Debate in the Lords on poverty and disadvantage
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Lord Bird To ask Her Majesty’s Government what plans they have to
address the root causes of poverty and disadvantage in the United
Kingdom. Lord Bird (CB) My Lords, it has been a bad morning. A few
miles down the river, a commemoration of the Grenfell Tower
disaster has been taking place at St Paul’s Cathedral. It is good
that we commemorate what happened there and bring justice to those
who lost their lives and give them the opportunity to be
remembered. I hope that...Request free
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Lord Bird
Lord Bird (CB) Last week I had to bury a cousin down in Chatham. I was very fortunate to be picked up at my hotel by a gentleman who came from Pakistan or northern India; I was not quite sure which. He took me to the crematorium and on the way back he pointed out the grammar school and the private school. As we were going along I asked whether he knew those schools. He said, “Yes, my daughter is at the grammar school and my son went through the private school, at £14,000 a year, and is now something big in the City”. He was not sure what he meant by “something big in the City”, but it obviously meant that he was making a shedload of money. It is interesting that that is one of the stories that we all love to hear—about the indomitable spirit of people who do not accept poverty simply because they have no money and very little chance. An immigrant gentleman comes to this country and prospers in a very modest way—because all he does is drive a cab and you cannot make a shedload of money doing that—but he puts all his eggs in the educational basket so that his children can move on. That is absolutely brilliant compared with my own family, who came over from Ireland, who knew how to drink and smoke cigarettes and avoid paying the rent. It is totally different. So there are different immigrations: not all immigrations will lead to a situation where you can tax their prosperity. I joined the House of Lords just over two years ago, and what I am really interested in is dismantling poverty. I am interested in calling the bluff on poverty, because one problem with poverty is that we have an enormous amount of people involved in measuring it. The Joseph Rowntree Foundation, for instance, has been measuring poverty for more than 100 years. We have organisations such as Shelter, Crisis, St Mungo’s, the Children’s Society and the NSPCC. We have a superabundance of people involved in poverty. We have Governments who come into office and swear that they will turn the tide when it comes to poverty. We have organisations such as the Big Issue—I have to declare an interest as the person who started it with Gordon Roddick—where we go out into the streets and offer succour and help to homeless people. We give them the chance of making their own money; we try to get them away from the streets because we believe very strongly in the work that we are doing. Because these people have fallen through the normal safety nets, they end up on the streets in absolute desperation. All of us are involved. Dare I say—and I do not want to say it in a horrible way—that we are all involved in an industry? The industry involves people writing reports; the BBC ringing me up early in the morning to go and comment on those reports; the Times and the media involved in promoting the reports; people collecting money ad nauseam—ad infinitum—for people in need. It seems to me that we operate on a principle around poverty which is called “emergencyism”. Around 80% of social money is spent in and around the problem, once the problem has become a problem. Very little money is spent on the prevention, and as for the cure, it might happen, but mostly it does not. I am sorry that I got caught on the rails today, so I am only just here; I say, “Bring back British Rail!”. That is another debate. Earlier today, I thought to myself, “What can I say that is different to what everybody else will say and what has already been said in this House? What can I say to the Government?”. The first thing that I can say to the Government is that they are not doing enough and they never will do enough. To do enough would involve tearing up all the accepted frameworks for doing enough. I say to the last Government and also to the next Government—my argument is not with the Conservatives, Labour, the Lib Dems or any coalition—that it is time to make a major change in the way that we deal with poverty, an absolutely miraculous change. We need an intellectual revolution. I came into the House of Lords to stir that concern up. I have been involved in the Big Issue for 26 years. Before that, I was working with homeless organisations and before that, I was in poverty and crime myself. Before that, I was born into the slums. You could therefore say that there have been 71 years, which is enough to say to this Government, “When are you going to come and talk to people like me, who say, ‘Let us end this conspiracy of dunces’?”. Forgive me, I include myself among the dunces. When are we going to say that enough is enough? I do not read every report. I have not read the last 10 Rowntree reports because presumably they were like the previous 10 Rowntree reports. I do not keep myself up to date with the facts and figures about poverty, because all I need to do is go out into the street and talk to people there at 2 am or 3 am and see that they have mental health problems and are outside society. It does not matter how much money the Government give: we have a self-fulfilling prophecy—this self-fulfilling failure on the streets. We need to stop and say, “Let’s work on the diagnosis and go forward to the prognosis”. The biggest problem is that everybody has a favourite project. I can tell the House about the wonderful gentleman whom I met in the cab, and we could have a little chat and then go away, and poverty will still be there. There is a poverty of spirit—the poverty of responses to poverty—and the worst thing about poverty is that many people who are helping the poor are often themselves suffering an impoverishment. We need to enrich them, and I include myself in this, because I do not have all the answers. All I know is that we need to move forward to a stage where there is a co-ordinated, joined-up plan, where we converge our energies. Why is it that, when I started the Big Issue 26 years ago, there were 501 homeless organisations in London alone? Today, why are there thousands of social interveners that do not work together or try to lock in and dismantle the problems? Why is it that every Government that we have promise the earth and deliver a flowerpot? 2.16 pm
