Clause 6 - Other amendments to Child Poverty Act 2010

Welfare Reform and Work Bill – in a Public Bill Committee at 12:30 pm on 17th September 2015.

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Leave child poverty targets and measures unchanged.

Photo of Albert Owen Albert Owen Labour, Ynys Môn

With this it will be convenient to discuss the following:

Amendment 97, in clause 6, page 6, line 19, at end insert—

‘(1A) In section 2 (Duty of Secretary of State to ensure that targets in sections 3 to 6 are met) for “2020” substitute “2030”.”

This amends the Child Poverty Act 2010 to set new child poverty targets for 2030 rather than 2020. To be read in conjunction with amendment 9.

Amendment 10, in clause 6, page 7, leave out from beginning of line 25 to end of clause.

Leave child poverty targets and measures unchanged.

Photo of Kate Green Kate Green Shadow Minister (Equalities Office) (Women and Equalities)

Amendment 9 would leave the child poverty targets and measures, currently provided in the Child Poverty Act 2010, unchanged.

With your permission, Mr Owen, I will also speak to amendment 97 on behalf of my hon. Friend the Member for Redcar who is engaged in a debate on the steel industry in the Chamber.

With the exception of Government Members, the importance of targets and measures of income poverty to internationally agreed definitions is unquestioned. Targets, measuring and reporting on them drive action, show progress and enable comparisons to be made: comparisons of trend data over time and other similar economies with similar demographic make-up. The importance of income poverty in that context, as we heard earlier, is linked to a range of poorer outcomes, in education, health and wider societal costs.

As I have said, there is widespread international acceptance that income is key. The Government in their own evidence review last year showed that the most important factor for children’s outcomes was lack of income. That is not just income among families where no one is in work but insufficient income from earnings, too.

Other indicators are important. It is important and right to track educational, health and child wellbeing outcomes, but those are not the same as tracking poverty, as we can see clearly from the written evidence submitted by the End Child Poverty campaign.

In 2013, the Government carried out a wide consultation on whether the income poverty measurement and target regime provided for by the 2010 Act was flawed and should be replaced. Of the many responses received by the Government to that consultation, the overwhelming majority—97%—of the responses said that the measures and the targets were fine and needed no alteration.

If ever evidence of a Government who really do not care about evidence and analysis is needed, it can be found in the proposals in clause 6. One cannot help but feel that it is not evidence but fear that motivates the Government: fear that failure to meet targets, or demonstrate progress towards them, would at the very least embarrass the Government and might even raise concern in the minds of Ministers that there could be a legal threat.

Photo of Emily Thornberry Emily Thornberry Labour, Islington South and Finsbury

To be fair—I do wish us to be fair to the Government—those who still believe that they are compassionate Conservatives might find it difficult if measures show that they are failing.

Photo of Kate Green Kate Green Shadow Minister (Equalities Office) (Women and Equalities)

That is a very charitable interpretation from my hon. Friend, but she is a charitable lady, so we should not be surprised by her generosity of spirit in Committee today.

I have spent many years looking at this territory and I know that legal challenges have been mounted in the past. I believe firmly that a challenge would not be viable against a well-intentioned, well-meaning Government who had taken purposeful action to address child poverty even if, due to external circumstances, they were not ultimately able to meet the targets they had set, especially if they were ambitious targets in the time hoped.

What we actually have is a Government who are not bothering to try to meet the targets. In the last Parliament, child poverty fell in the first two years of the coalition Government up to 2011-12. That was the result of measures introduced by Alistair Darling, the Chancellor of the Exchequer in the previous Labour Government, that had not yet been affected by the measures that the coalition Government set about introducing. Since 2011-12, while the coalition Government and the present Government have been in charge of family income strategy, child poverty has flatlined. There has been no progress at all and no strategy to improve the position of those poor families.

Photo of Neil Coyle Neil Coyle Labour, Bermondsey and Old Southwark 12:45 pm, 17th September 2015

My hon. Friend says that child poverty is flatlining, but for many families, is it not the case that absolute child poverty has risen? That is a particular concern in constituencies such as mine in inner London, and it is linked to in-work poverty.

