It is a pleasure to have this debate with you in the Chair, Mr. Bercow—I know that you care more than many people about this issue.
Eradicating child poverty is a bold ambition and in politics it is important to be bold and to say that we can get rid of it. Halving child poverty by 2010-11 and eradicating it by 2020 is necessary because by making bold claims we drive change forward. Without such claims, we bibble along and make the world less worse rather than better. I am glad that we have a target and that we are doing much better than the previous Government; when in power, they managed to double child poverty between 1979 and 1997. In addition, the figures changed from one in six to one in three children living in poverty. The target is not enough; we have to deliver on that target. We know that, if we fail to deliver, we will increase cynicism and a sense of hopelessness about politics, and make poverty seem an ineradicable problem. At a time when the latest figures show that we might be going backwards, it is important carefully to consider what needs to be done to tackle this problem.
The Institute for Fiscal Studies—a body that we all admire for its rigour—predicts that if we just carry on steady as she goes, we will be 700,000 children short of our target. That is not tolerable. All the experts in the field agree that, despite the £2 billion set aside in the 2007 Budget for tax credits and the rise in child benefit to £20 a week by 2010, which adds up to more than £1,000 a year, more money is needed, otherwise we will miss our target. I initiated this debate because I believe that the forthcoming Budget is our last chance to make sure that we do not miss the target.
The recipe is fairly straightforward; we know what needs to be done. For child poverty to fall, the incomes of those at the bottom need to rise faster than average income. It sounds straightforward, but how do we do that? The IFS says that £4 billion is needed. The Government are suggesting that that amount is not available at the moment, although it seemed to be available to deal with inheritance tax issues. It would be nice if we could find some resources to tackle the issue, which I know is this Government's priority. It is absolutely essential to do so. I wish to use this debate to highlight some of the demands we have, many of which have been proposed and worked though by a range of charities that have campaigned excellently on the subject. I thank them, as I am sure other hon. Members will, for the briefings and information that they have provided us with.
One call that is supported by an alliance of groups against child poverty is for seasonal cash grants for children in poverty. If we could deliver that, it would make a massive difference to the poorest children. There are two seasons when the grant is particularly important. In winter, some parents must choose between keeping their children warm and keeping them fed, and an extra cash grant would make all the difference to the cost of keeping them warm. Fuel poverty is one of the most shocking aspects of child poverty because it is an example of the poorest people paying more for the same services than richer people. It is shocking that, for example, people on an electricity pre-payment meter pay a 10 per cent. premium for their electricity and those on a gas pre-payment meter pay 8 per cent. more for their gas. Nobody who can afford not to have a pre-payment meter has one. The poorest people are paying premium prices for warmth, which is a basic human need.
I am grateful to my hon. Friend for raising this topic at this time. Both in relation to electricity meters and borrowing money—whether from loan sharks who come to the door or through adverts on television—the facts show that the poorest have to pay more to subsidise the rest of us, who are either on direct debit or have cards that we can use at the bank. The poorest are charged a higher tariff throughout so their expenses are actually more. The argument could be made that the poor are subsidising the better off.
My right hon. Friend is right. It is not only in relation to utilities that the difference in charges exists. For example, when purchasing household goods, if someone buys a washing machine—a washing machine that works is critical for a mother of a large family—the cost in Argos might be about £160. In a cheap credit sales shop it will cost more than £400 for the same washing machine, which will be paid for over time. That is another example of the poor paying more.
As I suggested, we could tackle some of the problems with cash seasonal grants, which would help with fuel poverty. We could reform the social fund so that it could become like a national Grameen bank—the nation owns a bank now so perhaps it could deal with some of these proposals. The poor should have access to credit on reasonable terms. That is a no-brainer for all of us who have been involved in making poverty history. We have been proposing such ideas in relation to poor people in Bangladesh, India and Africa. Why do we not make sure that poor people in Britain have access to credit on reasonable terms, instead of having to pay a premium for credit, which is what happens at the moment?
I am listening with interest to the hon. Lady's remarks. Does she agree that the credit union movement in this country is exactly the kind of excellent initiative that she is describing? It fulfils many of the necessary and vital functions that she has mentioned and is aimed at those at the bottom of the income scale.
It absolutely does aim to do that. If credit unions work, they are excellent. However, let us be honest: many parts of the country do not have a credit union and people often have to be resourceful and energetic to find their local credit union. That is the other burden on the poorest people. The problem is not simply that they pay a premium, but that access to information is more complicated. Poor people do not have broadband web access in their homes so they cannot comparethemarket.com on insurance. As a result, many poor people are uninsured, even though they often live in areas of high crime and are more likely to be victims of burglary and other crimes.
Although the credit unions are capable of providing part of the answer, we have a responsibility to find universal mechanisms through which people can access cheap credit, so they are not dependent on the credit union movement. Through reforms to the social fund and without fundamental cost to the Treasury, it is possible to provide access to affordable credit, which would mean that large expenditure items do not cause problems.
I am going to talk about the other time of the year when cash grants would make a big difference. In the summer, a poor family is faced with feeding children who are eligible for free school meals at other times of the year. Just to give lunch to a child costs a family at least £50 to £100 over the summer. The family also faces the cost of school uniform. In today's world, they feel that their kids' clothing must compete with that of the other children so that their kids do not feel socially excluded. Therefore, cash grants at that time of year would tackle a specific problem. We all know how much difference the extra cash grant for heating makes to pensioners just before Christmas. It seems to me that we should follow the Government's lead on that and look at whether we can give cash at the other end of the age scale so that we can help to tackle child poverty. Save the Children estimates that seasonal grants could lift 440,000 children out of poverty.
My hon. Friend mentioned winter fuel allowances for pensioners. Is she aware that the Every Disabled Child Matters campaign has called for winter fuel allowances to be paid to families with disabled children under the age of five because they incur extra heating costs and extra expense at that time of year?
In whatever strategy that we develop, we should recognise the features that are most associated with poverty. Compelling evidence exists that shows that, where there is a disabled child in a family, there is more poverty. Initiatives that help families with disabled children—for example, by looking at how the disabled living allowance works—might help to deal with some of those in the most dire poverty.
Cash on its own does not deal with the social isolation that poverty brings. That is another issue that needs to be addressed. While cash is critical to tackle child poverty, services are also important.
Before my hon. Friend moves off the subject of money, does she agree that one of the great scandals of child poverty now is the fact that there are 1 million children in poverty whose families are in work? We often equate poverty with people on benefits, but the real tragedy now is that we are encouraging low-income families off benefits and into employment that simply does not pay. Does she think that there is now a strong argument for revising the minimum wage and backing living wage campaigns, particularly in high-cost areas, to give people the chance to get out of poverty through employment?
