Child Poverty Bill

– in a Public Bill Committee on 20th October 2009.

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[Mr. Martin Caton in the Chair]

Photo of Martin Caton Martin Caton Labour, Gower 10:30 am, 20th October 2009

I have a few preliminary announcements to make. Hon. Members may remove their jackets during Committee sittings. Will all members of the Committee ensure that mobile phones, pagers and so on are turned off or switched to silent mode during sittings? Copies of the money resolution in connection with the Bill are available in the room. I remind members of the Committee that adequate notice should be given of amendments. As a general rule, I and my fellow Chair do not intend to call starred amendments, including any that might be reached during an afternoon sitting of the Committee.

The Committee will first be asked to consider the programme motion, on which debate is limited to half an hour. We will then proceed to a motion to report written evidence and a motion to permit the Committee to deliberate in private in advance of oral evidence sessions, both of which I hope we can take formally. Assuming that the second motion is agreed, the Committee will then move into private session. Once it has deliberated, witnesses and members of the public will be invited back into the room and our oral evidence session will begin.

Photo of Andrew Selous Andrew Selous Shadow Minister (Work and Pensions)

On a point of order, Mr. Caton. Two members of the Committee do not have seats, and I do not think that that is satisfactory.

Photo of Martin Caton Martin Caton Labour, Gower

There are seats available in another part of the room. I apologise to hon. Members. We would usually be sitting in the Boothroyd Room, but that has been taken over by the Speaker’s Conference.

As I was saying, if the Committee agrees to the programme motion, it will hear oral evidence this morning and this afternoon, and on Thursday morning and afternoon. Next week, we shall move to the Committee corridor and revert to the traditional clause by clause scrutiny of the Bill. I call the Minister to move the programme motion.

Photo of Stephen Timms Stephen Timms Parliamentary Under-Secretary (Department for Business, Innovation and Skills) (Digital Britain) (also HM Treasury), Financial Secretary (HM Treasury) (also in the Department for Business, Innovation and Skills)

I beg to move,

That—

(1) the Committee shall (in addition to its first meeting at 10.30 a.m. on Tuesday 20 October) meet—

(a) at 4.00 pm on Tuesday 20 October;

(b) at 9.00 am and 1.00 pm on Thursday 22 October;

(c) at 10.30 am and 4.00 pm on Tuesday 27 October;

(d) at 9.00 am and 1.00 pm on Thursday 29 October;

(e) at 10.30 am and 4.00 pm on Tuesday 3 November;

(2) the Committee shall hear oral evidence in accordance with the following Table:

TABLE

Date

Time

Witness

Tuesday 20 October

Until no later than 12.30 pm

Department for Work and Pensions, Department for Children, Schools and Families and Her Majesty’s Treasury

Tuesday 20 October

Until no later than 5.30 pm

Kate Green (Child Poverty Action Group), Neera Sharma (Barnardo’s), Fergus Drake (Save the Children) and Kate Bell (Gingerbread)

Tuesday 20 October

Until no later than 7.00 pm

Catherine Fitt (National College for Leadership of Schools and Children’s Services), Colin Green (Association of Directors of Children’s Services), Kevan Collins (London Borough of Tower Hamlets), Richard Kemp (Local Government Association) and Paul Carter (Kent County Council)

Thursday 22 October

Until no later than 10.25 am

Charlotte Pickles (Centre for Social Justice), Edna Speed (Save the Family) and Reverend Paul Nicolson (Zacchaeus 2000 Trust)

Thursday 22 October

Until no later than 2.30 pm

Dr Tess Ridge (University of Bath), Donald Hirsch (Loughborough University), Mike Brewer (The Institute for Fiscal Studies) and Neil O’Brien (Policy Exchange)

(3) proceedings on consideration of the Bill in Committee shall be taken in the following order: Clauses 1 to 7; Schedule 1; Clauses 8 to 16; Schedule 2; Clauses 17 to 30; new Clauses; new Schedules; remaining proceedings on the Bill;

(4) the proceedings shall (so far as not previously concluded) be brought to a conclusion at 7.00 pm on Tuesday 3 November.

We are all looking forward to serving under your chairmanship, Mr. Caton, and that of your co-Chair, Mr. Key. This will be the first time that I give evidence as a Minister to a Public Bill Committee, and I am looking forward to doing so with my colleagues. I take this opportunity to welcome all members of the Committee to our important task over the coming days. We had a pretty consensual debate on Second Reading and there was broad support from both sides of the House for the general principles of the Bill. I look forward to hearing evidence from members of the public about our proposals and then participating in the Committee’s scrutiny of the Bill.

The programme motion was tabled following the resolution agreed by the Programming Sub-Committee, which met on Wednesday 14 October. It is printed on the amendment paper, and I commend it to the Committee.

Photo of David Gauke David Gauke Shadow Minister (Treasury)

We look forward to serving under your chairmanship, Mr. Caton. We also look forward to hearing evidence from Ministers and outside experts. We are satisfied with the programme motion and it has our support.

Question put and agreed to.

Resolved,

That, subject to the discretion of the Chairman, any written evidence received by the Committee shall be reported to the House for publication.—(Mr. Timms.)

Photo of Martin Caton Martin Caton Labour, Gower

Copies of the memorandums that the Committee receives will be made available in the room.

Resolved,

That, at this and any subsequent meeting at which oral evidence is to be heard, the Committee shall sit in private until the witnesses are admitted.—(Mr. Timms.)

The Committee deliberated in private.

On resuming

Photo of Martin Caton Martin Caton Labour, Gower

We shall now hear evidence from the Department for Work and Pensions, the Department for Children, Schools and Families and Her Majesty’s Treasury. I understand that Dawn Primarolo is delayed. Although she is on her way, we have to proceed.

Welcome to this morning’s sitting. Will the two witnesses that we have so far introduce themselves to the Committee?

Mr. Timms: I am Stephen Timms, the Financial Secretary to the Treasury.

Helen Goodman: I am Helen Goodman, the Parliamentary Under-Secretary of State for Work and Pensions.

Photo of Martin Caton Martin Caton Labour, Gower

Thank you. Before I call the first Member to ask a question, I remind the Committee that questions should be limited to matters within the scope of the Bill.

Q 1

Photo of Graham Stuart Graham Stuart Conservative, Beverley and Holderness

According to the “Oxford English Dictionary”, in modern English “eradicate” means to remove or destroy completely. Do you accept that describing the targets in the Bill as relating to the “eradication” of child poverty represents an inappropriate use of the word? Would the term “substantial reduction” be more appropriate?

Mr. Timms: No, I would not. Eradication is the appropriate term, because poverty needs to be measured other than by relative income. If we are reducing the proportion of children growing up in households with incomes of less than 60 per cent. of median to 10 per cent. or less, we are not eradicating the phenomenon. However, the Bill carefully includes other measures because, as most people would accept, that one measure does not capture the totality of poverty. We could say that if we have achieved all the targets in the Bill, we have met our goal. That is not to say that there will never be children in households with income of less than 60 per cent. of median income. Nevertheless, the phenomenon of child poverty, which all of us see and which grew rapidly for a while but has been reduced in recent years, would have been eradicated.

Q 2

Photo of Graham Stuart Graham Stuart Conservative, Beverley and Holderness

So are the Government announcing today that they are rejecting relative poverty as the fundamental measure of poverty?

Mr. Timms: The Bill includes four measures. From the outset, our intention, which has been widely accepted, was to recognise that attempting to measure poverty with a single measure would not work.

Q 3

Photo of Graham Stuart Graham Stuart Conservative, Beverley and Holderness

The Government set out that they were going to seek to put Britain among the best countries in Europe in terms of child poverty. However, while other countries in Europe have fewer than 5 per cent. in relative poverty today, the Government are defining fewer than 10 per cent. as “eradication”. Surely that is an insult to the children who will continue to suffer relative poverty, even if the measures are successful.

Mr. Timms: No, they do not. Denmark has the lowest proportion of any EU country, which is 10 per cent. on the most recent 2007 data. Every other EU country has a proportion higher than 10 per cent.

Q 4

Photo of Karen Buck Karen Buck Labour, Regent's Park and Kensington North

A past criticism of child poverty progress has been that while some low-hanging fruit has been dealt with, the problem of severe and persistent poverty has not been tackled as rigorously as we would have liked. In the Bill, tackling persistent poverty will be dealt with retrospectively through the new Understanding Society survey. Is there not a danger that that will effectively postpone rigorous action on dealing with severe and persistent poverty? How will that be overcome?

Mr. Timms: I do not think that it will have that effect. It is true that, because of the break in the data, it will be a while before we have the numbers to enable us to set the right level of the target for persistent poverty, but I do not think that that needs to delay action to address the problem—I certainly hope that it will not. For me, this is a particularly important measure. We can all see that while being in a household with a relatively low income for a short period is one thing, all the evidence shows that being in that situation for a long period can be seriously damaging to a child’s prospects. We are lumbered with the break in the data, but I do not think that that needs to delay action on tackling the problem.

