New Clause 1

Part of Child Poverty Bill – in a Public Bill Committee at 5:00 pm on 3 November 2009.

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Photo of David Gauke David Gauke Shadow Minister (Treasury) 5:00, 3 November 2009

My hon. Friend anticipates and exactly explains my argument. New clause 1 is constructive. The purpose of the Bill, described by the Secretary of State for Work and Pensions, is to hold the Government’s feet to the fire. That is a good expression, but why should we not hold the Government’s feet to the fire with regard to the 2010 target? We also hear the argument that the Bill forces Governments to have strategies and reports, and to focus their mind. I think that argument is persuasive, but why not start that process sooner rather than later? Why not have some analysis in a proper report to Parliament on what has worked? Why has there been progress in reducing the number of children in relative poverty living in workless households, but not in working families, as pointed out by the Institute for Public Policy Research? How much of the progress has been because of income transfers, or other factors such as education, child care, family breakdown and all the various points that we have debated in Committee? Why did progress stall a couple of years ago? For two years child poverty numbers went up and then stayed static.

All of that could be addressed in a report that could provide useful analysis and guidance for future actions. We could have a better appreciation of the significance of the recession—a point that has come up once or twice during our proceedings. The evidence from the likes of the Institute for Fiscal Studies is that the recession does not have a straightforward negative impact on child poverty, although one might be forgiven for thinking that it does, listening to some of the things that Ministers have said—in Department for Work and Pensions questions on 29 June in fact.

I asked the Minister a question about child poverty targets and she replied:

“Everyone, even the hon. Gentleman, must understand that in the current economic circumstances meeting the 2010 target is a real challenge.”—[Official Report, 29 June 2009; Vol. 495, c. 10.]

We could infer from that that the current economic circumstances—the recession—have driven child poverty up, but we know that not to be the case. Child poverty is a relative measure and, because median incomes tend to be hit harder by recession than those who are on benefits, by and large there is a small negative effect. There is an impact on the public finances and, to be fair, in the course of the evidence session the Financial Secretary made it clear that that was the concern. It is worth bearing in mind that there is a choice that is often followed. I refer the Committee to the evidence given by Mike Brewer:

“The Government had a choice, particularly at the time of the fiscal stimulus. They had a choice between where to spend the money and they chose, for example, to keep the higher rate of personal allowance, which they introduced under a personal, temporary measure, rather than spend it on tax credits.”

I mention that because the Government might have acted differently if they had had to submit a report to Parliament in the near future explaining the progress towards the 2010 target. Perhaps a bit of hauling of the feet to the fire in the immediate future might change policy decisions on the upcoming public borrowing requirement.