May I remind Members and witnesses that we are bound by the Standing Orders and the deadline agreed on Tuesday? That means that this mornings sitting must end at 10.25 am. I hope that I do not have to interrupt Members or witnesses in the middle of a sentence, but if I need to I will have to do so. We will now hear evidence from Charlotte Pickles, Edna Speed and Reverend Paul Nicolson. Welcome to our meeting at this early hour of the morning. Could you please introduce yourselves and tell us something about your organisation? Can we start with Reverend Nicolson?
Rev. Paul Nicolson: We started the Zacchaeus 2000 Trust in the 1990s as a direct result of working with very vulnerable people who could not pay their poll tax. We found that not only were they not able to pay the poll tax, but they were in trouble with rent and fines. We needed to deal with those as well. We came to the conclusion that the reason they could not pay their poll tax was that they did not have enough income. Therefore, Professor Jonathan Bradshaw and I, as directors of the Family Budget Unit, approached the Joseph Rowntree Foundation and it turned us down. I found that Lord Sainsbury had just moved into my parish, in Turville, and was calling himself Lord Sainsbury of Turville. Turville is where I had the pleasure of giving permission for the filming of The Vicar of Dibley. I was the real vicar of Dibley for seven years, which I thoroughly enjoyed. Sainsburys came up with a very substantial donation, as did Barclays, Barnardos and some private donors.
We commissioned the Family Budget Unit. We found that the unemployment benefits being taxed were already £40 below what was needed, so there was really serious poverty. We went on from there. We worked as volunteers. I spent 10 years helping people fill in their means statements for the magistrates in Wycombe magistrates court, as a McKenzie Friend.
We at last got to a point where people began to notice that we might be doing something useful and raised substantial sums of money. We now have two full-time lawyers. We have an administrator and an office courtesy of the Duke of Westminster in Ebury street. I have some embarrassment in fighting poverty with the Maserati outside the door, not to mention the Bentley. However, there is a very nice grant to help us pay the rent and it is a very convenient place. We work hands-on with the most vulnerable. We only take those below the radar; we do not take mortgage or credit card debt cases. We deal with the most poor.
Charlotte Pickles: I work for the Centre for Social Justice. We were set up in 2004 by Iain Duncan Smith. Our focus is poverty and social exclusion. We produce policy focused on addressing those things. We also have an alliance of around 200 different grassroots charities, community organisations and people working with those who live in acutely deprived communities, who face the various different challenges of living in poverty and who are excluded from the mainstream. Our focus is on tackling the causes of poverty, and how and why families and individuals end up in those situations.
Edna Speed: I am the founder and chair of an organisation called Save the Family. I have been working at very close quarters with the organisation for 34 years. It came out of my school; I was a head teacher. For my sins, I have spent all my working life in desperately deprived areas. The whole thing is rooted in the poverty of a child. The organisation provides accommodation for homeless British families with absolutely necessary services to turn those families around. We are the largest provider of homeless accommodation for families in the whole of the British isles and, as I speak, we are overwhelmed with referrals.
I would just like to point out that not one of our childrenand it is a growing groupever appear on the radar. It is not absolute poverty; it is abject poverty. I was introduced to the Bill through Theresa Mays committee. I joined it in the summer and all I can say is that I am very saddened to come in at such a late time, because after 34 years of smelling, touching, seeingday in, day outabject child poverty in this country, I believe we have a lot to contribute. Thank you for this opportunity.
Q160 1Steve Webb (Northavon) (LD): What some of us would like to do, because you have kindly provided evidence, is follow through on some of the questions you have asked relating to the Bill. I will start with Charlotte and the Centre for Social Justice. Your Dynamic Benefits report is very helpful. We are very grateful and have some interesting ideas about earnings disregards and so on. You have a set of proposals that cost £2 billion or £3 billion but your argument is that over the long term you will get that money back, as 600,000 people will find jobs because you have removed barriers to work. That is my understanding. Can you clarify for us whether your model says that there would be 600,000 more jobs for those people to go into, or would those 600,000 people take jobs that other people would otherwise have had? Have you costed in the benefits that you would then have to pay to those 600,000 who would not be in work?
Charlotte Pickles: The report is not a report on job creation, if that is what you mean. It is about removing the barriers for people who are not moving into work at the moment. Obviously, we are in a recession and there are limited jobs available, but we will come out of that. The recommendations in Dynamic Benefits are focused on us coming out of the recession, and the people who are currently workless will be able to move from that position. Our focus is on getting workless households into paid employment. Our Breakthrough Britain report on economic dependency and worklessness made recommendations around welfare to work programmes and how you can additionally provide support and ensure that those people moving into work are sustained in work.
So in terms of the Committee assessing the value of the proposalswe could all spend £2 billion or £3 billion making the benefits system bettercan I just be clear that the assumption that you get that money back takes no account of the fact that the people you think would be able to get into work would displace another set of people to whom you then pay benefit? Have you allowed for that in your costings?
Charlotte Pickles: I am not aware of that being in the costings. Although we are currently in a recession, we know that over the past decade there have been around 5.4 million people completely out of work and dependent on benefits in a boom time when jobs were available. Our point is that we are going to come out of the recession and there will be jobs available. At the moment we have a lot of people who are not necessarily British workers taking jobs. Removing some of the barriers and supporting people who perhaps have not been in work for a very long time, which is often the case, will not only provide better lives for those families, and indeed the children who live in such families, but be much better for Britain. Our costings are probably somewhat conservative in taking into account all the different savings that could accrue down the linefor instance, the benefit of having someone moving into work.
