Tackling Poverty in the UK

Helen Goodman Excerpts

Thursday 10th June 2010 Commons Chamber

[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.

[Mark Tami]

Will my hon. Friend express a view on the comments of the Under-Secretary of State for Communities and Local Government, the hon. Member for Bromley and Chislehurst (Robert Neill)? I asked about them earlier and did not receive an answer, but the Under-Secretary said that the poorest would bear the brunt of the cuts.

[Helen Goodman]

That is the big worry, and if even Government Back Benchers can see it, I hope that Government Front Benchers will take that concern very seriously. As my hon. Friend the Member for Westminster North (Ms Buck) said earlier, the independent Institute for Fiscal Studies also stated that Labour’s tax and benefit reforms have reduced income inequality. If we had maintained the policies that we inherited in 1997, there would have been a much greater degree of income inequality.

The Minister before us this afternoon also overstated his case on worklessness. In fact, the number of people on inactive benefits is now 350,000 lower than the number that we inherited, and the number of lone parents in work has increased substantially from 46 to 58%, because of the positive measures that we took. I hope he does not mind my saying that he will find the problems rather more intractable than he implied in his speech.

We welcome the commitment to restoring the earnings link to pensions, and we are extremely pleased that the Government have decided to maintain the winter fuel allowance and free bus passes, which we introduced. As the Minister said, encouraging a savings culture is obviously important, but Labour Members cannot quite marry that with the halt that seems to have been put on the auto-enrolment programme.

[The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)]

May I, for the record, ensure that the hon. Lady understands that there is no such halt? We are committed to auto-enrolment, but we are reviewing how it is done within the whole NES—new entrepreneur scholarships—programme.

[Helen Goodman]

I am grateful to the right hon. Gentleman for that intervention.

The Minister talked about the importance of the problem of debt facing the very poorest people, and the Secretary of State mentioned credit unions in his speech on Tuesday night. The Labour Government introduced a growth fund for credit unions, and we put £86 million into credit unions across the country. I very much hope that the new Government will maintain that level of support in the public spending round that they are going to undertake.

[Mark Tami]

Does my hon. Friend agree that it is very important that we keep that support for credit unions, because if they are not there, such people will, yet again, have to turn to loan sharks and others who demand very high interest rates, often with menaces?

[Helen Goodman]

That is absolutely right. It is vital that we prevent the poorest people from being exploited in the way they have been. There is a lot of work to be done on this subject.

[Mr Frank Field (Birkenhead) (Lab)]

Has my hon. Friend had the same experience as I have in my constituency, where the Financial Services Authority is regulating credit unions in the way we wish it had regulated the big banks, thereby putting their future at stake? As my hon. Friend the Member for Alyn and Deeside (Mark Tami) said, credit unions play a vital role in giving poorer people an alternative way of getting cheap credit.

[Helen Goodman]

I do not know whether my experience in my constituency has been exactly the same as that of my right hon. Friend, but he reinforces the significant role that credit unions can play, and we urge the Government to maintain support for them.

[Richard Graham (Gloucester) (Con)]

In my constituency and around the county of Gloucestershire, the three credit unions that still exist—in Stroud, Forest of Dean and Gloucester—are all very small and only scratch the surface in trying to reach those on housing estates who are most vulnerable to loan sharks. Under this Government, we will try, with the help of a community foundation and social enterprises, to consolidate those three credit unions into a county-wide credit union that will be bigger and more solid and sustainable, and will reach more of the most poverty-stricken people.

[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.

[Kate Green]

Will my hon. Friend confirm that the Child Poverty Act has provided for the relative poverty measure to continue to be an element of the way in which we measure success and progress on poverty? Does she agree that that is the most meaningful measure for determining that we are ensuring that living standards for all, including the poorest, keep up as society’s wealth improves?

[Helen Goodman]

I certainly do; my hon. Friend anticipates one of the points that I was going to make.

As I was saying, the omens are not good, and I fear that the rhetoric is not matched by the reality. Only this morning, the independent Chartered Institute of Personnel and Development forecast a rise in unemployment to almost 3 million as public sector workers, mainly women and the low-paid, are thrown on to the dole. In fact, it is difficult to see exactly what the strategy of Her Majesty’s Government is. So far, the two coalition partners can agree on getting rid of the child trust fund and the future jobs fund, but what will be the effect of those cuts? The child trust fund was the first serious attempt to tackle intergenerational poverty by enabling low-income families to build up assets for their children. As the Minister said, it is vital to encourage a culture of savings, and it was designed to do precisely that, but it is going to go.

The coalition Government were also able to agree to cut the future jobs fund, despite the fact that before the election both coalition parties said they would continue it. That means that 80,000 young people will lose their chances of work this year, and perhaps 150,000 next year. The whole reason why we introduced the fund was that we saw the scarring effects of youth unemployment in the 1980s and ’90s. Because we took measures over the past 18 months during the recession, long-term youth unemployment is now one tenth of the level that it was then. However, the coalition parties have clearly learned nothing and care less. One must ask oneself why that is, so let us examine where the cuts in the future jobs fund will fall most heavily—the west midlands, the north-west, Wales and Scotland. The future jobs fund is about real jobs.

