Child Poverty: London

Kit Malthouse Excerpts

Thursday 22nd February 2018 Westminster Hall

[Joan Ryan (Enfield North) (Lab)]

It is a pleasure to serve under your chairmanship, Sir Henry. I, too, congratulate my hon. Friend the Member for Mitcham and Morden (Siobhain McDonagh) on securing this import debate and on her powerful analysis of the situation. Eight years ago, David Cameron said the Conservatives would be

“the most family-friendly Government you’ve ever seen in this country”.

Less than two years ago, the current Prime Minister stood on the steps of Downing Street and proclaimed that she would fight against “burning social injustices” and

“make Britain a country that works not for a privileged few, but for every one of us.”

What we have heard so far today throws some stark reality on that. This debate is another reminder of how reality fails to match the Government’s rhetoric.

My borough of Enfield, where I have lived for the past 20 years, and where my hon. Friend the Member for Enfield, Southgate (Bambos Charalambous) has lived all his life, is generally thought of as a leafy borough with a very solid foundation for employment, manufacturing, the service sector and logistics. It has always been said, and I have said many times, that it is a great place to live and bring up a family. However, Enfield is in the midst of a worsening child poverty crisis. Four in 10 of Enfield’s children—almost 34,000—live below the poverty line. The borough is the 11th most impoverished area for children in the UK.

My constituency and neighbouring Edmonton are also two of the top 20 constituencies in the country with the fastest growing levels of child poverty, and Edmonton is in the top 10, as my hon. Friend the Member for Mitcham and Morden mentioned. As the End Child Poverty coalition has said, low-income families are struggling to put

“food on the table, heat their homes and clothe their children.”

We should feel anger and shame that that is the situation. Last year, Enfield had the fourth highest rate of food bank usage in London. Is it any wonder that this is happening when wages are flatlining, with one in three jobs in Enfield being paid less than the living wage? I ask hon. Members to look at yesterday’s edition of the Enfield Independent, our local paper, which says that eviction rates are the highest in the capital. Levels of homelessness acceptances in Enfield have risen more than 80% in the past two years.

My hon. Friend referred to my constituency surgery, which I do every Friday afternoon from 3 o’clock. Anyone who turns up will be seen, even if they have not made an appointment, because people are desperate. A huge percentage of the problems relate to housing. Many hard-pressed local families are trying—and often failing—to cope with soaring rents and a lack of affordable and social housing. But under this Government, house building has fallen to its lowest peacetime rate since the 1920s. The number of affordable homes in Enfield increased by just over 300 in the three years to 2016. For most families, what is called affordable is not affordable, as we have already discussed. On top of all of this, most benefits for working families have been frozen, which has cut families’ real incomes. There is a serious shortage of genuinely affordable childcare.

I am proud that the last Labour Government introduced Sure Start, the transformative early years programme giving young children the best start in life. When Labour left office in May 2010, there were 24 Sure Start centres in Enfield. Now there are just five. Government cuts to these vital education services are a scandal and our most disadvantaged children are paying the price. As Save the Children has said, the consequences of a lack of quality early years education for children living in poverty are lifelong and

“it harms not only their quality of life, but their ability to learn and develop at a crucial stage in their lives.”

The lack of Government action to address these issues is in stark contrast to the leadership shown by Sadiq Khan, the Labour Mayor of London, who is championing the London living wage to support low income families.

[The Parliamentary Under-Secretary of State for Work and Pensions (Kit Malthouse)]

We all did.

[Joan Ryan]

The Minister may make an intervention if he wishes.

The Mayor is investing £15 million to buy homes for homeless Londoners and recently he launched the capital’s largest living rent scheme, to offer more Londoners a genuinely affordable home. He is supporting early years hubs, delivering on his promise to improve access to high-quality, affordable early years education for the most disadvantaged families in the capital. However, the child poverty crisis is a national issue that demands a co-ordinated, national response from the Government.

