Child Poverty

Penny Mordaunt Excerpts

Tuesday 20th December 2016 Westminster Hall

[The Minister for Disabled People, Health and Work (Penny Mordaunt)]

I start by congratulating the hon. Member for Barnsley Central (Dan Jarvis) on securing this debate on child poverty, and all Members from across the House who contributed to the discussion. Let me assure all that tackling child poverty and disadvantage and delivering real social reform is a priority for the Government. Our Prime Minister has set out clearly that she is committed to that. That includes taking action that addresses the root causes of child poverty and disadvantage, not just the symptoms.

I am grateful to the hon. Gentleman for the tone that he struck during the debate. This is about not just Government policy but everyone, whatever their political hue, at a local level working to combat these issues. That includes Members of Parliament, councillors and, as the hon. Member for Bristol East (Kerry McCarthy) pointed out, many organisations in our communities. The hon. Member for Stretford and Urmston (Kate Green) made excellent points about the consistency required on targets and the opportunities that come from devolution and local mayors. Those points are well made.

Before I turn to targets, let me briefly touch on the child poverty unit, which was mentioned. The unit’s main function was to support Ministers in exercising their duties in relation to the income-based targets set out in the Child Poverty Act 2010 and the associated child poverty strategy. Following the repeal of those targets, which was explicit in the Welfare Reform and Work Act 2016, responsibility for child poverty policy and analysis transferred to the Department for Work and Pensions. The Social Mobility and Child Poverty Commission secretariat continues to be based in the Department for Education, and the Secretary of State for Education is the lead Minister for that commission.

The Government want to take a fundamentally different approach to child poverty from the one driven by the Child Poverty Act measures and targets. Our approach will tackle the root causes of poverty and disadvantage and drive continued action in the areas that will improve long-term outcomes for disadvantaged children, now and in the future. It is for that reason we rejected the narrow, income-based approach to poverty incentivised through the 2010 Act. In place of that, we have, through provisions in the Welfare Reform and Work Act 2016, introduced two new statutory measures that will drive action on parental worklessness and on children’s educational achievement. Those are the two areas that we know can make the biggest difference to improving children’s long-term outcomes.

The 2016 Act puts a new duty on the Government to report annually on the proportion of children living in workless households, the proportion of children living in long-term workless households, and attainment at GCSE for all children and for disadvantaged children. The groundbreaking analysis conducted by my Department means that we now have a clearer understanding of disadvantage than ever before. We know that children affected by parental worklessness and its associated risk factors, such as family instability, drug or alcohol dependency and poor parental mental health, are disproportionately likely to experience poorer outcomes.

[Kerry McCarthy]

Will the Minister give way?

[Penny Mordaunt]

I am sorry; I would like to make progress, and I do not have much time. I will try to address all the points raised.

It is worth noting that the old Child Poverty Act targets were based on defining a household as being in poverty if its income was below 60% of median household income. That remains the basis for the “households below average income” survey, which is still the definitive source of data on poverty and low income; during the passage of the 2016 Act, the Government made a commitment to continue to publish the data.

I recognise the point made by the hon. Member for Stretford and Urmston about some of the obstacles to women in particular working, and working more hours, such as bunching around 16 hours, multiple caring responsibilities and so forth. We recognise that, which is why the Minister of State who holds this portfolio is undertaking a range of work to tackle those issues.

We also know—the evidence is clear—that work is the best way out of poverty. Working-age adults in non-working families are almost four times as likely to be living on a low income. The “Child poverty transitions” report published in June 2015 found that 74% of children in workless families that moved into full employment exited poverty; that 47% of children in workless households were in relative low income before deducting housing costs, compared with only 8% in households in which all adults were working; and that there are 100,000 fewer children in relative low income since 2010.

[Kate Green]

Will the Minister give way?

[Penny Mordaunt]

I am sorry; I want to address these points. The Government’s record on employment speaks for itself. The latest figures show the employment rate at 74.4%, unemployment at an 11-year low and 2.8 million more people in work than in 2010. That is important, because we know that being in work has wider benefits beyond financial ones. There is clear evidence that good-quality work is linked to better physical and mental health and improved wellbeing, and that better parental health is associated with better outcomes for children. That is why we are getting people into employment and working to change attitudes.

We are also introducing reforms to ensure that work always pays and to allow people to keep more of what they earn. We are cutting income tax for more than 30 million people this year and taking 4 million of the lowest-paid people out of income tax completely. By 2018, a typical basic rate taxpayer will pay more than £1,000 less in income tax than in 2010. We are also making sure that people working 30 hours a week on the national minimum wage do not pay any income tax. Together with the introduction of the national living wage, that will give full-time low-paid workers previously on the national minimum wage a pay rise of more than £15 a week. Under universal credit, people are moving into work significantly faster, and staying in those jobs for longer. That crucial welfare reform also increases support for parents; universal credit now provides up to 85% of childcare costs, meaning more support for working families.

The hon. Member for Barnsley Central is quite understandably focused on what happens next. The Prime Minister has set up—and chairs—a new Social Reform Cabinet Committee that brings together nine Government Departments to oversee and agree social policy reforms. Its task will be to lead the Government’s work to increase social mobility and deliver social justice. We will bring forward a social justice Green Paper in the new year that will identify and address the root causes of poverty and will build on the two statutory measures we have already set out in the Welfare Reform and Work Act 2016. That is fundamentally different from previous approaches; it is focused on not only the symptoms but the root causes of poverty, and will ensure a clear focus on improving long-term outcomes for the most disadvantaged children.

The Government have a good record on child poverty. There are now 200,000 fewer children in absolute poverty than in 2010 and—under Labour’s own poverty measurements—100,000 fewer children in relative poverty. However, we know that we need to do more. To deliver real social change and real social justice, and to make Britain the country that works for everyone, we will bring forward the social justice Green Paper in the new year. That will say more on our approach to tackling the root causes of poverty and disadvantage. I hope that will be something on which we will be able to build common cause and agree for the common good. Our children deserve that.