[Chris Grayling]

May I point out to the hon. Lady how proud I am to have many new colleagues on our Benches from the west midlands, the north-west, Wales and so on? Will she confirm to the House that a couple of weeks ago, this Administration announced tens of thousands of new apprenticeships, which are likely to have a much longer-lasting impact on securing proper careers for the future for young people?

[Helen Goodman]

Of course Members from the coalition parties could be elected in those areas, given that they did not say before the election that they would cut the future jobs fund. They promised that they would continue it, and now they have cut it. That is the problem. I suspect that the Government’s real agenda is to make young people do the same work that they were doing under the future jobs fund, but whereas everybody was paid at least the minimum wage through that fund, under the schemes that the Minister and the Government are proposing they will have to live on benefits. What will that do for poverty levels, and where does it leave the Liberal Democrats’ commitment to raise the minimum wage for people under the age of 24?

It is ironic that the one thing the partners in the coalition really cannot agree about is the role of the family. The Tories want to reintroduce the married couples allowance, but that is one of the few matters on which the coalition agreement allows the Liberal Democrats to abstain. Who will benefit from it? Not the widow, the abandoned mother or the woman who has left her husband because of domestic violence. The Liberal Democrats should have the courage of their convictions, and they should vote against it. It is a wholly regressive and retrograde step. As the Deputy Prime Minister said during the election campaign, it is

“a throwback to the Edwardian era”

and “patronising drivel”.

The Secretary of State, who unfortunately is no longer in his place, revealed on 27 May that he was still looking to the Treasury for an extra £3 billion to reform the benefits system. The coalition agreement states that

“initial investment delivers later savings through lower benefit expenditure…based upon the DEL/AME switch”—

the departmental expenditure limits/annually managed expenditure switch. That is obviously based on the work of the Centre for Social Justice, which we examined in some detail when we took evidence on the Child Poverty Bill. The Secretary of State even seemed to be laying his job on the line later on 27 May when he said that he had not taken the job to be a “cheeseparer”, and stated:

“If somebody tells me I have to do something different then I won’t be here any longer.”

I suspect that the Chancellor of the Exchequer may be telling him to do something different right now, because he says that tackling the deficit is the priority. If Ministers in the Department for Work and Pensions can persuade the Treasury that the extra £3 billion is the goose that will lay the golden egg, we shall be extremely surprised.

A further complication in trying to tease out the Government’s strategy is that No. 10 has appointed my right hon. Friend the Member for Birkenhead (Mr Field). We have not yet seen his terms of reference—I do not know whether they are to think the unthinkable—but there seems to be something strangely familiar about the situation. Last Saturday The Guardian said that he was going to look again at the definition of poverty. That really would be unthinkable. What is the point of it?

[Mr Frank Field]

Will my hon. Friend give way?

[Helen Goodman]

I will, because I would like my right hon. Friend to answer two questions. Is the purpose of moving away from the definition agreed in the European Union and the OECD to tell poor people that they are not really poor, or to avoid future embarrassing comparisons?

[Mr Field]

I am disappointed that my hon. Friend does not know the Labour Government’s record better. If she examines the last publication that we produced, she will see that we said there was a choice of four definitions of poverty. I shall go into them more if I catch your eye later, Mr Deputy Speaker, but that document asked for views on the balance among the four and whether we should add others. By all means let us have a go at each other about this on a personal level, but let us also be clear where the Labour Government left the debate.

[Helen Goodman]

I think my right hon. Friend ignores the fact that it is less than three months since the Child Poverty Act 2010 received Royal Assent. It committed any Government to eradicating child poverty and set out the four measures that will be used to make that judgment, which are of absolute poverty, relative poverty—that is the one agreed in the EU and the OECD—persistent poverty and material deprivation. Everybody in the House supported that Act, and I hope that the Government will not renege on that support.

The main problem with the Government’s position is that it is incoherent. They are divided on family policy and welfare strategy. Everyone knows that worklessness is one of the key drivers of poverty, but the proposals that we have heard from the Government so far will increase unemployment and the north-south divide.

[Ms Buck]

Was my hon. Friend surprised that the Minister made no mention of child care, which is critical to employment levels, particularly of lone parents? Does she share my disappointment that just before the election, the Mayor of London chose that moment to abolish child care from the London Development Agency’s work and to start unpicking measures such as the child care affordability programme? Does she agree that affordable child care must be at the heart of the wide range of programmes and policies that we use to tackle poverty?

[Helen Goodman]

My hon. Friend is absolutely right, and I hope that what the Mayor of London has done is not a precursor of what the Government intend to do. The Labour Government increased resources for child care significantly. We provided for three and four-year-olds to have 12 and then 15 hours of free provision, and we provided an element in the tax credits for people to pay for the child care that they found convenient. Our manifesto set out a commitment to extend child care provision to two-year-olds as well, because of the importance of the developmental needs that the Minister talked about so eloquently little more than 15 minutes ago.