I have just one other question. One of your arguments for your scheme is that it is much simpler than what currently goes on, and you argue that you take the Inland Revenue out of the assessment process. You also propose delivering the benefits that you have invented through the pay packet, through a tax code-type thing. A big problem with tax and benefit reform is that you have benefits based on households and taxes based on individuals. If you have a couple where both partners are working and one gets the households tax credits, how would you keep tabs on both partners? If I were the higher earner, my spouses tax credits would have to be cut through their pay packet. How would the administration of that work?
Although you did not work on this particular paper, is the reason that you did not include the idea of a static supply of jobs, that we are part of the European Union? There were jobs that sucked in foreign workers, for instance, because of the benefit blocks that disincentivise people here who would like to work and to get out of poverty but find that doing so is not to the economic benefit of their family.
Charlotte Pickles: Yes, that is very much the case. We looked in great detail at both the participation and marginal tax rates and the huge disincentive that that provides, particularly for those who are completely workless. Once you have added on the cost of travel and losing free school meals and other such passported benefits, in some cases you can be worse off moving into work than being on benefits. If we do not tackle those disincentives, we will not be able to move people into work. As I said, we know there are social benefits for adults and children living in a working household as opposed to a workless one.
You mentioned, Reverend Nicolson, some very close, first-hand examples of people living in poverty. We talk about legislation here. Do you think that that will be effective as a way of tackling poverty? Are there not really issues like jobs, education and other issues? Could you give us your thoughts on how legislation might deliver? Out there, those who are actually in poverty, do you think that they believe that legislation is the answer, or is it something else? Could I ask you to speak from your own experience?
Rev. Paul Nicolson: First of all, I shall make a comment on what has been said. We have read that report and, broadly speaking, welcome it. I think that there are specific things in it that will be extremely valuable: increasing disregards, reducing the rate of withdrawal, abolishing the couple penalty and, indeed, having one place where claimants can get all benefits, which was being said by the local authorities yesterday. All these steps forward would be very good things.
We are not so sure about the suggestions about two benefits; we think that needs a lot more examination. We are very pleased that at least an attempt has been made to calculate the savings, because we asked the Treasury if it could tell us what estimate had been made of savings from reducing child or any other poverty and it said that it did not do that. However, the Joseph Rowntree Foundation has, and it is £25 billion, but it does not include adults of working age or pensioners. Savings have been calculated at £25 billion, which includes £17 billion in costs. To have that sort of figure available does help the publicity, partly answering your question.
I think that there are two poverty thresholds. There is the 60 per cent. of the median poverty threshold and there is the level of statutory minimum incomes. Unless the policy increases the level of statutory minimum incomes, be they unemployment benefits, the national minimum wage or the state pension, the policy is not going to succeed. We know perfectly well that all the unemployment benefits are below the Governments poverty threshold and that when people go into work on the national minimum wage without holiday pay or sick pay they are still very much in povertyit will depend so much on how the local authorities manage the housing and council tax benefit transfer from one to the other. We know that such people are in poverty because of our experience with the living wage.
I have been overtaken by megalomania since I retired. I am also trustee of the Family Budget Unit, so I have had great joy in standing outside KPMG and yelling at the top of my voice, Low Pay, with 200 cleaners replying vehemently, No way. We go in and see the management of KPMG, who say, Look here, we are very embarrassed, but not by your shouting. We have been telling our employees that were one of the best employers in the world and you have told us that we are not. KPMG helped us by making the business case for the living wage, and we are very glad to see that it has now been taken on by the Department for Children, Schools and Families. We cannot begin to understand why the cleaners in every other Department are not also receiving it. Indeed, we have an amendment suggesting that all local authorities should support it, just as the Mayors of London have, because it was Ken Livingstone who required the GLA to calculate the level of the living wage by using the research that we used and raised the money for in the 1990supdated, and triangulated with national statistics. It comes out now as £7.60, including the use of tax credits and all other benefits. You have to be over £10 to get in the blissful area of work where you are actually out of the benefit system, which would be the goal of everyone who has ever been on a benefit.
There is a huge difference between £7.60 and £5.80. It means that anyone on the national minimum wage without holiday pay or sick pay is suffering. As I said, my answer to your question is that unless you raise the statutory minimum incomesin work, out of work and on pensionsthis target is not going to be met.
Edna Speed: First, I would like to say that the name of the Bill is not right. No child is in povertyit is the family who are in poverty. That starts the whole focus. It is not a child in isolation. Whatever model of family life we have today, it is the whole family. That should focus into the reality of poverty.
I have had problems with legislation down the years because, and I have repeated this over and over, I believe that among the people who write our Bills there is a large perception and not reality. May I repeat that pleaseperception and not reality. Hence the Bill is so restrictive and restricted. We have only talked today about money: benefits, salaries and levels. That is very important. There has to be a level of money coming into a home. However, sooner or later and hopefully through Bills such as this, we will have to face the fact that that is not the only problem.
We have a growing number on benefits. Many of those who are on benefits because of the recession do not want to be on those benefits. Hence lifting them out of that is important. I am not an academic. I am a practitioner. I am with people. I believe we need to look more closely at the roots of poverty. I believe that there is soil that has never been properly analysed and then brought back to Committee and looked at. I am concerned because as I sit here today, I know that thousands and thousands of children are in poverty. That is my campaign. My drive is to lift them out of it.
I urge you, if you would like to liaise with us, to meet with me and I will talk you through my concern about the constriction of the Bill. It is not broad enough. It has gone in on one level and I would love not just to pull it apartI know it is too late and I know there is a deadlinebut to see whether other things can be inserted into it that would give a much broader look. I would say that today we are setting the scene for the future. It could be that someone is back in this room in 10 years time and my words have come true. I do not want that to happen, but I believe that the Bill itself is too restricted and constrictive.
