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My Lords, there are 1.7 million children in families where at least one adult is in work in absolute poverty, before housing costs. However, the evidence shows that nearly half of these families are in part-time work or are self-employed. A child living in a household where every adult is working is about five times less likely to be in relative poverty than a child in a household where nobody works. This shows that work is the best route out of poverty.
My Lords, I beg to differ that these figures show that work is the best route out of poverty, which is a message that the Government repeatedly tell us. How do they account for the fact that seven in 10 children in poverty have a working parent, up from just over half at the point they first took power? In particular, what assessment have they made of the impact on current and future levels of child poverty of their cuts to in-work benefits and tax credits?
My Lords, the statistics expressed by the noble Baroness do not reflect the £1.7 billion a year cash boost to our welfare system announced in the Budget, which will enable 2.4 million households to keep more of what they earn. We have taken strong action to support working families. The latest rise in the national living wage will increase a full-time worker’s annual pay by over £2,750 since 2016. No one wants to see poverty increase. That is why we are doing more to help parents into work and to stay in work through multiple avenues of support from across government.
My Lords, the Social Metrics Commission found that in 2018 almost a third of children were in poverty. The Joseph Rowntree Foundation found that child poverty has been rising almost entirely in working families. What action will the Government take to ensure that children are not disadvantaged? Will they consider in the comprehensive spending review ending the benefits freeze and the two-child limit?
My Lords, I have already made it clear at this Dispatch Box that we intend to end the benefit freeze next year. Again, the stats produced by the Social Metrics Commission last year predate much of the additional support that we have invested in the system since the last Autumn Budget.
We have done a huge amount to help families through transforming the welfare system so that people are not just helped into work. We are working hard on in-work progression, so that people preferably do not just have a full-time job—three-quarters of all jobs since 2010 are full time—because we want people to have good jobs, and are piloting new ways of supporting that. We are also boosting our capability to work with local businesses and working with jobcentre specialists to encourage local employers to support progression and good-quality flexible working which will support the children of those families in work.
My Lords, the Minister has talked a lot about what the Government are doing to help people in jobs, but if the aim is to get families out of poverty, it is not working. The facts are clear: people are simply moving from one kind of poverty into another—that is, from out-of-work poverty into in-work poverty. The impact on children is very serious. Did the Minister see the recent research in the Archives of Disease in Childhood showing that child poverty has not only risen but will rise further? It looked at the impact on children of being in poverty in childhood and found that those in “persistent poverty” were three times as likely to have mental health problems and twice as likely to have a long-standing illness. The president of the Institute of Child Health said that we need,
“national targets to reduce child poverty backed by a national child poverty strategy, the reversal of cuts to universal credit and the reversal of public health cuts”.
Does the Minister agree?
My Lords, again, we are doing a huge amount, quite a lot of which is not reported or reflected in the additional support we have injected. I have just returned from the G7 in Paris, where we focused on labour. There is no question that, across the world, the changing world of work presents challenges. We are at the forefront on this issue; other countries look to us. Our living wage is way in excess of what other countries afford their citizens. We are setting an example and achieving a huge amount in having a transformational system that helps people into work, pays them to work and gives them in-work progression. Let me give an example: a couple with three children need to work for a total of only 24 hours per week to be exempted from the benefit cap; they can then receive from the state the equivalent of a £35,000 gross salary a year, plus housing support. That is not ungenerous.
Absolutely. The increase in weekly earnings makes a huge difference. Tackling poverty will always be a priority for this Government; they have lifted 400,000 people out of absolute poverty since the party opposite was in government. Inequality has fallen. Our reforms have made sure—this is important—that our welfare system encourages people into work, but is also fairer for the taxpayer and sustainable for the future.