Child Poverty

Oral Answers to Questions — Work and Pensions – in the House of Commons at 2:30 pm on 19 July 2010.

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Photo of Jim McGovern Jim McGovern Labour, Dundee West 2:30, 19 July 2010

What assessment his Department has made of the effect on levels of child poverty of ending the future jobs fund; and if he will make a statement.

Photo of Chris Grayling Chris Grayling The Minister of State, Department for Work and Pensions

The future jobs fund is directed at young working-age people. It continues to provide work placements, and all existing contractual commitments are being honoured. Next year we will introduce our Work programme. This will offer integrated employment support to young people, regardless of the benefit that they claim. The programme will help them move into sustained employment rather than temporary jobs. The Government believe that that will have positive impact on child poverty, and indeed all kinds of poverty, in future. However, the recent changes made by the Chancellor in the Budget will have no overall measurable impact on child poverty in the next two years.

Photo of Jim McGovern Jim McGovern Labour, Dundee West

I hope that the Minister will agree that a decent living wage is the best way, and the most efficient means, of combating poverty. The previous Government certainly knew and understood that, and supported and helped many people back into work, not only to their benefit but to the benefit of their families and communities. Will the Minister consider the implications of unemployment for poverty? Will the Government reconsider their proposal to scrap the future jobs fund?

Photo of Chris Grayling Chris Grayling The Minister of State, Department for Work and Pensions

What the hon. Gentleman does not understand is that the future jobs fund does not guarantee a sustainable future job. I agree with him about getting people off welfare and into work. Nobody will rise out of poverty by remaining on welfare. We want to change things and to get people back into work, but we want to get people into sustainable work. That is why we announced 50,000 additional apprenticeships, and why the Work programme will be geared to getting people into long-term sustainable employment. We will do people no favours by creating artificial short-term schemes that cost a lot of money which, thanks to the previous Government, we can no longer afford.

Photo of James Clappison James Clappison Conservative, Hertsmere

Is my right hon. Friend aware that child poverty can also be tackled by helping people on low incomes to get into work or, if they are in work, to earn more? There was talk of a living wage under the previous Government. I am no professor of maths, but is he aware that analysis of materials published by his Department shows that a single mother with two children under 11 who earns £250 a week suffers an effective tax rate of 90% as a result of benefit withdrawal and tax changes? Is not that a broken, complicated and perverse system?

Photo of Chris Grayling Chris Grayling The Minister of State, Department for Work and Pensions

My hon. Friend is absolutely right. We inherited from the previous Government a system in which there are tangible disincentives to move back into work. When people do the right thing and move back into work, they often face penal rates at which they lose the money they are earning, either through loss of benefits or through increased taxation. That must change if we are to create a genuine incentive for people to do the right thing and return to the workplace.

Photo of Helen Goodman Helen Goodman Shadow Secretary of State for Work and Pensions

The Government have already cut the future jobs fund, child tax credits and housing benefit, which will increase child poverty in two or three years' time. Will the Minister tell us whether, in addition to that, his right hon. Friend the Secretary of State has proposed means-testing child benefit?

Photo of Chris Grayling Chris Grayling The Minister of State, Department for Work and Pensions

I have no intention of taking any lessons from the previous Government on child poverty-[Hon. Members: "Answer the question."] The Labour party promised to halve child poverty by 2010, but missed that target by 1 million children. Its failure on child poverty was lamentable. By contrast, this Government will take steps over the next few years to reduce child poverty and to ensure that we do the right thing by the people in this country who are at the bottom end of the income scale.