Charlotte Pickles: I would echo what has been said. Obviously we need to look at the income levels and whether they are sufficient. In our report we chose not to look at that specifically. I would certainly support that. Just to pick up on Ednas comments, our raison dĂŞtre at the CSJ is to look at the causes of poverty and it is vital that we do not solely look at income as the issue around child poverty. For example, we know that 1 million children live with alcohol-addicted parents and a further 350,000 children have drug-addicted parents. Giving more money to either of those categories is not going to bring that child out of poverty. In addition we know that it will take a great deal more than simply focusing on increasing benefits to break the cycle of inter-generational poverty.
Our fear about the Bill is that because it has these specific income or material deprivation-related targets and very little else it will skew the policy process towards increasing benefits. We know that increasing benefit dependency does not break the cycle of inter-generational poverty. Indeed a child who grows up in a benefit-dependent household is much more likely to be benefit dependent in their adulthood and so will their children be and so it will carry on. It is important that we look at much wider things such as family circumstances, emotional and psychological poverty, relational poverty and poverty of aspirations.
A study done in Canada showed that even if you eliminated child poverty, you would see only a 10 per cent. reduction in the behavioural and academic difficulties of the children involved in the study. If you cannot get that right, then those children will grow up and most likely live in poverty and have dysfunctional family units when they are older.
Can I pick you up on something? I think everyone on the Committee agrees that there is deep, multiple deprivation that we have to tackle through different Government Departments. You just said that increasing wages, benefit or whatever would not lift people out of poverty. That is not right, is it?
Okay, but I think it is important for the record that it is clear that the definition of poverty families being on 60 per cent. or below of median income; we accept that it is only part of the whole storyis addressed by tackling income. It would be extremely unfortunate, and I hope you would agree, if we imply that dealing with the issue of income would not help us to tackle poverty, because I think it would.
Charlotte Pickles: Of course. I started my comments by endorsing what the Reverend said about needing to address sheer income levels. Of course we do. Our argument at the CSJ is that you can do that but it is not necessarily going to help that childs outcomes in later life. If our sole purpose is to raise someone above that 60 per cent. median income threshold, giving them more money will do that. Do I think it will necessarily make them better at school and more engaged? Do I think they will be more relationally able? Do I think they will be emotionally and psychologically more stable? Do I think they will be able to create a stronger family life themselves? Do I think they will get into work by doing so? No. I do agree that, of course, you need to address income levels but that cannot be the sole thing. Unfortunately, the Bill is framed in such a way that we feel that the point of looking at a wider perspective may be lost.
Those statements slot quite neatly into the area that I wanted to probe as well, which is to get our witnesses views on the extent to which the Bill gets the balance right or wrong between alleviating symptoms and dealing with causesexactly the area that you have been talking about. I wonder whether you share a concern that the Bill as currently written may not drive policy in a sensible direction. Edna, you said earlier that it is too late. It is not. We have next week to try to amend the Bill, then it goes through the Commons and the Lords, notwithstanding the electoral arithmetic. So, all these comments can be taken into account and Members can consider them when they vote.
My question is, what are your thoughts on how we should change the Bill so that we actually have to track progress on dealing with the causes of poverty, some of which you have already mentioned? I do not know whether you have any specific proposals. The Joseph Rowntree Foundation produces a report card with 56 different indicators of poverty, some of which the Government have made good progress on, others of which are steady, others of which have got worse. The Department used to produce such a report card up to 2007 and then slightly bizarrely stopped. Do you think a report card like that would be helpful in driving policy in a more sensible direction?
Edna Speed: I am comforted that it is not too late. I have travelled down from the north-west and I am glad to hear that. As an organisation, we work not just in the limited field of homelessness. We work across the very broken and divided communities, deep in the heart. I visit them three times a week with all kinds of aid, from bedding to tins to childrens clothes. I believe that there has to be a deeper look at those causes. If there has been a deeper look, maybe what has been deduced is not balanced because out of it has come only money. I absolutely endorse what Charlotte said. There are growing bands in this country where children will not benefit by more benefits. I will prove that to you if you want.
Edna Speed: It is not linked to just drug addiction and alcoholismit is deeper than that. It is generational, and it is a whole culture of thinking. When you have benefit handouts, there is something about that money that isnt quite like the earned money. This is why I am all for getting people into jobs. There is the idea of live for today, of Ive got the benefit, I can have what I want, and then the benefits gone and the rest of the fortnight is spent in severe poverty. It is almost an educative programme that we have to do. I do not like the word programme because programmes have failed. Take Sure Start. Sure Start never came on the radar for our families. If you said Sure Start to them theyd say, Sure what? They wouldnt have a clue. In those Sure Start programmes there was budgeting and child care, but they didnt access themthey didnt even relate to them.
We need to be very creative in our thinking, and that is what we have done in Save the Family. We are off the wall, if you like, at times, but we find ways forward and we engage with them. Hence, we are probably the most successful: 86 per cent. of our families are turned round for ever. They go into jobs and university, and live in community. Please look at us. We would love somebody to come and research us. Can we be a pilot project? We have been going for 34 years. We are there. Weve other sites to go to.
