Child Poverty

Stephen Timms Excerpts

Wednesday 1st July 2015 Commons Chamber

[Stephen Timms (East Ham) (Lab)]

I thank the Secretary of State for early sight of his statement. What he read out today is the obituary notice for compassionate conservatism. It is the death knell for any idea that his party might one day be a party for working people.

It is only a week since we received the news that progress on child poverty has stalled, with most poor children now living in working households. The Conservatives’ manifesto said that they would

“work to eliminate child poverty”.

Instead, their solution is to change the definition—incidentally, at their second attempt; they tried this before and gave up—to remove altogether child poverty from the remit of the Social Mobility and Child Poverty Commission, and next week to announce cuts that will make the problems much worse.

The Child Poverty Act, which the Secretary of State, if I understood his statement correctly, now wants to repeal, received all-party support before 2010, and it put one of the most important duties on Government: to ensure that, in the 21st century, children do not grow up suffering deprivation or lacking the necessities that most of us take for granted. It has not just one, but four measures of poverty: absolute, relative, persistent, and material deprivation. The relative measure is the internationally accepted definition used by every OECD country.

Do the Government accept the importance of relative poverty? Will the Secretary of State clarify that? He told us in his statement that a decade or so ago he was arguing against the use of relative poverty. As he knows, at the same time the current Prime Minister was arguing for acceptance of relative poverty. In what he said today the Secretary of State echoed the words of the Prime Minister last week when he said:

“Just take the historic approach to tackling child poverty. Today, because of the way it is measured, we are in the absurd situation where if we increase the state pension, child poverty actually goes up.”

Of course, the Prime Minister was right. If the Government increase the income of better-off people, they make others relatively poorer. The Prime Minister last week described that as absurd, but that was not what he said when he was trying to re-brand the Conservative party in 2006. In his Scarman lecture he said that the Conservative party

“will measure and will act on relative poverty…poverty is relative and those who pretend otherwise are wrong.”

He went on to say:

“We need to think of poverty in relative terms—the fact that some people lack those things which others in society take for granted.”

That was the Prime Minister speaking in 2006.

So what is the Government’s current view? Is it that focusing on relative poverty is absurd, as the Prime Minister said with conviction last week, or is it the diametrically opposite view that he set out with apparently equal conviction on behalf of his party before? Where do they now stand? The Prime Minister promised that a Government he led would “act on relative poverty”. Why is that promise being broken?

Why cannot the Secretary of State level with the House? He hopes nobody will notice this announcement or its significance because it coincides with the airports statement. Am I right in understanding that he proposes that in his legislation there will be no targets at all, or will he include some targets in it and, if so, will he tell us what they are? I remind the Secretary of State that he and his colleagues all voted for the Child Poverty Act in 2010.

When in government, Labour lifted more than 1 million children out of relative poverty and more than 2 million out of absolute poverty. A key success was raising lone parent employment from less than 45% in 1997 to more than 60% today, mainly thanks to tax credits. That was not about lifting a few people from just below a line to just above it; it was about a very substantial change in the way the economy works. Will the Secretary of State tell us whether next week the Government will announce big cuts to tax credits? That is not about making work pay; it is about making working families pay.

What we need is not a change in the definition of poverty, but a plan to deal with poverty and boost productivity. Ministers should be tackling low pay, but instead they are attacking the low-paid. The Children’s Commissioners for England, Wales, Scotland and Northern Ireland have today come together to warn that the Government’s policies will push more young people into poverty. What happened to the long-term plan? Why have children been left out? Why is the party that promised in its pre-election manifesto to work to eliminate child poverty now planning to increase it?

[Mr Duncan Smith]

Let me deal with the points that the right hon. Gentleman has made. First, I thought that his comments were a little ridiculous. The idea that this is somehow an obituary for compassionate conservatism does him ill. He knows very well that the purpose of what we are doing is to get rid of child poverty, and that remains our central purpose. As I said earlier—and we are not alone in this—the problem is that if we lock two sets of measures that actually drive spending to rotate people over that line, what we get is a process of churning, but not the real and deeper change in people’s lives. That is the big reason why we want to do this.

The truth is that the previous Labour Government, on their own measure, failed to achieve their target—they failed to halve child poverty by 2010. Worse, in-work poverty actually rose. We could go through the list, but I would have thought that there was a better way of building some consensus than saying that Labour, if in power, could somehow embark on a massive spending spree and everything would be all right. Even Alan Milburn said that was unrealistic, and it remains unrealistic. We have to deal with the world as it is now, and we have to change the life chances of those children.

It is worth remembering that under this Government 74% of poor workless families who found work escaped poverty, and there was a higher poverty exit rate of 75% for children living in families who went from part-time to full-time employment. That has happened under this Government.

The right hon. Gentleman talked about international measures and suggested that we are somehow breaking away from everyone else. The reality is that no other country embarked on a plan to get rid of child poverty using that child poverty measure, and the reason is that other countries realised that it would lead to peculiar patterns of expenditure, with very little result for those who most need help.

The right hon. Gentleman asked whether relative poverty is important. Yes it is, which is why we continue to publish statistics on houses below average income, and we will continue to do so, so everybody will still be able to comment on that. Our focus will be on turning around the lives of the poorest through education and ensuring that they get back to work through skilling, which my right hon. Friend the Education Secretary has been working on.

The right hon. Gentleman talked about the poverty figures published by the IFS last week. He knows very well that before last week most of his colleagues were running around saying, “It’s going to be terrible. The IFS is predicting that child poverty will rise dramatically.” Actually, none of that happened. [Interruption.] Even on those measures, child poverty fell by over 300,000 under this Government.

The right hon. Gentleman referred to a well-respected body such as the IFS, which has all the means at its disposal, and we have enormous respect for its ability to predict things, but its predictions on child poverty have been wrong every single year that we have been in government. In its most recent prediction it was wrong again. Its original prediction was that child poverty would rise to 2.8 million, but that was out by over half a million.

I am not attacking the IFS—far from it—but simply saying that if a Government set a policy on something they find incredibly difficult to forecast or predict, they will end up chasing the error, as the previous Labour Government did. Well over £200 billion was spent on tax credits, but the key point is to turn lives around. That is why we will present this Bill, and why we will change this so that we can reach the poorest children.