Q 5

Photo of Karen Buck Karen Buck Labour, Regent's Park and Kensington North

Do you accept that groups concerned with poverty would probably say that a ministerial hope will not be enough to reassure them that measuring severe and persistent poverty will be central to the Government’s objectives? Can we not be firmer?

Mr. Timms: There are two separate things. Persistent poverty is in the Bill. It is clear that it will be a key element in the targets have to be hit, which places it right at the heart of the Government’s strategy for tackling child poverty. Severe poverty is a slightly different matter. There are quite serious measurement difficulties regarding exactly what we mean by severe poverty. The survey evidence makes it pretty clear that there is something a bit odd happening, because those who appear in the income survey data as having the lowest incomes—significantly less than 60 per cent. of median income—appear not to be suffering from material deprivation. There has been some research into that but I do not think that we fully understand it. I cannot say that we will be measuring severe poverty closely, because of the difficulty in the data but, for persistent poverty, we most certainly will.

Q 6

Photo of Karen Buck Karen Buck Labour, Regent's Park and Kensington North

This is my last question. All the evidence indicates that it is primarily, though not exclusively, black and minority ethnic populations who are most at risk of severe and persistent poverty. Does the Bill’s impact assessment address that, and how do you see the correlation between ethnicity and poverty being addressed?

Mr. Timms: It is certainly true that the levels of child poverty are significantly greater in quite a number of the ethnic minority groups—not all, but quite a number. Helen might want to comment on this, but that has been the reason behind specific work in the DWP around employment for parents and others from ethnic minority groups and the establishment of the ethnic minority advisory group. I see that being addressed through our work on employment, and we will need to address it elsewhere in the strategy.

Helen Goodman: I would just add one point, which is that this ties in with part 2 of the Bill, which addresses the powers and duties of local authorities. It is precisely because different communities face different barriers to employment and tackling poverty, which is partly due to different minority communities, that we want to give local authorities that particular focus.

Photo of Martin Caton Martin Caton Labour, Gower

Before we come to the next question, we can welcome our third witness to the session. Would you like to introduce yourself?

Dawn Primarolo: First I would like to apologise, Mr. Caton. I thought that I was 15 minutes early for 11 o’clock, so apologies to all Committee members. I walked briskly from the Department for Children, Schools and Families. I am the Minister of State for Children, Young People and Families.

Q 7

Photo of Jamie Reed Jamie Reed Labour, Copeland

On the issue of measurement, while no one doubts the intentions of the Bill, there are issues to be resolved. We have talked about some of the most severely impoverished groups of children in the country, who require the provisions of the Bill to be applied to them. There is a difficulty with asylum-seeking, Gypsy and Roma children, for whom there are no targets in the Bill, are there not? How are we going to address those people?

Mr. Timms: The answer is that the strategies required by the Bill—this picks up on a point that Helen was making—will need to address the position of those children along with other children. The difficulty to which you are rightly drawing attention is about counting children who are not in households in the normal sense and who, therefore, will not be picked up in the household surveys on which data will be based. Nevertheless, we can address the needs of those children through the strategies drawn up and it is firmly our intention to do so.

Q 8

Photo of Jamie Reed Jamie Reed Labour, Copeland

My concern is that although we can measure the effect of the Bill, it will be difficult to measure the needs comprehensively before we implement the Bill. I am still worried that some children might slip below the radar—children of families that do not claim income tax credit, the family entitlements that they are allowed or free school meals—or not appear on our radar at all. How will the targets in the Bill address their needs?

Helen Goodman: May I say something about this, Mr. Caton? Obviously, to measure what is happening over time, we need a definition of the children who are measured—that is the definition of “children in households”. That does not in and of itself exclude asylum-seeking children or Gypsy, Roma and Traveller children. Some of those children live in households; they will be counted and covered in the normal way. As far as Traveller, Gypsy and Roma children are concerned, it all depends on whether the sites where they are living are permanent, with post codes and proper addresses. Those children will be included.

I would not want the Committee to take away the idea that the Government do not have equal concern for the small number of children who are not covered by the survey, the way in which they are treated and their quality of life, and that we do not have programmes to address their needs. For example, we have particular targets and objectives to help looked-after children to improve their educational achievement. I think that the DCSF Minister knows more about this than I do and might be able to help you a little more. Not being covered in the Bill is not a sign of the Government not being concerned about them.

Dawn Primarolo: I want to add briefly that this is a question of the layers of a strategy. Stephen and Helen have covered measurement but, over and above that, there has been specific mention of Roma and Traveller children and children from asylum-seeking families. My Department is working with local authorities to develop strategies for that very small number of children who could fall outside our radar, as you rightly say. The challenge, as always, is to ensure that our strategy looks at all the determinants and measures the ones that we think are key for all children in tackling poverty—that is where we are—and to make decisions about what you put in a Bill while ensuring that it is reinforced by other strategies and policies.

Q 9

Photo of Andrew Selous Andrew Selous Shadow Minister (Work and Pensions)

One other group in society suffers more than its fair share of poverty: families in which disability is present. A disability within a family clearly adds a significant element of cost to that family. I do not think that anyone would dispute that. The Government count disability living allowance as income for such a family, but I think that we recognise that that is offset by the costs of dealing with the disability. Do the Government recognise that as an issue? Do the Ministers before us think that that is fair and right, and do they propose to do anything about it? With housing costs, we look at income both before and after the costs; is there not the case for doing the same with the costs of disability?

Helen Goodman: I am sure that the Committee is aware that that is a long-standing issue, which we have discussed on other occasions as well. Of course, people with disabilities have higher costs, and those higher costs are recognised by the Government in the disability living allowance, which is paid to people at different rates depending on the impact of the disability on their way of life. We intend to continue with that.

We have some difficulty measuring that impact on families before DLA is paid, not least because we do not know how many people might have such needs—they are not measured if people do not claim the allowance. However, the Bill is a step forward, because if you turn to the definitions in the material deprivation standard  you will see that a number of them are about families with a disabled person—a child or an adult—only being able to achieve the quality of life that we are looking for with a higher standard of living. So, including the material deprivation standard tightens it up considerably.

Q 10

Photo of Andrew Selous Andrew Selous Shadow Minister (Work and Pensions)

Okay, but there are no plans to stop counting DLA as income available to the family, in a generally understood sense.

Helen Goodman: DLA is income.

Q 11

Photo of Andrew Selous Andrew Selous Shadow Minister (Work and Pensions)

But it has costs attached, which you would accept are specific.

Helen Goodman: Of course, it does have costs attached, but it is also income; it would be nonsensical not to include it as income.

Q 12

Photo of Andrew Selous Andrew Selous Shadow Minister (Work and Pensions)

But you do it differently for housing, don’t you?

Helen Goodman: We do it differently for housing, but I am not sure why the hon. Gentleman thinks that that is a parallel. I am not sure that I have fully understood why there is a parallel there.

Q 13

Photo of Andrew Selous Andrew Selous Shadow Minister (Work and Pensions)

I can explain that parallel very clearly. I think that most people accept that what a family has to live on, for food, heating and so on, is what they have available after they have paid their rent. That is why the Government have an “after and before housing costs” way of looking at the issue. Is it not very similar with disability in those families that have clear, defined weekly costs relating to their disability?

Helen Goodman: I do not think that it is, because although the disability living allowance is paid to people according to the impact on their way of life, to meet their needs, the lack of that income is not the same across the board in the systematic way that it is with housing.

Q 14

Photo of Steve Webb Steve Webb Shadow Secretary of State for Work and Pensions

To inform our assessment of how much the issue matters, is the Minister willing to ask her Department’s statisticians simply to run the stats through once minus DLA, so that we have a sense of how much the inclusion of DLA, which is income regarding which no costs are taken account of, affects the figures? I used to construct those figures myself, and it is simply a matter of excluding one income value from the totals and turning the handle. Is she willing to do that, to inform the Committee’s discussions?

Helen Goodman: I do not know whether it is as simple as that.

Helen Goodman: I will look into whether it is.

Q 15

Photo of David Gauke David Gauke Shadow Minister (Treasury)

May I explore what would constitute a breach of the duty on the Secretary of State under clause 1? If the Bill had been in place since 1997—enshrining the 2004-05 and the 2010 targets, as the 2020 target is enshrined in the Bill—what would the Government have done differently?

Mr. Timms: I do not know. The Bill is clear about the circumstances in which the duty would be breached—that is, if the targets are not met by the end of the financial year 2020 and if the report required by clause 14 states that they have not been met. If that kind of arrangement had been in place for the 2010 target, as we got closer to 2010 there would have had to be changes. What those would have been is impossible to say.