Baroness Bottomley of Nettlestone
(Con) I share ever more the pessimism of the social scientists on the inevitability of a downward cycle of disadvantage and deprivation. I deplore that attitude. I very much commend the comments this week of Amanda Spielman, the head of Ofsted, who talked about disadvantage one-upmanship: “I have so many children with so many problems in my school that you could not possibly expect any of them to succeed”. I am fascinated not only by the snakes that lead people down into poverty but the ladders that lead them up. In the last 18 years, I have been involved in search. I declare my interest: I often find the leaders of poverty industry organisations—not least, my colleagues found the new excellent head of the Joseph Rowntree Foundation. I also work with extraordinarily successful people in business. Unable to move on from my traditional approach. I always ask them about their parents and their upbringing and where they came from. What fascinates me is the number of people who have become extraordinarily successful from really unpromising, pretty horrific backgrounds. We need to understand what made them successful. The noble Lord, Lord Bird, told us that it was a probation officer when he was 10. Anybody who reads the recent memoirs of my noble friend Lord Harris of Peckham, Magic Carpet Ride, will see the protective factors for him. There are other people in the House who had all the factors against them in their infancy—so how did they break through and what happened? I commend the report written for the Government by my former boss, Frank Field, The Foundation Years: Preventing Poor Children from Becoming Poor Adults. Frank Field, who focused on poverty in its relative and absolute senses, ended up by saying that, “family background, parental education, good parenting and the opportunities for learning and development in those crucial years … matter more to children than money in determining whether their potential is realised in adult life”. We have to integrate the psycho-dynamics of child development, the housing aspects, the social work aspects and the mental health aspects with the income side. Here, I believe that the Government are entitled to some credit. The number of children living in workless households is at a 20-year low; 90% of children live in households with at least one working adult. The dilemma that Beveridge could never have expected is that half the children in poverty have at least one parent in work. When Beveridge set out 75 years ago to slay the giants of squalor, ignorance, want, disease and idleness, he could not have expected that we would have a 42-year high in the employment rate with these levels of poverty. This has become the latest challenge. I applaud the Government for introducing the national living wage and raising the personal tax-free allowance. Universal credit, with all its teething problems, will undoubtedly be a real way through on many of these issues. So I pay tribute to the noble Lord, Lord Bird, and commend the comments we have just heard from my noble friend Lord Agnew about the social mobility action plan, with its focus on regions as well as absolute levels of poverty and disadvantage. I much look forward to hearing what my noble friend the Minister has to say. 2.20 pm
Baroness Sherlock (Lab) I cannot analyse the causes of poverty in three minutes, so I am not going to try. I am just going to do one thing and I hope the noble Lord, Lord Bird, will forgive me. I want to make the case for why the welfare state is the best bulwark against poverty—the best preventer of it that we have. It was created alongside our NHS and with a similar aim: that as a nation, as a community, we will pool our risks and ensure that if anyone falls on hard times, we will not leave them to suffer alone. Social security plays a variety of roles. There is a safety net which is meant to stop anyone from being destitute—although it is being severely tested at the moment. Other bits of the system have different functions: some, like tax credits, are there to make work pay; some, like child benefit or child tax credit, are a transfer from the population as a whole to those with dependent children, because we all recognise that children are our future; some, like DLA or PIP, are there to recognise that some people have extra costs because they are disabled or chronically ill, or have disabled kids. Some recognise that bad things can happen to anyone—so, if you lose your job, get widowed, have an accident or get sick and cannot work, JSA or ESA kicks in. Having contributory versions of those benefits is really important as a collective insurance process for which the welfare state can pay. Some recognise that there are life stages when you need extra help: for the birth of a child or at retirement age, when the state pension kicks in. Of course, the state pension accounts for 41% of our total social security bill; JSA is just 1%. We always need to make it better and it is never just about money but I believe that our welfare state, along with our NHS, is a testament to our values of social solidarity. But if we value it, we need to pay for it. The last OBR Welfare Trends Report stated that coalition policies would cut £33 billion a year from social security spending by the end of this Parliament, and this Government’s policies another £11 