Welfare System and Child Poverty: Wales

Will Quince Excerpts

Tuesday 20th July 2021 Westminster Hall

[The Parliamentary Under-Secretary of State for Work and Pensions (Will Quince)]

It is a pleasure to serve under your chairmanship, Mr Paisley. I thank the right hon. Member for Dwyfor Meirionnydd (Liz Saville Roberts) for securing a debate on this hugely important issue. I share many of the concerns that she has expressed about poverty levels in Wales. I do not want to see a single child in Wales, which she knows I have huge affection for, or anywhere else in our United Kingdom, growing up in poverty.

It is absolutely right that all Governments are held properly to account for the effectiveness of their policies for tackling child poverty. Although I do not have all the levers to tackle child poverty within the Department for Work and Pensions, I assure the right hon. Lady that I take this issue incredibly seriously, and I am working with my counterparts across Government to identify and address the root causes and drivers of child poverty.

Our working relationship with the Welsh Government is well established and positive. The commitments made to Wales by the UK Government are central to delivering policies and services across the Union. We will continue to work closely with the Welsh Government on the commitments set out in their programme for government 2021 to 2026. An example is our collaboration with Careers Wales to revisit our redundancy offer and develop the service through a digital platform. In adapting our approach, we maintained distance support, one-to-one advice and fully engaged with employers to guide them and their workforce through the full package of support from both the DWP and the Welsh Government.

Over the past year, our priority has been to help families in all parts of our United Kingdom withstand the financial hardships brought about by the covid-19 pandemic. Such unprecedented times and circumstances have called for an unprecedented response. The Government have delivered this by spending over £407 billion on support measures to mitigate the impact of the pandemic, including the furlough scheme and the self-employment income support scheme. That has helped to protect jobs, keep businesses afloat and help families get by.

Spending includes an additional £7.4 billion injected into our welfare system to further support those most in need, targeted at those facing the greatest economic shock and financial disruption, and raising our total spend on welfare support for people of working age to over £111 billion in 2020-21. Extra funding includes the temporary £20 increase in the universal credit and working tax credit standard allowances, which the right hon. Lady referred to. In addition, nearly £1 billion has been spent on increasing local housing allowance rates to the 30th percentile of local market rents, which we are maintaining for a further year at cash level.

As we look to economic recovery, tackling child poverty will be very much at the heart of our mission. We have long championed the principle that the best way to do so is to support parents wherever possible to move into and progress in work through our reformed welfare system, which ensures that families of all backgrounds are better off in work. The Department for Work and Pensions in Wales, in partnership with the Welsh Government, delivered two community project: Communities for Work, helping the economically inactive and long-term unemployed in some of Wales’ most disadvantaged wards; and Parents, Childcare and Employment, for those for whom childcare is the main barrier to employment. Through these projects, eligible parents can access support for childcare while training and gaining skills to get a job. Since both projects started in 2016, Communities for Work has helped almost 11,500 customers to move off benefits and into work.

Statistics for 2019-20 show that before the pandemic the UK was in a strong position overall, with record levels of employment, rising incomes and 1.3 million fewer people, including 3000,000 fewer children, in absolute poverty after housing costs, compared with 2010. In the right hon. Lady’s constituency, the proportion of children in absolute low income reduced by three percentage points to 16% before housing costs in 2019-20, compared with 19% in 2014-15. However, there is still a huge amount to do.

Helping people back into work is also key to levelling up across Great Britain. My Department is playing a central role in the Government’s ambitious £30 billion plan for jobs, which is already delivering for people of all ages across the country. This includes over £7 billion on new schemes, such as the kickstart scheme, which in Wales is running alongside Youth Offer Wales for people aged over 16. Since the kickstart scheme launched last September, over 8,000 kickstart jobs have been advertised in Wales, and over 2,000 young people have started in roles.

During the last financial year, we fulfilled our commitment to recruit 13,500 more work coaches across Great Britain and our jobs army is working across all regions to give people the support needed to find employment. Each work coach receives specialist training to give in-depth knowledge of local labour markets, matching the skills of the claimant with the needs of businesses in their area. Under our rapid estate expansion programme, or REAP, we are opening new job centres to accommodate the work coaches. I refer the right hon. Lady to the opening on 19 May of a new site on Queen Street in Cardiff, which is now fully operational, with over 63% of interventions carried out face to face. Plans are underway to open additional REAP sites in Wrexham, Rhyl and Swansea.