Photo of Kate Green Kate Green Shadow Minister (Equalities Office) (Women and Equalities)

My hon. Friend is right, and I shall come to that point, because it leads into something that I shall say about the measures and targets that we use.

The summer Budget and the measures in the Bill will push more families and more children into poverty. We have not yet got an analysis of the impact of the Bill or the Budget on child poverty and on the numbers of children growing up poor. It is disappointing that the Government have not laid that impact assessment before the House. We cannot know for sure what assessment, if any, the Government have made of the impact. We do not know whether they bothered to make such an assessment. From our knowledge, expertise and understanding of what drives poverty, we can expect that the impact will be pretty adverse. We can also look to the very helpful Joseph Rowntree Foundation minimum income standards research, to which I referred earlier. It points to a particularly harsh effect on the family incomes of some particularly vulnerable groups, including single-parent families, couples with several children and families who face high housing costs.

Photo of Hannah Bardell Hannah Bardell Shadow SNP Westminster Group Leader (Fair Work and Employment)

I am listening intently to the hon. Lady and I agree with much of what she is saying. Does she agree that the alternative targets proposed are not necessarily related to poverty? Family break-up and drug and alcohol dependency affect families from all income deciles, and problem debt is generally a consequence rather than a cause of poverty.

Photo of Kate Green Kate Green Shadow Minister (Equalities Office) (Women and Equalities)

The hon. Lady makes a very good point about the complexity of disentangling causes from consequences and about the fact that Ministers are giving the public distorting messages about what poverty actually is. Let me make this clear: only 4% of parents experience alcohol or drug addiction, and far from all those parents are parents of poor children. Of course, it is devastating for children who grow up in households where parents are addicted, but it is not the same as poverty and it certainly does not explain the 3.7 million children growing up in poverty in the UK today. As she rightly noted, family break-up affects families across the income spectrum. There will be hon. Members in this room who have experienced it in their own families. We should not conflate the two. While it is true that single parents and their children face a higher risk of poverty, there are measures that could be taken to ameliorate and address that consequence, instead of which the Government will make the position of those families worse.

Photo of Neil Coyle Neil Coyle Labour, Bermondsey and Old Southwark

Is there not a challenge in what the Government are attempting to suggest, in that on the one hand the Minister says their policies on tackling poverty are working but on the other suggests that the measurements, accepted by the Prime Minister when they were introduced, are flawed? Does that not expose the Government’s real agenda, which is to mask their lack of effort in tackling the low-wage economy and in-work poverty?

Photo of Kate Green Kate Green Shadow Minister (Equalities Office) (Women and Equalities)

My hon. Friend absolutely makes the case.

As we have heard this morning, it is also ridiculous to think that measuring worklessness alone could be a substitute for measuring poverty, when two thirds of poor children are in households where somebody works. We have repeatedly heard from the Conservative party that the measures are somehow flawed or insufficient, so let us go through carefully what the Child Poverty Act actually requires in relation to measurement and targets.

We know that the Institute for Fiscal Studies expects a rise in relative poverty in this Parliament, but it also expects that it is entirely possible that absolute poverty could fall. So there is a two-way street, if you like, built into the cocktail of measures that we have. We have four measures of poverty in the Child Poverty Act: relative income poverty; absolute poverty; material deprivation; and persistent poverty. That addresses some of the concerns that Government Members might rightly have about tracking only one measure. It is right that when median income is falling, relative income poverty alone is not sufficient to give a good picture of what is happening to our poorest families, although it remains important in tracking the gap that exists.

However, it is also right to recognise that we do not look only at relative income poverty in the Child Poverty Act. We look at absolute poverty, persistent poverty and, crucially, material deprivation. Material deprivation gives a real-life test of poverty and the public can engage with it, get their heads round it and understand it. Also, as I said earlier today, it is a particularly good predictor of health outcomes for children.

