Child Poverty

Lord Freud Excerpts

Wednesday 8th July 2015 Lords Chamber

[Baroness Lister of Burtersett]

To ask Her Majesty’s Government what steps they plan to take to (1) implement their pledge to work to eliminate child poverty, and (2) meet the 2020 statutory targets set out in the Child Poverty Act 2010.

[The Minister of State, Department for Work and Pensions (Lord Freud) (Con)]

In line with our manifesto commitment to work to eliminate child poverty, we will bring forward legislation to remove the existing measures and targets in the Child Poverty Act, as well as the other duties and provisions. The legislation will introduce a statutory duty to report on measures of worklessness and educational attainment. These new measures will drive real change and make the biggest difference to the lives of poor children now and in the future.

[Baroness Lister of Burtersett (Lab)]

Will the Minister explain how government accountability for the elimination of child poverty will not be seriously weakened when the targets are abolished, the measures of child poverty as such are effectively abandoned and child poverty is removed from the title and presumably remit of the Social Mobility and Child Poverty Commission—all at a time when punitive cuts in financial support for low-income families with children, in work as well as out of work, will blight their children’s life chances and childhoods?

[Lord Freud]

The HBAI measure will clearly still be published and is a useful measure to track what is actually happening. It is, however, a very poor measure as a statutory target because it is simply not forecastable. I come back to the point about the so-called cuts for those in work. After today’s Budget, by 2017-18, eight out of 10 working households will be better off as a result of the combination of personal allowances, the new national living wage, which will rise to £9, and the welfare changes. That is 17.7 million households better off.

[Lord German (LD)]

My Lords, a policy that reduces the number of children in poverty when the economy is on the way down yet actually increases it when the economy is on the way up is surely a nonsense. You can never eradicate child poverty under that measure. But surely household income and knowing the circumstances in which children live is a very important measure in determining whether they are in poverty. Will the Minister agree to the Government including household income as a factor in whatever child poverty measure they use in the future?

[Lord Freud]

We will clearly go on reporting on the HBAI measure. As a legal target it is very dangerous, and we have just seen why. In 2011, the IFS projected a figure which was wrong by 5 million children. The IFS thought that there would be 5 million more children in 2013-14 than there actually were when the figures came out. If it is a legal target, you have to start working to reduce your poverty by 5 million children—sorry, half a million children, not 5 million. That is completely unforecastable and implies huge unnecessary costs on the state.

[Lord Fink (Con)]

My Lords, how do the Government intend to help the 390,000 children who live in workless households? What measures do they have to do this?

[Lord Freud]

The number of children in workless households has been coming down rapidly. It has come down by 390,000 and is now at a record low. We are looking to encourage more families back into the workplace through the financial incentives around universal credit, the new national living wage—clearly, a very direct incentive—and free childcare, and we are working to boost the number of apprenticeships from 2 million under the last Government to 3 million under this one.

[Baroness Sherlock (Lab)]

My Lords, the devil for today clearly is in the detail. It is working parents who depend most on tax credits to make work pay and lift their children out of poverty but, while a single parent with two children who is working 16 hours a week will gain £400 from the new national minimum wage, which is very welcome, sadly she will lose more than twice as much in cuts to tax credits. How can this be right? How can the Minister tell the House that working families are better off when it is those very elements of tax credits and universal credit which make work pay that have been cut today? How can that be the security for families of which the Chancellor boasts?

--- Later in debate ---

[Lord Freud]

My Lords, one has to look at all the elements that are going in. They are the new national living wage, the changes to welfare in both universal credit and the tax credits system and, clearly, the changes to personal allowances, which are moving up under our manifesto commitment to £12,500. Under universal credit there are gainers, but the real impacts that we will see from these changes will be on a dynamic basis because they will encourage people to go into work, and into better-paid work.

[Baroness Hollis of Heigham (Lab)]

My Lords, these Budget changes will actually make working families £40 a week poorer, with larger families even more so. It is a Budget for security but not for working families with children; a Budget for the family but not for working families with children; a route out of poverty but not for the working poor and their children. Will the Government accept that they have ensured that the face of poverty in this country will continue to be the face of a child?

[Lord Freud]

No.