Q 16

Photo of David Gauke David Gauke Shadow Minister (Treasury)

May I give one example? The Institute of Fiscal Studies, in its report of February this year—produced in conjunction with the Joseph Rowntree Foundation—said that in order to meet the 2010 target, an additional £4.2 billion in tax credits and benefits would need to be spent. Had the Bill been in place, as I described a moment ago, would the Government, in order to comply with the Bill, have had to increase benefits and tax credits along those lines?

Mr. Timms: The difference is that under the terms of the Bill there will be strategies drawn up, kept up to date and reviewed, and regular progress reports will be made over the 10 years leading up to 2020. Certainly, there will be a need for significant policy initiatives, but I hope that it would be possible to show over the course of the next decade that the Government are on track to meet the target, given the significantly different and more demanding set of arrangements that the Bill puts in place.

Q 17

Photo of David Gauke David Gauke Shadow Minister (Treasury)

But the Government have had strategies in place to meet their child poverty targets over the past few years. The Bill would now enshrine them in legislation, but the Government have had strategies. Yet we get to 2009 and it is pretty clear that the 2010 target is not going to be met. That has been clear at least since 2006. What would the Government have done since, say, 2006, when the IFS said that an additional £4.3 billion needed to be spent on tax credits and benefits, given that they had a hard and fast obligation to meet the target?

Mr. Timms: First, on the question of the 2010 target, the IFS estimates that, if there are no further policy initiatives, we should be about two thirds of the way to the 2010 target by the end of the financial year 2010-11. That is despite the fact that we are in the biggest downturn in the world economy for 60 years or more. The arrangement that the Bill sets out is significantly more demanding for the coming decade than the arrangements that have been in place over the past 10 years. That is the reason for the legislation. There will be strategies, formally drawn up, required by the Act, there will be a commission to advise on the work and there will be regular formal progress reports on how we are getting on. I believe that that will enable the Government over the next 10 years to ensure that the targets are delivered by 2020.

Q 18

Photo of David Gauke David Gauke Shadow Minister (Treasury)

So it would it be fair to say that the Bill imposes a tougher regime, and gives a higher priority to child poverty, for future Governments than has been in place for the current Government over the past 10 years.

Mr. Timms: It is certainly a more demanding regime, yes.

Q 19

Photo of David Gauke David Gauke Shadow Minister (Treasury)

We all know that the public finances are going to be in a more demanding position over the next few years, but is that an obligation that the Bill imposes on future Governments?

Mr. Timms: Yes. The central challenge for the work of drawing up the strategy will be to show how achieving the targets can be delivered alongside the consolidation that will be required for much of the coming decade. Indeed, that is an important reason for clause 15 highlighting that the strategy needs to be consistent with the overall economic strategy.

Q 20

Photo of David Gauke David Gauke Shadow Minister (Treasury)

We will come to clause 15 in a moment. We are looking forward to a greater emphasis on child poverty from now on; that appears to be what you are saying. A pre-Budget report is coming up, presumably next month. The Government could start trying to comply with the 2010 target then by introducing measures to increase tax credits and so on. I have a suspicion that you are not going to do that to the extent of meeting your 2010 target. Why not?

Mr. Timms: Questions about what may or may not be announced in the PBR are probably for another occasion. It is certainly clear that it will be difficult to hit the 2010 target in the current circumstances—a point I have made on a number of occasions—but we certainly have not given up on the target. As I say, on the basis of the Institute for Fiscal Studies projections, and without any additional initiatives, we will be two thirds of the way to that target.

Q 21

Photo of David Gauke David Gauke Shadow Minister (Treasury)

May I ask one more quick question on this subject? You quote the IFS and you also state that you have had the difficulties of the recession. The implication is that that has made things harder. The child poverty measure is a relative measure and, by and large, low-income families who are on benefits tend to be less affected by the recession than those who are working and those at the median level. The IFS has said that its forecasts for child poverty in 2010 would be slightly lower if the economy were to perform worse than the Treasury assumed. It has been clear for some years—years predating the recession—that you were not going to meet the 2010 targets. So is not the claim that it is due to the recession complete nonsense?

Mr. Timms: No. You are absolutely right to point out that there is not a straightforward link between the economy being in a recession and what happens to child poverty. From memory, although the child poverty line was on a generally inexorable upward ascent throughout the period from 1979 to 1997, it did not go up that much faster during the very damaging recessions in the ’80s and the ’90s. However, in the current environment, Government spending is very tightly constrained. That, in particular, is what has limited what has been possible over the last couple of years.

Q 22

Photo of Steve Webb Steve Webb Shadow Secretary of State for Work and Pensions

I am just trying to think through this issue of the value added of the Bill. I think that we would all agree that any enhanced effort to tackle child poverty is a good thing, that progress is a good thing and so forth, but we are not really talking about that. We are talking about eradication and a binding 2020 target. If, in a very benign economic environment, we miss the five-year target and the 10-year target—that, as  has been said, is the low-hanging fruit—it does not take a genius to say that the next five years are going to be very tough financially. We are not going to achieve the 2020 target without some very dramatic change of policy and emphasis. That would be the central assumption of an independent observer. The focus on the get-out clauses then starts to become important, as does the focus on enforcement, which is the flip side of the Bill. I have a couple of questions about enforcement.

Mr. Timms: May I just make a comment? I accept the logic of your point. One of the things that will be different during the next 10 years is that we will be able to benefit from the substantial investment in public services over the past 10 years, and that will have a significant impact. The Bill requires us to draw up a strategy to set out how targets can be achieved in what will be a constrained fiscal environment over much of the next decade. I certainly do not accept that it is time to give up or admit defeat.

Q 23

Photo of Steve Webb Steve Webb Shadow Secretary of State for Work and Pensions

No, I was not suggesting that we give up, but we need to know what the world would be like if it looks as if we are going to miss those targets. The first question is about how one enforces that duty. Will the Minister tell us what he envisages might happen? Suppose we get to 2017-18 and we are miles away from the target. Presumably, we will not know the 2020 numbers until 2022—I am not quite sure how that works. Who brings forward the judicial review? Who has to have the money to enforce the duty? If the measures are not working, who is going to use the stick? What is the value-added of this measure?

Mr. Timms: First, I do not envisage us getting to a position in 2016 or 2017 where we are surprised to find that we are not on track. By that stage, we will have had a number of iterations—two I think—of the strategy. We will have had regular annual reports, and the Government will be required to take every opportunity to ensure that by the time we get to 2017, we are in a position to achieve the target.

When it comes to who might take forward a judicial review, I think, at least in theory, that it could be done by a wide range of people. I suppose one could anticipate that those might include some of the effective child poverty lobbying organisations.

Photo of Steve Webb Steve Webb Shadow Secretary of State for Work and Pensions

But they would have to find the money to do that.

Mr. Timms: No doubt there would be costs but, as you know, often those costs do not prohibit action from being taken.

Q 24

Photo of Steve Webb Steve Webb Shadow Secretary of State for Work and Pensions

What about the defence that one might offer? We will come on to clause 15 more substantively in a moment, but judging by the Bill, the child poverty commission might say, “We recommend this, but after having regard to the fiscal circumstances, we are not sure that we can actually find £4 billion”, or whatever the number is by the end. The Secretary of State, having regard to the fiscal position might say, “We’d love to tackle child poverty but we haven’t got the money.” The judicial review then comes along, and the Minister stands up and says, “We would have loved to have done it, but we didn’t have the cash, and the Bill allows us to not achieve it.”

Given that it will be possible to say such things in 15 years’ time, and given that it will probably be impossible to achieve those goals if we cannot do it when the times are right—we have missed the five-year and the 10-year targets—are we not building up a whole set of excuses for 10 years’ time?

Mr. Timms: No. I take issue with a number of those points. In particular, the Bill does not say that if fiscal circumstances are difficult the target does not have to be met. The target is not qualified in the Bill and that is an important point that should be underlined.

Q 25

Mr. Timms: No. The strategy needs to be consistent with the economic realities. That is true and clearly must be the case. Any Government strategy must be consistent with the truth about the fiscal environment. It is a strength of the Bill that that point is explicit, rather than implicit or assumed. However, hitting the target in the Bill is not subject to propitious fiscal circumstances. The Bill requires those targets to be met.

Q 26

Photo of Steve Webb Steve Webb Shadow Secretary of State for Work and Pensions

What if the immovable object hits the irresistible force? What if meeting the target requires something fiscally, but the advice is that we cannot do it fiscally? What gives?

Mr. Timms: Under the Bill, a court could, in response to a judicial review, require the Government to make substantial spending commitments in order for the targets to be met. This is a strongly binding target.

Q 27

Photo of David Gauke David Gauke Shadow Minister (Treasury)

I shall follow on similar lines. I am interested in your point that the court could require the Government to make fairly substantial spending commitments. For example, it could presumably require the Government to increase child tax credits, which is perhaps unlikely, but do you envisage that as a possibility under the Bill? Is there any reason why a court could not do that?