billion by 2020-21. The IFS, using Treasury and OBR data, projects that inequality will rise over the next four years and that child poverty will rise by seven percentage points. Ministers often say that the system is unsustainable, but the best test of sustainability is the cost of social security as a percentage of GDP, which has barely changed for decades. However, the OBR predicts that if these cuts go ahead until 2020-21, the money being spent on children and working-age people will account for the lowest share of GDP since 1990-91. Politics is about choice. When Lupton et al analysed the coalition policies, they found that the social security cuts and tax breaks balanced each other out; they contributed nothing to deficit reduction. So it is about choices. Trouble could be around the corner for any one of us. Let us be proud of our commitment to walk with each other along the road of life. Let us be proud of the welfare state. 2.24 pm
Lord Wallace of Saltaire (LD) “43% of people who left education without any formal qualifications experienced poverty at least once between 2011 and 2014”. Worryingly, when I read the Children’s Commissioner’s report for the previous debate, I saw that we now have 120,000 16 to 18 year-olds who are not in employment, education or training and, much more worryingly, that we have 160,000 permanently or temporarily excluded children. The latter is a new problem, which is rising. League tables are encouraging schools to push difficult children out of school. We all know where that leads in the end. We recognise that educational failure interacts with a range of other issues, which others will no doubt talk about, such as housing, family breakdown, community breakdown, mental health and depression. The issue of the communities which have been left behind—the white working-class communities or the coastal communities, where employment is difficult and the only jobs you can get are low-paid—is a real problem. We know that we need a whole-government approach to this, not just a DWP response. We need an industrial strategy and housing benefits; we need education, training and a lot of co-operation from employers, much of which is still lacking. We also recognise that it is investment in education which pays off in the long run, not the cuts in spending that primary and secondary schools are now suffering. The long-term unemployed are those who receive most in benefits and our prisons are filled with people who have been excluded from school. So what do we need to do? We need to provide premiums for teachers and money for teaching assistants, who are absolutely vital with difficult children in schools. We need support outside school, and outside school terms, in those sorts of communities. Teachers get demoralised. They need support and recognition. A bit of extra money for the teachers who work in difficult schools would help. I worry about the transition from school to work and the extent to which the new apprenticeship scheme appears not to be coping with the idea that what children need most, from the age of 14 or so, is the prospect of some training that will take them into a worthwhile job. That means links with employers, work experience and employers coming into schools. I do not see the new apprenticeship scheme dong that yet. We need devolution because much of this differs in Bradford from the way it is in Scarborough, or in Sunderland from the way it is in Southport. We do not yet have a coherent position from the Government on the extent to which they will let local authorities do more. As we all know, local authorities are desperately short of money, with the cuts still continuing. So we will be stuck with persistent poverty and stubborn pockets of disadvantage, sadly, for many years yet. 2.28 pm
Lord Best (CB) I will make a few quick comments. To begin, I strongly commend the report from the Joseph Rowntree Foundation earlier this month, UK Poverty 2017. My congratulations to Helen Barnard and her colleagues at the JRF for this thorough analysis of how the nature of UK poverty has changed over the last 20 years. The report shows how poverty fell significantly over this period but how, over the last three years, those gains have been unravelling. Things are still looking much improved for pensioners but at the other end of the age scale, 400,000 more children living in working-age households have fallen below the poverty line in the last three years. The JRF analysis indicates three key contributory factors as the underlying drivers of poverty: employment, welfare support and housing. On the employment side, more people have qualifications and more people have jobs but, as the JRF report says, “rising employment is no longer reducing poverty”. This is because of cuts to top-up benefits and tax credits and because wages have not kept up with rising costs, including those for housing. On housing, the absence of a proper home is perhaps the most telling penalty of being poor, and if the cost of keeping a roof over one’s head is disproportionate, as it so often now is, housing is a direct driver of growing poverty. The Government are committed to tackling the broken housing system, and I applaud them for a range of helpful new policies, but in the context of rising numbers in poverty, while I appreciate renewed efforts to eradicate street homelessness, two policy measures are needed. First, in going for 300,000 more homes a year—a worthy aim indeed—the Government must ensure that a substantial proportion must be available at so-called social rents, for which a capital grant is needed. Secondly, until supply builds up, shortages are eased and rents stabilise, the DWP must desist from its catalogue of welfare reforms that have hit tenants with a succession of rent caps, ceilings and freezes that have eroded the income of the poorest households. DWP support has to recognise the actual rents tenants must pay in the real marketplace; otherwise, landlords simply turn their backs on people who cannot pay, pushing the poorest further into poverty or into the horrors of homelessness. I hope the Minister can reassure us that the DWP recognises that its policies deeply affect people’s housing and are therefore major contributors to our national failure to sustain progress in reducing poverty. 2.31 pm
