Poverty (London)

Part of the debate – in Westminster Hall at 11:00 am on 12th February 2002.

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Photo of Karen Buck Karen Buck Labour, Regent's Park and Kensington North 11:00 am, 12th February 2002

I am grateful to the hon. Gentleman. He is right. Communities have different experiences, and an understanding of the barriers to take-up and participation must be rooted in community experiences. A multiplicity of organisations, including local councils, the London development agency and women's and child care organisations, have an important role to play and should be part of the process. We should listen to them to find out what they regard as problems.

Joblessness in London is at the heart of the problem. It is the reason why Londoners cannot break free from poverty and use the working families tax credit as a stepping stone out of poverty. The welfare-to-work strategy, in all its forms, is not working as well in London as it is elsewhere. That is not a criticism of the programme or its policies, which I back 100 per cent. It is an argument for a more focused look at why the strategy is not as effective in London.

Let us take the example of the new deal. Figures provided by the Centre for Economic and Social Inclusion show that the job-entry rate through the new deal in London is below the national average, with central London districts such as mine and, I am sad to say, that of my hon. Friend Mr. Coleman performing particularly badly. That is partly because London handles a high proportion of unemployed people with multiple disadvantages, including those who have experienced homelessness, the prison system, mental health or drug problems and those with literacy or language problems. The Government could do more to address that important issue.

The agencies of delivery, particularly the Employment Service, have a disproportionate difficulty in recruiting and retaining the staff necessary to guide those with multiple disadvantages through support programmes and into work. If the new deal and Jobcentre Plus are to deliver to Londoners and contribute to cutting poverty through work, extra resources will be needed to pay personal advisers better in order to retain them longer.

I regularly go to my local Employment Service and sit in on interviews. I am saddened by the fact that good people do not stay. They move in order to earn more, and I do not blame them; they are not paid terribly well. We need to keep people of especially high quality in London, so that we can use their skills to develop properly tailored packages for the people who need them, especially lone parents.

We need to overcome the barrier of child care. The proportion of lone parents in the capital is much higher than in the rest of the country. I am grateful to the Library for its excellent research on the subject. Lone parents are much less likely to have family support networks that provide informal child care. Only 18 per cent. of pre-school children in inner London are looked after by grandparents compared with 34 per cent. across the country. The need for child care is greater, particularly for lone parents, yet the provision of affordable child care is significantly lower.

Although there have been improvements in recent years—the national child care strategy is a welcome development—the Daycare Trust said last Friday that the imbalance between quality child care places and need was particularly severe, with a place for fewer than one child in seven. Last summer, the Daycare Trust carried out an analysis of day care costs and found a shortfall between the cost of child care in London and the subsidy from the working families tax credit: it is £40 a week for a nursery place and £33 a week for a child minder, which is £6 or £7 more than in the rest of the country. We must accept that the cost of providing nurseries in London is far greater, especially in respect of capital costs and recruitment and retention of child care staff. Unfortunately, the flat-rate child care component in the working families tax credit, which will be carried through in the new tax credits legislation, will not be enough to allow parents, particularly lone parents who want to enter the workplace, to access child care.

Some evidence—it is mostly anecdotal but it is supported by the Daycare Trust—shows that the child care component of the working families tax credit is leading to some perverse incentives in London and elsewhere, whereby the costs of child care are ratcheted up to the level of the working families tax credit supplement. In my constituency some people in need have lost places as an unintended and perverse consequence of working families tax credit. Welcome as the child care component is there is no substitute for a dramatic extension of child care places, which will have to be funded by capital. Otherwise, there will be child care inflation and we will never catch up with it. Access to child care places remains inadequate and needs further development.

Housing costs have been endlessly debated in this Chamber and elsewhere by others and by me. London is engulfed in a housing crisis with three times the level of overcrowding than in any other part of the country. A significant increase in the number of families in temporary accommodation is another factor relevant to the poverty and welfare-to-work debate. Families in severe housing need are in poverty. For 60,000 households, the cost of private rented and temporary accommodation makes working impossible. Rents are about £300 a week. It is virtually impossible for people to find work that will pay while they face that housing difficulty. While we continue to try to unlock the housing crisis through supply, it is essential to provide special new deal-type provision for families in temporary accommodation, who are expected, through no fault of their own, to pay prohibitive rents and are unlikely to take up work opportunities.