Deprivation/Child Poverty

My hon. Friend is absolutely right. There is a link between the minimum wage and the £95 a week disregard in carer's allowance. There is a similar problem with permitted working limits for incapacity benefit. If the two figures do not change at the same time, there can be a period when somebody suddenly finds that they are breaking the rules although they have done nothing wrong. There is an easy solution, and I hope that the Department is considering looking at it just once a year instead of at the point of change. My hon. Friend the Member for Leyton and Wanstead (Harry Cohen) mentioned sanctions. The Minister is well aware of my personal opposition—and, indeed, the Committee's opposition—to moving lone parents on to the jobseeker's allowance regime. I am grateful to him and accept that he has been extremely helpful, as has the Secretary of State, regarding how the regulations will be implemented. A great deal of flexibility will be allowed. The decision has been made, so that is where we are, but there is still the problem of lone parents who get moved on to the JSA regime being exposed to a much harsher sanctions regime. It does not increase the child poverty numbers if somebody is sanctioned, as they are already in poverty. It just means that they are even deeper in poverty. I hope that the message is going out loud and clear that sanctions must be the last resort. There is a general problem with sanctions. Too often, people do not know that they are being sanctioned; if they do know, they do not know why; and if they do not know why, they do not know how to put things right. The whole idea of sanctions is to change somebody's behaviour, but if communication is not clear, and if it is not apparent how behaviour can be corrected, the function of the sanction is lost. The research into the sanctions relating to the work-focused interview, which is a serious issue for lone parents, is due in about two weeks. It will be interesting to see what it has to say. I accept that there has to be a sanctions regime, but it has to work and it has to be understood by the claimant as well as the personal adviser or the decision maker. By the bye, two large contractors who have pathways to work contracts have told me that they get a 40 per cent. no-show of referrals from Jobcentre Plus, but, although they send the names back for a sanction to be considered, nothing happens. One wonders whether these are just teething troubles in the early days, or whether people are saying, ““We've got rid of that problem now; it belongs with the contractor so we don't need to do anything.”” Again, there is different treatment for different groups of clients. I shall draw my remarks to a close, because I know that other hon. Members want to contribute to the debate. The key issue in relation to child poverty, identified by the Select Committee and by a number of other groups, is the point of change. People have to feel comfortable at the point of change. Too often, we are told that people on benefits are more comfortable with that much lower income—knowing that it is secure and will come every week, and most importantly knowing that the rent is paid and there is a guaranteed roof over their family's head—rather than with the haphazard world of work. A clear majority of lone parents are in work, so for some people it obviously works, but we do not do enough to find out what made it work for them and try to apply those lessons to the people who are left. Too often, we ask people, ““Why aren't you pulling your finger out?”” instead of trying to marry up the experiences of people who have successfully moved from benefits into work. The fear that people experience is genuine and heartfelt. We talk a lot in the report about in-work poverty, but the fact is that if people move from benefits into work, their income increases significantly, albeit it might not lift them all the way out of poverty. If people are still nervous about taking that step, there is something wrong with the advice and guidance procedure beforehand. To help, we can be a lot more imaginative with benefit run-ons—there is a run-on on housing benefit, for example. The Work and Pensions Committee has published a report on research on social housing and worklessness in which we say:"““The complex interaction between earnings, housing benefit, tax credits and resulting net income makes it difficult for tenants to fathom the financial consequences of entering work. Difficulties understanding this interaction and being able to compare net income in work compared to out of work were apparent among the people interviewed. Few respondents appeared to be aware of the operation of housing benefit as an in-work benefit, raising concerns about their ability to cover housing costs when in work.""This uncertainty expressed by some respondents about the income implications of entering work was in stark contrast to the certainty of their current situation, which allowed the development of personal strategies for 'getting-by'. Many also drew attention to the insecure nature of the work available to them and contrasted this unfavourably with the stability of benefits””—" despite their paucity. That encapsulates the problem. Large groups of people are opting for the safety of very low income rather than taking a chance. That is especially true in London, because of the much higher rents there. Part of the problem is lack of knowledge and poor advice and guidance about in-work benefits; part of it is the appalling performance of some local authorities in processing housing benefit claims. The current one-month run-on should last for three months. Within that three months a local authority should have to establish the new claim and, if they do not do so, full run-on should carry on at the local authority's expense and the cost should not be reimbursed by the Exchequer. That would be a direct inducement to improve performance. We need to get over people's insecurity about the point of change. That applies equally to other issues. Housing benefit is the most spectacular example but there are others, such as entitlements to free school meals and school travel. For example, 57 per cent. of authorities still give clothing grants for school uniform, which people lose if they move into work. People take all those points into account in their minds: they are not stupid and they need to know that moving into work, which is supposedly so good for them, will actually work out. Finally, I want to make two quick points about steps that we need to take to further increase the rate of progress on child poverty. At every Budget time, we see people almost scratching round to find £1 billion here or £1.5 billion there to try to at least hold the figures steady, so here are my proposals. First, if we enforced equal pay—it is nearly 40 years since the legislation came in—that would do an awful lot to reduce child poverty. Secondly, we have to grasp the nettle and increase the minimum wage by above the rate of inflation or the rate of wage increases. If we had a minimum wage of, say, £7 an hour today and enforced equal pay, we would take about 1.5 million children out of poverty straight away. Society and Government have a joint responsibility and an interest in this issue. It is outrageous that, today, some 40 years after we passed equal pay legislation, 68,000 claims are pending at an industrial tribunal. In local government alone, some 400,000 claims of a class action nature are waiting; there are others across the public sector and many more in the private sector. Forty years on, we really should be saying, ““Enough is enough; everybody's had a chance,”” and enforcing the legislation. The two measures that I have mentioned would have a dramatic effect on the child poverty figures. At the end of the day, that is what matters. We are talking about children. Putting it crudely, these are the people who will be paying their national insurance contributions that fund our pensions in retirement and paying for our care in residential homes, or wherever, and they deserve a better chance than they have at the moment.