I feel this very strongly, and ask you to listen, whether or not you agree with me. I am coming from the deep dark pain of the poverty of children, the poverty of not having the shoes or the uniform and not having enough to eat, but also the poverty of experience. If you will bear with me today, my drive in the last years of this work is to be able to relate the realities to people, and I will go anywhere and everywhere. I am not political on any front. I thank the Centre for Social Justice for putting us on the radar, but we are not political. I just want to tell you that this Bill does not address the deep roots. You can bring in money, I am all for that leveldont ever think Im notbut there is going to be a widening, and a bigger margin or group than you will ever know. Those children will not benefit, and I am saying that from experience. I can give you statistics and examples. I could walk my families in today. Along with jobs and with getting them into training, it is a much bigger, more educative programme that is needed, lifting them up. In this third generation, there is no idea of work and their own expectations are at such a low level.
One of the big drives that weve got in Save the Family, is Every mother, every father, youre gonna make it. In this country today there are two sides to this. There is the extraordinary weight of families on benefits and the awful social problems, with the support of the courts and the probation service and all that we have, but on the other side is the loss of that potential, which hurts me deeply. There are people in university today
Rev. Paul Nicolson: I agree with everything that has been said. I do want it to be understood that I think there is a very serious problem that cannot be dealt with only through money. But I do not want the necessity of having enough income to go by default. When you look at the situation of single adults, of women aged anything from 18, on £50.95 a week unemployment benefit, and when you look at the Joseph Rowntree Foundation research into what is required to buy an adequate diet£45 a weekthere isnt much left to buy anything else. Food is constantly competing with heating, lighting and debtseverything but rent and council taxand there is a desperate need for social fund loans.
For 10 years, I helped people to fill in their means statements at the magistrates court. They came into court with no money to pay their fine. The reason was that the jobcentre had stopped their benefit because they did not go to one interviewthat was usually the reason; they did not have the money because it was stopped altogether. When they got the money back, they had the £60 loan they had been given by the social services to be paid off at £10 a week, and £5 to pay off the fine. So from £50, they were down to £35. You cannot live on that. So what do you do? You complain about the rise in the level of crime and see all the young people in prison. You have to take a look at this very much from a point of view of minimum income standards.
The Joseph Rowntree Foundations minimum income standard for a single adult is £144 a week. That includes a lot of things that you, as a Government, might not want to select for benefits. But my goodness, it gives you the necessary information if you are going to select benefits from the necessary research on the ground. I am very glad that you will be interviewing Donald Hirsch this afternoon, who will give you the methodology on that, which is very thorough. We had a slightly different methodology, but we are doing exactly the same thingthe £1,000 that I raised in 1998to get the job done. We found that the benefit was £40 a week below what was needed. Now it is much more below that particular level of minimum income standard. We are keen that minimum income standards will come on to the scene.
Can I stop you there? What you said was very useful; thank you very much for that. In America, as far as I am aware, there are poverty standards based along the lines that you are talking about, on what a nutritious diet costs for a family and multiply that for different levels of family. I think they worked out that families spend a third of their income on food, so they multiplied it by three to get levels of income on which they judged people in poverty. Is that the type of idea that you are talking about?
Rev. Paul Nicolson: Absolutely. Indeed, it is all there. I spelt it out in our submission to the Committeeit is all there. What we do not do in this country, which is done in the Nordic countries, inevitably, but also in France, Germany, Australia, New Zealand and the United Statesvarious states in the US have ways of doing itis to research the adequacy of statutory minimum incomes.
Rev. Paul Nicolson: No. As you have in the Bill, you have to take account of economic circumstances. I am saying that you have a target of income for healthy living for the unemployed, the employed and pensioners. It is right across all three. We do not have it in this country, and I think it is profoundly dangerous to leave unemployed youngsters on a benefit of £50.95 a week. When I was doing my stint in court, they literally came in with no money, and you can guess what they were doing to get the money. You can carry drugs from A to B for £50 a time. I actually dealt with a case of that. The person did not have any money, so a friend of his said, Well, you can take this parcel from A to B for £50 a time. If you do that four times a week, why will you need benefits at all? Why will you need a job? When I told the police about this, and said to them that that was what I met with when I was doing this work, they said, Yes, you are right. It always escalates, because he then goes on to actually take the drugs.
All economists talk frequently about the moral hazard of having a benefit too high because people will never take work. What is never looked at is the moral hazard of having it too low. The consequences of that are profoundly serious. Having full prisons is a start.
What Reverend Paul Nicolson says about the importance of young women eating healthily is extremely important. That is one of the reasons why we introduced the Sure Start maternity grant and the health in pregnancy grant this year. I would like to ask Charlotte a question. You said that money spent on benefits for families where there is drug and alcohol addiction probably would not benefit children. Do you suggest that those families should have lower benefits, or that any increases in benefits for all families should not go to those families?
Charlotte Pickles: Absolutely not. That was in no way what I said just then. I said that by raising benefits, you are not going to pull that child out of poverty. We have an entire report that makes numerous recommendations about how you could get people off an addiction to drugs or alcohol. We are saying that the priority in that situation has to be first ensuring that that child is living in a safe family environment, which is unlikely if a parent is addicted to drugs or alcohol, and secondly that you need to get the parent off drugs and alcohol. I do not think that in any way the solution is found by saying, Lets take away money, but rather by saying, Lets have a proper, real, meaningful intervention, which is going to transform lives, rather than creating dependency and relying on maintenance.
Of course its true that people who are addicted to drugs and alcohol need help to get off their addiction. Of course they need care from the health services. However, we are talking about a Bill about child poverty. There are services delivered by the local authorities and the NHS to deal with those problems, but I do not quite understand what relevance that has to your comments on the Child Poverty Bill.
Charlotte Pickles: If you have a child living in poverty, and you are focusing the Child Poverty Bill solely on income targets, there is the danger that by skewing a policy response towards increasing benefits to pull that childor, as Edna said, that family, which is as it should beover the poverty threshold, you are not improving that childs life in any way, shape or form. They are still living in a household that is likely to be chaotic. I also refute the fact that at the moment we have sufficient, or even nearly adequate, services for tackling addiction. Our polling of addicts who say that they want to come off drugs and not be maintained in their addiction shows that we need a different approach to addiction.