The Lord Bishop of Carlisle “The first step towards tackling poverty is understanding it better”. Where better to begin than with its causes, about which I would like to make just two observations? The first is that the causes of poverty and even its incidence are often hidden, like some of the vulnerable children we heard about in the previous debate. I live in Keswick, among some of the most beautiful countryside in the world, yet in Cumbria one in eight households has an income of less than £10,000 a year, one in 10 experiences fuel poverty and there is a 20-year differential in life expectancy between the wealthiest and poorest wards in the county. In parts of Barrow-in-Furness, one in four children is living in poverty, and in the lovely Eden Valley travel times to key services are the longest of anywhere in this country. In other words, there is hidden deprivation even in the most apparently idyllic parts of our land, and many families who have little choice about what they eat or wear, or where they go, are too ashamed to ask for help. My second observation has to do with the complex, multifaceted nature of the causes of poverty. As we know, there is usually no one single cause and it is the result of a whole series of factors that come together and reinforce each other. In the north-west, this was the key finding of our Furness poverty commission in 2013 and the Cumbria welfare reform commission, which I chaired. Most of those factors are obvious and widespread. Like other parts of the country, the north-west experiences most of them, from a lack of job opportunities and low wages to changes to benefits, which, it is estimated, will lead to a 3.5% increase in child poverty in the north-west by 2021. There is one other cause of poverty which is less often mentioned yet which has, in my experience, a very significant effect on people’s well-being and life chances. That is family life. There is now considerable evidence to show that weak, unstable or even uncaring family relationships not only lead to low self-esteem and poor achievement at school but feed into the toxic mix of other factors and cause considerable damage to the health and aspirations of individuals and of society as a whole. We heard about that in the previous debate in powerful speeches from the noble Lords, Lord Farmer and Lord Judd. There are no simple solutions to the problem of poverty in this country, but if a starting point for a co-ordinated approach is required, the need to strengthen families and address the underlying moral and social issues in our society is where I would begin. 2.35 pm
Lord Farmer (Con) “a poor test of whether children’s lives are genuinely improving”. It placed a new duty on the Secretary of State to report annually on the educational attainment of children in England and on the number of children in workless families. As I reminded the House during the debate on A Manifesto to Strengthen Families, which I published with many colleagues here and in the other place, the Minister for Welfare Reform also promised that alongside statutory measures of education there would be, “a range of non-statutory indicators to measure progress against the other root causes of child poverty, which include but are not limited to family breakdown, addiction and problem debt”.—[Official Report, 9/12/15; col. 1585.] When I asked the Minister why the existing family stability indicator had been dropped when the new indicators were published earlier this year, he replied that the quality of relationships within a family had a greater impact on child outcomes than the structure of the family. I urge the Government not to pit family structure against relationship quality as both are important. Saying that people parenting alone, who are usually women and frequently on a low income, face disadvantages that make one of the hardest jobs much harder does not stigmatise them; rather it does credit to the challenges they face instead of minimising them. My second point, is that Sir Martin Narey, chair of the North Yorkshire Coast Opportunity Area, told the “Today” programme yesterday that what underlies everything, and is not about money, is parental engagement. He wants to get parents, especially those of disadvantaged children, to realise how much better in life their kids can do if they have good literacy, speech and communication skills. I went to see Ed Vainker in Reach Academy Feltham at the suggestion of the noble Lord, Lord Nash, when he was Schools Minister. Ed Vainker also realises that engaging parents in his school is essential for fulfilling his ambition to crash through the attainment ceiling. He is working with his local authority and other local partners to set up a family hub in the school so that parents can get any help they need with parenting skills and in other areas. The overall aim is for teachers to work in harness with them so that children enjoy the best conditions for learning at home as well as in school. Will the Minister inform the House how opportunity areas are partnering with parents to improve their children’s learning and well-being? Strengthening families should be their first priority and the thread running through all they do. If it is not, another important initiative to help another generation of children will fail. 2.39 pm