Mr. Timms: I do not know whether, in practice, a court would want to set out the detailed policy changes that it thought were needed, although it is conceivable that it might. I suspect that it would not give instructions on quite that detailed a levy, but it certainly could require the Government to make substantial expenditure.

Q 28

Photo of David Gauke David Gauke Shadow Minister (Treasury)

I suspect that you are right that the court would send it back to the Government and ask them to think again and come up with more proposals. However, if the proposals were inadequate to meet the requirement—the likes of the IFS and the Joseph Rowntree Foundation tend to state that the only way that the Government can meet a target at a particular point is by increasing tax credits—it is presumably possible that that may happen.

Mr. Timms: There certainly could be a judicial review that in effect required the Government to spend more on tax credits or some other element of the benefit or tax credit system.

Q 29

Photo of David Gauke David Gauke Shadow Minister (Treasury)

Briefly returning to my earlier counter-factual point: if there was currently an Act enshrining the 2010 target and the Government did not intend to meet that target through an increase in child tax credits, it would presumably be possible for a child poverty  lobby to take the Government to judicial review with a view to requiring an increase in expenditure in that area.

Mr. Timms: What that means is that the Government need to plan over the next 10 years not to be in a position where they would meet a judicial review.

Q 30

Photo of David Gauke David Gauke Shadow Minister (Treasury)

In the way that the Government have not planned in the past 10 years?

Mr. Timms: As I have said, the arrangements that the Bill will put in place are significantly more demanding than those that have been in place over the past 10 years.

Q 31

Photo of David Gauke David Gauke Shadow Minister (Treasury)

May I return to the issue of the irresistible force and the immovable object? In addition to clause 15, the Government also intend to introduce a fiscal responsibility Bill making it legally binding to reduce the deficit. Who knows, maybe you and I will debate that issue sooner rather than later, Minister. If reducing the deficit is going to be legally binding and enforceable in the courts, there could be two legally binding obligations, one of which is under the Child Poverty Bill, as you have described it, requiring a considerable increase in public spending, and the other requiring a significant reduction in public spending. How would those two judiciable legal requirements work?

Mr. Timms: The Bill requires a strategy for delivering the child poverty targets that is consistent with the Government’s fiscal strategy. Both those goals need to be delivered, and the Bill requires one of them to be delivered.

Q 32

Photo of David Gauke David Gauke Shadow Minister (Treasury)

But as you have said, it is possible for the court to state, “The strategy is not working and, regardless of the fiscal strategy, the target is non-negotiable and is not qualified. This is what you need to do to meet the target: spend more money.” At the same time, however, there could be another Bill in relation to which someone could take the Government to judicial review, and the court could state, “Don’t spend more money.”

Mr. Timms: What you are rightly underlining is the nature of the targets set by the Bill, the fact that they are to be taken very seriously by the Government over the next 10 years and that there needs to be a convincing strategy to deliver them. I do not think that any Government would want the sort of train crash that you describe to occur in 10 years’ time. It therefore requires action planning now to ensure that that crash does not occur.

Q 33

Photo of David Gauke David Gauke Shadow Minister (Treasury)

But again, if we look at 2010—I am not sure I would necessarily describe it as a train crash—the Government are not meeting their objectives. They could do so by increasing expenditure on child tax credits. As you, Minister, rightly said, you are constrained by the state of the public finances. Notwithstanding your best efforts, and those of the Government over the last 10 years, we are where we are. If we are in a similar position in 2019 as we are now, what happens when the court has two Bills it is trying to enforce, one requiring additional expenditure and another potentially requiring less?

Mr. Timms: One of the central benefits of the Bill is that in 2018-19, we will be in a different position relative to the 2020 target than we are now. We would have had the Bill in place, and its obligations would have been addressed throughout the decade.

Q 34

Photo of David Gauke David Gauke Shadow Minister (Treasury)

I have one final question. Is it not the case, regardless of whatever clause 15 states, that the duty under clause 1 would be subject to a later Bill that would impose a duty of fiscal responsibility on the Government—that a subsequent Bill would trump an earlier one?

Mr. Timms: No. I do not think so. As I have said, the Bill as it stands will require a strategy to deliver the targets in clause 1, which is consistent with the wider fiscal framework. I do not think that that would be affected by the later legislation.

Q 35

Photo of David Gauke David Gauke Shadow Minister (Treasury)

Is there an intention for there to be a carve-out from the fiscal responsibility Bill for the obligations under the Child Poverty Bill?

Mr. Timms: No.

Q 36

Photo of Graham Stuart Graham Stuart Conservative, Beverley and Holderness

I think the last question goes to the heart of the matter. Minister, do you accept that it is the Government’s job to mediate between different interests and priorities of any time?

Mr. Timms: We are all doing that the whole time, yes.

Q 37

Photo of Graham Stuart Graham Stuart Conservative, Beverley and Holderness

Yet, you are taking some priorities and setting them in a statutory framework. Let us take at face value your undertakings today that a difference will be made. It will be different from when the Government promised solemnly in Parliament that they were going to halve child poverty by 2010, which they have not, and somehow putting it in legislation would not change that. But let us assume that that is true. Going forward with ever-changing priorities and obligations, you are setting up an immovable need to tackle child poverty. Is that not fundamentally wrong if you have not gone through a set of priorities and are able to show how you will not end up with savage cuts to, for instance, support for the elderly?

Mr. Timms: That depends on the degree of priority one assigns to the goal of eradicating child poverty. The Bill received an unopposed Second Reading in the House of Commons, which I interpreted as meaning that across the House, Members assign a high priority to eradicating child poverty. I think that they are right to do that, and I am pleased that there is such a degree of consensus that the area is one to which a high priority should be assigned.

Q 38

Photo of Graham Stuart Graham Stuart Conservative, Beverley and Holderness

I put to you the reasons for introducing the legislation. I know there is a genuine desire in the Government and across Parliament to eradicate child poverty; whether the Bill does it is a different matter. There are also two other, less creditable, drivers. The first is that by bringing the legislation forward, the Government create a smokescreen for their failure to deliver on their 2010 target, which was a solemn and supposedly binding one. The second is an attempt, as almost everything seems to be under this Government, to create dividing lines with the Opposition, who do not wish to be put into a position—I can say as a Back Bencher—where they appear to be less interested in eradicating child poverty than the Government.

At its heart, the legislation is fundamentally flawed for precisely the reasons that my Front-Bench colleague Mr. Gauke has just laid out. It is grossly unfair to create an expectation among those concerned with child poverty that it will be eradicated when it will not. It is also  grossly unfair on other interests, be it the elderly, the disabled or any other vulnerable group, who will be disadvantaged if the Bill has the force that you are claiming for it.

Mr. Timms: If the aim of the Bill was to create a dividing line in the way that you have described, it was a signal failure because everyone supported it. I am glad that everybody supported it, because I welcome the fact that—in contrast with the position between 1979 and 1997, when child poverty in the UK more than doubled to the highest rate in Europe—there is today a consensus to address the problem and achieve the targets set out for 2020.

On the question of 2010 and 2005, I always felt that the 2005 target—perhaps I should say the 2005 milestone, rather than target—was only missed by a whisker, though it subsequently appeared missed. The target, the overriding goal, has always been for what would be achieved by 2020. That was what Tony Blair set out in 1999. Subsequently, we said that this is how we hoped to progress towards that target, but the big prize has always been what we could achieve by 2020.

Q 39

Photo of Graham Stuart Graham Stuart Conservative, Beverley and Holderness

May I push you, though, on the other groups, because circumstances change. There could be a massive deterioration in the British economy, we could find ourselves in another war—who knows what might happen. The truth is that because of this legislation the interest of child poverty eradication will be put ahead of priorities that have not managed—for political purposes which I certainly ascribe to the Government in bringing this forward—to get themselves the same legislative support. That means that any Government will find themselves failing to make the proper balance—their fundamental duty—between different interests, because they will be guided by this legislation to favour child poverty eradication against the interests of any other vulnerable group.

Mr. Timms: I understand that argument. That is a view that could have been expressed on Second Reading. As it happened, nobody opposed the Bill on Second Reading, and I welcome very much the cross-party commitment in the House to tackling the problem of child poverty as a very high priority.

Q 40

Photo of Jamie Reed Jamie Reed Labour, Copeland

It is of course unquestionably right, morally, that the Bill should bind future Governments to the eradication of child poverty. There can be absolutely no doubt about that whatever. With the Minister’s experience in other Departments, is it not a common occurrence for Government objectives to be subjected to judicial review? Green groups take on our energy policy time and again. This is just part and parcel of ordinary government, is it not?

Mr. Timms: It certainly does happen from time to time in a number of contexts, yes. It is not something that Governments seek, but it happens.

Q 41

Photo of Judy Mallaber Judy Mallaber Labour, Amber Valley

UK child poverty strategies deal with very wide aspects of poverty. Some of those are not included in the Bill, such as crime, family breakdown and disability. Why is that?