I completely take your point that this is about child poverty. It comes back to Mr. Selous question earlier, which I did not get a chance to respond to. I will take a moment now to do so. If your targets are solely focused on income, and not on other issues around poverty, you are not measuring what is necessarily going to bring that child out of poverty. If you had a wider range of indicatorsI am sure that the JRF is a great place to startyou could be tackling child poverty by supporting that family, by taking parents off drug addiction, by strengthening family units, by giving support to parents to improve parenting skills, and all those other things, which are very interrelated to child poverty. It is not just about income.
I want to point out that you have said again, in that extremely long answer, that a child in an addicted family would not benefit from increases in benefits. I think that you should look at the record after this session to see precisely what you have said. That is exactly what you have said.
Charlotte Pickles: Can I come back on that? I would also like to say that I dont think my answer was particularly long in comparison with those of other members of this panel. I would like to respond by saying that we at the Centre for Social Justice are in no way saying that income levels or material deprivation are not important. As you will have seen in my paragraph submission to the Committee, we fully support the desire and the drive to tackle child poverty, and we fully support the targets, which are being put on a statutory footing. We do not think that tackling income alone is going to provide the outcomes that Im sure everybody here wants to seeto improve the lives and outcomes for children. I would like to make it very clear that we are not saying that you should not tackle income; we are saying that you are not going to get the results by tackling income alone.
Rev. Paul Nicolson: I just want to comment on the question of poor maternal nutrition and the fact that the Government have, rightly, introduced various payments from 25 weeks onwards. I sent a letter to Jim Knight saying that I thought he ought to look at the problem of benefits for 18 to 25-year-olds being £50.95 and food costing £43 a week, and women conceiving on that. It is about conceiving; 25 weeks into pregnancy is far too late, it ought to be earlierbefore they conceive. Indeed, the research by Michael Crawford says that you have to have enough income from puberty, so £43 out of £50 is constantly reduced if they are going to remain within the law. That has another serious consequence. That letter was sent to the Department of Health. I rather fear that because it is nutrition, it is not being coupled with income matters. It is vital that it is coupled with income. It took four months to get a reply, which said that it had been sent to a Committee.
With your permission, Chairman, I will spell this out: I have been over, since 1970, endless investigations into inequalities and health, all of which mentioned the need to examine poor maternal nutrition and low birth weight, which have consequences for ill health and particularly mental health. We now have a mental health bill in the NHS of £76 billion a yearmore than cancer and heart disease put together, and far more than obesity, which all the concentration is on. That figure was announced by Dr. Jo Nurse, head of mental health services in the NHS and was calculated by the Kings Fund. That is hugely serious.
One of our amendments is about making savings from reducing poverty. If you feed women properly when they are conceiving and holding babies, you will make a very big difference for the rest of those babies lives. I do not think that it is being done and I think that is the result of two parties failing to tackle it for many decades. I am not blaming one party or the other.
You have all welcomed the Bill, but do any of you fear that it could prove counter-productive, for instance due to a misallocation of resources? If in a constrained financial situation a Government felt the need to meet the income levels, they would fail to allocate resources when they might more properly have been spent on other support services.
Edna Speed: Could I answer that in a strange way? I shall make it very brief, I promise. I want to flip back to the discussion about whether benefits will lift children out of poverty. Again, I am all for a good level of any income at all. However, this is just a little snapshot into our action research work. A move away from alcoholism and addiction is an absolute nightmare at times. The most important sessions that we run are on budgeting and meal planning. The most important are children, budgeting and meal planning. Two people who have no addictions at all have not coped on any amount of benefit or other ways of getting money. This is vital to the Bill. I will say it again: the budgeting, the way of looking, the way of feeding and of caring for children is vital.
That is not in this Bill and that is my point: could the Bill, as it stands, be counter-productive and in what ways? What do we need to change to ensure that it is not like that?
Charlotte Pickles: I am not sure whether it is counter-productive or not. It depends on what the UK strategy that it mentions actually contains to tackle child poverty. But, as I have already said, we at CSJ would certainly say that there is a danger of it being skewed towards simply increased benefit payments when actually, at this stage, it would be greatly beneficial to invest in things such as early intervention programmes, development, families, ensuring that we have good schools and so on. Those sorts of things would have a much better long-term sustaining impact that would break the inter-generational cycle of child poverty.
Rev. Paul Nicolson: I think that the benefit system is inadequate. I start there. It is too low and it is not providing for healthy living. Of course, I accept everything that has been said by my colleagues. There are hundreds of other things that can be done. I note that there are amendments in relation to housing. Overcrowded housing is a major problem; there are a million children in overcrowded housing. If you are going to have a Child Poverty Bill, you have really got to tackle housing. There has not been a proper housing policyapart from saying that as many people as possible should own their housesthat has tackled the real problem of inadequate housing for a large number of families for about 30 or 40 years. That, I think, is a major issue and I am glad to see that Sally Keeble has put it in the Bill. I hope that you will let it through.
We seem to be partly in an argument about whether it is a lack of income that leads to other problems. While accepting some of the very difficult families in multiple deprivation that we have been talking about, I see a large number of families in my constituency who have been helped solely because they have been given more income. Could you all comment on whether it is the case that for a substantial number of people, just having more income would resolve their other problems? Secondly, to what extent do you think it would be sensible to put more and more targets within one Bill, as is being suggested by adding yet more areas to different clauses?