My hon. Friend is absolutely right. There is a compelling case to look at the minimum wage. The minimum wage is £5.52 an hour at present, and there are too many people who exist on that level of pay. Often, minimum wage jobs not only create poverty, but trap people. People on the minimum wage do not usually get annual upratings unless they are forced by increases in the minimum wage. They often do not get anything above minimum holidays. If they have to take time off because their child is sick, they lose pay. One of the things that we need to do in our employment strategy is to follow the Harker report, which states:
"A system which encourages parents to take any job rather than one that offers them good long-term prospects, or leads to parents 'cycling' between having a job and being out of work is neither efficient nor effective in tackling child poverty."
I am glad that the Minister who is replying to this debate is from the Department for Children, Schools and Families. As well as access to better pay in work, we need to give people access to better training and to qualifications. Often, people in the lowest-paid work are expected to train outside working hours. If they have children, that is not possible because of the cost of child care. In our welfare-to-work strategy, we should put some energy into assisting parents in the lowest-paid jobs to raise their capacity to earn more as well as to improve their income. A critical need in my constituency is access to English for speakers of other languages. Such assistance will enable people to step out of the lowest-paid work into potentially better paid work. Often, it is not better paid at the first step but it becomes better paid thereafter.
We should place emphasis on not just getting people into jobs but keeping them in jobs and helping them to get promotion. That can be done by mentoring and supporting people in low-paid work. At the moment, our services do not focus on that. It is not a requirement of the jobcentre, yet assisting women in low pay to hang on to work and to get the skills that they need to get promotion and to improve the quality of their work would do much to sustain levels of employment and to increase their and their families' income.
I am not a benefits expert. I think that much has been made of the so-called couple penalty. What I am concerned about, and what this debate is about, is children, particularly the poorest children. The Government need to decide which children constitute the very poor. A lot of our progress to date has been on lifting children who are poor out of relative poverty. However, we have not succeeded in reaching the very poorest children.
A striking fact is that the very poorest children have probably gone backwards compared with the bulk of children who are in poverty. Frankly, I would expect every initiative to be tested against whether it makes a difference to the very poorest children. I would like the Minister to consider creating a measure of extreme poverty and targeting an initiative towards it. That should have a higher priority than pretending to support—or not—the institution of marriage, which I suspect is what Mr. Harper was getting at.
My hon. Friend has been most generous with her time. May I draw her attention to a set of essays—I am sure that she is already aware of them—published by practitioners and experts called "Why Money Matters"? Two lines in the essays struck me, and they relate to the question from Mr. Harper. One stated:
"Families on low incomes typically manage their money well", which is contrary to popular opinion. I would like the Government to focus on the fact that the essays
"point strongly to the need to support family incomes to a far greater extent if we are to eradicate child poverty once and for all."
Unless we look at how we can get more money to the poor, we will not tackle this problem.
I will not at the moment because I have just found my place, as it were. I had taken quite a detour, so it would be helpful for me to regroup to make the speech that I wanted to make.
I was about to say how services as well as money can change the experience of poverty, and how they are critical to dealing with child poverty. Cash on its own does not deal with the social isolation of poverty, and accessing services can be a struggle for the poorest people. For example, they do not have access to cars so that they can drive their children to the dentist. Indeed, other things that everybody in this Chamber takes for granted are not accessible to those children.
One of the most telling things is that the prosperity premium starts operating very early in children's lives. Children who are born into poor families who are ahead at age two—the testing could be on child achievement, understanding and so on—would be overtaken by more prosperous, middle-class children by the start of schooling. Children are born with a wide range of abilities, but one group of children descends in the achievement and success scale and the other ascends because of parental income and family prosperity, such is the impact of family poverty by the time a child is two years old.
We must concentrate not only on family income, but on how we give children who are born into poor families access to experiences that will enable them to succeed. I thoroughly praise the Government for investing in access to outdoor play for children. The poorest children often have no access to safe outdoor play areas where they live. More prosperous children have a back garden, but poorer children could be stuck in high-rise homes or, if they have a garden, it is shared or dangerous or tiny. There would be no equipment in those gardens; there would be no lovely trampoline on which children can play adventurously, for example, as one sees in many middle-class households. That makes a real difference to what children achieve and how they behave.
I praise the Government for identifying outdoor play as an important issue in the children's plan. My local council, which is run by a "barmpot" alliance of every party except Labour, has managed to fail to achieve a grant of a third of a million pounds that was identified by the lottery—it had Slough's name on it—because its playgrounds policy was to build on them. The council said, "We'll close the little playgrounds on the council estates, which really make a difference to mums, and put playgrounds in the big parks." The lottery saw through that and said, "You're not getting our money so you can do that".
I am happy to say that today, the Government have identified Slough as a possible play pathfinder, and the town has a one-in-two chance of getting up to £2.5 million to improve its play areas. The campaign that I have been running since the council developed its ineffectual play strategy could give kids in Slough the chance to access safe outdoor play areas.
That is one of the ways in which the children whose parents cannot take them to toddler Tumble Tots, Jungle Gym or ballet lessons could get physical activity that is safe and enjoyable. As a universal service, that would actually make most difference to the poorest children. It is one of the exemplars of how universal services, which do not stigmatise, can make most difference to the most excluded children, and it is useful. Some services should be universal, but we need to target some exclusively at the poorest children at the youngest ages. That is what makes the difference. We know that before the age of two, children have a range of abilities that are not determined by parental income. If we intervene early, we can really make a difference.
There is an example of an excellent scheme in Slough—the nurse family partnership. It works with about 100 families, the women in which became mothers before the age of 20. That is a good way of targeting, because just as we know that families with disabled children are likely to be poorer, we know that children of very young mothers are likely to be poorer. Some 61 babies have been born and only two were premature, which is a much improved statistic. Only one of the 61 babies had a low birth weight, which is a huge difference from the usual situation. The partnership helped mothers to improve their diet—again, that improved the prospects for the children—and to cut down on smoking and drinking. It also alerted them to antenatal appointments by text message, for example. Services are not good enough at doing such things. We need more such early intervention initiatives.
We need to be brave. The High Scope Perry research shows that the payback for intervention with a two or three-year-old is not over five or 10 years, but over 25 or 30 years. In 25 or 30 years' time, such early intervention will mean that those people will have better jobs, will be less likely to be in the criminal justice system, will themselves be better parents and will be more likely to have degrees. Investment in the first two years of a child's life really makes a difference.