Helen Goodman: You mentioned a long list: crime, disability and family breakdown. Your question is related to our earlier discussion about minority communities. It  is important, when we build those strategies, that they are robust and measurable. However, that does not mean that they can cover every single area of Government policy. The Bill is not a crime Bill; it is not a disability Bill; and it is not a family law Bill. Therefore, it does not seem to be sensible to include in the strategies every single thing that will ever have an impact. Indeed, not all of those things are measurable in the way that I think you would need them to be.

Q 42

Photo of Judy Mallaber Judy Mallaber Labour, Amber Valley

The child poverty commission will be responsible for advising Government on meeting the income and material deprivation targets and on the aspects of the Bill covered in the strategy. How broad will the commission’s remit be if it feels that other factors not mentioned in the Bill are critical to meeting those targets? Will it have a broad remit to advise Government as it sees fit across the board?

Helen Goodman: Yes. The commission is intended to be completely independent. The advice it gives the Government on how to achieve the targets will be published, so it will be possible for anybody to see what the commission is saying to the Secretary of State. Throughout part 2 of the Bill, on local authorities, we are linking with work on crime and disability through the local child poverty strategies, but that is different from having them as part of the building blocks. That does not mean that all sorts of things are not going on in other parts of government to improve the situation in respect of crime, disability and family breakdown.

Q 43

Photo of Judy Mallaber Judy Mallaber Labour, Amber Valley

Because, obviously, in the Bill we are talking about a broad range of issues in the strategy that could affect child poverty, which is reflected in having three Departments represented here. Will one Department have overall responsibility for making sure that those targets are met? Alternatively, how will that responsibility be shared across Departments?

Mr. Timms: It will be the Government, corporately, that will be responsible for delivering the targets. The strategy will set out which parts of Government will do which tasks, but the Government as a whole are obligated under the Bill.

Q 44

Photo of Judy Mallaber Judy Mallaber Labour, Amber Valley

This is probably an impossible question, but if targets are missed, will there be any way of assessing how much impact which of the various factors involved had in terms of us meeting or not meeting the target? How will that assessment be carried out, to guide future policy decisions?

Mr. Timms: That would be quite a difficult exercise; I hope that the occasion would not arise.

Helen Goodman: I do not think that the situation is quite as mechanistic as that. We could draw up a strategy that was a Heath Robinson machine, saying that this would produce this and that would produce that, but because there are a large number of influences on child poverty there will be a whole range of actions to address it.

May I come back to your point about family breakdown and say a little more about that? The Government are not wholly convinced that family breakdown is a cause of poverty; on the contrary, we tend to hold the view that poverty is a cause of family breakdown. We are concerned not to move into a mentality that is punitive  or that attributes completely false causal links. For example, if we look at the situation of lone parents, it is not in fact being a lone parent that causes a family to be in poverty or otherwise—the most important aspect is whether the lone parent is in work or not. The child of a lone parent in a full-time job has only a 10 per cent. chance of living in poverty, whereas one in a workless household has a 55 per cent. chance of living in poverty. The status of the family is not of itself a driver of poverty.

Q 45

Photo of Andrew Selous Andrew Selous Shadow Minister (Work and Pensions)

Following on immediately from that, Minister, is it not the case that if your parents separate you are twice as likely to grow up in poverty as a child?

Helen Goodman: The data that we have show that there is a small downward blip at the point of a family breakdown, but that over the long term the outcomes for the children are not as you described. Furthermore, what is considerably more harmful for children is living in families with high levels of conflict.

Q 46

Photo of Andrew Selous Andrew Selous Shadow Minister (Work and Pensions)

Okay. Perhaps we shall look further into the data and develop that issue later in the Bill. I am concerned that you seem to be rowing back from what your own regulatory impact assessment on the Bill says:

“family breakdown may have caused the family to fall into poverty.”

That is something that you quibble at, but it is in your own impact assessment.

Helen Goodman: Sorry. I thought that you were trying to say that the outcomes for children in families that have formed and re-formed were half as good as the outcomes for other children.

Q 47

Photo of Andrew Selous Andrew Selous Shadow Minister (Work and Pensions)

No. My first question was on the data that I have seen, which say that if you live in a family situation in which your parents have separated—classically known as a single or lone-parent family—you are twice as likely to be living in poverty as a child. We will, perhaps, go back to the data and come back to that issue. My second point was that in your answer to the hon. Member for Amber Valley you seemed to be rowing back from what is in the impact assessment:

“family breakdown may have caused the family to fall into poverty.”

I was delighted to see that in an official Government document. Most people would say that it is common sense. While I wholly accept that poverty causes families to fall apart—I am absolutely with the Minister on that—I think that it is a two-way relationship. Your impact assessment says that. I hope that you are not rowing back from it; that was what you seemed to be implying in your answer to the question put by the hon. Member for Amber Valley.

Helen Goodman: The difference between us is probably about time scales, but my colleague from the DCSF has something to add.

Dawn Primarolo: I think that it is somewhere between the two. Conflict in a family leading to break-up has a negative impact on children; I think that that is quite clear. The question is on the contribution of poverty to that break-up in the first place that needs to be taken into account. The stable relationship is crucial. When  we look at families and the relationships in them, we see that a complex set of factors is involved. I know that the hon. Gentleman has spent a long time looking at that and appreciates that as well.

It is not always possible to say that there is one direct causal relationship, but conflict and break-up can be a cause of the family moving into poverty. There were slightly different questions being asked and answered about the nature of the family unit, what is important in managing the stability of relationships within that and how that could or could not contribute to the child experiencing poverty.

Q 48

Photo of Andrew Selous Andrew Selous Shadow Minister (Work and Pensions)

Thank you for that.

May I ask the Treasury Minister why he believes that it has proved so much harder to reduce child poverty than the Government thought in 1999? I do not think that anyone doubts the Government’s commitment or effort; they announced a plan to eradicate child poverty by 2020 in 1999. The target was to reduce it by a quarter by 2005. We had the good times up to 2005 and will have more difficult times up to 2010. Why has it proved harder to reduce child poverty than the Government thought? We need to understand that if we are going to do better over the next decade.

Mr. Timms: We have actually made a lot of progress on this since 1999. On the most recent figures, the number of children below the poverty line has fallen by 500,000, and other measures already in place will increase that reduction by another 500,000. We have made very substantial headway and have learnt a lot. We have seen very large investments in public services—early years education, child care and so on—that will help us in the coming decade as well. The question slightly implies that not much has happened, but actually a huge amount has happened.

Q 49

Photo of Andrew Selous Andrew Selous Shadow Minister (Work and Pensions)

No, I will stop you there Minister. I accept that, according to the Government’s targets, there has been progress; I am not disputing that. However, to reach the 2020 target the Government themselves thought that they had to reduce child poverty by a quarter by 2005 and by half by 2010. It is generally accepted by people who study this in great detail, outside the House and across the country, that it has proved more difficult than the Government thought would be the case. If we are going to do better in the next decade, the Bill needs to focus on why we have not done as well as the Government hoped—why they set the targets for 2005 and 2010. We have had the list of achievements, which are not disputed, but why has it proved harder than was thought in 1999?

Mr. Timms: On the IFS projections we will be two thirds of the way towards the 2010 target by the end of that financial year, and there may be scope to get closer still. That is a substantial achievement. The constraints that we currently see because of the worldwide economic circumstances have impeded what we might otherwise have achieved by the end of 2010-11, but I agree that we need to learn from the experience of the past decade. Setting that target in 1999 was absolutely unprecedented—

Q 50

Photo of Andrew Selous Andrew Selous Shadow Minister (Work and Pensions)

May I stop you there? In the good times, up to 2005, we did not meet the first target to reduce child poverty by a quarter. That was before the recession, in fairly benign economic circumstances, so what went wrong then?

Mr. Timms: Actually, we got very close to meeting the 2005 milestone, and it was pretty widely expected that we would. There was a good deal of surprise when the data came out and showed that we had narrowly missed it. As far as I know, no other country in the world has set about doing the job in this way, with a target to eradicate child poverty in 20 years. I agree that we need to learn lessons from what has gone well. The Bill is part of that, ensuring that we have a more demanding set of arrangements in place over the next decade, so that we can hit the 2020 target.

Q 51

Photo of Andrew Selous Andrew Selous Shadow Minister (Work and Pensions)

You mentioned the rest of the world. Has anywhere else legislated to reduce poverty and, if so, has that been effective?

Mr. Timms: I am not aware of anywhere else that has introduced legislation. There are certainly countries where child poverty is less common than in the UK. The Bill is pioneering legislation, which is being followed with a good deal of interest around the world.

Q 52

Photo of Andrew Selous Andrew Selous Shadow Minister (Work and Pensions)

Clause 8 on the UK strategies is a central part of the Bill, and it is what Ministers will concern themselves with as soon as the Bill becomes law. I am sure that there are already draft UK strategies. Notwithstanding the progress that has been made, do Ministers accept that if we are to do better over the next decade—the Financial Secretary was good enough to admit that we do need to—we need to have a greater understanding of and to tackle the causes of child poverty in families? Is that a fair understanding of Government thinking on that point?

