Earl of Listowel
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(9 years, 4 months ago)
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Baroness Pinnock
My Lords, this is a timely amendment, given the Government’s Statement of last week. When we were considering the Bill’s impact, it seemed to us that it would be a progressive move to relate the benefits of the additional free hours of childcare to improvement or otherwise in measures of child poverty, hence the amendment tabled in my name.
When considering the impact of the Bill, we became concerned that the financial benefits claimed by the Government could be completely undermined by changes they are going to make elsewhere. We were right to be concerned, given their announcement last week that they aim to abolish the measures of child poverty that were instituted in the Child Poverty Act 2010. In particular, we are concerned that the combination of those changes and the changes to working families’ benefits will have an adverse impact on child poverty.
There was cross-party support for the Government’s attempt in the 2010 Act to set out targets to reduce child poverty. Therefore, I am disappointed—to put it mildly—that the Government are now intent on removing the income-related figures for child poverty and replacing them with measures of worklessness and educational attainment. If you are a child living in a family on low income or benefits, it matters little whether that is the consequence of your parents’ worklessness or educational attainment, and there is little you can do about it. It is really important that we get to grips with this and use the Childcare Bill to lift more children out of poverty. I am sure there is a commitment to doing that across this House; it is the way we do it that will be a matter of debate.
The Government will want to use the undoubted benefits of the Bill to achieve that by agreeing to amendments that would extend the definition of working parents to those seeking to improve their education and skills. That would marry very neatly with what the Government said in the other place last week about educational attainment being a measure of poverty. If that is to be one of their measures, using the Bill to help parents who are seeking to improve their skills by going into education or training would combine the wishes of the Government with the Childcare Bill. That is something we could perhaps all agree to.
When I raised this issue last week, the Minister said that there were other ways for young parents who were in education to access some form of childcare, and he is right. But, having asked people over the weekend how this works, I can assure him that it is not that easy for young parents going into college, university or training to access really good free childcare. Aligning the Bill with the requirements of people going into education and training would be an enormously progressive move towards helping low-income families and therefore tackling child poverty.
If there is something we can do to lift more children out of poverty—which would have long-term benefits not just for them but for the country as a whole—and if we can do it fairly simply by linking parents’ educational needs with the Bill, we should all try to do it. I would be very pleased indeed if the Minister rethought the answer he gave me last week, in the light of the Government’s announcement, and I urge him to do so. I beg to move.
The Earl of Listowel (CB)
I am grateful to the noble Baroness for moving this amendment. The Child Poverty Action Group has told us that it welcomes this legislation because of the positive impact that it is likely to have on child poverty. I hope that it may be helpful to remind the House of concerns about other current factors in play which might impact on child poverty.
I am grateful to the Minister for agreeing to a meeting on the issue of homeless families. I am reminded of a couple of times recently where, due to a combination of policy factors, many poor families have had to move out of London because they can no longer afford to live here. That is causing concern to employers, as their workforce is leaving London, and one must be concerned that those families are going to areas where they will have difficulty finding employment. While I know that this is an extremely difficult issue, it is helpful when we are talking about policies which will raise children out of poverty to keep in mind other things that might be pushing children into poverty and to think carefully about what we can do to hit that on the head as well.
Baroness Jones of Whitchurch (Lab)
My Lords, I add my support to the amendment and to the comments of the noble Baroness and the noble Earl. What the Government are proposing in terms of redefining child poverty is an absolute disgrace. What we need is not a change to the definition of poverty but a plan to deal with poverty. The truth is that, after child poverty fell under the previous Government, last week’s Households Below Average Income DWP statistics show that more than 4 million children have plunged into absolute poverty under this Government. The Government seem to be determined to disguise the fact that they are on course to miss the target of abolishing child poverty by 2020 by changing the statistical goalposts. So what assessment have the Government made of the DWP statistics? Do they accept that the number of children in absolute poverty is increasing?
Following on from the Oral Question on the Family and Childcare Trust report, Access Denied, how will the provisions of the Bill contribute to meeting the child poverty target when children in disadvantaged areas are expected to miss out disproportionately on the early years provision? Does the Minister accept that families on low incomes frequently work on unstable contracts both in terms of the hours they are offered each week and the length of contract? These are the points that we rehearsed in the debates last week. So how can we be assured that low-income families will benefit from these proposals rather than being penalised —or even possibly criminalised—by their uncertain working patterns, where, for example, shifts are cancelled at short notice and the eight-hours criterion is not always met? This is a real challenge for us. How are we going to measure the progress that we are making on these issues? How can we be assured that disadvantaged children are not going to miss out disproportionately once again through these proposals? I look forward to the noble Lord’s response.
The Earl of Listowel
Before the noble Baroness withdraws her amendment, I thank the Minister for her comments and her elucidation of the Government’s plans on child poverty. I recognise that she does not want to give any details now but it was helpful to have that information. I omitted to say that I was at a meeting with the Local Government Association a little while ago, which was chaired by her colleague the noble Baroness, Lady Eaton. The association is asking for greater flexibility in borrowing for housing, for instance. The Government might choose to take certain measures which would help it to increase the supply of housing. I will leave that with the Minister for her to think about.
The Earl of Listowel (CB)
May I ask the Minister about a point of detail? At a recent meeting of the All Party Parliamentary Group dealing with children’s centres, one of the practitioners said that, while in the past Ofsted has examined centres to see how they were engaging with fathers, it had been decided that it should no longer do that. For instance, when providing information to parents, a centre might say, “Dear Mum and Dad” or “Dear Mother and Father”, rather than saying “Dear Parents”, in order to reach out to and engage fathers. They do a lot of work to try to reach fathers. That should be recognised. It may not be the case—it was only one practitioner’s experience—but I would be grateful if the Minister could write to me to confirm whether Ofsted is checking this, acknowledging the good work in this area.