The hon. Lady may remember, as I am sure the Minister does, that I was arguing for such early intervention many years back and I continue to believe in it. I also agree with what the hon. Lady said about health interventions at an early stage. However, just before she talked about those things, she spoke about those in dire poverty, which we could define as people earning less than 40 per cent. of median income. Does she agree that in that group, the bulk of the immediate problem is that people are not in work? Does she agree that, above all, if we are to deal with people who are in the direst poverty, we need to find means for parents to get into work so that they are not stuck in dependency, often with chaotic lifestyles to go with it?
I spoke about how important work is as a route out of poverty, but my suspicion is that the direst poverty is among people who are not able to take their first step into work at the moment because they or their children are disabled, or because of other complexities. That is one of the reasons why I argued that we need to have a definition of severe poverty, and why we should examine targeted strategies to deal with people in severe poverty. Simply saying to people in the circumstances that I described that their road out of poverty is employment is not, on its own, sufficient for those who cannot take the first step.
I agree with that, too; we are not, on the whole, talking about people who can simply waltz into work. The problem is that there are hurdles to overcome. Does the hon. Lady agree that we need to find a means of getting what many of the third-sector providers provide—a way over the hurdles—if we are to find for people who earn under 40 per cent. of the median income a route into work and out of the chaotic lifestyles of addiction and indebtedness, and the other cycles of deprivation?
I have long been an advocate of third-sector providers. I vividly recall visiting an American project that in this country would be classified as a project that deals with ex-offenders. However, it was an anti-poverty project. It recognised that people who had been in the criminal justice system were the most likely to face massive barriers to employment, ranging from having been locked away for so long that they did not know how to use the equivalent of the Oyster card in New York, to prejudice from employers. By providing targeted support to enable them to get into work, or by providing some element of supported employment as a step towards independent employment, the project was able to demonstrate that it could make a huge difference to the experience of some of the poorest people.
We should not romanticise the capacity of voluntary organisations to deal with these issues. Because state provisions have to be scalable and replicable and to meet targets and so on—that is a democratic imperative—the state can sometimes be what I might call stupid. It does not intend to be, but that is a consequence. However, although voluntary organisations can sometimes be fleet of foot, flexible and imaginative, going round the back door rather than the front, they cannot always do so; there are some groups that they cannot help, and if the state starts stitching the voluntary sector into the statutory system, it can sometimes lose those good qualities.
The romanticism that I sometimes see in Opposition Front Benchers—that such fantastic initiatives, many of which are good, are always available to solve the problem—is just that: romanticism.
I am grateful to my hon. Friend for giving way; I shall soon have to leave for a meeting with Mr. Speaker. Although I endorse what my colleagues said about the role of the voluntary sector in supporting vulnerable individuals, let us not be seduced by that argument at the expense of recognising that the real barrier for people getting into work is almost always financial. That is particularly so for families. The real dilemma for those living in London—in inner London, 51 per cent. of children live in poverty—is the barriers of high housing costs and high child care costs. Voluntary organisations can support the individual, but they will not overcome those financial barriers. That needs Government support.
My hon. Friend is right. She has done some excellent work in showing how, in high rent areas such as in her constituency and mine, a massive poverty trap excludes people from work. We need more intelligent mechanisms for housing benefit and so on to help support those who want to take low-paid work. Such people want to take work because they are desperate to get on, but the interaction between rent levels, housing benefit and tax credits means that taking work costs them, which means that they have less time to spend with their children. We should not expect poor people to have to make such a choice.
I hope that I have managed, in what was a longer speech than I had intended, to show that child poverty is a critical issue for the Government, that there are ways of solving the problem, and that we need to admit the difficulties of meeting the interim targets. We need to be as transparent as possible about that, but we must also keep the determination that we had when setting the target—that it is possible to eradicate child poverty and that we intend to do so.
Five or six Members are seeking to catch my eye. It is my intention to call the Front-Bench spokesmen to start winding up at, or close to, 3.30 pm. Members are perfectly capable of doing the mental arithmetic, but a certain self-denying ordinance would be helpful. I would like everyone to have the chance to speak, and I simply observe that if everyone called were content to settle for five minutes, I could probably achieve my objective.
It is a pleasure, Mr. Bercow, to serve with you in the Chair. I shall attempt to comply with your ordinance. I note that Mr. Rooney, the Chairman of the Work and Pensions Committee, is here; it would indeed be a shame not to hear from him, as I know that the Committee will be publishing next week its report on child poverty deprivation and social mobility—all issues raised by Fiona Mactaggart. I pay tribute to the hon. Lady for securing this debate; it is about an important subject, one on which every Member of the House has views.
I shall touch upon four points, Mr. Bercow, and I shall try to keep as close to five minutes as I can. The first point I do not need to discuss at length. The hon. Member for Slough acknowledged that the Government have made some progress, but not as much as she would have liked. Indeed, their performance has been disappointing by their own standards. The Minister will acknowledge that the Government's target was to reduce child poverty by a quarter by 2004-05; the next target on that road is to halve child poverty by 2010. I would welcome it if the Minister did as the hon. Member for Slough asked, and was honest about her assessment of the Government's progress. That issue came up last in questions to the Secretary of State for Work and Pensions, when my hon. Friend Chris Grayling asked whether the Government were on track for hitting that target. The Secretary of State avoided answering the question; he confirmed that the Government were committed to the aspiration of doing so but would not give us a progress report.
My hon. Friend may like to know that when giving evidence to the Select Committee several weeks ago, the Government's child poverty adviser said that it was her firm opinion that the Government would not hit the interim target in 2010.
I am grateful to my hon. Friend for that intervention. Given that that assessment was made by a Government adviser, it would help if the Minister shared with us the Government's assessment, so that we know where we stand. The ultimate aspiration is one that we share. My right hon. Friend Mr. Letwin put it on the record in 2006 that we were committed to the aspiration of eliminating child poverty by 2020.
Our party went for that target a long time ago, and then Conservative Front Benchers signed up to it; it took a little longer for the Liberals to join up. I want to be absolutely clear about whether Conservative Front Benchers are still signed up to that target; there is some ambiguity.
Yes, it is an aspiration. It has to be an aspiration because we do not know how things will be when we come into office. The hon. Gentleman will know that in the most recent period, between 2004-05 and 2005-06, the number of children below the poverty level increased. There are another two and a half years to go under the present Government, and if we come into office at that point we will not know how things will stand. The hon. Gentleman can make fun of the difference between "aspiration" and "target", but the Secretary of State for Work and Pensions rather avoided using such specific language when talking about the 2010 target. It would be interesting to hear the Minister's assessment of whether the Government will hit it. As I said, the Conservative party is committed to the aspiration of ending child poverty by 2020. That point was made clear earlier by my right hon. Friend the Member for West Dorset—and by my hon. Friend the Member for Epsom and Ewell in an excellent article in the press at the weekend, which made our position clear beyond peradventure.
