Child Poverty

Liz McInnes Excerpts

Tuesday 26th January 2016 Westminster Hall

[Peter Dowd]

The hon. Lady makes an important point. As I said earlier, even the Prime Minister accepts that there is relative poverty, and all the jiggery-pokery with definitions is not going to make that untrue.

[Liz McInnes (Heywood and Middleton) (Lab)]

Is my hon. Friend aware that the Child Poverty Action Group has stated that it costs £29 billion a year to respond to the issues caused by child poverty? CPAG says that it is a false economy to drive up child poverty and that this Government should be considering measures to drive it down.

[Peter Dowd]

My hon. Friend is absolutely right. She has stolen my thunder—I will refer to that figure later—but she makes an absolutely valid point.

The Government’s January 2014 evidence review of the drivers of poverty found that a lack of sufficient income from parental employment, not just worklessness, is the most important obstacle to getting children out of poverty. Of course, to pick up on what my hon. Friend said, the Government say that a high-skilled, high-wage economy will lift family incomes—ergo, poverty will fade away. In the world where many of my constituents live, it does not quite work like that. I am afraid that even combined with increased personal tax allowances, the increase in the minimum wage, or whatever the Government want to call it—another redefinition—does not go far enough to alleviate child poverty to any substantial degree.

There can be no doubt that child poverty is rising and that it has an effect on educational outcomes, health outcomes and job prospects in the longer term. Independent projections from the Institute for Fiscal Studies indicate that, as has been mentioned, child poverty is beginning to rise. Research by End Child Poverty identified that 4.1 million families and 7.7 million children have been affected by below-inflation rises in both child benefit and child tax credit over the past few years. Interestingly, poverty of aspiration by the Government in policy terms begets financial poverty, because it restricts the use of the very tools that could tackle the drivers of poverty.

In my constituency, child poverty in one ward has reached 40%. Across the constituency, it is around 30%. In other words, almost 7,000 children in my constituency live in poverty. That cannot be right. Remembering the point I made earlier about the number of children in working families who still live in poverty, youth unemployment hovers between 8% and 9% and adult unemployment at about 7%. The median wage is £470, below the national median level of £520 and the regional level of £480. What message is that sending to our children: “Start your life in poverty; get a job on low wages; and you’ll still be in poverty—and so, in turn, will your children.”? It is hardly the most encouraging of straplines for young people.

In 2015, £7 million in early intervention funding was allocated to Sefton Council, in whose area my constituency sits. That is a reduction of £10 million since 2010 in early intervention, the very thing we should be getting to grips with. How can that funding cut help alleviate child poverty? Problem debt in Bootle is £12.5 million. The Children’s Society suggests:

“Too often, when families are struggling with repayments, the response from creditors is unhelpful…a breathing space scheme”

would give

“struggling families an extended period of protection from default charges, mounting interest, collections and enforcement action”,

enabling them to seek advice and preventing them from falling deeper into the debt trap. That is a practical suggestion.

I believe that my constituency is not an outlier in statistical terms; it is typical of many areas, both rural and urban. It is lazy to suggest that people are shirkers. Levels of child poverty in this country are dreadful. They are a blot on the integrity of our society. The Government cannot solve all the problems, nor does anyone expect them to, but poverty costs money. As my hon. Friend the Member for Heywood and Middleton (Liz McInnes) said earlier, the cost to the UK of poverty is reckoned by one assessment at about £29 billion pounds: almost £6 billion in lost tax, £15 billion for extra spending on services to deal with the consequences of poverty and £8.5 billion in lost earnings to individuals. What a waste! Surely, even forgetting the human stories and experiences behind those figures, the statistics and costs are enough to make any Government reconsider their strategy for dealing with the child poverty that our country faces.

As Nelson Mandela said, standing just yards away from here while he addressed Parliament,

“poverty is not natural. It is man-made, and it can be overcome and eradicated by the actions of human beings.”

I have managed to agree with the Prime Minister and Nelson Mandela in one fell swoop, which does not happen very often.

--- Later in debate ---

[Priti Patel]

I completely reject that assertion for many reasons, and I do not have the time now to have the full debates that we had in Committee; please forgive me, Mr Howarth.

This process is not about moving goalposts or changing definitions; it is about making a fundamental review of the approach that we take. I will not be tempted by the hon. Member for Bootle, who basically said that I would inevitably regale Members with what happened under Labour. However, this process is a fundamental shift in the strategy and the approach that are being taken. The approach is a holistic one, looking at the root causes and recognising that we have to address, for example, the number of workless households and the causes of worklessness, and ask why households have been workless in the past, and recognising that having work in households changes the future outcome for children and of course redefines child poverty and what it means to households.

We should also recognise in this debate that work plays a very important role in addressing the issue of poverty, including child poverty, because we know that work is the best route out of poverty. Evidence has shown that nearly three quarters of poor workless families who have found employment have escaped poverty. So these are some of the crucial underlying factors that we have to address, and of course work—

[Liz McInnes]

Will the Minister give way?

[Priti Patel]

I will give way just one more time, because there are other points that I want to make.

[Liz McInnes]

I thank the Minister and I will ask a brief question. If work is the route out of poverty, can she explain why two thirds of those who are defined as being in child poverty are in working households?