Low-income Households

Maria Miller Excerpts

Tuesday 14th September 2010 Westminster Hall

[The Parliamentary Under-Secretary of State for Work and Pensions (Maria Miller)]

It is a pleasure to serve under your chairmanship, Ms Clark. I understand this is the first time that you have chaired Westminster Hall. You have done us proud and done a great job. I congratulate the hon. Member for Westminster North (Ms Buck) on securing the debate. As the hon. Member for Colchester (Bob Russell) said, this is not the first time that we have debated these issues in this Parliament, and I am sure it will not be the last. However, it does give me an opportunity to set out, in a more measured manner perhaps, the impact of the policies that we are talking about as a coalition Government.

We have had a wide-ranging debate, and in the time left, I hope that I can cover as many as possible of the points that hon. Members raised. The hon. Member for Westminster North talked about challenges in relation to the perceptions of the Labour party’s record in government, but she must acknowledge that the facts speak for themselves when it comes to the impact, or lack of impact, of Labour policies on issues of poverty. As the hon. Member for Colchester said, there are still far too many children living in poverty in this country after more than a decade of Labour Government. Labour talked a great deal about trying to reverse the problems of inequality in this country, but it failed to tackle the root causes of poverty, leaving a catalogue of entrenched social problems that the coalition Government must now deal with.

[Ms Buck]

I hoped that I was being fair in stating that I did not think that the Labour Government got everything right and tackled every problem. In the interests of equivalent fairness, will the Minister accept that child poverty increased threefold during the time of the previous, Conservative Government and inequality soared?

[Maria Miller]

The hon. Lady is again being selective in her recollection of the facts. When we examine the level of child poverty now, we see that it has gone up since 2004 under Labour. She can throw her hands up in horror, but unfortunately the facts speak for themselves.

There are other facts that we need to acknowledge. Levels of household debt have gone up significantly. In 2009, there were almost 160,000 personal insolvencies in this country. Those were record levels; there were 30,000 more than in the previous year. The hon. Lady must look at the whole picture when giving the facts in the debate.

Further assertions have been made that progress was made under the previous Government because of the level of investment that they put in, but as we all know, investment alone is not the answer. We need structural changes in the way in which support systems work. In relation to welfare, spending on social security and tax credits has increased by about £60 billion in real terms over the past 10 years, yet as the hon. Member for Colchester said, there has been an inability to tackle the issues of poverty, and the performance on inequality has either stalled or deteriorated.

Now we face the biggest legacy from Labour of all, which is that we have the biggest deficit of any G20 country. It is incumbent on the present Government to get that deficit under control; otherwise, stability, either in interest rates or in our ability to provide employment for people or to encourage strong business, will be undermined. It is therefore absolutely right that the Government put first and foremost trying to get the deficit under control.

The Labour party now understands the failure of its policies in this area and that keeping on spending at unsustainable levels is not the way forward. The hon. Member for Bishop Auckland (Helen Goodman) was a Minister in the Department in which I am now a Minister when that spending spiralled out of control. She will know that the cuts would have had to come anyway and that her Department was already tabling 20% cuts. The problem is that the Opposition would not tell us where those cuts were to come from. Despite their being asked repeatedly, those details were not forthcoming.

[Helen Goodman]

There is absolutely no truth in the suggestion that the Department for Work and Pensions was proposing to the Treasury 20% cuts. I do not know where the hon. Lady has got that from. She certainly should not have seen the papers under the previous Administration. There is no truth in it, and I can assure her of that fact.

[Maria Miller]

Of course the hon. Lady will know that it was the other way round: the Treasury telling the Department for Work and Pensions that that was the case, because it was published in its detailed information about how a Labour Government would have to move forward after the last general election.

There is no option but for the present Government to be putting on the table the reform that is needed, because there is no viable alternative. We cannot proceed with the way in which the previous Government mismanaged the country. We have agreed and made it clear that we will protect the most needy and the most vulnerable. In the emergency Budget, my right hon. Friend the Chancellor of the Exchequer made it clear that the measures that he was proposing first and foremost would do that.

A number of hon. Members, including the hon. Member for Westminster North, referenced the IFS study. Obviously it is important that we examine such studies; and across Government that study will be taken seriously and examined in detail. However, as the hon. Lady will have to admit, it is not a complete analysis. There are omissions in the IFS analysis that make its findings incomplete. I am thinking particularly of the area that affects my Department the most—the impact of incentives to work, which will have a dynamic effect on all issues but were not taken into account in that study. The analysis by the hon. Member for Solihull (Lorely Burt) of the IFS report was a helpful contribution to the debate and balanced some of the other comments.

Another area that many hon. Members touched on was the impact of the Budget measures on families in general. My hon. Friend the Member for Cities of London and Westminster (Mr Field) referred to the wide-ranging impact that poverty can have on communities. I join him in applauding the work that Westminster city council does in that respect. I know about that, having met people involved in it before the election, when I was not in my current post, to hear in more detail about the family recovery plan in that area.

The Budget measures included increases in the child element of the tax credit that are well above inflation. That meant that the measures taken to freeze child benefit would be neutralised. We saw in the Budget a very effective way of protecting the poorest families by ensuring that we target the help available to us on the people who need it most.

A number of hon. Members referenced the VAT increase. I want to ensure that it is clear to hon. Members that that still does not apply to the things that children need the most: food and clothing. Therefore the increase will not have the impact that some of the scaremongers who have been talking about it might imply.

The hon. Member for Westminster North asked where the savings were coming from. I suggest to her that having 2.1 million people written off on old-style incapacity benefits is not the best and most effective way to run the country, that work is the best way out of poverty and that helping more of those people out of benefit dependency and into work will be an effective way of reducing our benefits bill.

In addition, we are working on a number of ways to ensure that families and parents benefit from work. Jobcentre Plus is now very experienced in developing employment programmes to support lone parents. The previous Government did a lot of work on that. Lone parent advisers have flexible options to enable families to get into work whenever they can, within the needs of the families and particularly their children’s need to go to school. [Interruption.] If hon. Members will forgive me, I have two minutes to try to complete my answers to an extremely long list of questions.

I want to talk directly about child poverty. The hon. Member for Colchester challenged me again on a number of issues to do with child poverty. I confirm to him that I have had meetings with both Save the Children and Barnardo’s. He talked about putting in place a cross-Government scheme to examine these issues. The Cabinet Committee considering social justice issues will be exactly the forum to debate some of these matters. Perhaps I can give him more details of that later.

The coalition Government continue to be committed to the aims of the Child Poverty Act 2010 and eradicating child poverty by 2020. The latest figures show that 2.8 million children remain in poverty. That is an increase of 100,000 since 2004 and is well off the previous Government’s targets. The Opposition need to acknowledge that fact if we are to have a reasoned debate.

There are a number of issues that I have not been able to cover in my comments. I was glad that the hon. Member for Solihull mentioned issues relating to pensioner poverty. Our policies in that respect will do a great deal to alleviate some of the problems faced by pensioners. With regard to disabled people, perhaps I can clarify one point for the hon. Member for Stretford and Urmston (Kate Green). It will not be a medical gateway that we introduce in relation to DLA. It is an objective assessment. I just wanted to put her mind at rest on that.