I urge Ministers to restore targets to end child poverty. The Government must support local authorities as they attempt to address the worst effects of child poverty in their areas, instead of gutting their budgets. Enfield Council alone has had its central Government funding slashed by £161 million since 2010, with another £35 million in cuts due by next year. The Government need to fix their broken housing policy and help to make sure that all families in Enfield, particularly those on low incomes, have the chance to live in a safe, secure and genuinely affordable home. Universal credit still needs to be fixed to ensure that it does not drive even more families into debt, arrears and eviction, and the Government need to take steps immediately to provide more good-quality childcare and early years education.

Child Poverty Action Group rightly says that poverty

“damages childhoods; it damages life chances; and it damages us all in society.”

I am proud that the last Labour Government lifted 1 million children out of poverty. They addressed this issue and, to a large extent, they succeeded. It is time that, rather than making the situation worse, this Government got their act together for these children or moved over and let someone else do it.

--- Later in debate ---

[The Parliamentary Under-Secretary of State for Work and Pensions (Kit Malthouse)]

It is a great pleasure to appear before you, Sir Henry. I begin by congratulating the hon. Member for Mitcham and Morden (Siobhain McDonagh) on securing this important and very relevant debate, not least because I spent 16 years as a representative in central London, both as a councillor and as a London Assembly member—where I shared a constituency with the hon. Members for Westminster North (Ms Buck) and for Hammersmith (Andy Slaughter)—so I am well acquainted with some of the problems. Indeed, I started my career as a councillor as deputy chairman of the housing committee on Westminster City Council, dealing with the heavy investment that we made in the Mozart estate in Queen’s Park at the end of the 1990s, as the hon. Member for Westminster North may remember. This issue has been of importance to me in the past and remains so.

I emphasise from the outset that the Government are committed—the hon. Member for Mitcham and Morden referred to this—to building a country that works for everyone, where no one and no community are left behind. I completely agree that we must continue to provide appropriate support for the least well-off and the disadvantaged in our society, so that we can make a meaningful and lasting difference to their lives and outcomes and those of their children.

However, I was disappointed to hear the hon. Lady say, as I think she did on the record, that work is no longer the route out of poverty. The Government believe that work offers families the best opportunity to get out of poverty and become self-reliant. That is why we are undertaking the most ambitious reform to the welfare system in decades—so that it supports people to find and stay in work.

The evidence about the impact of worklessness on children’s outcomes, in both the short and the long term, is clear. In 2014-15, 75% of children in workless families failed to reach the expected standard at GCSE, compared with 39% for all working families and 52% for low-income working families.

[Ms Buck]

Will the Minister give way?

[Kit Malthouse]

No, I am short of time. As adults, children who grow up in workless families are more likely to be workless themselves, compared with children who grow up with working parents, which creates an intergenerational cycle of disadvantage. It is therefore vital that we continue with our policies to encourage work and to address the often complex employment barriers faced by many disadvantaged families.

A number of hon. Members raised concerns about working families who are in poverty. However, the evidence is clear. Adults in workless families are four times more likely to be in poverty than those in working families. Children living in workless households are five times more likely to be in poverty than those in which all the adults work. Children in lone-parent families are three times less likely to be in poverty if their parent is in full-time work. And the chances of a child being in poverty if one parent works full time and the other part time is one in 20.

We are making good progress. Nationally, there are 954,000 fewer workless households and 608,000 fewer children living in such households now, compared with 2010. In London, there are 197,000 fewer children in workless households than there were seven years ago. By 2016, the number of children in long-term workless households in London was less than half what it was in 2010. The latest data shows that the London employment rate has increased by 7.1 percentage points since 2010. Comparable national figures show a slightly lower increase of 5 percentage points, so London is doing better.

Universal credit is at the heart of the reforms and the positive change that the Government are committed to driving. Through universal credit, the welfare system is, for the first time, providing working people with the opportunity to progress in work and to work more hours so that they can increase their earnings and become financially secure. Once fully rolled out, it will boost employment by about 250,000 and generate £7 billion in economic benefits a year.