The evidence is clear that parental employment, particularly full-time employment, substantially reduces the risk of child poverty. However, we know that having a job is not always enough to lift families out of poverty. People also need the right skills and opportunities to progress in their roles, so that they can increase their earnings and build their careers. The independent in-work progression commission published its report on the barriers to progression for those in persistent low pay on 1 July. We will consider its recommendations carefully before responding later in the year. I encourage the Welsh Government and employers in Wales to do the same.

The right hon. Lady raised a number of issues, and I will do my very best to respond to as many as possible in the time remaining. First, she referred to devolution in Wales. The Department for Work and Pensions is committed to delivering the St David’s Day agreement in full. As she knows, the Wales Act 2017 implements the parts of the agreement that require primary legislation. However, employment and social security, as she mentioned in her speech, did not form part of that agreement. The previous Welsh Government commissioned work on the question of more devolution in the administration of the benefits system, but they have made no request to the UK Government for further powers in that area.

A single labour market needs a system of financial support for jobseekers and workers that provides a common framework of support, conditions to be met in return for that support, and access to employment and training opportunities. As the right hon. Lady knows, that is delivered through universal credit and associated employment provision, operated locally by Jobcentre Plus across Wales, and reflects both local labour markets and the differing needs of individuals. That not only ensures a coherent system across a single labour market, with equal treatment regardless of geographical location; it also allows for a pooled risk system that flexes and is able to accommodate asymmetric economic circumstances in different parts of the country.

The right hon. Lady knows that in the Department for Work and Pensions, and in particular within my remit, there are two potential levers for tackling child poverty: benefits and support for those of working age, and support to get people into work and to progress in work. However, she will know that some of the other drivers of child poverty, the root causes, are housing, education, health, addiction, family breakdown and debt. Many of those are issues on which the Welsh Government can take action. I know that they are doing so in many areas, and she may wish to push them further.

The right hon. Lady mentioned the removal of the universal credit uplift. As she rightly said, universal credit has provided a vital safety net for over 6 million people during the pandemic. We announced the temporary uplift as part of a £400 billion package of measures that will last well beyond the end of the road map. However, it is right that we now focus on our multibillion pound plan for jobs, which will support people in the long term by helping them learn new skills and increase their hours or find more work.

The right hon. Lady rightly referred to a response to a written parliamentary question from the hon. Member for Arfon (Hywel Williams), in which I said that it was not possible to produce a robust estimate of the impact on child poverty of removing the £20 uplift. That is particularly the case at the moment because of the uncertainty around the speed of our economic recovery and how that will be distributed across our population.

The right hon. Lady also rightly mentioned food insecurity, which is an issue that concerns me too. We take the issue incredibly seriously, which is why we have, for the first time, published data on household food insecurity from the family resources survey, in order to get a better understanding of the lived experience of families. I have gone one step further: in subsequent editions of the survey, we will now ask questions specifically on food bank use.

The most recent data from the survey shows that most households were food secure, with either high household food security or marginal household food security—high household food security at 87% and marginal household food security at 6%. A minority of households were food insecure, with low household food insecurity at 4% and very low household food insecurity at 4%. That is why we want that additional data, so that we can really get to the bottom of the core drivers of food insecurity.

The right hon. Lady referred to the two-child policy. We have a benefits structure that adjusts automatically. If we were to set up, as she would like us to, a benefits structure that adjusted automatically to family size, it would be unsustainable. Statistics from the Office for National Statistics show that, in 2020, of all families with dependent children, 85% had a maximum of two in their family, and for lone parents the figure was 83%. The Government therefore feel that it is proportionate to provide support through the child tax credit and universal credit systems for a maximum of two children. What I will say, though, is that we recognise that some claimants are not able to make the same choices about the number of children in their family, and that is why exceptions have been put in place.

I am conscious of the time and would be very happy to pick this up with the right hon. Lady at a later date to discuss some of the issues that I have not been able to cover as part of my response now. To conclude, I restate the Government’s firm belief that the approach that we are taking to support families back into work is the right one for families, wherever they live across our United Kingdom, if we are to tackle child poverty in a way that is sustainable and to level up opportunities across our country. Of course it is absolutely right that as the country begins to recover from the effects of the pandemic, we ensure that our welfare state continues to support the most disadvantaged; and as we have done throughout the past 16 months, we will continue to assess how best to target taxpayers’ money on support for the most vulnerable families beyond the pandemic.

Question put and agreed to.