Mr. Timms: My colleagues might want to comment on that. I think that on the whole we do understand the causes. We need to continue to encourage parents into work, look at the barriers that people in some circumstances still face and see what we can do to overcome them. Looking back on the decisions that have been made over the past decade in respect of our investment in public services—education, early-years child care and so on—they seem to have been the right ones, in terms of us benefiting from them in the coming decade.

Helen Goodman: May I add something? I think that your earlier questions were predicated on the assumption that there is only one driver of poverty—namely, financial support for families with children. That is why you concentrated so much on the Bill’s relationship to the forecast for the public finances. However, as I am sure you know, clause 8 includes improving parental skills and employment opportunities, promoting children’s health and education outcomes, and improving the quality of housing and local area facilities and services. Those are all areas in which we have secured and can continue to secure improvements, and some of those improvements can and have been achieved without further public spending.

Q 53

Photo of Andrew Selous Andrew Selous Shadow Minister (Work and Pensions)

I accept that. My earlier questioning did not imply that I was focusing uniquely on the family. Education and worklessness have been mentioned, and we have touched on the family. I want to ask about addiction, debt and the benefit traps that mean that many people up and down the country make a rational calculation to stay on a very small amount of benefit that they view as safe and secure. The Financial Secretary to the Treasury may remember that those issues were raised by Jobcentre Plus staff at the child poverty  conference that he and I attended in Manchester a couple of weeks ago. The issue is important, because if people are going to progress there needs to be common ground on what is holding them back and on the causes that are keeping people in child poverty.

Addiction has not been mentioned, and I put it to the Ministers that when there is serious drug addiction in a family, no matter how much you increase the tax credit, it will probably not do a lot for the children. Debt and its potential impact have not been mentioned either. There are severe and specific issues aside from low income. A number of the causes universally recognised by the centre-right and centre-left of British politics are not in clause 8, and they need to be addressed if we are going to do better over the next decade. I have not heard a list, but I have a list of six: educational underachievement, worklessness, addiction, debt, family separation and benefit traps. We have heard about a couple of causes from the Ministers, but I want more on this issue.

Dawn Primarolo: You are absolutely right in noting how drug addiction and alcohol misuse in families act as a barrier to the parent getting work. The National Treatment Agency for Substance Misuse is working with local partnerships and Jobcentre Plus on employment; I would be happy to send the hon. Gentleman a note on that. They are looking at how movement into employment—I am sure that we all agree that employment is the best route out of poverty—is prevented or does not occur because of addiction. It is important that we focus the provision of services, both through Jobcentre Plus and the local partnerships, on families with children—though not exclusively on such families—and address the hon. Gentleman’s point.

The issue rests with the Department of Health but, because of the impact on children in families, it also comes under my brief, to ensure intensive support. That goes back to the hon. Gentleman’s earlier point about whether relationships are stable within the family and the consequences of that for children. Work is being undertaken and I see it as part of the employment, education and skills remit to look at drugs and alcohol, which is another area where there can be neglect, and an inability for the child to benefit from Sure Start and outreach. Specific strategies are being developed in relation to substance misuse and alcohol, which echoes another point that the hon. Gentleman made earlier. The stubbornness of some of the causes of poverty in particular families and the necessary strategies needed are clearer now.

The first five years in education are more important than the next 45 years. The investment in the early years, and the fact that that is now beginning to show progress through this year’s early years foundation stage results, show how important it is to work at that early stage. Education has a role to play in future skills and employability. The strategies on narrowing the gap and raising attainment in both primary and secondary schools have a crucial role to play in contributing to the overall strategy. They are being taken forward and are clear successes in what are still the relatively early stages. The hon. Gentleman will know that it takes quite a long time to see the effects.

Finally, I share the hon. Gentleman’s interests and concerns about the family. It is important that we understand the causes and how to support stable and positive relationships and parenting because of the  clear benefits to the child. In my view as a Minister, to put the child at the centre is to ask what are the supporting requirements to ensure that that child can flourish. I will be happy to send a copy to all Members of the Committee.

Helen Goodman: May I say something about benefit traps and debt? I do not know whether members of the Committee are aware that last week we published the tax-benefit models tables. They show progress over a long period of time. Obviously, the concern with the benefit trap is to do with cases where withdrawal rates of benefits are extremely steep as people’s paid income goes up. The number of people with a marginal deduction rate of over 90 per cent. has fallen in the past 12 years from 130,000 to 60,000. The number of people with a marginal deduction rate of 70 per cent. has fallen similarly from 740,000 to 300,000. We can see in both those cases, looking across the board, that there are now about half the number of people in benefit traps that there were when the Government came to power. That is in large measure because of the significant reforms we have made to the tax and benefit system.

We have also latterly done a number of things to address particular concerns about the uncertainty that people face when they move into work. They have a lot of anxiety about whether they will be better off. When people go to the jobcentre nowadays they get a better-off calculation done for them to enable them to understand that they will be better off. We have also introduced run-ons on tax credits and housing benefit. We have increased the earnings disregards. There has been a range of such reforms. Each in itself might not seem significant, but taken together, they have produced that halving of the number of people in the so-called benefit traps.

The hon. Gentleman also talked about debt. I am sure that he is aware of the consumer White Paper that was published in the summer. One of its proposals is to prevent unsolicited approaches by credit card companies. That is precisely the sort of thing that can drive people into a spiral of unsustainable debt. Again, we are taking action on that. There are obviously serious issues with regard to people on very low incomes. We have had a whole programme of activity over several years in conjunction with the banks and credit unions to strengthen the credit union movement. The Government established the growth fund, which has nearly £100 million in it, to which the Chancellor added a further £80 million in this year’s Budget. It means that 180,000 people have received loans on reasonable terms, who would not otherwise have been able to do so. I am talking about people probably outside the banking system and whose credit ratings are extremely low. We have the safety net of the social fund and, this year, have put an additional £263 million into it. We are extremely alert to the problems of debt and have been very active on that front.

Photo of Martin Caton Martin Caton Labour, Gower

We will come back to clause 8 in a moment, but the most recent exchanges have stimulated three members of the Committee to ask further questions.

Q 54

Photo of David Gauke David Gauke Shadow Minister (Treasury)

I shall speak very quickly about your first point, Minister, after which I shall ask my further question. You mentioned marginal deduction rates of above 90 per cent. and 70 per cent. Do you know the numbers for a rate of above 60 per cent.?

Helen Goodman: I do not have them on me at the moment.

Q 55

Photo of David Gauke David Gauke Shadow Minister (Treasury)

Until 2007, the Department for Work and Pensions published an annual “Opportunity for all” report that listed a range of indicators of progress or otherwise in dealing with factors such as living in a jobless household, teenage pregnancy, low educational attainment and erratic school attendance, school leavers not in education, employment or training, living in substandard housing or temporary accommodation, infant mortality rates, teenage smoking and obesity. Those are all similar to what we were talking about when we discussed causation, and to the points made by my hon. Friend the Member for South-West Bedfordshire. Why did the DWP stop publishing those reports? Why not include some of them under the Bill as points to be picked up as part of the strategy?

Helen Goodman: With that question, the hon. Gentleman has tested the absolute limits of my knowledge of the history of my Department. I do not know the answer, but I will find out. However, the fact that the reports are not being published in one document does not mean that the information is not available. I will find out where it is available.

Q 56

Photo of Jamie Reed Jamie Reed Labour, Copeland

If we were to look at the map of child poverty in the United Kingdom, we would see direct correlations between areas that suffered aggressive de-industrialisation during the 1980s and 1990s and pockets of severe child poverty—the most severe child poverty that we see today. There would be a lot of surprises, particularly with regard to rural areas.

I shall move on from one of the important points made by the hon. Member for South-West Bedfordshire about the barriers that are in the way. It is hard to address, from a technocratic point of view, some of the real cultural problems, not only with people who are in the benefits trap and in long-term unemployment, but with the significant numbers of people who, by contrast, do not come forward to claim what they are entitled to claim, and who, for whatever reason, will not enter the system and are falling outside the scope of the programmes that we are introducing. We do not seem to be addressing that real cultural issue when it comes to beating child poverty. How will we address it?

Helen Goodman: You are asking about two different things. I shall talk first about the regional dimension and then about the take-up problem. What you say about there being different needs in different regions is absolutely right. That is why we see local authorities as key partners in achieving the eradication of child poverty. We want local authorities to incorporate their child poverty objectives with their sustainable communities planning so that we achieve an approach that is sensitive to the different needs of different areas. Although we have not set out particular measures under the Bill, we are establishing a process that will enable us to identify the problems that you mentioned.