Edna Speed: It is definitely right that there will be a group that will be helped that does not have those multiple problems. I feel that the Bill is incomplete, because it does not take into account a lot of social, mitigating factors. That will almost not lift children out of poverty. Whether we agree with it or not, those are the facts today. I want to point out that that group is growing as we sit here. I think that because this is a long-term Bill, it has to be right not only for 2009, but also right down the years. If the trend is going to continue and not be addressed, the Bill will be more incomplete than we already know it is.
Rev. Paul Nicolson: I think that income is absolutely central. It is not just income; it is the way in which the benefits system is so inefficient sometimes. People get housing and council tax benefit arrears that are really the result of confusion between the four different departments that deliver unemployment benefits. A rationalisation of the benefits system would help an awful lot of people. People inevitably go into debt because their incomes are far too low.
We constantly battle against Provident plc, which will charge £200 for a £400 loan. That is horrendous and done under pressure. I am currently having an argument with the Financial Ombudsman Service about that, and I only heard yesterday that I have won. In other words, a woman who was lent a loan under extreme circumstances for a fine that she could not pay has paid off some of it, but she will not have to pay off the rest. The complications of being poor are huge, so income is absolutely essential. I stick by that. We commissioned the Family Budget Unit. It was one of the first things we did when we discovered that there was no adequacy research by the Government. They do not do adequacy research before they set the level of statutory minimum incomes in work, out of work or for pensions.
The Family Budget Unit reported in 1998 that for a family of two children and two adults £40 a week was below what they needed, and that the poll tax was being taken out of unemployment benefits. The situation is very serious. We are nothing like as well off as those European countries with minimum incomes that are better than ours. You would never find £50 a week unemployment benefits in Europe after rent and council tax.
Apologies to you, Mr. Caton, members of the Committee and witnesses for being late for the hearing. My comments should perhaps be understood in the context of that apology. Although I have been very encouraged by some of what I have heard this morning, I am disturbed by what seems to be the false notion that the one and only method by which this country is dealing with child poverty is the Bill. A lot of the conversation and comments are that, in the policy fields of housing, health, education, early intervention, free school meals, working family tax credit, child trust funds and efforts to address market failure in English regions are somehow irrelevant and divorced from the Bill. Would you like all those other different strands of policy that address child poverty and poverty in the round in this country to be included in the Bill?
Edna Speed: Yes, certainly. I dont think that there is a safe and effective way forward without that. You just mentioned school dinners. I was head teacher of a school for 15 years and I never had one child who did not have free dinners. The take-up was 100 per cent. the whole time that I was there. I have great practical knowledge. We cannot isolate. The big problemwe have seen it throughout the countryis that we do not work together. However much we talk about it, there is no cohesion, hence the disasters.
Save the Family is a catalyst for cohesion. We take the holistic approach. Instead of children going into care, and mothers and fathers being on the streets, there is an either/or. I said to the Barnardos man, You havent got to leave a child in an extreme difficult situation or put them into care. Theres got to be in this day and age of clever thinking an either/orand we are the either/or. We take the whole family and we put them into care.
Charlotte Pickles: Judy Mallaber clearly mentioned too many targets and of course, we do not want too many targets. Equally, we do not want a Bill that is skewed entirely towards income, which is our point. Yes, you are entirely right: you have to recognise that tackling child poverty is a much broader issue than income. If our four targets are directly linked simply to income and material deprivation, it will prove to be a massive problem.
Rev. Paul Nicolson: In 1991, the Winterton Commons Select Committee on maternity services requested action on low birth rate and inequalities of health. One of the proposals was the adequate income on which to be pregnant, but it disappeared. It has not happened since then. There is a lot to be done that would prevent some of things that you have suggested from going wrong. As I read it, the Bill is about income. That is important. It should be about income. I should like to see it more closely related to the research of the Joseph Rowntree Foundation, speakers from which you will talk to this afternoon and to which I shall listen. I am glad that it picked up from where we took matters in the 1990s and updated them for London citizens. I hope that London Citizens and the Greater London assemblythe living wage for London is backed by Boris Johnsonwill now pick up from the Joseph Rowntree Foundation.
On Tuesday afternoon, we took evidence from some other voluntary sector groups, including Gingerbread, which is the lone parents organisation. I am going to ask you the same question that I asked them: do you think that family breakdown is a significant cause of child poverty?
May I ask a follow-up question about that? Taking your perspective together with Reverend Paul Nicolsons, if you think that that is a crucial moment when families fall into poverty, do you think that the state should provide extra support at the moment that families separate? Should there be a divorce grant?
Edna Speed: I would just push it back a little. I think that the support should be there before it happens. I think the indicators that it is happening should be flagged, and very relevantIll say itcreative intervention should take place. It could, and I believe would, help with real support to those young adults.
Charlotte Pickles: Family breakdown is both a cause and a consequence of poverty, but I think that it is probably a significant cause of child poverty. You asked whether we should give more money to people at the point of separationyou said divorce, but a lot of the families never marry in the first place. I find that very interesting because that is simply saying that we accept that all those families are going to break down so we should just pick up the pieces. That is one of the greatest challenges we have had with current policy, or policy over the past couple of decades, which has not focused on prevention.
I think that what we should be doing is investing a great deal more. I do not mean just money, although Reverend Paul Nicolson obviously mentioned a couple penalty, which would be a great place to start in terms of trying to take away one of the disincentives to being in a stable two-parent family. We need to invest much more in early intervention, parenting programmes and in strengthening couple relationships. If we do that, we would probably find that it has a great impact on child poverty.
