Child Poverty Bill — Second Reading (Continued)

Part of the debate – in the House of Lords at 6:47 pm on 5 January 2010.

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Photo of Baroness Walmsley Baroness Walmsley Spokesperson for Children, Schools and Families 6:47, 5 January 2010

My Lords, I welcome the Bill as a significant step forward in addressing one of the greatest scandals of our time-the prevalence of child poverty in our country. The Government face a formidable challenge in meeting the complex and often long-standing needs of the most vulnerable children and families. Unfortunately, recent research has found that Governments are failing to make the best use of public resources to improve children's lives. As a consequence, the UK spends far more money than its European neighbours remedying preventable social problems. We know that the impact of deprivation can scar lives over generations and result in high levels of child neglect. On the other hand, we know that well targeted early intervention is cost-effective and helps to release families from the trap of cyclical deprivation and reduce the likelihood of family breakdown.

So what will legislation achieve? Well, it will achieve nothing on its own. Its success will depend on the quality of the implementation and the detail of the strategies. Therefore, it is welcome that the powers and duties are given to national, devolved and local government and many other partners, and that the Bill also sets up an expert advisory group.

The Bill contains four targets, about which we have just heard from the noble Baroness, Lady Hollis. However, I am concerned that organisations will concentrate too much on children just below the border-line, in order to raise them just above it, instead of focusing help on those in the deepest poverty, in the same way that schools focus on the border-line C/D grades in GCSEs, raising those that are anticipated to get a D so that they just get a C for the sake of the league tables. Whatever targets we use, we must avoid that.

Then there is the matter of what we mean by eradication, on which I heartily agree with my noble friend Lady Thomas of Winchester. Even if we reached 5 per cent, that would still leave 600,000 children in poverty-hardly eradication.

There is another area where the Bill is deficient. Article 1 of the UN Convention on the Rights of the Child states that a child is,

"every human being below the age of 18 years".

Yet Clause 25 defines a child for the purposes of the Bill as,

"a person under the age of 16", or qualifying for child benefit. Why the difference? The danger is that the NEETs and young care-leavers may be excluded from measures to alleviate poverty, and that would be a disaster because many of them suffer extreme poverty at present.

The Government have already had a hard mountain to climb. According to the Library Research Paper 09/62, the number of children living in households on less than 60 per cent of median income in 1979 was 13 per cent and this had risen to 27 per cent by the time Labour took over. This is the horrifying record of the last Conservative Government and we should never forget it, even though it was conveniently forgotten by the noble Lord, Lord Freud, in his attack on the Government earlier this afternoon. Since 1997, things have improved as the figure is now 23 per cent so something has been achieved by this Government, even though they have not hit their targets.

In 1999, Tony Blair pledged to eradicate child poverty within 20 years. We are halfway there in time but not in achievement, so we need to accelerate our actions. What are the Government's priorities? In April 2009, an Oxfam report on poverty noted that:

"Hundreds of billions of pounds have been made available to banks in an effort to avert financial meltdown-throwing into sharp relief, for example, the £4.2 billion needed to meet the interim child-poverty target".

The figure of £4.2 billion comes from the Institute for Fiscal Studies. So have the Government committed this amount? No. The 2009 Budget committed only £140 million extra and yet child poverty costs the Exchequer £25 billion every year, so failing to invest adequately in eradicating child poverty is economically short-sighted and fiscally foolish.

I have two main concerns about the Bill. The first is about the independence and powers of the Child Poverty Commission and the second is about the voice of the child. How can we be assured that the Government will take any notice of the commission? Will it have enough resources to be able to commission research and call for evidence? Will it have a duty to consult children? Will it be truly independent? Based on my recent experience of looking at the independence of Ofqual in the Apprenticeships, Skills, Children and Learning Bill and the subsequent behaviour of the Secretary of State for Education, I think the answer is not very independent. Paragraph 1 of Schedule 1 says that the chair and everyone else, apart from the appointees from the devolved Administrations, are to be appointed by the Secretary of State. How independent is that? I will be seeking to oblige the Secretary of State to consult Parliament, in the guise of the Select Committee on Children, Schools and Families, before appointing the chair of the commission. I will also be seeking, as conceded by the Government in the case of Ofqual, to have the members of the commission appoint the deputy chair themselves rather than the Secretary of State doing it.