Photo of Hannah Bardell Hannah Bardell Shadow SNP Westminster Group Leader (Fair Work and Employment)

Again, what the hon. Lady says chimes strongly with me. Is she aware that, as indicated by the House of Commons Library, the Social Mobility and Child Poverty Commission warned in 2014 that although levels of child poverty are low by historic standards,

“there is no realistic hope of the child poverty targets being met in 2020, given the likely tax and benefit system in place”?

That was in 2014, before any of these changes were made. Is this not a thinly veiled way of covering up the fact that those targets were never going to be reached?

Photo of Kate Green Kate Green Shadow Minister (Equalities Office) (Women and Equalities)

We are certainly not going to reach them under the Government’s current policies; indeed, we will move further away from them. I share the hon. Lady’s scepticism about the Government’s motives, to put it gently. It is really regrettable that, rather than seeking to tackle the problem of poverty, they simply seek to remove it altogether from any understanding of the public policy world.

I hope that the Committee understands that the critique of the Child Poverty Act and its measures and targets as being somehow deficient is completely false. It is also important to understand that the measures the Government proclaim will address poverty are also false, or at least incomplete. As I said earlier this morning, the so-called national living wage will not fully compensate for cuts to benefits and tax credits. What is more, it is highly regrettable that the Government, who are fond of the argument that tax credits are simply a substitute for lower wages, fail to recognise the different functions of pay and tax credits. It is why we have a complex cocktail of policy responses to a set of different drivers of poverty.

Working tax credits compensate for low pay. That means that in households where a family member is low paid, they may derive some benefit from tax credits. Some low-paid people will not do so because they are not in low-paid households; they are the low-paid earner in a household with a high overall household income. So tax credits are a response to low pay, and they help households that suffer low income as a result of low pay to avoid the adverse effects of that low pay.

We should also recognise that the purpose of tax credits for children is not to compensate for low pay or to subsidise employers. It is about sharing among society as a whole the investment that we all have a duty, and indeed an interest, in making in the next generation, who will deliver the future productivity in our economy that will sustain us as we grow old.

We should also remember that while rising pay and an increase in the so-called national living wage are welcome, the national living wage would have to rise very substantially for parents who have no access to any other sources of income—to more than £13 an hour—before their children were lifted out of poverty. Tax credits meet that gap. If it is to be filled entirely by rising wages, that is likely to lead to substantial numbers of job losses, which Ministers would be rightly concerned about.

It is also said that the Child Poverty Act and the measures therein are deficient, because they only look at money. While I strongly contend that money is important, that is also an incorrect analysis of the provisions of the Child Poverty Act. On Second Reading, I particularly sought to draw the House’s attention to that point when I highlighted the fact that written into the Child Poverty Act is a requirement for strategies in relation to child health, children’s education, parental employment, debt—a subject of interest to Government Members—and parenting. Those are all associated with child poverty and provided for in the Child Poverty Act, but they sit alongside the provisions of the Act in relation to measuring relative income poverty and targets for it. They are not the same thing or a substitute.

I am concerned and disappointed by the provisions of clause 6. The clause is cynical and distressing and cheapens the United Kingdom in the eyes of the international community. Most importantly, it means that many of our poor children are at risk of becoming poorer, unobserved. I am frankly shocked at the brazenness of the clause.

As my hon. Friend the Member for Redcar is unable to do so today, with the permission of the Committee I will speak briefly to amendment 97, which was tabled in her name. It addresses the concern that the hon. Member for Livingston pointed out a few moments ago relating to the Government not being on track to meet the 2020 target to eradicate child poverty. That is right, but as Alison Garnham pointed out to us in her oral evidence earlier this week, the Government would not have been completely unable to reach the target in due course. Let us remember that the target, as Ms Garnham pointed out to us, is not to reach zero poverty. A frictional level of poverty will always exist. Families move in and out of poverty, but it might not be sustained if, for example, they quickly return to work. We accept that a reasonable definition of the eradication of child poverty was to reach the best level in Europe—around 10%—which is a realistic target.