Not all benefits have high take-up rates, although child tax credits have a particularly high take-up rate of between 80 and 90 per cent. That is way above the 30 per cent. of the family income supplement, which was the precursor to child tax credits way back when, and part of the benefit system. The Department for Work and Pensions constantly has take-up campaigns to encourage people to avail themselves of their entitlements.  I would say that the cultural difficulties with take-up are probably greater among older members of the community than among parents with young children. We had a report done recently by Sir Trevor Chinn, which looked at how further to improve our work on take-up.

Mr. Timms: May I add a couple of points? Helen has raised the cultural issue, which is important. We have made some progress on that. At the beginning of 2008, we had 29.4 million people in work—more people in employment in the UK than we have ever had before. When I was Minister with responsibility for work, the best part of the job was meeting people who had gone into work after long periods out of work, perhaps because of a health problem. Returning to work after 10 or 18 years, they said how their lives had been transformed as a result. We have made some headway in dealing with the cultural problems, but I agree that there is more to be done.

It is interesting that in the area that I represent in east London, the mayor of Newham has introduced an employment pilot. The idea is that the local authority works intensively with the small number of people who take part. The deal is that we guarantee that if you go into a job you will be better off. If we need to, we will give you extra money to make absolutely sure that you will be better off as a result of having gone into work.

Something like 100 families have been part of the pilot. It is interesting because it has not been necessary for the council to give extra money to anyone so far. Mr. Selous made the point about the perception. That is not to say that there is no one at all who is not better off for going into work; there are people in some circumstances who are not. The incidence of that problem is much less than is widely thought and one of the things that we have to do is to explain to people and show them what the benefits of being in a job are.

Q 57

Photo of Karen Buck Karen Buck Labour, Regent's Park and Kensington North

That leads into what I was going to say, although I hate to disagree with a colleague. Important though the impact of de-industrialisation on employment was in many parts of the country, the Minister knows that the highest concentration of poverty is in London, despite the fact that overall, and notwithstanding the present situation, it is one of the healthiest labour markets in Europe. That tells us something important. It tells us that there is an issue about better-off calculations and marginal rates of deduction. It is good to hear from the Minister that a proportion of that has fallen significantly, but I think it is still very much in place.

The bigger picture, and something that has been entirely missing from what we have talked about this morning, concerns the role of employers and the world outside the state in meeting the poverty target. Is it not true that half of all children in poverty are living in families where at least one person is in work? Is it not the case that one of the most important ways we can achieve the poverty target is to deal with the problem of low pay? Some of that is to do with work incentives and tapers and so forth, but a lot of it is to do with challenging employers on the issue of low pay. We have a dilemma. Tax credits are important and valuable, but in a way they subsidise bad employment practice and low pay. Should that not be at the heart of what the Government are trying to achieve?

Mr. Timms: I very much agree with the point that you made about employers having an important role. One of the strengths of the London Child Poverty Commission  work that you were involved in, and the follow-up to that, has been a recognition of the importance of engaging employers and everyone working together to tackle the problem. It is certainly right that if we can find ways to increase people’s incomes in work, that will make a significant contribution to what we need to do. Going to employers directly about that, and the sort of living wage campaign that we have seen in London, can make a helpful contribution. Equally, we need to be able to work with people to help them progress once they are in work. That is one of the substantial benefits of the big investment that we are making in skills training at the moment—the Train to Gain programme. That will enable people who are in work to develop their skills and, over time, to increase their incomes. Your point about employers is important. As you will know, the other thing that came out strikingly from the work in London was the difficulty parents there had in finding part-time work. If we can encourage employers to provide that kind of opportunity it will help a lot, too.

Helen Goodman: To add to those points, 1.5 million children are living in families where there is somebody in work. Of those, 25 per cent. are families where one parent is working full time and 21 per cent. are those where one or both parents are working part time only. One of the conclusions we draw from this is that we need to concentrate more on what we call second-earner activity in families and attaching those people more strongly to the labour market. We have programmes in the jobcentres now for addressing specifically the needs of those workers, as well as encouraging the one parent in a family who is working to move on from part-time work to full-time work.

The minimum income guarantee, which people now have when they are in work, has increased in real terms by 30 per cent. over the last 10 years. That is very significant. As well as what Stephen has just said about encouraging employers to offer more part-time work, we have put new legal obligations on employers to offer more flexitime. Obviously that will enable more families to balance better their work and their family life and thereby encourage people to take jobs who might otherwise have felt that the barriers and the practicalities were simply too difficult.

Q 58

Photo of John Barrett John Barrett Shadow Work and Pensions Minister

I should like to return to clause 8 and getting the strategy right. I listened to what the Minister said about the preparation, and witnesses have expanded on the work that has gone into that. Clause 8 details the review of the strategy, making progress and so on. One thing it does not have is a duty to implement the strategy like that in the Disability Discrimination Act 1995. Does that give you a get-out clause, because it is just not there, or will you simply be left with a strategy that does not have to be implemented?

Mr. Timms: I do not think there is a get-out clause here, although I understand the question. In the DDA the obligation was to compile an access strategy which would be a one-off exercise that would then need to be implemented. The difference here is that the strategy will evolve and be updated every three years. Some elements of the first strategy that is published may well not get implemented because three years on it is clear that a different approach needs to be taken and some things need to be done more and other things less. That  is the big difference between those two pieces of legislation, which helps to explain the difference of approach here. The key is that the target, as we were saying earlier, is binding. So there is the strongest possible incentive for the Government and their partners to deliver a strategy that over time achieves the targets.

Q 59

Photo of John Barrett John Barrett Shadow Work and Pensions Minister

But you understand the fears that you can have continually moving targets and continually revising strategies without the problem being dealt with at the end of the day?

Mr. Timms: That is a fair point. However, the target is not going to change. It has been set, and will be applied in 2020. I imagine that there will be an evolution of the strategy because the Bill requires it to be updated after three years. The strategy will need to change as time goes on.

Q 60

Photo of Sally Keeble Sally Keeble Labour, Northampton North

I want to ask about housing. Given that the Every Child Matters report identified housing and homelessness as being key factors behind the vulnerability of children, and as being linked to unemployment and poverty, why has a higher profile not been given to such issues in the Bill?

Helen Goodman: May I answer that question? I am sure that everybody knows that good housing is one of the material deprivation standards. Regarding material deprivation standards, the point picked up on is about bedrooms for children over the age of 10. I do not know how many people on the Committee know that the bedroom standards and the legal definitions of overcrowding are different—I could describe that point in great detail, but I will not detain the Committee for too long.

I knew that the Committee was concerned about this issue, so I checked out the statistics on it this morning. I can tell the Committee that the criterion used in the child material deprivation standard is tougher than that for the legal bedroom standard. Therefore, the number of people who do not meet the material deprivation standard in this country comprises 16 per cent. of children, whereas under the statutory definition, the number of households that are overcrowded is only 2.7 per cent. Although the Bill does not include more about overcrowding and the statutory definition of housing, having checked the material deprivation standard, I think that it will turn out to be a tougher standard than would otherwise have been produced.

Q 61

Photo of Sally Keeble Sally Keeble Labour, Northampton North

That is helpful and it would be useful to have a note on that. If that standard has to be achieved through the Bill, why are housing authorities in two-tier local government areas not included as partner authorities under clause 18(b)? They are specifically excluded. My housing authority in Northampton, which I must say does appalling things to families with children, is specifically excluded as a partner authority.

Helen Goodman: That is probably because the housing associations are independent of Government.

Q 62

Photo of Sally Keeble Sally Keeble Labour, Northampton North

No, not housing associations. Sorry—it is housing authorities and district councils in areas where there is two-tier local government. District councils as housing authorities are specifically excluded. Under  Every Child Matters, the Department for Children, Schools and Families has excluded housing authorities from responsibility. There is a clause that specifically excludes housing authorities; they are not responsible authorities, they are partner authorities, yet it is those authorities that have to deliver on this overcrowding standard. I welcome any improvement to the overcrowding standard; I think it is wonderful, but it must be delivered.

Helen Goodman: But the partner authorities have a duty to co-operate with local authorities so that responsibility for chairing meetings and drafting the strategy lies with the responsible local authorities mentioned in clause 18. However, all the partner authorities set out in clause 19, which includes those district authorities, are required to co-operate in the needs assessment, the strategy and in carrying it out.

Q 63

Photo of Sally Keeble Sally Keeble Labour, Northampton North

May I come back to that issue? In fact, when I was a housing Minister, Karen Buck and I had long and turbulent discussions about mechanisms for dealing with homelessness, and the arrangements that were made between children’s services and housing services. The net result—because of legal difficulties that they are supposed to have protocols, which looked very much like what you have here—was that it does not work; it spectacularly does not work. Unless an authority has a clearly specified responsibility to do something, it will not do it. The authorities do not talk to each other. I have had endless problems with the county council and the borough council when we have talked to each other. For example, last weekend, we had a special needs couple with two children in a one-bedroom flat in disrepair, and the two authorities did not talk to each other about it. Would you look at moving housing authorities up to being responsible authorities?