Returning to your injunction, Mr. Bercow, I shall attempt to move on a little more quickly. We have touched on some of the facts. I did not have the chance to intervene at the time, but Ms Buck, who is no longer in her place, referred to the fact that in London more than 50 per cent. of children are in poverty. That is clearly an important issue—one that will no doubt be discussed during the mayoral elections later this year.
In the remaining few moments, I shall touch on what the Conservative party would do in office. First, I pick up on the point made by my right hon. Friend the Member for West Dorset about welfare reform and getting many more people back into work, particularly the several million people on incapacity benefit. As the hon. Member for Slough said, we should not use only the voluntary sector because some things are not scalable; we should use private sector providers as well, as the Government look likely to announce they will this week. As the Secretary of State for Work and Pensions has made clear, they will adopt the Freud report in its entirety to move a significant number of people into work. Nearly 5 million people are on a range of out-of-work benefits, and that is obviously a significant contributor to child poverty.
The second issue, which I mentioned in my intervention, is ending the couple penalty in the tax credits system. In an analysis that it carried out for the social justice policy group chaired by my right hon. Friend Mr. Duncan Smith, the Institute for Fiscal Studies said:
"Bringing tax credits fully into line with the rest of the benefit system" would ensure that
"1.8 million of the poorest couples with children will gain on average £32 a week", which would have the direct effect of lifting
"300,000 children in two parent families out of poverty."
Clearly, that would be a significant achievement. The Conservative party has committed itself to ending the couple penalty in the tax credits system. That would be a powerful tool, and it would be interesting to hear the Minister's response.
Finally, it would be interesting if the Minister indicated which Department has lead responsibility for the Government's child poverty target. According to its website, it is the Department for Work and Pensions whose Secretary of State has the objective of ending child poverty. The Department for Children, Schools and Families does not have direct responsibility, but it works across government to achieve that target. It is important to clarify that, because if the Government miss their 2010 target, we want to be clear which Cabinet Minister the Prime Minister will blame.
It is a pleasure to take part in the debate. I should just make one correction regarding the report that my Committee will publish on Monday: it is actually a seminal child poverty report, and I hope that people read and take an interest in it.
I want to focus narrowly on the issue of work because of the limited time available. The absolute fact is that moving people into work increases a household's income; it might not lead that household totally out of poverty, but it will significantly increase the income available to it, and we need to remember that.
One key issue is that literally tens of thousands of lone parents start work and stop again within three months, which suggests that some of the support mechanisms are not working. When we meet lone-parent groups, the key issue for them is the point of change. Although such people are on a relatively low income, it is secure and it is there every week, so they can pay their rent and keep a roof over their heads. When they move into the uncertain world of being paid a month at a time and having to make a fresh claim for housing benefit—frankly, some local authorities are abysmal at processing new claims—they say, "No. That is too big a risk for my children. I'm not going to do that."
We can eliminate some of that risk, but the system is, unfortunately, extremely complex, although that is often for good reasons. It is designed to deal with the 0.2 per cent. of people who try to fiddle things, not the 99.8 per cent. who play the game. If a lone parent is willing to take the big step of moving into work, we should pay them 100 per cent. housing benefit for the first three months that they are in work. During that period, the local authority should assess their new level of housing benefit so that it will kick in on the first day after those three months. That would give the individual additional security.
People on incapacity benefit are in exactly the same situation. Many years ago, we had the horrendous system of therapeutic earnings, which was an abuse of individuals' civil rights. We now have permitted working, which allows people to test work and to keep any earnings that they get up to a certain limit. Unfortunately, we have four different systems of permitted working rules. If somebody gets a job after having been on incapacity benefit for five, eight or 10 years, as people often are, I would say, "Well done. You can carry on getting your incapacity benefit and you can keep all your wages. Come back after three months, and we'll talk about how it's going and how we can translate this into a permanent situation." The benefits system does not allow that, however, and we should not allow a system that has grown up over 60 years to hinder the drive to give people more money.
I want to touch on a longer-term issue. Whether the Government meet their target in 2010 or not is now an arcane debate; the direction of travel is right and the policies are getting better all the time. The issue is whether, come 2020, we have in place the longer-term infrastructure that we need to deal with such issues, in so far as that is possible, and there will always be somebody who accidentally falls temporarily into poverty. The major issue that we face is that benefits are increased by the retail prices index, while poverty is measured against wages. Wages will always go up faster than the RPI, so the gap between earnings and benefits will always increase. By 2020, there will be a cohort of people who cannot work because of disabilities or other factors, and we must ensure that the benefits available are such that they will lift those people out of poverty. That raises the issue of work incentives, and we need to start work now if we are to reach a situation in 10 years' time where the benefits system does not trap such people in poverty.
There are huge issues relating to child care, and I know how committed the Minister is to promoting child care. Vast sums have been invested in it, and the number of places has increased exponentially, which is fantastic. However, 22 per cent. of places nationally are vacant, which raises a question. Only a third of those who are entitled to the child tax credit take it up, so something structural is obviously not working. We need to marry up those two points, because there is no point in investing in staff and buildings and creating places if they then stand idle.
If I may say so, I think that we have slightly oversold the guarantee on nursery education. We are talking about two and a half hours a day, although it will go up to three hours a day by 2010, but such child care does not assist the welfare-to-work programme or help somebody to move into work. Lots of people—particularly lone parents—will typically want to work evenings and weekends so that they can be around during the school day, but the child care system does not accommodate that. It certainly breaks down totally when we come to disabled children.
There were lots of other things that I could have said, but I have seen the time, so I will sit down.
As far as I can tell, four Members are still seeking to catch my eye from the Back Benches. I would dearly love to call each and every one of them, but I require some pretty exceptional self-discipline from Members at this stage.
I will certainly keep to your guidance, Mr. Bercow.
Before I turn to the issue of child poverty close to home, I shall take one minute to look at the wider problem elsewhere in the world, because the scale of poverty worldwide is hard to imagine. According to a recent UNICEF report, tens of millions of children in developing countries still do not have access to basic human needs such as food, water and sanitation. In many such countries, poverty is increasing, not decreasing, and issues such as malnutrition among the under-fives are particularly significant. Such children are often plunged into poverty through no fault of their own, because of famine, drought, conflict and war, corruption, the scourge of AIDS and natural disasters—the list goes on.
Closer to home, there is a wide variety of reasons why child poverty continues in the midst of wealth in many parts of our country, and I congratulate Fiona Mactaggart on covering many of those issues in her speech. There is no need for any child in the UK to live in poverty. The only thing that is lacking is practical action. A recent report by the Select Committee on Scottish Affairs showed that child poverty levels are at a historical high in Scotland, with 30 per cent. of children living in families whose income fell below the commonly used poverty line of 60 per cent. of median income.