Lord True
My Lords, I apologise to my noble friend. She looked around to see whether I was still in my place. I share the concern of noble Lords who are coming in about the trauma being inflicted on the people of Greece by the euro project, and I have moved along to allow other people to come in and make a point. I have to leave after this stage.
I am very grateful to my noble friend for what she said. It is important always to remember, before every piece of legislation that comes before this House, that the need for one local government officer at a relatively low grade across the 32 boroughs of London alone costs £1 million. That is besides the rest of the country and is a minimum sum, so noble Lords will understand why I am concerned that no regulatory demand should place pressure on local authorities to employ even more.
I am very grateful for the undertaking that we can have discussions on this and I am very grateful for the spirit in which my noble friend responded to the amendment. I beg leave to withdraw the amendment.
Baroness Pinnock
My Lords, Amendment 39 is in my name and that of my noble friend Lord German and the noble Baroness, Lady Jones of Whitchurch. The amendment is an extension of our discussion on Amendment 34 on the links between this Bill and child poverty. As we know, the Government have a way of encouraging people out of poverty by encouraging them into work, and to make work pay. One of the ways of making work pay is by providing additional free childcare. Those who have relatives with young families will know the huge cost of paying for childcare in order to go out to work. We know that some working parents currently pass over most of their income to childcare costs, so this Bill is to be greatly welcomed.
However, I would like to explore through this amendment the link between the Bill and the incomes that families will have, and the changes to those incomes that we know are on the cards later this week in an announcement from the Chancellor of the Exchequer. The Government have claimed, no doubt accurately, that the provisions in the Bill will see an additional benefit to families of around £2,500 a year. That would be a huge and significant saving to parents. However, the simple fact is that for those on low incomes and who most need the benefits of free childcare, all that good work could be wiped out by government cuts to tax credits of various kinds and perhaps to housing benefit.
I know that the Minister will be unable to tell us exactly what cuts to tax credits we are set to see in the Budget this week. Indeed, the Government have been singularly unwilling to spell out where their £12 billion of welfare savings will come from, but I think all sides of the House can agree that these cuts are likely to come at the expense of lower-income working families. The Prime Minister has already trailed that we will see cuts in tax credits, with some people suggesting that there might be up to £5 billion of projected savings. If that is the case, it would result in families with two children losing up to £1,700 a year, seriously diminishing the very welcome impact of the free additional childcare.
Despite what the Prime Minister suggested about companies paying more to workers to offset the impact of any cuts to tax credits, without real action on the minimum and living wage that is frankly rather more hope than expectation. We cannot assume that employers will be either able or willing to pick up the slack by paying a living wage to make up for the loss, for instance, of working tax credits. The decision about tax credits will make a huge difference to people, whether in employment or not. Cuts will mean that it is no longer financially possible for someone with high childcare costs to go out to work. That means that they will lose not only their tax credits but potentially the entitlement of free childcare, a double whammy that will do what none of us wants and punish the children of those families.
However, as much of this detail is still to be discussed and we may not know the Government’s intentions until Wednesday, we propose in this amendment to have a review two years hence of the financial impact on lower-income working families of the combination of the free childcare offer and any reductions in working tax credits, child tax credits and housing benefit. I made the case earlier today about the important link between this Bill, child poverty and the impact on low-income families. If the Government want to be progressive—I am sure they do—they will see that link and try to make work pay by ensuring that childcare is of benefit to low-income families. Ultimately, that is the purpose of this amendment: to consider the link between the two. I beg to move.
The Earl of Listowel
My Lords, the noble Baroness referred to the national living wage. I believe that two former advisers to the Prime Minister recently endorsed a move towards the living wage. Clearly, this Bill would be that much more effective and there would be much more incentive for people to take what is offered in it if we moved to a national living wage. What current position do the Government take towards the gradual introduction of a national living wage?
Lord Nash
In Amendment 39, the noble Baroness, Lady Pinnock, seeks assurance that the Government will monitor and report on the impact of the entitlement. She spoke with passion about the importance of supporting low-income working families with the cost of childcare, which is the subject of today’s debate, and I will confine my remarks to the subject of today’s discussion. I agree that it is extremely important and must be kept in mind at all stages of policy development in the early years.
The Government have ably and amply demonstrated their commitment to supporting low-income working families with the cost of childcare and to improving the educational outcomes of all children, particularly those from disadvantaged backgrounds. As my noble friend and I have set out in this debate and in previous discussions, the Government have committed to increasing childcare support within universal credit by around £350 million to provide 85% of childcare costs from 2016 where the lone parent or both parents in a couple are in work. The Government have introduced an entitlement to free early education for the most disadvantaged two year-olds, while the early years pupil premium will provide more support to improve outcomes for disadvantaged three and four year-olds.
The Government have demonstrated their commitment to understanding the impact of the provision of free childcare through previous projects such as the Effective Pre-School, Primary and Secondary Education project and the new longitudinal study of early education and development, as my noble friend and I mentioned previously. The Government also collect a range of data on the take-up of the existing entitlements, including the number of children taking up a place. The most recent data were published on 25 June. They reflect the position in January of this year and are extremely encouraging. As detail of the new entitlement is developed further, we will consider what further data should be collected to enable effective monitoring of the new entitlement.
The Government recognise the benefits and importance of evaluating the impact of significant policies such as this but do not believe that it is necessary or appropriate to legislate for the production of a report or to define the timeline and content of such a report. I therefore urge the noble Baroness, Lady Pinnock, to withdraw her amendment.