poverty threshold. The Labour Government were nothing other than well intentioned; there is no question about what they were trying to achieve, but their policies simply did not work and did not deliver what was needed to deal with child poverty. As the hon. Gentleman said, many people felt disillusioned as a result.

The figures speak for themselves. The previous Government’s approach did not work because they did not do what the hon. Gentleman has suggested, which is tackling the root causes of poverty. The gap between the richest and the poorest is at its highest since records began. At best, the previous Government’s attempts to tackle poverty stalled, despite their spending some £85 billion a year on benefits and tax credits.

The simple truth is that there are 800,000 more adults in poverty now than there were in 1998-99. Instead of the number of children in poverty having been reduced, it has increased by 100,000 over the past five years, and 2.8 million children are now living in poverty. The hon. Gentleman also spoke about the definition of poverty and asked whether it should include housing costs. The Prime Minister has asked the right hon. Member for Birkenhead (Mr Field) to consider that matter in his independent review, which will report before the end of the year.

It is clear that the old way is failing. We need a new vision, a new approach to tackling poverty and giving children a better start in life. I am sure that that was one of the hon. Gentleman’s main passions when he first came to this place, as it was one of mine. That new approach is what I intend to set out today.

It is not enough to tackle the symptoms of poverty; we must tackle the underlying factors that make it a seemingly intractable problem. They include entrenched worklessness and economic dependency, family breakdown, educational failure, addiction and debt. Those are the drivers of poverty—finance is only one aspect. If we are to deal with the persistent poverty and multiple disadvantages of some of the UK’s most vulnerable families, we need to fight poverty in its broadest sense, and I suspect, judging by the feeling that I got from the hon. Gentleman’s contribution, that such a view lies behind his call for this debate.

The hon. Gentleman talked about the importance of joined-up government, and I could not agree with him more. If we are to take on this complex and multi-faceted problem, we need to ensure that we tackle all the different facets of poverty so that we break the cycle of disadvantage and deprivation and give all children the same opportunity to flourish and excel.

My hon. Friend the Member for Gloucester (Richard Graham) mentioned Sure Start. We have clear coalition policies on taking Sure Start back to its roots to increase the effectiveness of its outreach services, and to uphold our commitment to early intervention. We know that Sure Start has a critical role to play, and we want to make it work harder.

We want to ensure that more children have the advantages of a good education, which is critical to improving stalled social mobility, and that is where the pupil premium comes into play. By making some £3,000 available to each pupil who falls into that sector, we will be making a significant financial contribution to schools. We will also give schools the autonomy to use that money in the way they think is best. We will end the couple penalty in the tax system that jeopardises the future of too many children, because we know that stable family life is an important way of addressing child poverty.

We will also introduce wide-ranging welfare reform, as was set out in the Gracious Speech, through the work programme, which will be more effective in helping people into work and so out of poverty. At all points, we will ensure that work pays. All parts of the House now accept that helping people back into work is a basic principle of tackling poverty.

The hon. Member for Colchester talked about the importance of a holistic approach, and I could not agree with him more. We are on the same page of the book in that respect. Clearly, such a programme to address child poverty needs to work across the board, which is why the Prime Minister, working in conjunction with my right hon. Friend the Secretary of State for Work and Pensions, has announced the establishment of the Social Justice Cabinet Committee. Such a group gives us the opportunity to bring together people from across government to tackle these seemingly intractable problems. Its one mission will be to consider social justice in this country.

[Bob Russell]

The Minister may not know the answer to this question immediately, but if so, perhaps she can find it out for me. Will the organisations directly involved in tackling child poverty be part of the arrangement she has just described?

[Maria Miller]

The organisations the hon. Gentleman mentioned will have a critical role to play in pulling together the strategy on child poverty that we need to develop by March 2011. With regard to the constitution of the Social Justice Cabinet Committee, it is early days yet. Certainly, I will take the hon. Gentleman’s thoughts back to our team and put forward his suggestion, because it has great merit.

The Social Justice Cabinet Committee will consider the causes of poverty and how we can make a difference to the lives of thousands of children. The hon. Gentleman mentioned housing—an issue in which he has a passionate interest—and particularly the role of councils in ensuring that good-quality housing is available for families, thus giving children the stability and good accommodation that can make such a difference to their lives. A Cabinet Committee such as the one that will be constituted can tackle an issue such as that, as part of a holistic strategy for dealing with child poverty. I hope the hon. Gentleman is reassured that we share his view that that is the only way to make a real difference.

Let me turn to how we plan to go forward in practical terms. Like the hon. Gentleman, I have sat in this Chamber many times, hearing Ministers talk in abstract terms about what they may or may not do, so I should like to tell him about some concrete things that we will be doing. We will set up the Social Justice Cabinet Committee, which will provide a holistic, cross-government approach on this issue. Under the Child Poverty Act 2010, the Government will publish a strategy to show how we will meet the goal of ending child poverty by 2020. The first such strategy will be published in March 2011. I know that the organisations the hon. Gentleman mentioned—Barnardo’s, Joseph Rowntree and Save the Children—will be making important contributions to the development of that strategy. I look forward to meeting those organisations in the coming months to ensure that we have the full value of their experience and expertise in this area, because only by doing that will we come to the right answer.

The simple truth is that the previous Government fell short on the progress that was needed on child poverty. That is why our new approach needs to be implemented quickly, if we are to reach the ambitious targets set out in the 2010 Act. Over the next nine months, I shall work with colleagues across government to ensure that we have a robust child poverty strategy in place. We want to tackle not just the symptoms of poverty but the root causes, so that we can say that we have the strategy on child poverty that both the hon. Gentleman and I know this country needs.