I welcome the fact that the voice of the child is mentioned in the Bill but it is not enough. Apart from the fact that there is no mention of consulting children in the clauses on the commission, the Secretary of State in Clause 9(4)(c) on consultation with children, is to consult,

"such children, or organisations working with or representing children, as the Secretary of State thinks fit".

I will seek to change that "or" to "and", and I was delighted to hear from the Minister in his opening remarks that he may support that.

Other changes are needed to make to the Bill fit for purpose. One of my major concerns is Clause 15, which obliges the Government and the commission to have regard to economic and fiscal circumstances. Presumably this means that in adverse economic circumstances the Government could be exempt from the legal commitment to meet the target. I believe this is unnecessary and could weaken the legislation. I mentioned earlier the high cost to the state of child poverty. What we need here is long-term thinking. The Action for Children's Backing the Future report, produced with the New Economics Foundation, reveals that the cost to the UK economy of addressing current levels of social problems, such as crime, mental illness, family breakdown, drug abuse and obesity, all of which are linked to child poverty, will amount to almost £4 trillion over the next 20 years. They found that, for every £1 invested annually in their own targeted early interventions, society benefits by between £7.60 and £9.20. The report shows that a £191 billion 10-year investment programme of targeted interventions for our most vulnerable children, alongside a £428 billion 20-year programme of investment in universal childcare and parental leave, would deliver net savings of £486 billion over the next 20 years.

This excellent return on investment is approximately five times the current annual budget for the whole of the NHS, so is a very good deal. Why are the Government not proposing a financial package such as this alongside the current legislation? We need cross-party commitment to succeed in the war on poverty. There are to be annual progress reports on the success of the Bill, so let us not make them just an opportunity for party political carping and knocking the Government. We need consensus if we are to succeed. I for one will welcome success where it is shown.

One of the Bill's main principles is getting parents into work. This is fine as long as it allows parents of very young children, who wish to stay at home to look after them, to do so. We need longer and better paid parental leave, as we on these Benches have for so long advocated. We need to have in place all the measures that enable parents to work and care for their children; for example, flexible working hours, part-time workers to be properly paid and to have the same rights as full-time workers, and high quality accessible and affordable childcare. We also need a fair deal for part-time students who should have the same access to grants and loans as full-time students.

We also need a fairer tax system. One of the best ways to remove low-paid families from poverty is the Liberal Democrat tax plan to raise the threshold for paying income tax to £10,000 thereby taking 4 million low-paid people out of tax altogether and saving the average working adult £700 per year.

Does every child matter? The Secretary of State should measure the impact of all these policies on all children and make explicit reference, as has been said, to the most at-risk groups when setting out the impact of measures under the building blocks. Asylum seekers are one such group as their benefits are lower than those of citizens. The Government should allow the adults to work while they are waiting for their applications to be decided. The right reverend Prelate the Bishop of Leicester mentioned the problem of children in communal accommodation, as the criteria based on households do not apply to them. They may be Gypsy and Traveller children and children in care in children's homes as well as asylum seekers in detention centres.

Fostered children are another vulnerable group: 75 per cent of foster carers earn less than the minimum wage from fostering and most do not have time to work full-time outside the home as they look after the children. Some BME groups, such as Pakistani and Bangladeshi families, also feature highly on the poverty statistics and my noble friend Lady Thomas mentioned disabled children.

We also need to look at debt. In the past 12 months, there has been an increase of 170,000 in the number of children in families living on benefits. Many of them get into debt and pay outrageously crippling interest rates. We need action by the financial services industry to avoid low-income families getting into high-interest debt.

This is an important Bill for children and I look forward to this House making it even better.