The amendment tabled by my hon. Friend the Member for Redcar suggests that the target could be reasonably met by 2030, based on the trajectory that we were on before the measures in the summer Budget and the Bill. The argument for keeping the target but extending it over a realistic period is interesting. We are naturally disappointed that, for another 10 years, too many children will grow up poor, but we would rather that we retained  the measure and the target in the statute book at least to ensure that there was a mechanism to drive progress forward.

My hon. Friend’s amendment is good, and seeks to give the Government leeway to deal with the difficult challenges that have existed since the 2008 financial crash and with the fact that pay either fell or was frozen in order to sustain people in employment. We recognise that time must be bought to cope with the consequences of the world financial collapse, but it is not right to give up the ambition for this generation or for future generations of children. We want the target to remain on the statute book, and amendment 97 seeks a realistic end date for that target.

Amendment 10 is similar to amendment 9 and merely addresses the same point elsewhere in the Bill.

As many hon. Members will know, I worked for the Child Poverty Action Group before I was elected to the House in 2010, and of all the measures in the Bill this is probably the one that I feel most pained, outraged and angered by. It is a disgrace. It is a disgrace and a shame that will affect our children, and I hope the Government will think again before it is too late.

Photo of Corri Wilson Corri Wilson Scottish National Party, Ayr, Carrick and Cumnock

I am conscious of the time, so I just want to pick out a few reasons why the SNP oppose the changes. The loss of income targets means that a fundamental driver of poverty—how much money a person has in their pocket—is essentially being deprioritised. Focusing on worklessness ignores the 67% of UK children in poverty who live in a household in which one or more adults are working. That is in-work poverty.

The additional targets currently proposed are not necessarily related to poverty. As we have heard, family break-up and drug and alcohol dependency affect families from all income backgrounds, and problem debt is generally a consequence rather than a cause of poverty. The new measures are a step towards characterising poverty as a lifestyle choice, rather than addressing the social and economic drivers that cause people to fall into poverty. Without income-based targets, it will be impossible to measure poverty and thus combat it. We oppose the new measures.

Photo of Priti Patel Priti Patel Minister of State (Department for Work and Pensions) 1:00 pm, 17th September 2015

With the amendment, hon. Members seek to preserve the Child Poverty Act 2010 in its original form, including the much discussed income measure and targets, and to extend the target year of the measures from the financial year beginning 1 April 2020 to that beginning 1 April 2030. The Government do not support that position.

First, on amendments 9 and 10, the existing measures and targets in the Child Poverty Act 2010 focus on the symptoms of child poverty while failing to tackle the root causes. We have had an extensive discussion this morning about many of the root causes. As I have described, the fundamental weaknesses with the existing statutory framework, set around the four income-related targets of child poverty, have become all too apparent.

Photo of Priti Patel Priti Patel Minister of State (Department for Work and Pensions)

No, I will not give way.

Removing the flawed income-related measures and targets and replacing them with the new measures of worklessness and educational attainment will drive this Government and future Governments to improve disadvantaged children’s life chances, and it will strengthen our approach by tackling the root causes of child poverty. We do not believe that any number of duties, producing a UK strategy, or placing new demands on local authorities, would be a substitute for a clear commitment to report on the real root causes, which evidence tells us will make the biggest difference to improving the life chances of children and, importantly, transforming their lives. We will report on the life chances measures in this Bill and will be judged on our actions.

On amendment 97, I have described the fundamental weaknesses of the existing statutory measures and targets. It is a framework that incentivises Government action to move people from just below an arbitrary line to just over it, rather than tackling the fundamental issues that affect families, children and their life chances. Extending the target year to financial year 2030-31 will not overcome any of those fundamental weaknesses. Only by removing the flawed income-related targets and replacing them with new measures will we drive this and future Governments to improve and focus on children’s life chances. The Government are focused on doing that; we will focus our resources on achieving those outcomes. It is only right and fair to children and taxpayers that we do so. The Government will not throw good money after bad; it is not fair on our children or our taxpayers, and that is precisely what Opposition Members seek to do.

Photo of Priti Patel Priti Patel Minister of State (Department for Work and Pensions)

No, I will not.

