Child Poverty Bill

I thank the noble Baroness, Lady Hollis. Of course, I was not implying that the only thing that influences people is economics, but it is a pretty significant influence in many cases. The Laffer curve has been found to have a significant influence at lower levels, as we see with people not wanting to go into work if the gain is marginal, perhaps not surprisingly. There is a point to raising this issue in this context. As the noble Baroness, Lady Hollis, says, getting these things right is what politics is all about. The whole point of this Bill is to set in stone a statutory target. It is to freeze politics; it is to take away the politics over a decade because you have frozen one side of the triangle as a target. That is the reason for bringing in the other two sides. If you are going to freeze one in political terms, why not freeze the other two, or look at their context? That is the point. At the moment, the system tries to fix little aspects of withdrawal rates. The curve of the marginal rate of withdrawal goes up and down depending on who you are or what group the Minister thinks needs encouraging in a particular way at any one time. The result is that we have ended up with an absurdly complicated welfare system. It is now so complicated that the main element that drives people, apart from financial matters, is sheer fear. There is a fear of taking the risk of leaving the benefits system because it is so fiendishly complicated to re-establish yourself in it if the risk, or attempt to take a job, does not work. People cannot work out what the results of changes may be, so we have created a very conservative, risk-averse population at the low-income levels. That is the real cost of the complexity and of not having a clean and simple basis for benefits. I argue that the reason why one does not need to distinguish between a more general support system, which this represents, and child poverty, which the Bill is about, is that, in practice, we are looking at a large number of households, not just the children. We have discussed this in the past. To the extent that we are looking at a large number of households, if you skew the system for them and not for everyone else, you will end up with a system that is not optimised. That is why I have tabled this amendment.