We are also committed to tackling poverty by helping people with the cost of living. The national living wage, rising to £7.83 an hour in 2018-19, has given the UK’s lowest earners their fastest pay rise in 20 years. The right hon. Member for Enfield North (Joan Ryan) referred to the London living wage in glowing terms with regard to the current Mayor, but of course that project was started well before he came to office. Indeed, I am pleased to say that the largest expansion of the London living wage came when I was responsible for it at City Hall, between 2012 and 2016. However, that is not the only measure that we have taken. We have cut income tax for more than 30 million people and taken 4 million low earners out of income tax altogether. A typical basic rate taxpayer will now pay £1,000 less in tax compared with 2010.

Universal credit, with its generous childcare offer, has been designed to support parents to work after the birth of a child. Working parents on universal credit can have up to 85% of their childcare costs reimbursed, which is worth up to £1,108 a month for someone with two or more children. That is in addition to their entitlement of up to 30 hours of free childcare a week.

Hon. Members have raised serious concerns about child poverty rates, including the key findings in the End Child Poverty report, which came out a couple of weeks ago. Let me take this opportunity to emphasise that whichever way we look at child poverty rates—relative or absolute, and before or after housing costs—the headline national statistics published by the DWP show that in London all are lower than they were in 2010. Across the country, 600,000 fewer people are in absolute poverty now, compared with 2010—the figure is at a record low—and 200,000 fewer children are in absolute poverty.

Let me turn to the figures used by End Child Poverty. Those are projections based on Her Majesty’s Revenue and Customs data from 2014, and even the academics who produced the analysis have pointed out the limitations in the method. More recent data, published by Her Majesty’s Revenue and Customs since the report, shows that rather than rising, the proportion of children in low-income families in London fell in 2015 to an estimated 19%, compared with 24% in 2014. Indeed, every parliamentary constituency saw falls between 2014 and 2015. That includes some of the areas highlighted by the report. For example, in Bethnal Green and Bow there was a fall of 12 percentage points and in Poplar and Limehouse a fall of 11 percentage points. There was a fall of 6 percentage points in Hackney South and Shoreditch, as there was in Westminster North and in Enfield North. The data and the projection from the data in 2014 were immediately contradicted by the data subsequently published for 2015.

Let me deal quickly with some of the specifics that were raised. The hon. Member for Barnsley Central (Dan Jarvis) raised the issue of child poverty targets. Some hon. Members will remember that there was recognition by the Government in the past that making a long-term difference to the lives of disadvantaged children required an approach that went beyond a focus on the welfare system. That is why the Government repealed the income-related targets set out in the Child Poverty Act 2010 and replaced them with new statutory measures of parental worklessness and, critically, as my hon. Friend the Member for Hornchurch and Upminster (Julia Lopez) mentioned, children’s educational attainment. That is vital; all the evidence points to its being critical to long-term welfare and prosperity. Those are the two areas that can make the biggest difference.

A number of hon. Members raised issues about housing. The Government have recognised that there is an issue with the housing market, and a huge amount of work is going on at the newly named Ministry of Housing, Communities and Local Government. On standards, we agree that everyone deserves a decent home. That is why the numbers of homes that have been brought up to standard in both the public and the private sectors have increased very significantly, and the numbers that are below standard now lie at record lows. On housing generally, hon. Members will know that a significant amount of extra money has been put into the Government house building programme. That now stands at £9 billion, and no doubt there will be more initiatives to come from the Ministry of Housing.

We are also supporting, I believe, the Homes (Fitness for Human Habitation and Liability for Housing Standards) Bill, promoted by the hon. Member for Westminster North. It will give tenants the right to take legal action against landlords who do not fulfil their duties.

It was slightly disappointing to hear from the Opposition a fairly stout defence of the previous benefits system. As far as I can tell, that was a fraudulent system, perpetrating a lie upon the poor. It was designed to trap them in poverty. That is why we saw very little change in long-term poverty, which is what we are dedicated to tackling. I can reassure hon. Members that we are not complacent and particularly not in London, and we will be doing our best over the years to come to try to address the problems that have been raised.