Baroness Tyler of Enfield (LD) Disturbing data from the Joseph Rowntree Foundation, as we have heard, shows that 1.25 million people are destitute, unable to afford the most basic necessities. Perhaps most alarming when looking at the reports was Living Standards, Poverty and Inequality, from the Institute for Fiscal Studies, which forecasts a strong risk that the UK’s proud record of reducing poverty will unravel over the next few years, with child poverty set to increase. Poverty and disadvantage affect people across the life cycle, beginning for some before birth, and all too often continuing through childhood and into adulthood. The recent State of the Nation report from the Social Mobility Commission is essential reading for anyone trying to understand the dynamics of poverty and disadvantage and how they affect geographical areas differently. To summarise, it paints a bleak picture of a deeply divided nation, in which too many people are trapped in geographical areas with little hope of advancement. It talks about an “us and them” society, in which millions feel left behind. Specifically, the report talks about major changes to the labour market in recent decades which have left some 5 million workers, mostly women, in a low-pay trap from which few escape. The report paints a highly nuanced picture of the prospects for social mobility, highlighting places that offer good prospects for income progression and those that do not. It adds up to a real social mobility postcode lottery, with the worst problems concentrated in remote rural or coastal areas and former industrial areas. However, intriguingly, the report also finds little correlation between the affluence of an area and its ability to sustain high levels of social mobility, citing examples of both very deprived areas which provide opportunities for people to progress and relatively affluent areas that offer very few good education and employment opportunities for their most disadvantaged residents. More encouragingly, the report finds that well-targeted local policies and initiatives adopted by local authorities and employers can buck the trend and improve outcomes for disadvantaged residents. In short, where there is a will and strong leadership, something can be done. The report also contains a number of important recommendations aimed at both local authorities and central government. Many of those aimed at the latter are about better joining-up between government departments. In winding up, could the Minister say whether the Government’s social mobility action plan, announced today, will respond directly to these recommendations, which go far wider than education and DfE matters? Will the Government produce a national strategy for tackling the social, economic and geographical divide that the country faces with a more redistributive approach to spreading education, employment and housing prospects across the country? It is challenging to talk about the root causes of poverty and disadvantage in three minutes, so I end by suggesting that this is an excellent area for a House of Lords Select Committee to look at. 2.42 pm
The Lord Bishop of St Albans Plenty of statistics have been bandied around today, and I can quote even more: 14 million people, by some counts, are living in poverty in this country, including 4 million children. The trouble with those and other statistics is that they hide the individual lives they represent: for example, the three men, whom many of us have seen, in sleeping bags in Westminster Tube station as I came in at 8 am yesterday morning; or Joe—not his real name—whom I met this morning in St Peter’s Street in St Albans as I went out to get my morning paper. There has been a visible increase in the number of people on our streets in places such as St Albans over recent months. I have got to know a number of them, and this morning, knowing I was coming in for this debate, I thought I had to sit and talk to Joe just for a minute. I felt I could not in all conscience come and speak on a subject such as this without actually finding out his name and just a little about his story. Of course, it was patronising even to spend five minutes with somebody like that, but as I discovered with the other two young men on the street whom I spoke to in recent weeks—it only takes five minutes just to sit next to them on the ground—the causes of poverty and reasons why they are there are many and varied. Each individual has a unique story, so there is no silver bullet to address the whole issue, but for Joe, it is to do with mental health. That is the first of the two areas I want to comment on briefly. Statistics reveal that men and women in the least well-off fifth of the population are twice as likely to have mental health conditions as those on average incomes, which makes escaping poverty so difficult. People with severe and enduring mental health conditions have the lowest employment rate of all disability groups. Ensuring the least well off can access good, timely and appropriate mental health provision is critical if we are going to address this problem. Secondly, I want to say a few words about addressing poverty and deprivation in rural areas. Here, I declare my interest both as the president of the Rural Coalition and as a vice-president of the Local Government Association. Overall, around one-sixth of areas with the worst health and deprivation indicators are in rural or significantly rural areas, as my right reverend friend the Bishop of Carlisle has already mentioned. Nevertheless, these pockets of deprivation are frequently overlooked by official statistics, which deal in generalities. Delivering services to individuals living in poverty in rural areas is particularly challenging: the lack of bus services, poor access to the internet and closing community centres and libraries all make looking for a job, claiming benefits or learning a new skill extremely difficult. Often these individuals simply end up at the door of the local vicarage, having had nowhere else to turn. In the light of that, can the Minister assure the House that every effort will be put into ensuring that all government policies addressing poverty and disadvantage will be fully rural proofed, as we seek to care for all people in our nation? 2.46 pm
