Child Poverty

Kate Green Excerpts

Tuesday 15th September 2015 Westminster Hall

[Kate Green (Stretford and Urmston) (Lab)]

It is a great pleasure, Mr Howarth, to respond to this debate and to serve under your chairmanship. I congratulate the hon. Member for East Renfrewshire (Kirsten Oswald) on introducing it this afternoon.

As the debate has proceeded, we have understood the complexity and multi-layering that is intrinsic in child poverty, but we should also recognise that we know what works to tackle it. Looking at the track record and progress that was made under Labour Governments between 1997 and 2010, I am proud that we saw huge progress with more than 1 million children in the UK lifted out of poverty.

We know what led to that massive reduction in child poverty. As the hon. Member for East Renfrewshire acknowledged, it was in no small measure due to the effectiveness of tax credits, and to the rise in employment, particularly the employment of lone parents, which increased from 44% in the mid-1990s to approaching 60% when we entered this decade.

None the less and despite that progress, today, as we have heard, 3.7 million children in this country live in relative poverty. Perhaps even more depressing, since 2011-12, progress to reduce that number further has stalled. There was no progress whatever under the coalition Government after 2011-12, and the prediction is that under this Parliament, we will start to see a substantial rise in child poverty. None of us can be satisfied or complacent about that.

We have, rightly, heard a lot about the importance of measuring child poverty and having meaningful targets for tracking and tackling progress. At one time, there was cross-party consensus on the importance of measuring relative income poverty and targets for its reduction, but that consensus has broken down between the parties. It seems to have broken down in the Prime Minister’s mind—we have heard him say that he is in favour of targets and measuring and addressing relative poverty, and that he is not and believes that that is irrelevant. We have heard that the Government intend in the Welfare Reform and Work Bill, which is now being debated in Committee, to remove the targets altogether and no longer to set that hard ambition for us to improve our performance. I cannot help feeling—the hon. Member for Airdrie and Shotts (Neil Gray) hinted at this—that that is motivated by fear that the targets will not be met, fear that the position will worsen and fear that the Government will be held to account, as they should be.

We know the importance of having targets and an agreed definition of poverty. Targets drive action. They drive progress and they allow for comparisons that show the direction of travel and the trends, and enable us to compare ourselves with our international peers. No one would pretend that child poverty in this country is like child poverty in some of the poorest economies of the world, but the measures in the Child Poverty Act 2010 have presented a very useful picture that has enabled us to compare performance here with the best performing countries in Europe. Indeed, that was the ambition. It was not to eliminate child poverty to zero, because we all recognise the existence of frictional poverty, but to be at the level of the best in Europe. Until the arrival of the coalition Government, we were on track to achieve that.

It may be that recognition of the importance of targets is why in 2013, when the Government consulted on changing or abolishing the targets, 97% of those who responded said there was no need for any change, so it is highly regrettable that there are proposals from Ministers today to do something that has been roundly rubbished by all the respondents to that consultation. I am shocked by the lack of notice that the Government have taken.

We also heard today, rightly, about the importance and centrality of income in defining, measuring and tackling child poverty. Indeed, Kitty Stewart of the London School of Economics has shown that income is the single most significant factor and indicator of poor outcomes for children across a whole range of measures, including educational attainment and poor health. We also know that poverty has a cost to society as a whole. Estimates by the Child Poverty Action Group suggest that the cost to society of failing to tackle child poverty is £29 billion a year.

In recognition of the intrinsic link between low income and poor outcomes for children, the Child Poverty Act 2010, which received cross-party consensus, covered not just income poverty and did not require measures only on income poverty, but also required strategies on, for example, education, health, parental employment, debt and parenting. All those are associated with high levels of child poverty, but they are not the same as child poverty and it is important not to confuse the two.

None the less, one of my regrets about the abolition of much of the 2010 Act is that we will lose the requirement to produce those strategies. This morning, we heard in the Standing Committee considering the Welfare Reform and Work Bill—the hon. Member for East Renfrewshire may have repeated this this afternoon—that the intention in Scotland is to continue to produce that strategy and I understand from this morning’s evidence session with witnesses that that is also the case in Wales. However, there is no expectation that that will happen in England. Ministers will not expect local authorities to produce comprehensive strategies to address child poverty. If I am wrong about that, I shall be very pleased to hear it and I hope that the Minister will be able to contradict my assertion this afternoon.

We know that the Government know that income is important. Their own evidence review in 2014 showed that it was the most important factor, and not just, as we have heard today, that low income arises because families are out of work, but when there is insufficient income from earnings. It was right for hon. Members to point out this afternoon the absolute inadequacy and insufficiency of measuring only worklessness when two thirds of children in poverty are growing up in working households. We know the reasons for that. They are not laziness on the part of those parents, but poorly paid jobs, lack of access to flexible jobs that can be combined with family responsibilities, high child care costs, high housing costs and ill health. The need to care for a family member suffering ill health or their own ill health curtails employment chances.