I was not saying that that was my view; I was just trying to explore the logic of the witnesses position. Picking up on the issue of parents, do you not think that clause 8(5)(a) on the development of the skills of the parents surely covers skills that go beyond work skills? Does it not cover life skills? Is that not what it addresses?
Charlotte Pickles: I welcome that clause on UK strategies. I mentioned earlier that it obviously depends on what comes of it. Perhaps this is me not understanding entirely how Bills work, but subsection (5)(a) mentions
the promotion and facilitation of the employment of parents or of the development of the skills of parents.
Linking employment and skills comes across to me as meaning developing skills in terms of employment. If that means developing skills in terms of pure parenting skillsattachment theory, relational competence and so onit is absolutely wonderful. It is not a target and whether it will be done remains to be seen, but we certainly think that supporting parents to be good parents is absolutely necessary.
Rev. Paul Nicolson: I think that family breakdown has a multitude of causes right across society. I am sure that, again, lack of income and debt contribute to family breakdown right across society. I would suggest that the sad part is that you are better off separated than together if you are on benefits. That is a serious situation and adds to the stress. It is stress that causes family breakdown. The poverty of being on benefit is very serious. The stress of low pay is very serious. Low pay is very, very low in some instances. There are multiple causes of breakdown. Income is certainly one of them. Debt is certainly another. Drugs would be another. I would not want to pin it down quite as hard as you have, but I think it is a contributory cause.
Just a quick follow on. The Minister directed us to clause 8(5) which mentions some vitally important areas: health, education, social services, housing, the built environment, the promotion of social inclusion and the promotion and facilitation of employment of parents in the development of skills. I recognise all of those. Would our witnesses think it would be helpful to have something explicit in the Bill that just talks about the importance of trying to strengthen family stability? I absolutely accept Mr. Nicholsons statement that it is poverty and debt that often drives family breakdown, but it works the other way. As the impact statement says, family breakdown can also cause poverty.
Edna Speed: I think, if I can phrase it another way, there should be an emphasis on the culture of poverty. That might sound awful to people, but there is a culture of poverty. There is no aspiration to ever get out of it. I advocate today that it is that root level. I go on about this: the culture is in the soil. Unless we analyse what that is, I do not think that you, ladies and gentlemen, will get your desired ends. You will miss them. I cannot emphasise the culture enough. That covers the multiple problems of poverty. They are complex. Yes you can list them. Yes you can pull them out. But they are inside a culture and I believe that definitely needs to be in the Bill in a central place.
Rev. Paul Nicolson: There are complex reasons the whole way up and down the scale, but I do think that money causes breakdown. When you are on a very low incomeand totally inadequate income by the way, because all unemployment benefits are below the Governments poverty threshold and very far below if you are single or adult with no childrenthe pressure of finance is one of the reasons for breakdown. Single mothers get rather a bad deal publicly. They need all the help and support they can get. They are astonishing. They do amazing things. I am looking after a single mother with eight children
Two of our witnesses have expressed concern about the emphasis on income in the Bill. Which of the four targets in the Billrelative low income, material deprivation combined with low income, absolute low income and persistent povertydo our witnesses think the focus should be on as part of the Governments strategy to tackle child poverty? Which is the most important?
Rev. Paul Nicolson: I think the matter is enormously complex, which wont be easily understood by the public. I hope you have all received and read our submission. We commissioned the Family Budget Unit to do work back in 1998. I am glad to see that you are talking to Loughborough university, but the Joseph Rowntree Foundation commissioned a more recent report, and I have quoted it in our submission. I think we have to addin a manner that is totally discretionary on Government, so you are not compelled to do it and cannot be taken to judicial review if you donta clause in the Bill that will require you to have regard to minimum income standards. Its done in the Nordic countries, Germany and France, in parts of America, in Australia and New Zealand. It is a very valuable tool and it gives a guide to what is going to keep people healthy in the way of income.
Rev. Paul Nicolson: It should be decided against the evidence on what are necessities, plus what is good for well-being. There is a wonderful amendment that would bring the issue of well-being into the Welfare Reform Bill, which I am terribly pleased to see. I am going to listen to those proceedings in the House of Lords. You want to look at the market and see the quantities and prices of the minimum income standard. That is what minimum income standards do; thats what I hope Donald Hirsch will explain to you. If you consider the market, and the Government take a look at the adequacy report before they set the level of statutory minimum incomes, you will be doing the poor a great service. At the moment there is no connection with reality; it is all based on statistics.
Reverend Paul Nicolson said, with regard to the minimum income standards, that the matter should not be subject to judicial review. May I ask all three of you to say briefly how you see the role of judicial review, as far as the Bill and the targets enshrined in it are concerned? How important is it that Government could be taken to judicial review, and is that a helpful element of the Bill?
Charlotte Pickles: I cant say I have thought about that in great detail. We know, for example, in relation to children in care, that there are certain statutory requirements where there is no come-back, and which are therefore pretty useless. If you are going to enshrine something, I think there should be a way of coming back to ensure that it is being done, but you have to enshrine the right thing.
Rev. Paul Nicolson: We came in on the issue of the poll tax. A colleague of mine, one of our associates, overturned on judicial review more than 1,000 cases of unlawful imprisonment for not paying the poll tax. I went to ask the Lord Chancellors Department how many more there were, and they said that they didnt keep a record of imprisonment for non-payment of local taxes. That is another story. Yes, I do think the judicial review element is vital. What is wonderful is for you all to take on this responsibility of being accountable, not only in the sense of being voted for, but also accountable to the courts for ending poverty. I think you should welcome that and go to the public. Where its going to be difficult for you is that half the population doesnt believe that there is any poverty in the UK, and so you are going to have to persuade them that there is. The language of the debate on poverty will need to change. Perfectly good words such as dependency have become dirty words in the tabloid press. You need to be able to talk about poverty and its reality as statesmen, if I may be very pompous.