We have discussed the flaws and weaknesses of the measures to some extent. Members suggest that we should extend the deadline on the same flawed measures and force future Governments to spend money on tackling symptoms, not the root causes. I recognise that Members will probably press the amendments, but I urge them not to do so.

Photo of Kate Green Kate Green Shadow Minister (Equalities Office) (Women and Equalities)

I certainly will not withdraw amendment 9. I feel all the more strongly that it must be pressed to a Division in light of the Minister’s response. She is a very intelligent woman, and I have a great deal of respect for her as a Minister. She is extremely able, but she must know that what she is saying is a disgrace that overlooks the myriad evidence before us and—as I think my hon. Friend the Member for Bermondsey and Old Southwark wished to point out—the position of her own party and the Prime Minister in his lecture in 2006. Her party supported what she now calls a “flawed measure” when it supported the Child Poverty Act in 2010.

If the Minister is going to try to tell me that she now thinks that the Government have had some awakening that was not available to them in 2010, I invite her to present the evidence that was not available in 2010 and is available today. She has not done so. The fact is that these targets are internationally recognised and respected, have been over many decades and were endorsed in the Government’s own consultation in 2013. There is no reason why we should abandon them now.

May I raise two points with the right hon. Lady? First, she says there is a temptation to move people from just below an arbitrary line to just above it. That is  not what happened under the Labour Government. We raised incomes in every single income decile. We were ambitious for all of our children, and we remain so today. The idea that having targets or duties does not work is also a completely flawed argument. Conservative Members often like to point out that child poverty rose under Labour. Yes, it did, in one or two years, but I would point out that it doubled under the Conservatives between 1979 and 1997, whereas Labour took a million children out of poverty between 1999 and 2010. However, I accept that it rose in one or two years. As soon as we could see that we were veering off progress towards the target, we took action to bring ourselves back on track. That is the importance of targets. Any Government can make mistakes and any Government can be faced with external circumstances that make progress difficult, but without ambition and without targets to measure that ambition, there is no incentive, requirement or likelihood of action being taken to correct progress as soon as it is right and possible to do so.

I feel this matter very personally, as hon. Members may identify from the way I am speaking in the Committee this afternoon. I will press amendment 9 to a vote. I urge hon. and right hon. Members, in the interests of future generations of children, not to scrap the Child Poverty Act.

Photo of Albert Owen Albert Owen Labour, Ynys Môn

I am grateful to the hon. Lady. It is her last speech in this Committee. I thank her and I am sure we will all miss her.

Question put, That the amendment be made.

The Committee divided: Ayes 5, Noes 9.

Division number 9 Decision Time — Clause 6 - Other amendments to Child Poverty Act 2010

Aye: 5 MPs

No: 9 MPs

Ayes: A-Z by last name

Nos: A-Z by last name

Question accordingly negatived.

Photo of Priti Patel Priti Patel Minister of State (Department for Work and Pensions)

I beg to move amendment 87, in clause 6, page 8, line 23, at end insert—

“(c) in the section heading omit “Regulations and”.”

This amendment removes the words “Regulations and “ from the heading of section 28 of the Child Poverty Act 2010, consequential on the changes of substance to this section made by clause 6(7), which removes references to regulations.

This amendment removes the words “Regulations and” from the title of section 28 of the Child Poverty Act 2010, consequential to the changes made in clause 6(7), which removes the regulation-making powers in the 2010 Act. There is only one order-making power. It is therefore logical to remove the obsolete component of the title, “Regulations and”. This is a technical amendment designed to ensure that the wording and section titles in the 2010 Act are consistent. The change is a matter not of policy but of clarity and consistency.

Amendment 87 agreed to.

Question put,That the clause, as amended, stand part of the Bill.

The Committee divided: Ayes 9, Noes 5.

Division number 10 Decision Time — Clause 6 - Other amendments to Child Poverty Act 2010

Aye: 9 MPs

No: 5 MPs

Ayes: A-Z by last name

Nos: A-Z by last name

Question accordingly agreed to.

Clause 6, as amended, ordered to stand part of the Bill.

Ordered, That further consideration be now adjourned. —(Guy Opperman.)

Adjourned till this day at Two o’clock.