Households Below Average Income Statistics

Neil Gray Excerpts

Thursday 28th March 2019 Commons Chamber

[Amber Rudd]

I would invite my right hon. Friend to come to my Department and find out a bit more about how universal credit works and how the taper rate has changed the benefits system—how people who start a job and earn more receive less from their benefits but only on a very gentle trajectory. The taper ensures there is not the sort of trade-off he is hinting at from the previous system of tax credits.

[Neil Gray (Airdrie and Shotts) (SNP)]

I thank the Secretary of State for advance sight of her statement. There has long been a debate in this place about whether we should measure absolute or relative poverty—in that regard, I wish she would look at the work of the Social Metrics Commission—but, regardless of the measure, the Government are presiding over a trend of rising impoverishment. The relative child poverty rate, before housing costs, is up 400,000, and the absolute rate is up 300,000 in a year. This takes the rate before housing costs to its highest level in almost 20 years. After housing costs, we see a stagnation in relative terms and a 200,000 rise in absolute terms, while severe poverty and material deprivation are both up 4% to 5% for all children.

The Secretary of State must know the impact that policy, particularly social security policy, has on poverty levels—she spoke about the power of her Department in this regard. When there is investment, poverty levels drop, and when there are cuts to individuals, levels rise. That is why ending the benefit freeze this year would have been the best place to begin to stop—and, in some cases, to reverse—the rising poverty trend. She could also have lifted the two-child cap, which is a cut directed at children that is impoverishing them. Why has she not done the right thing in these areas?

The Secretary of State has taken some welcome steps, and she has moved further than any of her five predecessors I have dealt with, but I know that she understands that she must go further. These figures should put a rocket under the discussions that she is having with the Chancellor ahead of the spending review. Work should be a route out of poverty, but it currently is not. What does the Secretary of State see as her key anti-poverty policy, and what is her anti-poverty target for the next year, given that whatever type of Brexit occurs will harm family budgets and affect living standards?

[Amber Rudd]

I thank the hon. Gentleman for his partially constructive comments. We are looking at the Social Metrics Commission’s assessment of poverty. It is an interesting approach, because it puts the measure of poverty back towards what people spend their money on, as well as what they actually get in. It is a fair point for the hon. Gentleman to raise with me, and I will come back to him when we have some further conclusions.

The hon. Gentleman highlighted difficulties for families with moving into full-time work. We have made a commitment to make the process more straightforward by providing more free childcare. We have ensured that more money per year is invested in childcare; that has gone up from £4 billion to £6 billion, providing 30 hours of free childcare for people with three and four-year-olds. That is an important change to ensure that people can go into full-time work. The hon. Gentleman also highlighted the difficulty for people on low incomes in part-time work, and we recognise that. We are trying to make it easier for people to go into full-time work, because there are much lower instances of poverty when two parents are in full-time work, and that must be people’s goal.