Baroness Gardner of Parkes (Con) I have never lived in poverty, but my father came from a very poor family. He was the son of Irish migrants to Australia in 1860, and got educated by accident because some rich boy in the town had his education paid for and refused to go, so that family handed it on to my father’s family. He had to carry his shoes to school before that, as he could not afford to wear them, but that convinced him that the real way to make something out of life was education, which was the key to everything. If you were to be at all worthy of your place in society because you had developed some way of making a living, that would help. I strongly support what has been said about education today. My father went on to be a Member of Parliament and introduce child endowment, as the only other Minister for Health and Motherhood in the world in the 1920s, in the Storey Government. We call that child benefit here. He did that because he had a large number of children himself and saw how hard it was to bring them up. After his death, instead of finding myself penniless, my dental degree—each of the family had some degree—meant that I had a way of earning a living. The surgery we had here was in a very poor part of east London, but it had a tremendous community. All the buildings were red brick, 200 years old and suffering subsidence—in the surgery, the door dropped about a foot between one side and the other—and eventually it was all redeveloped. But that community spirit really helped tremendously, because people cared about their neighbours: doors were usually just open and people sat in the sunshine in the doorways. When women came round for dental treatment, they were usually in slippers and hair curlers; men came round when they could, after whatever job they had been doing. We have lost a huge amount of that community spirit and that habit of helping one another. It should not require something like the Grenfell fire to bring communities back together again. That is a very important feature too. Individuals are also important. I remember one family in particular, with three boys. The mother cleaned offices, while the father was a bit of a drinker and not much use for anything. The three boys went to the local school and were also patients of ours. One boy never achieved anything much in life. The second used to come in at the age of 10 with a dummy in his mouth, and if they took it out they had to hurriedly put it back in again, because the flow of language was so bad. As for the third boy, the schoolteacher called the parents in and said, “This boy is clever and should go to a grammar school”, which he did. He had a future and has done so much in life. There are opportunities. Youth organisations bring people out of the really awful backgrounds from which they are suffering. We should also outlaw the immoral loans that people can accumulate at a huge loss in no time without even being aware of it. 2.50 pm
Lord Shipley (LD) I agree with my noble friend Lord Wallace, who reminded us that poor educational attainment leads to poor life outcomes and that investment in education pays off. I also agree with my noble friend Lady Tyler, who said that well targeted local initiatives can help to alleviate problems caused by poverty in those areas. In government, my party introduced the pupil premium for children in deprived neighbourhoods who qualified for free school meals. It was a major policy initiative which has enabled many schools to improve standards and opportunities for disadvantaged children. There is a value that is very important: all citizens should be able to benefit from a decent education, a stable job and a secure home. It is the responsibility of Governments of all parties to put in place the means of their doing so. All too often, at least one of those three foundations is missing. Too many households are in insecure accommodation. Indeed, 20% of households are now in the private rented sector, facing high rents, restrictions on financial support and short-term tenancies, none of which has been helped by the way universal credit has been rolled out. I was very struck by the recent annual report of the Social Mobility Commission, which revealed that in some of the wealthiest areas of England, disadvantaged children face worse outcomes than children in places that are generally much poorer. It gave the example of the London Borough of Tower Hamlets. It is the council area with the highest rate of child poverty—and it is next to the City of London. I cannot be alone in thinking that there is something fundamentally wrong in a society where income and wealth distribution is so unequal—a problem that is getting worse. The rise in homelessness announced today is worrying. It results from an inadequate supply of social homes for rent. As long as we fail to address this issue, too many households will be insecure and forced to pay higher rents than they can afford. There is a value that we should support, and it is this. People in work on the living wage should be able to afford to live reasonably close to where they work, spending no more than a third of their income on housing. That should be a crucial aim if we are to be a truly inclusive society. 2.53 pm
Lord McKenzie of Luton (Lab) I say to the noble Lord, Lord Farmer, that, notwithstanding other issues, we hold to the basic importance of income-based tests in judging these things. The Joseph Rowntree report charts the improvements over 20 years—very significant among some working-age families—but records that poverty rates have started to rise among both pensioners and families with children. The JRF attributes the falls in working-age poverty to two things: sustained government support through the benefit and tax credit system—much maligned by those on the Government Benches—and big rises in employment and reductions in worklessness, supported by rising skill levels, increased wages and the minimum wage. That these have gone into reverse is because of reductions in support offered through the benefit and tax credit system which were not outweighed for many low-income families by tax cuts and minimum wage rises. Many of the benefits reductions are just coming through the system—the freezing of working-age