New Clause 2
Child Poverty Bill
5:30 pm
Steve Webb (Northavon, Liberal Democrat)
I think that everyone was baffled by those decisions, Mr. Key, but I am sure that you know what you were doing.
We have now reached the final group of new clauses, which touch on a fundamental point about the Bill—whether it is possible to achieve the 2020 child poverty target with benefit rates that are not themselves above the poverty line. Under new clause 2, someone who is wholly dependent upon benefits or tax credits would have an income of at least 60 per cent. of the median poverty line. New clause 4 was tabled by the hon. Member for Beverley and Holderness, and I have added my name to it. I know that the Committee appreciated hearing the evidence of Rev. Paul Nicholson and the Zacchaeus 2000 Trust, who suggested amendments along these lines. I shall return to new clause 4 in a moment.
New clause 2 is fundamental. We talked earlier about levers and what local and central Government can do. New clause 2 is about what central Government can do and the rate of social security benefits and tax credits. If we do not accept new clause 2, there is a logical inconsistency in the Government’s position. To quote the Bill, they want to “eradicate” child poverty, but they are not prepared to set the rates of benefits and tax credits at levels that lift people clear of the poverty line.
Government rhetoric at moments such as this is, “Yes, but we do not want people on benefits. We want them in work.” Unless we are going to have full employment, nobody out of work and nobody at home looking after their children, there will always be somebody on benefits and tax credits. The question is whether it is acceptable to have a Bill about eradicating child poverty and an explicit lever of Government policy that puts people into child poverty. It is that fundamental inconsistency that we are seeking to raise through new clause 2.
In the spirit of inquiry, I asked the House of Commons Library staff to do some sums for me, which they are always pleased to do. I asked them to compare the poverty line in the Bill—60 per cent. of median—with what somebody wholly dependent on benefits and tax credits would have to live on. They came up with some very interesting figures. They calculated that a lone parent on benefits and tax credits—getting average amounts of housing benefit I assume—is already clear of the poverty line. That does not mean that there are no lone parents living in poverty. The House of Commons Library figures show that taking the Government’s tax benefit model tables and assuming full take-up with people getting everything to which they are entitled, including, I think, an average amount of housing benefit, a lone parent would already be clear of the 60 per cent. median poverty line. However, the figures also show us that many lone parents are not clear of the 60 per cent. median poverty line. That raises an issue of why not, to which we shall come back.
Couples, interestingly, are not clear of the poverty line. On average, a couple with one child, getting all the benefits and tax credits to which they are entitled, based on the tax benefit model tables, is 7 per cent. below the poverty line and a couple with two children is 11 per cent. below the poverty line. On the basis of those figures, the Government are paying couples with children a benefit and tax credit rate below the poverty line while trying to pass legislation to eradicate child poverty.