Earlier, several Members touched on the specific issue that I shall concentrate on today: the link between disability and child poverty, which applies all over the world. I hope that the Minister will address some of the relevant issues, as some people have a constant battle every day of their lives and would like to be entitled to the same opportunities that the rest of us take for granted. While we debate today how best to meet the ambitious targets on child poverty, the link between child poverty and disability is a key area that warrants our attention. Indeed, the Government themselves have rightly noted that the 2020 target will be achievable only with targeted help for disabled children and their families.
Disability is both a cause and a consequence of poverty and the link between the two is so strong that policy makers simply cannot afford to ignore it. To tackle it, however, we need a better understanding of why that is the case. I commend the work of the Child Poverty Action Group, Contact a Family and the Every Disabled Child Matters and End Child Poverty campaigns, all of which have played a key part in doing that. According to conservative estimates, there are at least 770,000 disabled children in the UK, although it is likely that there are more than 1 million children living in poverty and affected by disability. A quarter of all poor children have a disabled parent.
On top of the broader social and economic reasons behind child poverty that we have discussed so far today, disabled children face a number of other challenges. Perhaps the most obvious is that they are more likely to live in poverty simply because the incomes of disabled households are 20 to 30 per cent. lower than the income of the average household.
The Government will rightly be commended for recognising the need to re-evaluate the support provided to disabled children, and indeed much has been done. However, there are genuine concerns about the way the current system operates, and a number of changes are necessary to help us to break the link between poverty and disability. I would particularly welcome the Minister's view on Monday's forthcoming announcement about the independent living strategy, and the impact that she anticipates it will have on the matter.
At present, a key tool in the context of disability and child poverty is the disability living allowance. When it works it is effective, but there are too many problems; there is too much distrust of the system, too great a lack of awareness and too many other things outwith the scope of today's debate. Disability living allowance is not having as big an impact as it might. If we are to have any chance of meeting the 2010 target we simply have to do more specifically to target disabled child poverty and to give better support to disabled children and their families.
Child poverty is a national disgrace and a global disaster and is all the more tragic for being preventable. Poverty and disability often go hand in hand, but the link is not inevitable and it will have to break if we are to have any chance of meeting the child poverty targets that we all want to be achieved.
I congratulate my hon. Friend Fiona Mactaggart on securing this timely debate.
In 1997 the UK had the worst rate of child poverty in Europe, and one of the worst of any industrialised nation. In 1999 the Government set what is widely recognised as a very ambitious policy objective—to eradicate child poverty within a generation—which was reiterated in the children's plan published by the Department for Children, Schools and Families in December 2007. As I understand it, the target of halving child poverty by 2010 and eradicating it by 2020 remains intact.
It is worth remembering, especially in the light of what I shall say, that through investment in support of children and families the Government have stopped the long-term trend of increase in child poverty, and by April 2009 the poorest families will be an average of £4,000 a year better off. That has meant a reduction of 600,000 in the number of children living in relative poverty in the UK, which is the biggest reduction in any EU country during the period. In the north-east, my region, child poverty has fallen by a massive 26 per cent. However, 31 per cent. of children still live in poor households, which is obviously much too high.
Despite the general downward trend of child poverty, the most recent figures show only a levelling off, or even a slight increase. The Joseph Rowntree Foundation has noted that changes to the child tax credit announced in the previous Budget might lift another 200,000 children out of poverty by 2010, but that would still mean that the Government were falling massively short of reaching the 2010 target. The Institute for Fiscal Studies, which my hon. Friend the Member for Slough mentioned, has estimated that between £3.8 billion and £4 billion is necessary to achieve the target.
The key policies that have been used to reduce child poverty—redistribution of income through the tax and benefits system to provide a safety net for the poorest families, and assistance to make work pay—have been successful so far, but the charity Barnardo's now believes that those policies will produce diminishing returns, because the families that have so far been lifted out of poverty have been the easiest to reach. We know that the families still experiencing poverty are those with the most stubborn problems and the most complex needs. The Child Poverty Action Group has outlined a range of measures, including increasing child benefit, tax credits, getting more reliable child support through to lone parents and a fairer and more equitable tax system. I am keen to hear what the Minister thinks about those measures, and whether the Government intend to look at the CPAG proposals in detail.
There was discussion earlier of universal services, so I shall mention free school meals. Families living on low incomes have huge financial pressures: rent, council tax, utility bills, debt and social fund repayments. The most flexible part of the budget is often food costs. Before the Liberal Democrats took over and stopped it, Hull had a scheme for universal free school meals. There could be enormous benefits from that for all children in helping them to concentrate at school and learn social skills, but it would be excellent if the Government commissioned some research and perhaps set up some pilots to examine the impact that universal free school meals could have on reducing child poverty.
I join other hon. Members in congratulating my hon. Friend Fiona Mactaggart on securing the debate. I obtained a similar debate about a year ago and the turnout has roughly tripled since then, which shows the extent to which the issue is now firmly on the political agenda. I welcome that.
Because of the time constraints I want to make just two brief points. First, considering the issue in the context of what the Government are trying to do, particularly through the Department for Work and Pensions, in encouraging more people to get into work, good work is being done on moving people from incapacity benefit into work, and moving lone parents into work. Several other hon. Members have made the point that such movement into work is crucial to tackling child poverty. However, we must make sure that where those measures relate to families with children there is always a child-focused element to them.
For example, the provisions on lone parents having to start work when the youngest child reaches 12 will be introduced later this year—eventually the requirement will be to start work when the youngest child reaches seven. If we do not get the "better off in work" calculations right, or if for example child care arrangements do not stack up, the child will be the one who suffers if sanctions are introduced. I accept that conditionality per se may not be a bad thing, but we must make sure that we do not punish the children because of the parents. Often it is through no fault of their own that the parents are not working. It is not that they do not want to, or that they are undeserving in any respect; it is just that they cannot make all the elements of going back to work stack up. We must make sure that sanctions against the parents do not result in suffering for the children. That is a note of caution that I want to sound.
Secondly, like other hon. Members who are present, I was at yesterday's launch of Save the Children's book "Why Money Matters", which clearly makes the case that, for most children who are living in poverty, household income has a huge impact, not just on the household's resources but on such things as educational attainment, health and the child's development.
I welcome the fact that the Government, by having the Department for Children, Schools and Families take a lead on the child poverty issue, are looking at the wider picture. I particularly welcome the Families at Risk review, because all of us who have people coming to our constituency surgeries know that some families have a multitude of problems. It is not just about the fact that there is not enough money coming into the household; there are other issues.