[Jim Shannon]

I mentioned during my contribution the effect on those on low incomes of buying cheaply because it is better financially for their pocket, but that affects their diet and health. Does the hon. Lady believe that we should also address that issue?

[Kate Green]

The hon. Gentleman made a useful contribution on the poverty premium: that the poor pay more for the basics. He now adds another important dimension: that lack of income means that the poorest in our society are unable to afford to have the quality of life that protects health, wellbeing and social participation.

The critique of measures on which the Government are relying to underpin their rejection of the Child Poverty Act 2010 is simply wrong. Let us remember that it is not that the income measure in the Act does not capture the full picture of poverty. There is not one income poverty measure, but four to give us a rounded view. It is important to continue to measure relative income poverty, which we expect to rise. None the less, Ministers should be grateful for the four measures in the 2010 Act because it is possible that at the same time as seeing a rise in relative income poverty, we may see a fall in absolute poverty in the next few years. If median wages rise, but benefits are frozen or rise only with prices, we will see a rise in relative poverty. Conversely, absolute poverty could fall if benefits rise in line with the consumer prices index. It is important for Ministers to recognise that we have a good mix of measures in the 2010 Act, which would enable them to point to the complexity of the picture, rather than rejecting the Act on the misleading grounds that it measures relative poverty alone.

We have no analysis yet of the impact on child poverty of the measures in either the Welfare Reform and Work Bill or the others announced in the summer Budget, some of which we are debating this afternoon. However, we know that the impact of those measures will not be felt in the same way across all family types and structures. Lone parents, couples with several children and those with high housing costs will be hit particularly hard.

As we have heard this afternoon, it is important also to understand that the effect of the so-called national living wage will not wholly compensate for the cuts that are being made. Indeed, the cuts are particularly perverse when we consider that many of them are to in-work benefits, increasing, not reducing work disincentives. I am quite at a loss to understand why Ministers think that is a sensible way to proceed.

There is also a massive amount of ignorance about the purpose of different policy instruments to tackle poverty. Everybody welcomes higher minimum pay. Of course it is right that people should be paid properly for the work that they do, and of course it is right that the taxpayer should not subsidise low-pay economies, although we should recognise that achieving a minimum income standard for some families from earnings alone would simply drive businesses out of business. We have heard the projections that even a national living wage may lead to the loss of some tens of thousands of jobs. That is why, in addition to measures to tackle low pay, it is important to invest in tax credits, because many low-paid people who will benefit from the increase in the national living wage may not live in poor households. Conversely, many of those who are going to receive the national living wage will not be lifted out of poverty by that alone, because of their family and household structure and size. Therefore, it is important that we proceed on both fronts, and we cannot expect, at the lower end of the labour market, for wages alone to lift all families out of poverty.

Income poverty is crucial, and the Government’s analysis of the limitations of the Child Poverty Act and the limited approach that they will take to address rising family poverty, frankly, are simply wrong. It is regrettable that, with so much evidence before us and such a long history of having seen what works and what does not, Ministers are so uninterested in looking at the facts and the evidence, and instead insist on pursuing an ideology that will cause hardship for many, and, for the most vulnerable, destitution, the likes of which we have not seen for two decades.

--- Later in debate ---

[Justin Tomlinson]

I will address that later, so please be patient for a little bit longer.

Children grow up without the aspiration to achieve. They become almost certain to repeat the difficult lives of their parents, following a path from dependency to despondency, rather than to independence. At the beginning of my remarks, I talked about my background. That is what drove me into politics. We all have our calling, our passions and our priorities. That very much was what drove me into politics. As I said, I think we all share the same end goal; there is just disagreement on how we would look to achieve it.

On our record on worklessness and poverty, I highlight that many hon. Members have referred to the IFS statistics throughout the debate. I sound a strong note of caution on that. The statistics have been wrong every single year since 2011, and in the summer, they were half a million out, so I attach a big note of caution to the predictions and doom-mongering.

[Kate Green]

The Minister will know that one of the reasons why there may have been a discrepancy between the IFS prediction and the out-turn is to do with the use of survey data and different datasets. Does he agree that there is no doubt at all that the accumulation of measures announced in the summer Budget will increase child poverty, perhaps by many hundreds of thousands of pounds? They cannot fail to, because they will make working families worse off.

[Justin Tomlinson]

I thank the shadow Minister, but I am afraid we disagree on that, and I am setting out why I think that is not going to be the case.

Despite a huge increase in spending, by 2010, the number of households where no member ever worked nearly doubled, in-work poverty rose and the Labour Government missed their own 2010 child poverty target by 600,000 children. Compare that with our record. During the previous Parliament, we turned around Labour’s legacy of worklessness. There are now 2 million more people in work. To put that in context, it is more than the figure for the whole of Europe put together. We have the fastest growing major economy.