benefits and the two-child policy being just two examples— so there is worse to come. The latest news from the ONS is that the number of people in work has fallen in the three months that ended in October. We have always seen that work should be the route out of poverty, but JRF identified 3.8 million workers living in poverty in the UK: 1 million more than a decade ago. It considered 55% of people in poverty to be in working households. A study by Cardiff University academics found that 60% of people in poverty live in households where someone is in work. They considered that the biggest determinant was the number of workers in the household—that is not surprising. The research pointed to where one adult partner worked in a household but the other looked after the children at home. It was associated with low pay as well, although this did not necessarily drive poverty if there were other workers in the household. The study found that in-work poverty was disproportionately concentrated in households in the private rented sector, hit by rising rents and caps on housing benefit. Of course, low-income households are disproportionately hit by the rise in inflation. What do we conclude from this? In-work poverty does not have to be accepted. It needs reversal of cuts to tax credits and universal credit, greater provision of affordable childcare and action to tackle high rents in the private rented sector. It needs political will and a national effort—a major change, in the terms of the noble Lord, Lord Bird. 2.57 pm
The Parliamentary Under-Secretary of State, Department for Work
and Pensions (Baroness Buscombe) (Con) Tackling poverty, and the root causes of poverty, is a key priority for this Government. As the Prime Minister has said, we are committed to building a country that works for everyone, not just the privileged few. It is for this reason that we are pushing ahead with the most ambitious reform to the welfare system in decades, delivering real and lasting change to the lives of many of the most disadvantaged people in our society. Previous Governments have varied in their approach to this vital task; ours is based on a clear understanding of what works. We know that for most people, work represents the best route out of poverty. For example, adults in workless families are four times more likely to be in poverty than those in working families, and children in workless households are five times more likely to be in poverty than those in households where all adults work. Our reforms have acted to ensure that this principle is reflected in the service that we provide. Through the introduction of universal credit, we have acted to transform a benefit system hindered by bureaucracy and welfare dependency into one which places personalised assistance for individuals and their families—families, I stress—at its very heart. People entering universal credit have access to more tools than ever before to underpin their search for work and receive a tailored package of support to meet their needs. It is clear that this reform is working. UC claimants are able to find work faster and stay in work for longer than those under the system it replaces: 86% of people under UC are actively looking to increase the hours they work, compared with only 38% on jobseeker’s allowance. Those changes are empowering people. They acknowledge that the benefits of work extend beyond the purely financial. The evidence is clear that good-quality work can serve as a basis for a healthier, happier society, with demonstrable links to better physical and mental health, and improvements in personal well-being. We are committed to doing all we can to ensure that as many people as possible are able to share in these advantages, with particular help announced last week for those with a disability or health condition. In response to the right reverend Prelate the Bishop of St Albans, I have to say that this is something on which we have very much been focusing, and as a Government, we are proud of the progress that has already been made towards this objective. There are 600,000 more disabled people now in work, for instance, than there were four years ago. I want to stress, however, that increasing the rate of employment alone has never been the limit of our vision for a wealthier, more affluent society. We also want to build a country where work changes lives. This is why we have radically reshaped the welfare rules we inherited to ensure that people are able to see their efforts reflected in rising levels of prosperity. For those already in work, our reforms mean that people are able to take on more hours and increase their income without fear of being penalised, and that those on lower incomes can take home more of their earnings. To this end, the Government have cut income tax for more than 30 million people and taken 4 million low earners out of income tax altogether. We plan to further increase the tax-free personal allowance to £12,500 by the end of this Parliament. The introduction of the national living wage has given the UK’s lowest earners their fastest pay rise in 20 years. Since 2010 the annual average income of the poorest fifth of households in this country has risen in real terms by more than £300, while the income of the richest fifth has fallen. However, we are not complacent. We are reducing social rents until 2020, and lowering the cost of housing for tenants and their families. I respect the fact that a number of noble Lords have focused on housing as one of the key issues. The basic state pension is now at one of its highest rates relative to earnings for over two decades, reversing a trend of decline we saw between 1997 and 2010. The number of pensioners living in absolute poverty on a before-housing-costs basis has fallen by 100,000 since 2010. In contrast, severe poverty rose under Labour. The results speak for themselves. Employment is now at near record levels, with 3 million more people in work than in 2010. The number of households where no one is working is down by 