For example, I think that there are about 250,000 to 300,000 children for whom a parent is a problematic drug user. There are also issues associated with parents who are serving prison sentences and there are parents with mental health problems. It is estimated that families in that situation—where they face a number of problems—often deal with eight to 10 agencies in trying to sort out their problems. Therefore, I welcome the fact that the Minister is taking a lead in looking at a whole family-based approach and is not just looking at income.
May I also start by congratulating Fiona Mactaggart on securing this important debate, as we rapidly approach the deadline for the target of halving child poverty by 2010 and also the forthcoming Budget?
A number of organisations must be congratulated on their ongoing campaigning work and I would also like to mention in particular the launch yesterday of "Why Money Matters" by Save the Children, which I was pleased to attend. This has been a wide-ranging debate and in my short contribution I cannot touch upon everything that I would like to, or answer certain points that were made. However, I shall do my best to achieve a wide coverage of the issues.
It is generally accepted that progress has been made by the Government on child poverty targets and we congratulate them on that. We also well remember how rapidly child poverty grew in the 1980s. However, it is clear that more action is needed if both the 2010 target and the longer-term goal of eradicating child poverty by 2020 are to be achieved.
Changes to the benefits and tax credits for families with children have helped to lift a substantial number of children above the poverty line. However, it seems to be a great irony that the policy of tax credits and the complexity of the tax credits system have plunged some families into poverty when they have been overpaid and that money has subsequently been clawed back, sometimes in a very unsympathetic manner. There are also the complexities of the child care element of the working tax credit; I saw today on the website that the guide to that alone is 23 pages long. We need reform and simplification in those areas.
The expansion of child care provision and other policies aimed at reducing the number of out-of-work families has undoubtedly had a positive impact on reducing child poverty. However, as has previously been said, the latest figures tend to show a rise in the number of children living in poverty. I think that it has always been known that, while some families needed only a small change in circumstances to take them out of poverty, the more marginalised families living in persistent poverty would be much harder to reach.
In fact, we have noted today that half of the children living in poverty come from working households. Clearly, there is a need to make progress towards higher-paid work and sustainable work, via education, training and mentoring, as well as by making work pay and making it beneficial for lower-income families. Clearly, there are costs for entering the labour market and we need to look at those.
With the change in policy that requires lone parents with older children to register for work, the extended school programme, which is already operating well, will continue to be important, as are the issues of affordability and parents applying for the tax credits for which they are eligible.
The poorest pay proportionately more tax than the rich and I would like to see some changes in that regard. For example, council tax should be replaced with a local income tax based on the ability to pay.
We have commented today on the "poverty premium" and I am sure that there is more that we can do in that regard across a range of items, particularly utility bills. We have also spoken about securing credit, which is a real drawback for those poorer people who are financially excluded. They pay higher rates of interest, which only increases poverty. Reform could be made to the social fund to make it more accessible to those who need it most. We must also ensure that the poorest people are well advised and supported when they borrow money.
Save the Children has estimated that, at the current rate of progress, the target of halving child poverty will not be met until 2024. We have heard that various organisations have estimated that we need an extra spending commitment of £4 billion annually between now and 2010 to ensure that the 2010 target is met.
The Liberal Democrats have signed up to the child poverty targets, but we were concerned that there should be policies in place showing how those targets might be reached. One policy that we have in place is increasing child benefit, raising it to £5 a week through the elder child rate, which would reduce the number of people living in poverty by 400,000. In due course, we would make further investment in improved child benefit, directed at second and subsequent children, to help to remove larger families from poverty. We would also invest more in the child tax credit and, crucially, we would improve its administration. Furthermore, many benefits available to poor families have poor take-up rates and I feel that we could do much more to improve those rates.
My hon. Friend John Barrett has already said that families with disabled children remain disproportionately likely to be in poverty and he has mentioned a number of the things that we desperately need to do to improve that situation. Of course, anyone with a disabled parent in the family has an increased risk of poverty.
There are other groups, besides families with disabled children, that are most likely to suffer from poverty: large families; black and ethnic minority children; Travellers' children; children leaving care; and asylum seekers. Children in those groups are the most socially excluded children and are faced with inequality and poor social mobility. Those are issues that we must address if we are going to reduce child poverty permanently.
We can talk about the extra spending that we need, but to have a sustainable reduction in child poverty entails breaking into that vicious cycle of deprivation and inequality. That cycle means that children growing up in poor families are far more likely to be poor themselves. Britain consistently performs poorly in studies of social mobility by the Organisation for Economic Co-operation and Development, and, of course, we also had the UNICEF report last year, in which the UK came bottom.
There is a strong relationship between family income and educational attainment, which indicates the desperate need to form policies aimed at tackling inequality across society. That involves targeting funding at the poorest, most disadvantaged sections of society in order to improve opportunities for all.
The Government have made considerable investment in Sure Start, but the latest evaluations are showing that the most disadvantaged are not being reached. The Liberal Democrats would like workless families to receive more support with child care, because that would be a way of providing extra early years provision and thereby breaking into that cycle of deprivation that I referred to earlier. We also propose a pupil premium, which will attach additional funding directly to pupils who are identified as disadvantaged. That funding will follow the pupil to whichever school the pupil attends.
It is well documented in the 2007 UNICEF report that the Scandinavian countries scored highly on all measures, including those dealing with child poverty, in contrast with the UK. So what can we learn from those countries? They have a high proportion of single parents, but a high proportion of them are in work. There must also be lessons that we can learn from them about how to avoid disincentives and how to make it easier and more beneficial for parents to work. Scandinavian countries clearly have a high degree of transfer of earnings between rich and poor and they have high-quality child care, including good early years services and family centres.
Poverty affects so many aspects of a child's well-being: health, cognitive development, achievement at school, aspirations, relationships and employment. We must identify the action that can be taken quickly to combat poverty. I think that it was alluded to earlier in the debate that it would be a very good idea to have "poverty-proofing" of all new measures. I would like to ask the Minister: to what extent has that been considered?
I add my congratulations to Fiona Mactaggart on securing this debate and also on her frank exposition of some of the problems that are still facing us on the very important issue of child poverty. It is good to see a good turnout from both sides of the House for the debate.
The hon. Lady made some interesting points about the Budget possibly being the last chance to do something about the problem of child poverty, because simply to go on as we are at present will mean that we miss out 700,000 children, as she said. I also thought that her suggestions about seasonal cash grants were interesting.
The hon. Lady began by saying that to eradicate child poverty is a bold ambition. It is a bold ambition and we need to turn it into cold reality rather than just having some of the targets that I fear have failed to be achieved in recent years. Certain matters need to be addressed, therefore, including the couple penalty, which my hon. Friend Mr. Harper mentioned. We have to tackle the increased cost of borrowing by the poorest—my hon. Friend John Penrose mentioned credit unions. We have to do something about the bureaucracy involved with benefit claims—a point made by the Chairman of the Work and Pensions Committee, Mr. Rooney and repeated today by Annette Brooke—which means that the most vulnerable have the most hurdles to straddle when filling in forms and getting benefits that they need more than other people.
