Households Below Average Incomes Statistics

Debate between Lord Howell of Guildford and Baroness Buscombe

Thursday 28th March 2019 Lords Chamber

[Baroness Buscombe]

My Lords, of course nobody wants to see poverty rising, and we take these statistics extremely seriously. But I hope the noble Lord heard me when I made it very clear that the statistics relate to two years ago. The reality is that we have done a huge amount to inject more money into the system as well as making a great difference in practical support terms. We do not want people trapped on legacy benefits, which have been a disincentive to their working full-time to support their families and give them life chances. We are looking across the piece on how we can help families out of poverty. The best ways are through work and a good education system for all children. My department is an important part of the jigsaw, but we want as a Government to be much more joined up in how we approach poverty.

[Lord Howell of Guildford (Con)]

My Lords, there is much to commend in the Statement but the Government say they want to do more. Is it not time to recognise—and this applies to the thinking in both political parties—that the whole process of new wealth creation produces benefits that go almost exclusively to those who already have savings and wealth, and to people who are personally accumulating capital on a scale they could never conceivably use, whereas the vast majority of households do not gain at all? They must rely only on wages income or, in the case of the poorest households, on income from welfare in the way that my noble friend has described. Is it not time to think of ways in which we can get more dignity and status from the ownership of resources and capital to millions of households who presently struggle with no benefit from the growth of wealth in the economy? Is it not time that our own party and the party opposite thought much more about ways in which wider ownership of capital and resources could be spread to millions of households, so that they benefit from the new wealth rather than see it grow among fewer and fewer people—in a tiny number of hands—creating social tension and denying the vast majority of people any benefit from the growth in capital and wealth that our system can now produce?

[Baroness Buscombe]

I entirely agree with my noble friend. Of course this is very important. It is why I welcome a review of low wages. That is why I want to talk about the big picture; we talk in silos, across different departments, about what each department is trying to do to support those who need support, but the reality is that we can do this only if we take time to stand back and talk across the piece. Obviously, much of this rests with the Treasury, which has an incredibly difficult job to do in deciding who receives what from each budget, but the reality is that we need to turn this on its head rather than just trying to increase by increment what people receive to lift them out of poverty.

Attacking the key causes of poverty is terribly important through a good education system and a welfare system that gives people sufficient support so that they can focus on improving their lives, rather than on getting by week to week. All the evidence shows us that the universal credit system will help; indeed, it is already helping—look at the record reduction in unemployment. Under the last Labour Government one-fifth of all UK households in the UK were entirely workless, but we have brought that down to somewhere below 13.9%, although I do not have the latest figure.

The reality is that we believe in having households where people are working and children are in school, and which have the right support systems in place. Focusing on those who are unable to work is of course hugely important, but we are spending more than £100 billion a year on benefits for people of working age. Think what we could be doing with much of that if we could lift those people out of the need to turn to support. My noble friend is right: it is a tough challenge.