Deprivation/Child Poverty

I congratulate the Chairman of the Committee on securing this well-timed debate, coming as it does shortly after the news that the number of children living in poverty has risen by 100,000 for the second year running. That stark statistic led the End Child Poverty campaign to say that such a poor result will be a setback to the Government's target of halving the number of children living in poverty by 2010. The Committee Chairman has presented a pretty thorough, comprehensive survey of many of the points contained in the Committee's report and, I am sad to say, summarised accurately the Committee's reaction to the Government's response, which we had hoped would be substantially more constructive and engaged than it was. I hope that the Minister will be able to embroider and develop the Government's response and, perhaps, change that perception by the end of this debate. This problem affects all of us. I am pretty sure that every hon. Member present has pockets of poverty and deprivation in their constituencies, no matter which part of the country they represent. In my constituency of Weston-super-Mare, according to figures released by the Joseph Rowntree Foundation, 19 per cent. of children live in families on out-of-work benefits. That local authority is one of the dozen or so worst in the south-west. In fact, we have seven super-output areas in the bottom 10 per cent. of indices of multiple deprivation, and two super-output areas in the middle of Weston-super-Mare in the bottom 2 per cent. of indices of multiple deprivation. Therefore, the issue affects all hon. Members here today, who will have pockets of severe poverty in their constituencies as well as less badly affected areas. I want to discuss what we mean by poverty. One of our early recommendations as a Committee was that the Government should change the way in which they measure and report poverty. That might sound like a slightly dry topic, but it has fundamental and profound implications, because poverty, as we all know, is a multifaceted problem: many different factors contribute to it and affect it. Therefore, the Government could pull many different levers to try to improve the situation. The Government have moved towards viewing poverty through three simultaneous lenses. They use a relative measure, the internationally comparable OECD measure of 60 per cent. of median income, to assess poverty. Whenever we made international comparisons in our report, the Committee used that index as a way of comparing the UK's performance with that of others. In addition to the relative measure, the Government use material deprivation, which is very closely linked with the indices of multiple deprivation that I was just discussing. Under that measure, it is a question not just of how much money is coming into a household—the income relative to the national median—but what someone can buy with that money. The Chairman of the Committee rightly pointed out that in London, where living costs are high, a person can have the same income as someone who lives in another part of the country, in which the cost of living is lower, and yet be able to afford fewer of the essentials of life and, therefore, be comparatively worse off. That is a particularly important issue given the environment in which we live at the moment, with rising fuel and food prices. Many of the essentials of life are becoming rapidly more expensive. Therefore, material deprivation will become more of an issue. It is appropriate for the Government to consider poverty through that lens as well. The final measure that the Government use relates to social mobility and the persistence of poverty. Again, that is a crucial measure. It is question not just of whether or not someone's income briefly falls below 60 per cent. of the median, but how long it stays there. If people are temporarily out of work—even if it is only for a week or two—their income could theoretically fall below 60 per cent. of the median. As such people may only be out of work for a week or two before getting another decently paid job, that should not push Government policy in a particular direction. We must address the problem of those who find themselves stuck in poverty for an appreciable length of time because obstacles prevent them from getting out of it. The Chairman of the Committee made some important points about people who are affected by change and who find it, if not comfortable, comforting to remain in a situation that is stable and safe rather than take the risk of going into work. They may worry about how all the unknowns, which have overcomplicated the benefit system with multiple interactions, will impact on their situation if they take that risk. It is appropriate for the Government to look at poverty through those three different lenses. It is vital as well because this is not just an academic debate about the causes of poverty. Were we to choose only one of those views of poverty, it would have profound implications on the policies that we pursue to relieve poverty. For example, were we to choose the relative measure of poverty and say that it is important to minimise the number of people who are below 60 per cent. of the median income, it would unavoidably push us in the direction taken by the Scandinavians to relieve poverty. We would have to have significant rises in taxes to effect substantial rises in benefits, particularly out-of-work benefits and possibly the minimum wage as well. The Government have not gone down that road. It is not Government policy solely to use that method of alleviating poverty, and my party would probably agree with them on that. There are other things that we need to do. With the possible exception of the hon. Member for Leyton and Wanstead (Harry Cohen), who might think that the perfect solution to relieving poverty, there is not a widespread political consensus that that is the only road out of poverty, even though it works for other societies such as those in Scandinavia. Therefore, it is vital for the Government to be clear about what they are trying to do to alleviate poverty. If they are to hit their target in 2020 of substantially wiping out child poverty—even if as gently and elegantly as they can they are backing away from the notion that they will hit their halfway-point target in 2010—it is essential that we all understand what the Government aim to do. Many of the essential planks in their platform will take effect not between now and 2010 but from 2010 to 2020—in particular, the welfare-to-work reforms. Those reforms are critical because the Government are effectively saying that they will not rely purely on a Scandinavian attempt to raise taxes and benefits, but on getting more people back into work and off benefits, allowing them to take the step through the point of difference—to which the Chairman of the Committee referred—believing that they will be better off in work. We hope that the ““better off in work”” calculation will be simple, easy to understand and right. A combination of earnings and in-work benefits, or tax credits, is the way to lift people either out of severe poverty and improve their earnings or to lift them entirely out of poverty over time. I hope that that is a statement of where the Government are going.