Kerry McCarthy made some interesting points about the need for all our policies to be child focused. Dr. Blackman-Woods said that the Government have reversed a long-term trend. I fear that the reality is far from agreeing with that supposition. The Government promised to reduce by a quarter the number of children in poverty by 2005, but have failed to do so; after housing costs, they missed the target by a whopping 300,000. Last year, the number of children living in poverty actually rose. Again, using the housing cost figures, it rose by 200,000 to 3.8 million.
If we take the 10 years between 1996 and 2006—the last year for which figures are available—the number of children in poverty has barely shifted, after 10 years of a Government who supposedly made it a priority and pumped an awful lot of money into it. In reality, as mentioned by the hon. Member for Slough, those in the most severe poverty have not been helped at all. In fact things have got worse and that group has actually expanded. However, there has been much tinkering around the margins. Many children in poverty have been lifted to just above the poverty line and in many cases are in danger of falling back below it after a short time. The Government point to some shifts in numbers that do not reflect a significant shift in the fortune of those involved.
It is extraordinary that, under this Government, the number of people living in severe poverty has actually increased by 600,000—from 2.5 million in 1996-97 to 3.1 million in 2004-05—according to a report published last year by the Institute for Fiscal Studies, which has been cited already. Social mobility in the UK is lower than in Canada, Germany, Sweden, Norway, Denmark and Finland. Although the gap in opportunities between the rich and poor is similar in Britain and the US, in the US it is at least static, while in Britain it is getting wider, according to the London School of Economics. According to the Joseph Rowntree Foundation, the number of poor households has grown in the last 15 years and the gap between rich and poor is the biggest it has been for 40 years.
Are the Government backtracking from their target to reduce child poverty by half by 2010? Everyone else seems to think so. The Treasury Committee report on the 2007 comprehensive spending review stated:
"We are concerned that the Government may have drawn back from a whole-hearted commitment to meeting this target."
Will the Minister reassure us that that is not the case? Will she also tell us why, as the Treasury was forced to admit, the Joint Committee on Child Poverty, which was chaired by the then Chancellor, now the Prime Minister, and was supposed to facilitate liaison between Westminster, the Scottish Executive and the Welsh Executive on the Government's child poverty strategy, held its last meeting on
Why is child poverty so important? A number of Members have touched on many of the issues. More than 2.2 million British children—one in five—now live in households dependent on state benefits. In some inner-city areas, almost half the children are growing up in entirely benefit-funded homes, as Ms Buck mentioned earlier with respect to London. Britain has a higher proportion of its children being brought up in workless households than any other nation in Europe, including countries in eastern Europe. In fact, in the past 10 years the number of people aged 16 to 18 estimated to be not in education, employment or training has increased by more than 50,000 to 206,200. The number of homeless families with dependent children in temporary accommodation in England has increased from 54,660 in 2002 to 71,560 in 2006. The instability and inadequacy of bed-and-breakfast accommodation is hardly a way out of poverty.
As we have all said, early intervention is crucial. By the age of three, being in poverty makes a difference equivalent to nine months' development in school readiness. Children living in poverty lag two years behind their peers by the age of 14 and if they do badly at primary school are less likely to improve at secondary school. Families living in poverty have less than £10 per day to buy everything they need, such as food, heating, toys, electricity and transport. One third of children in the UK are forced by their parents' poverty to go without at least one of the things that they need, such as three meals a day, essential clothes or adequate heating in the winter, as we have heard. Furthermore, children from disadvantaged backgrounds are less likely to stay on at school and are 10 per cent. more likely than their peers to leave school with absolutely no qualifications.
As we have seen, poverty has an impact on all aspects of children's lives, from their educational achievements to their personal and social interactions. For a child born into poverty, it is very difficult to escape from the poverty cycle. In fact the chance of escaping from poverty more or less rapidly differs largely in Britain compared with other countries such as Denmark, where between 70 and 75 per cent. of children in poverty do not experience poverty for longer than two consecutive years. That compares with the UK where a lone parent with two young children can expect to spend an average of 4.2 years in poverty—more than double.
When a child lives in poverty their aspirations and expectations for their later life can be so low that their potential goes unexplored and the cycle of poverty is repeated for generation after generation. As Save the Children commented, the extent of the poverty suffered by children in Denmark is considerably less than in our country—that goes back to the severe poverty definitions. The particular impact on families with disabled children has been mentioned. They are more likely to live in debt, face higher child care costs and are more than twice as likely to have no educational qualifications.
That simply is not good enough after 10 years of hearing constantly about how child poverty is a priority for the Government. Reducing child poverty must be a reality in practice, not just in soundbites and manifestos. It will be a priority for the next Conservative Government. We endorse and share the widely held aspiration that child poverty in Britain should be eliminated by 2020, but are profoundly worried about the lack of progress made by the Government. We will reform our welfare state; we want a US and Australian-style back-to-work initiative with special centres across the country, where people on benefits will have help with job applications, IT skills and interview techniques. We also want to increase the support we give to families who are in work but on low incomes, which involves using the savings generated by our welfare reforms to abolish the couple penalty in the tax credit system—mentioned by my hon. Friend the Member for Forest of Dean—that leaves many couples better off if they live apart. In doing so, we will be directing an additional £3 billion a year towards many of Britain's poorest families and helping to reduce family breakdown, which is one of the key causes of child poverty. Indeed, children who live with a lone parent have a 48 per cent. chance of living in poverty compared with a 27 per cent. chance for all children. That is not good enough. As the Institute for Fiscal Studies says, that change alone will lift at least 300,000 children out of poverty, and we believe that our radical welfare reform plans will help take the figure towards 500,000.
Furthermore, a report last year by the Frank Buttle Trust found that nearly half the children surveyed who lived in poverty had no grandparents involved in their lives—something not mentioned by Members thus far. Grandparents can make excellent support networks for disadvantaged children, especially after a family split. Why, then, did the Government reject our extended family amendments to the Children and Adoption Act 2006, which would specifically have addressed that problem?
I am keen to hear from the Minister how realistic she thinks her Government's plans are for reducing child poverty over their remaining years of office. Their plan on child poverty is so far off track as to lack credibility. It was less likely in 2006 that a child of parents in a low income bracket would rise to the top income bracket than it was in 1970. All that despite the fact that the Government have made reducing child poverty one of the main planks of their policy statements. Have all their targets and warm words been merely a gimmick, or is the truth that their approach to child poverty has failed to deliver the significant results that we were promised?