Rev. Paul Nicolson: Because it is terribly difficult politically to undertake the necessary revision of the distribution of wealth to actually achieve the target. Somehow or other, politicians have got to beat that one because, as I said, the Joseph Rowntree Foundation has estimated that there is a £25 billion cost of child poverty. There is a huge cost to the nation of direand it is direpoverty. The measures that you have never show the full depth of poverty: the debts, the bailiffs, the £250 charge for a £400 loan, the loan sharks, and the sheer stress and mental illness. Some £76 billion a year is spent on mental illness, and that is partly due to the stress of being poor.
Charlotte Pickles: I think that they havent reached the target for many reasons that we have discussed today, and there hasnt been enough focus on getting workless households into work. Instead, there has been a greater focus on getting second earners in a home. We know that those living in severe poverty are much more likely to be in workless households. Also, if we look at which children are in poverty, around half of them are actually living in couple households where there is at least one person who works, so dealing with the couple penalty would go some way towards dealing with that issue. Another reason is that there has been a focus on shifting people from just under to just over 60 per cent. of median income, and if you look at the statistics and the figures, there are more peoplemore familiesliving in severe poverty today than in 1997.
This has been a very worthwhile discussion about whether targets on income alone do the job. Obviously, the Bill is more sophisticated than that; we have got measures relating to material deprivation and persistence, which are very welcome. I think that you are suggesting that we have targets on underlying causes, and I am trying to think what they might look like. Charlotte, you mentioned that there ought to be other targets of that sort. Could you give us some examples? For instance, if you think family breakdownnot just divorce but other sorts of breakdownis one of the causes of child poverty, should we make cutting the divorce rate a target in the Bill? What would you suggest?
Charlotte Pickles: No, I havent got a specific suggestion. I am not an expert in targets and how things are measured. I would also say that there are other things around education and the addiction issue, which we have raised. The JRF has the indicators, and it would certainly be worth looking at them and pulling some of them out.
Rev. Paul Nicolson: I absolutely agree with that, because that is what minimum income standards are. You get the dietician unit of a university to find out what people need to live, and then you cost it in the market. If you go out into the market and find the minimum that people need to live on and take a look at what they need for well-being, you can then judge whether you are providing statutory minimums, set by Government, that are keeping people healthy. You also save a fortune in many ways, including in the health service, in the education servicewe know very well that educational underachievement is related to poverty at homeand, I would hope, in the Prison Service and on law enforcement. So it is hugely important to have minimum income standards. I have a proposed amendment, and I sincerely hope that some good, kind Committee member will pick it up and table it, so that, at the very least, it can be debated.
Charlotte Pickles: No, I dont think so. You do have to have regard to what would be in the best interests of the economy. We have talked about that, in terms of the potential savings to be made by investing in other areas, or by at least not skewing the investment just towards benefits. For example, in an early intervention programme, if you invest £1, you can save up to £17. In that context, it is about asking what works, what will have the greatest social impact and what is the fiscally responsible thing to dothat is an important aspect.
How do you reconcile what you have just said with your report, Dynamic Britain: towards welfare that works, in which you set out a programme that you have costed at £2.7 billion?
Are you saying that this £2.7 billion is instead of the numbers in the forward forecast projections, which means an overall cut, or are you proposing that the £2.7 billion be on top of what is in the existing projections?
Charlotte Pickles: I am saying that we already know that if we do nothing, we are going to see massive increases. That £30 billion was something like a 23 per cent. increase in expenditure. If we look back at the history of expenditure on social security, we see similar increases over those periods of times. An initial up-front investment of £2.7 billion, I think I saidI am trying to remember this off the top of my head, but you have access to the reportwill accrue around £3.6 billion in savings within two or three years. There will be an overall marked difference between what you are spending and what you get back, which will mean that within a few years, you will
One of the things about this mornings discussion that has been useful is that it has looked at matters at a macro-economic level, but the Bill hands the delivery of what it wants to achieve over to local government. Given that the Reverend Paul Nicolson said that the Bill is about income, is that an appropriate thing to do to achieve what the Bill sets out to do?
Rev. Paul Nicolson: Clearly, if you are going to end poverty, which is what want to do for adults, families, children and pensioners right across the board, you have to talk about income, because some of the incomes are so low that they are going to cause ill health, damage and crime. I want to draw your attention to the fact that I had votes in the General Synod of the Church of England, in the General Assembly of the Church of Scotland, in Unison and in the Methodist conference. If you put the subject of minimum income standards to the people, the people vote for it unanimously, in my experience. You are getting letters from each of those Churches.
That is fine, but my question is a practical one. The Bill will transfer much of the delivery to local government. Is that going to achieve what you think the Bill should achieve?
Edna Speed: I think you have a very important point, and I think it can only be answered with reference to track record. We have missed the deadline. Is the Bill going to be delivered in a way that will reduce child poverty? I will read one sentence, relating to defining the current economic circumstances that we have been talking about. It states:
This clause does not refer to the fiscal benefits which preventing and tackling child poverty would bring about (child poverty is estimated to cost the UK at least £25 billion each year). Though it is important that measures
the crucial word is measures
are cost effective.
Is there anything out there on the ground at the moment that gives you confidence that it is best practice for delivering what the Bill wants to achieve on the ground?
Charlotte Pickles: No, and I want to add that I think there is significant tension there. We certainly welcome the fact that there is going to be a local needs assessment, because you cannot address problems without understanding what the specific needs in a locality are, but I agree that there is tension and effects on income.