Helen Goodman: Obviously, overcrowding and poor-quality housing have a huge negative impact on some families, and I am sure everyone understands that. What we need to think about as we move forward is the extent to which a change in the legal definition is the most effective way of tackling the issue. My understanding is that if we were to go down that path, it would take about 15 months to implement such change—I am not ruling it out, but it would certainly take 15 months to implement it, and then we might need to consult on that, and that could add more time. Should we not concentrate on putting more resources into tackling overcrowding and into running more pilots and experiments for dealing with the issue on the ground? I would suggest that that would bring an earlier improvement than the change to the legal definitions.

Q 64

Photo of Sally Keeble Sally Keeble Labour, Northampton North

I have one more question about two partner authorities that are not included. The first is development corporations, which are now responsible in some areas for procurement and allocation of land for housing, including social and affordable housing, which is a big issue. The second is race equality councils, given the big correlation between certain ethnic minority groups and poverty. I wonder whether thought has been given to how those two factors are delivered on.

Helen Goodman: Regional development agencies have not been included as partner authorities because the focus is on a more local level.

Photo of Sally Keeble Sally Keeble Labour, Northampton North

I mean development corporations, not RDAs. It is the ones that were set up to do all the planning and delivery. They have the planning powers and all the rest of it now.

Helen Goodman: If you look at clause 20(1)(c), you can see that we can co-operate with

“such other persons or bodies as the authority thinks fit.”

That could include race equality councils, development companies, people from the voluntary sector and whoever would be appropriate. That will vary from place to place.

Q 65

Photo of John Howell John Howell Conservative, Henley

I want to continue with the local authority theme and the duties imposed by the Bill on local authorities. The Minister will no doubt be aware of the cynicism over the indicator NI 116, which is widely seen as delivering merely a paper output. Many authorities have already chosen to unpack that and go for a range of more specific indicators that produce outcomes that are much more reflective of their own local circumstances. To what extent will the Government ensure that local authorities have the necessary flexibility and freedom to be able to match the Bill to their own circumstances?

Helen Goodman: I am afraid that I do not share Mr. Howell’s cynicism. Even before we introduced the Bill, some 45 local authorities had already chosen the indicator NI 116 as one of the 30 that they were going to prioritise and work towards. Out of the 33 London local authorities, 14 are signed up to the child poverty pledge. We have pilots in a number of local authorities. In a later sitting, we will hear from people who have been working in three of the beacon councils on child poverty strategies, so I really do not think that local authorities are negative in the way that you suggest.

I think that you were asking whether we were constraining local authorities. I do not think that that is right. We will issue guidance, but the reason for doing so is to reduce the burden on them so that they do not have to reinvent the wheel and think everything out from scratch all over again, which would be costly. We are supporting them with some small financial resources and by putting skills in through the Government offices and—I do not know how much you know about this—through their own self-management organisation, the Centre for Excellence in Outcomes, or C4EO. We are also providing them with a data tool for measuring, so I think that we give them a supportive environment and approach that will help them to progress with this work.

Q 66

Photo of John Howell John Howell Conservative, Henley

The cynicism, Minister, is coming from the local authorities themselves. The numbers you cite are small in the great scheme of things, because they have opted for measurements of child poverty alleviation that are much more reflective of their own local needs. If you look at the local needs assessment regulations—the draft regulations that accompany the Bill—I have to ask why you have chosen to impose quite a rigid standardised view and have, again, not left the flexibility to local councils and local partnerships to pursue things that are much more targeted to what they know in their own area.

Helen Goodman: We want to give local authorities the flexibility to implement measures in ways that are sensitive to local needs. Obviously those vary, and obviously  that is a proper role for local government, but at the same time we need to be sure that we expect the same standards so that we give children across the country the same opportunities, irrespective of whether they live in Durham or Buckinghamshire.

Q 67

Photo of John Howell John Howell Conservative, Henley

One of the areas in which that is, perhaps, most significant is the thrust—both from the Bill and from the regulations—that leads councils to tackle that on a geographical basis, rather than family by family. Many councils opted out of looking at that on a geographical basis—opted out of saying, “We are going to have a programme that is there for a complete area”—because that is particularly wasteful and untargeted. They have found that using a family-by-family basis, and approaching that through the education system—which knows where families in poverty really are—is a much more effective approach. My reading of both the Bill and the draft regulations suggests that you are actually pushing councils away from that sort of approach.

Helen Goodman: No, I really do not think that that is right. Just pause and think for a moment about who the partners are going to be. We want to encourage local authorities to work with the voluntary sector. We want the children’s trusts to be very much involved in that work, and they work on a family-by-family basis.

Q 68

Photo of John Howell John Howell Conservative, Henley

Lastly, what does the Bill do to bring together the voluntary sector and other partner organisations to deliver effectively and ensure that the innovation and energy is captured?

Helen Goodman: The local authorities are able to involve, as a fully-fledged partner authority, any voluntary sector organisation where those in that organisation agree that that would be appropriate. We did not think that it would be right to put the same duties that are on the statutory bodies on to the voluntary sector, because of course the whole point about the NGOs is that they want to maintain their independence. We do not want them to be driven solely by the agenda of the Government, and they do not want that either.

Mr. Timms: It is worth adding that the intention is to provide guidance about local authorities and third sector organisations working together.

Q 69

Photo of Jamie Reed Jamie Reed Labour, Copeland

Aside from the abilities of front-line professionals working in this field for local authorities throughout the country, we have some dreadful local authorities up and down this country—some absolutely rotten organisations. We all know that. Recent cases of child abuse and child murder have in many ways proven this. What confidence do you have that every local authority can deliver what is being asked of it by the Bill?

Helen Goodman: The whole purpose of giving every local authority the duties in the Bill is precisely to tackle that serious problem you raise.

Q 70

Photo of Jamie Reed Jamie Reed Labour, Copeland

I certainly hope that, in addition to the flexibilities that local authorities require to meet the specific needs in their localities, there will be some significant and effective—I almost hesitate to use this term—central control over those measurements and targets. Would that be right?

Helen Goodman: Regarding the measurements and targets themselves, yes, but with respect to the ways of working, no. We want to leave space for innovation and flexibility at the local level.

Q 71

Photo of Jamie Reed Jamie Reed Labour, Copeland

In the same way that we have discussed the potential for judicial review of existing or future Governments’ ability to meet the Bill’s requirements, what do you envisage as the power of central Government to take effective and immediate intervening steps to ensure that local authorities are doing what is required of them?

Helen Goodman: We will review the situation when we collect the information, which we are going to do on a three-yearly basis, from the local authorities. That will be the moment at which it will be possible for central Government to review how things are working in practice.

Q 72

Photo of Jamie Reed Jamie Reed Labour, Copeland

Finally, on a slightly different tack, how are the needs of children living in local authority care met under the Bill? How will local authorities meet the requirements of those children? What measurement processes will be in place to make sure that local authorities meet the needs of the children whom they have in looked-after care?

Helen Goodman: This relates to the earlier discussion about asylum-seeker, Gypsy and Traveller children. Most children in local authority care are living fostered in families—I think 70 per cent.—so they would be covered in households in the normal way. The other 30 per cent., as I said, are looked after under the obligation and statutory framework run by the children’s trusts. As I also said, we have got a whole set of objectives and measurements to improve the quality of life and outcomes for that particularly vulnerable group of children.

Photo of Martin Caton Martin Caton Labour, Gower

We have time for one last very succinct question and answer.

Q 73

Photo of Steve Webb Steve Webb Shadow Secretary of State for Work and Pensions

The child poverty commission is overseeing a Bill that the regulatory impact assessment says will cost about £400 billion over 20 years. Its budget, according to that assessment, is £190,000. It will meet four times a year and appears to have no research budget. Does it have any real teeth? Does it have the resources to do the job?

Mr. Timms: It is very important that it does. Our view of the commission is that it should have a key role in identifying barriers to hitting the targets, for example, and in advising the Government on what each of the revisions of the strategy should contain. If you look at organisations such as the Social Security Advisory Committee or the Low Pay Commission, they are organisations that one might say have fairly modest budgets in comparison with the overall spend in the area in which they are advising but, as Mr. Webb knows, they are very influential and effective organisations.

Q 74

Photo of Steve Webb Steve Webb Shadow Secretary of State for Work and Pensions

Could it have a research budget, because otherwise it is just scavenging for what is lying around? If it needs research doing, can it have the budget to get it done?  

Mr. Timms: We can certainly have a look at that. I agree with the point that it needs to have the resources to do the job that the Bill is giving it.

Photo of Martin Caton Martin Caton Labour, Gower

I am afraid that that brings us to the end of the time allotted for the Committee to ask questions of the witnesses.

Ordered, That further consideration be now adjourned.—(Mr. Mudie.)

Adjourned till this day at Four o’clock.