All the evidence suggests that child poverty is at the start of a cycle from which it is difficult to escape. It is a false economy not to tackle it now as a priority, with policies that work at the sharp end and impact on the poorest families most of all. It is not just about ticking boxes or shifting imaginary numbers, but about bringing lasting and practical benefits to the most vulnerable people in our communities, who need them most of all.
I am delighted to see you in the Chair for this important debate, Mr. Bercow. I, too, congratulate my hon. Friend Fiona Mactaggart on securing the debate. With her usual effectiveness, she has secured it at an important time—just before the Budget. She has been a passionate campaigner for the ending of child poverty, as have my other hon. Friends who are present in the Chamber. Many Members have made important contributions to the debate.
There is consensus, at least in this room, about the debilitating effects of poverty, about how early those effects start and how quickly they can become entrenched and affect many dimensions of a child's development and well-being. I assure my hon. Friend the Member for Slough and other hon. Members that my colleagues in the Government and I need no convincing of the need not just to tackle child poverty, but to work vigorously to end it. That is what we are determined to do.
I am grateful to my hon. Friend Dr. Blackman-Woods and to Annette Brooke for reminding us about the context for the debate. In the two decades preceding 1997, we had become the worst country in the European Union for child poverty, which more than doubled between 1979 and 1997. By 1997, 3.4 million children were living in poverty and one in five families had no one in work.
I am sorry to have to tell the Conservative Members present that that eventuality was not an accident, but a direct result of the policies of the Conservative Government during that period. Although I accept that we want to go further and faster, we are the first ever Government who have had the ambition to reduce and eradicate child poverty. We reaffirmed that ambition recently in the child poverty public services agreement that was reached during the latest comprehensive spending review.
I want to correct some of the claims that were made in an article on the issue in The Sunday Telegraph this week by Chris Grayling. He wrote that one in five poor children is still in a workless household. That was the case in 1997, but there has been a reduction of 400,000 in the number of children in workless households. There is confusion about workless households and people claiming out-of-work benefits. The hon. Gentleman also said that 3 million people were living in poverty in 1996-97.
I shall finish the point, if I may. The hon. Member for Epsom and Ewell said that 3 million children were living in poverty in 1996-97— 10 years ago. However, the figure was as I have just said—almost 3.5 million children—so that claim is not true either. The figure has now fallen by 600,000. Absolute poverty has reduced by more than half and we expect a further 300,000 children to come out of poverty as a result of the measures in the last Budget.
I understand completely that the Conservative party has a real credibility gap in its record on child poverty and in its current policies. Policies over the 18 years of Conservative Government caused the huge rise—
No, I shall finish this point. The Conservatives' policies caused the huge rise during that period. On current policy, it is clear that we cannot trust what the Conservatives are saying because they are committed to using at least half the proceeds of growth for tax cuts, so I am not clear how they can possibly afford even—
I am grateful to the Minister for giving way, as she has made some very direct points, which I shall deal with briefly. The UK now has a higher proportion of children in workless households. We did not say that—the Joseph Rowntree Foundation did. My hon. Friend the Member for Epsom and Ewell made it clear that the last set of figures for child poverty were for 2005-06 and they showed an increase. Ten years before, there were 3 million children in poverty, so there was a fall of just 200,000 in that period.
Yes. The number was 3.4 million. That was the high point for the number of children in poverty. If the hon. Gentleman is trying to play around with figures and say that a little before that there were only 3 million children in poverty, he is simply pointing out that in the last year of Conservative Government the figure rose by almost half a million children as the cumulative effect of their policies. He has, therefore, not made his point very effectively.
I will look at some of the more constructive points that Members have made. Many Members suggested refining how the welfare state looks after the poorest families and that is right. We need to uphold people's right to a decent standard of living, particularly if they are in work. There must be an active responsibility for people to take steps to find work and to safeguard their children's futures.
My right hon. Friend John Battle is right to say that we can see clearly from our current work that although being in work is not a guarantee against children being in poverty, it significantly reduces that risk. Work is an important component and we believe that it is the best route out of poverty. However, we must also recognise that some families face additional barriers to work. Some Members rightly said that disability plays a big role in that regard. We must ensure that we can support such families. Achieving a balance between supporting the vulnerable and encouraging the able to return to work is the key, and it underpins our strategy.
We must ensure that measures to end child poverty are sustainable and effective over the long term. It would be a hollow victory if we were to lift children just over the poverty line, only for them to slip back into poverty a generation later. That is why the strategy that we have been pursuing has four important strands, which Members have identified. First, there should be work for those who can do it and we must make work pay. Secondly, there must be direct financial support for those in the most need. Thirdly, there must be a real improvement in public services, particularly for the earliest years and for families, but which goes right the way through the age range for children to ensure that we address issues such as poor educational attainment and general health and well-being, which can be consequences of poverty. We must do all those things at the same time. Fourthly, there must be direct support to help parents to look after their families.
Four recent developments are helping to galvanise our efforts. The creation of the Department for Children, Schools and Families, with its joint responsibilities, is extremely important. As I mentioned, there was a new public service agreement in October, which set a series of tough targets that are laying the foundations for breaking the poverty cycle. Through that PSA, there is real collaboration at the heart of Government between the Treasury, the Department for Work and Pensions and my Department, which includes focused work on how we can narrow the gap between the poorest children and the rest.
Last but not least, there is the children's plan, which my hon. Friend the Member for Slough mentioned. It is taking the focus on a holistic view of children's well-being a stage further. My hon. Friend referred to play and I agree about its importance. I commend what she has done in trying to get her local authority to take that issue seriously. I am glad that it will be bidding to be a pathfinder.
My hon. Friend mentioned the £4 billion question. That has now been recalculated as £3.4 million through various stages to help us reach the 2010 target. The Government are actively examining the options and doing a lot of analytical work to understand the various groupings of families with different characteristics and problems.
It is evident that there is no single mechanism that can help all families. We have to respond to the different circumstances of different groups, whether they are in or out of work, whether there is disability or whether there are other barriers to work. We are making a careful analysis and looking at a wide range of options. My hon. Friend mentioned seasonal grants and they may be an option, but we have to look at whether they are sustainable and at how well targeted they will be.
My hon. Friend talked about a severe poverty measure. There was some misunderstanding. The poorest children have been helped the most. My hon. Friend the Member for City of Durham pointed out that they will be £4,000 a year better off by April 2009 and that their weekly income has risen faster than anybody else's. We need to keep the focus on the poorest children.
Finally, the fight to end child poverty does not end in Westminster and Whitehall. It involves local authorities. We need concerted action across local government, the third sector and business, but I hope that over the coming months Members will not just have to take my assurances of today, but will see real commitment put into practice.