954,000 over the same period, with 608,000 fewer children living in a workless household than there were seven years ago. However, 14.5% of all UK households still remain workless. That is something that we have to tackle. The approach taken by previous Governments to tackling child poverty was to focus resources on increasing family incomes above a notional poverty line. This Government believe that making a lasting difference to the lives of disadvantaged children and families requires a different approach that goes beyond the safety net—referenced so eloquently by the noble Baroness, Lady Sherlock—of the welfare system to address the underlying reasons why people fall into poverty. We want to focus on prevention, referenced so strongly and eloquently by the noble Lord, Lord Bird. Our approach is based on compelling evidence about the impact of worklessness and the problems associated with it on families and children. Analysis conducted by the Department for Work and Pensions shows that children who live in families where no adults work are significantly more disadvantaged, and achieve poorer educational and employment outcomes than others. Again, a number of noble Lords, quite rightly, referenced the importance of education. Despite employment being at near record levels, around one in eight children still lives in workless households, Improving Lives: Helping Workless Families, published in April, provided a framework for a continued focus on improving children’s outcomes, now and in the future. We set out nine statutory and non-statutory indicators to drive collective action in the areas that are important in tackling the disadvantages that can prevent families from moving on with their lives—for example, parental conflict. As my noble friend Lord Farmer stressed, parental conflict and family breakdown is so critical to all this, together with poor mental health, and drug and alcohol dependency. If we are to deliver lasting change, we must continue to take action to support those who face the most complex employment barriers, whether or not they have children—people whose ability to work is, for example, frustrated by issues such as a disrupted education, a history of offending, addiction, insecure housing and serious problem debt. This is why our jobcentre work coaches offer individualised, tailored support to those with complex needs. This can include temporarily lifting work requirements where claimants are homeless, in treatment for drug or alcohol dependency, or are victims of domestic violence. It can also include early access to the new Work and Health programme, and referral to local services that can help claimants get their lives back on track. We also offer targeted support to claimants in particular circumstances. For example, we are trialling the individual placement and support approach to help back to work those dependent on drugs or alcohol, as recommended by Dame Carol Black. People who are financially included are better able to find and remain in work, and are less likely to experience debt and financial difficulty. We therefore welcome the findings and recommendations of the Lords Select Committee Report, Tackling Financial Exclusion: A Country that Works for Everyone? In our response, we announced the creation of a financial inclusion policy forum to be jointly chaired by the Minister for Pensions and the Economic Secretary to the Treasury, and bringing together Ministers from other departments and representatives from financial service regulators, industry and consumer groups. The noble Lord, Lord Bird, has asked a question of vital concern to all of us in your Lordships’ House, and I take this opportunity to commend him personally for all the work he has done to raise awareness of the issues involved through a lifetime spent campaigning on behalf of the homeless—and, of course, the creation of the Big Issue. In truth, entrenched disadvantage is not something that a single department or indeed, the Government alone can do. As the right reverend Prelate the Bishop of Carlisle said, causes of poverty are often hidden. We respond by saying that they require a cross-governmental approach, and one, as referenced by the right reverend Prelate the Bishop of St Albans, that must also be rural-proof. The noble Baroness, Lady Tyler, referenced the need for a joined-up approach. The social mobility action plan, issued by the Department for Education is something in which we, as a department, will be much involved. That is why the Department for Work and Pensions continues to work across government in order to support the most disadvantaged. In addition to the financial inclusion policy forum, DWP is represented at ministerial level on the Social Reform Committee, the inter-ministerial group on homelessness, gangs and violence against women and girls; and on the drug strategy group. For far too long, poverty and disadvantage have held back far too many people in our society. The Government are committed not only to changing this, but are already making tangible progress through the measures that I have outlined. I have no reservation in recommending our approach to building a society where everyone can realise their potential. I just want to respond to the question asked by my noble friend Lord Farmer in relation to opportunity areas. We have a number of opportunity areas, and evidence is at the heart of the OA programme. I say to the noble Lord, Lord Bird, that in an ideal world we would not have reports or bother with the evidence, but we have to have the evidence to try to do the right thing. Sadly, some of us are weighed down by our reports, but they guide us. In addition to improving outcomes for young people in the opportunity areas, we are also looking to learn what works best in driving up social mobility, so we can spread effective practice to other areas. In closing, I reference my noble friend Lady Bottomley who said that we can talk about the inevitability of the downward spiral, but I agree with her: let us concentrate on the ladders. |