The proof of the pudding will be whether the Government commit the policies to match the rhetoric. We fear that that will not be the case, and that there is now a serious risk of a double-dip recession. I urge DWP Ministers to be very careful indeed, lest they frustrate their no doubt good intentions by agreeing to cuts in the coming Budget.

[Several hon. Members]

rose—

--- Later in debate ---

[Mr Frank Field (Birkenhead) (Lab)]

I am pleased that you were in the Chair when I rose to speak, Mr Deputy Speaker, even though you are about to leave the Chamber, because I can add my congratulations to those of others. It is a particular pleasure to see someone from the north-west in the Chair.

As the debate is rightly dominated by maiden speeches, I wanted to comment on how I felt more than three decades ago when I made my maiden speech, but from what I have experienced in this debate, my recollections will be irrelevant. For days, my insides were chewed up with nerves because I was worrying about making that maiden speech. The good news that I thought I would be bringing to Members making their maiden speech today is that it does not get any better. However, I can see from their performance that their confidence and the quality of their contributions far exceeds that of the intake of 1979.

I am grateful for the chance to contribute to this wide-ranging debate on poverty. I hope the House will forgive me if I focus narrowly on part of the canvas rather than addressing some of the wider aspects that Members have already touched on. A starting point for me is our debate on the Child Poverty Bill before the last election, when I expressed both admiration for what the Government had done and a sense of worry about where we would go from that position of relative success.

If we cast our mind back to the then Prime Minister’s objective to abolish child poverty by 2020, we can only exclaim that it was one of the most audacious targets set by any Government. I happened to be a Work and Pensions Minister at the time, and I learned about the target for the first time when I went into my room at the Department and saw Sky News on the television. That is when I learned that the Government’s objective was to abolish child poverty by 2020, even though I was a Minister with some responsibility for it. Others will have shared my sense of awe about how decisions came down to us—lesser Members—from Mount Sinai.

Had I been consulted beforehand, I hope I would have advised the then Prime Minister that although we should commit ourselves to the objective, the formula was one that no other country in the free world had achieved. We should not set targets for people, nations or Governments to fail; we should set targets they can achieve. It was thus immensely important before we fought the general election that we not only set out attempts to broaden our understanding of how we might measure poverty but put them in an Act of Parliament. That process is being developed and possibly taken a stage further in the review that the Prime Minister has asked me to undertake.

It gives me considerable pleasure that I have been asked to carry out the review, but it would have given me even more pleasure had my own side asked me to undertake that activity. The terms of reference took some time to agree—about seven times as long as the coalition agreement. They are public—they are certainly on my website—and I shall set out what I hope the review will achieve by Christmas.

In interviews, I have cited just one study, although there are many others that we could cite from our constituencies. The study relates to the work of the Prince’s charities in Burnley. It is a wonderful project, where volunteer mothers make sure that children are up in time for school. The children are taken to school. If need be, they are washed at school, fed breakfast and made ready, with all the other children, to start their day’s activities and endeavours.

My plea to the House is that if anyone thinks that those projects will be made irrelevant simply because we increase household incomes, however necessary basic income is, they are doing a disservice to poorer families and to the poor generally. Indeed, one of the great purposes of the review, if it fulfils its ambitions, is not only to run alongside the monetary definitions of poverty considerations of what non-financial aspects push children into poverty but, more importantly, to move the debate on. Until now, it has been obsessed with inputs—what we put in, and how much money is at stake, crucial though that is—and we need to consider outcomes. Therefore, part of the review will consider how we can together construct an index of what determines children’s life chances, how we can extend those life chances and, more importantly, how we can measure that, so that we can report back to our constituents on whether we have been successful during each Parliament.

[Helen Goodman]

I should like my right hon. Friend to be specific. I am not sure whether we were at cross-purposes earlier. My concern is that we do not redefine the poverty level. That is the major concern among Labour Members. We should not say, “Oh, 60% of median income is far too high. We want to go to 40%.” I draw his attention to the full definition that we put in the Child Poverty Act 2010. We now take into account a wide range of things: outdoor space in which to play, celebrations on holiday and at Christmas and swimming at least once a month. Those items are under a continual process of renewal, because that index is based on surveys of the whole population and what the whole population thinks it is reasonable for a child to have.

[Mr Field]

I am happy to give assurances to my hon. Friend. The law is quite clear about the objectives. I have no idea what the report will contain, but those objectives that we have are ones that we should achieve. The primary definition that we used before the 2010 Act was not only difficult to achieve mathematically, but has not been achieved in any country in the free world—hence we asked in the document that we published whether we should use an average of those countries that do best in achieving that definition in setting our target.

Time is scarce, and I obviously do not want to be delayed by a narrowly focused, technical debate on definitions—I hope there will be plenty of time for that—but my hon. Friend says that other aspects of the 2010 Act that are used to define poverty are important. Of course they are important, but I want to focus much more clearly on pathways out of poverty and on increasing life chances. I hope that those Members of Parliament who have views—they clearly have, given today’s maiden speeches—that will add to that side of the review, as well as to the debate on the technical definition of poverty, will contribute to the review.