Child Poverty in the North

Karen Buck Excerpts

Wednesday 3rd May 2023 Westminster Hall

[Ms Karen Buck (Westminster North) (Lab)]

It is a pleasure to reply to this debate under your chairmanship, Mr Hollobone. I congratulate my hon. Friend the Member for South Shields (Mrs Lewell-Buck) on introducing it in a rigorous and well-argued speech in which she drew out the commission’s work. I welcome the important contribution of the hon. Member for Cheadle (Mary Robinson) to the debate, and we also heard a strong speech from my hon. Friend the Member for Blaydon (Liz Twist). Welcome as it is to have this important debate today, it would have been marvellous if we had been able to hold it on a day when other representatives from the north could have been here to give the topic the full range of contributions it deserves.

The speeches we heard drew heavily on the work of the child of the north all-party parliamentary group and the North East Child Poverty Commission—I was heavily involved in the earlier London Child Poverty Commission, so I know how much work goes into such inquiries. What is important about them is that they draw on the lived experienced of people in poverty, the range of factors that drive poverty, including ill health and disability—sadly, correlated with poverty—and the growing significance of in-work poverty, as my hon. Friend the Member for Blaydon drew out. That is something that we have always had, but it has, sadly, developed into a strong driver of poverty these days.

All the speeches we have heard this morning have made it clear that there are long-term consequences and harms if a child grows up in poverty. When we talk of poverty, we should always reflect on the moral dimension. It is morally critical for us to recognise and commit to dealing with child poverty. We should also reflect on the sheer inefficiency and waste that comes from trapping families and children in poverty. Growing up in poverty will have an impact on health status, leading people into poorer physical and mental health. It is also so closely correlated with educational underachievement that our schools must make extra efforts to support, educate and help children in poverty. In addition, my hon. Friend the Member for South Shields drew out the fact that, tragically, there are consequences for some of our poorest children and families in terms of interventions by children’s services. There is simply a strong economic as well as a moral case for ensuring that we deal with and invest in child poverty.

The Government have made a lot of their levelling-up agenda over the past few years, but if we do not do more to tackle the stark disparities in income poverty between regions, it will continue to be a slogan rather than something that makes a difference on the ground. We can see what remains to be done simply from the Department for Work and Pensions’ own statistics. In the three years leading up to the pandemic, 37% of children in the north-east were living in poverty after housing costs; in the north-west and Yorkshire and the Humber, about a third of children were in poverty. That is the last three-year period for which we have full income data, as the pandemic prevented the production of regional figures for 2020-21, so later figures need to be treated with a degree of caution, but there is little reason to believe that things have got better. Indeed, there are strong reasons for believing that they have, in fact, got worse.

Child poverty is a major problem in every region and every country of the UK. Even in the south-east, nearly one in four children are living in poverty after housing costs. But the north-east has seen a major worsening of its position: child poverty increased by a remarkable 11 percentage points in the five years leading up to the pandemic. The Institute for Fiscal Studies states:

“On a wide variety of measures, regional disparities in the UK are greater than in most comparable countries.”

Tackling those economic disparities requires concerted, long-term action across the full range of Government functions, at central and local levels—from economic development to skills, housing, employment services and infrastructure. It certainly requires more than a pot of levelling-up funding that delivers the equivalent of £80 per capita to the north-east and north-west and just £60 to Yorkshire and the Humber. What the Conservative Mayor of the West Midlands describes as Whitehall’s “broken begging bowl culture” cannot be the basis for addressing entrenched economic inequalities between areas.

The issue of regional child poverty also brings out the centrality of social security policy, because bad social security policy choices will exacerbate underlying economic inequalities between regions. The Government are simply not addressing that problem; indeed, for the last 13 years they have pursued policies that lead to a sharpening of regional disparities, and no amount of levelling-up rhetoric can disguise the fact that those policies remain in place and continue to have their inevitable effect.

[Mrs Lewell-Buck]

If the Government are committed to the levelling-up rhetoric, why is child poverty not mentioned once in the levelling-up White Paper or the Levelling-up and Regeneration Bill? Is my hon. Friend concerned about that, as I am?

[Ms Buck]

My hon. Friend is absolutely right. Frankly, it is bizarre that child poverty is not seen as a critical issue in its own right in the levelling-up agenda.

At the root of the problem is the fact that the Government have long ceased to bother with one of the most basic tasks of any social security system, which is matching resources to needs. Not bothering with that task is, of course, the explicit aim of the two-child limit, whereby the DWP is forbidden by statute from taking third and subsequent children into account in setting universal credit and tax credit entitlements, but it is also the effect of a host of other policies that override entitlements based on assessed needs. Those policies include the failure to uprate benefits by inflation and, from 2016 to 2020, the failure to uprate them at all. The four-year benefit freeze has permanently reduced the value of benefits, including in-work benefits. Ministers seem to have difficulty getting their heads around that point; they seem to think that, because benefits were uprated with inflation this year, everything is now all right. They seem not to be aware of the permanent damage that has been done.

Failing to set the local housing allowance in line with real-world rents is another issue. The local housing allowance remains frozen at 2019 levels. Across the north, two thirds of universal credit households receiving rent support in the private sector have rents above the local housing allowance maximum for their area. The shortfall between rent and the local housing allowance has to be made up out of whatever other income households have. At a national level, the average shortfall is £100 a month. Have a Government ever come up with a more elementary design flaw than building debt into universal credit by making people wait five weeks for their first payment? The examples can be multiplied.

In all cases, we see the Government breaking the link between benefit entitlements and needs as a matter of deliberate policy. Families can wind up falling foul of more than one of those policies simultaneously, which can lead to cumulative impacts—needing to make up the rent out of the rest of the UC payment, which has already been reduced to pay back an advance and which takes no account, for example, of their third child. This has been going on for years. Is it any wonder, then, that we see evidence of destitution throughout the country, or that regions that have historically done worse have faced a disproportionate impact? Consider that 49% of children in the north-east are in families receiving universal credit or an equivalent legacy benefit, compared to 24% in the south-east. Of course these policies impact some regions more than others. One of the more shocking results of the latest poverty statistics from the Department for Work and Pensions is that one in 10 children in the north-east are in families that used a food bank in the last 12 months—nearly twice the national figure.

Tackling economic disparities between areas requires a functioning social security system that takes account of all relevant needs and costs. As long as we do not have that, the rhetoric of levelling up will remain just that—rhetoric.