Child Poverty Bill

My Lords, this is our central amendment to the Bill. It reflects what seems to be a genuine difference in approach between the Government and us over the Bill—that is, how best to tackle the problem of child poverty. Simply put, there are two approaches. We can transfer income until nobody is below the relative target line, or we can take measures which will help many people to move above the relative target under their own steam. I labour the distinction because until recently the Government have been essentially wedded to the first approach, as reflected by the Treasury being the department responsible for the child poverty agenda. I repeat the words of Sir Nicholas Macpherson, the Treasury Permanent Secretary, to the Treasury Select Committee, quite recently, in 2007: ""The primary reason that the Treasury has led on Child Poverty is that we control the levers which are critical for meeting the 2010 target, as we set the levels of financial support for families. Employment will have an important impact on achieving our goal of halving child poverty, but financial support is the most important lever"." As I acknowledged in Grand Committee, this position has modified recently. The impact assessment on the Bill talked about combining, ""action on income with other social policies"," designed, ""to reduce the disadvantages of growing up in poor families and deprived neighbourhoods"." However, the Bill has not been rebalanced in this way. The "other social policies" referred to in the impact assessment are dealt with in Clause 8, which places the Secretary of State under instruction to take various issues into account, including the employment and skills of parents. They are absolutely not targets in the sense that the financial measures are targets. This leads to the conclusion that, in practice, the Bill is a reinforcement of the Treasury’s approach, and that the talk of balance between the two approaches in the impact statement is so much hot air. The concern is further amplified by the fact that under this Government—I am informed by the Minister—the Treasury will retain a key interest in the work of the Child Poverty Commission, alongside the DWP and the Department for Children, Schools and Families. The risk we are running is that policy develops exclusively on track 1—that is, on financial transfers. The purpose of introducing formal non-financial targets is to make sure that the obligations are balanced; that these goals receive an equivalent weighting to the financial measures and are not tucked away in Clause 8; and that there are targets that provide a powerful base for the DWP and the DCSF in the debate about how to tackle child poverty. After all, there is strong evidence that a pound earned is worth more to the recipient than a pound transferred. I cite the DWP’s own research report 219, The Dynamics of Deprivation. I turn to the specific non-financial targets in the amendment. I make absolutely clear that these represent a best attempt to isolate what appear to be major sources of, or at least correlations with, poverty and poor child well-being. Much of the debate surrounding this proposition in Committee focused on the precise nature of these financial targets. Therefore, should the Government be tempted to adopt this approach, I would be absolutely open to fine-tuning the specific targets. Indeed, if a clause along these lines were acceptable, I would be happy to establish these specific items following consultation with the proposed Child Poverty Commission. Let me lay out why the Government should consider this proposition. This is a Bill about the next 10 years, in which it is important that there is bipartisan support. The Government should therefore be interested in ensuring that this Bill is useful for whichever party is in power. I also point out that the Minister, as a representative of the DWP, should welcome an amendment that reinforces the position of that department in tackling child poverty. I am particularly conscious that he has just piloted the Welfare Reform Bill through the House, with its emphasis on individualised intervention to help the economically inactive. Therefore, he has an intimate understanding of the importance of such interventions. He will be as conscious as I am of the internal government battles to establish strategies in this area—battles that would be exacerbated by the three-way structure of management this Government propose. I turn to the specific drivers of poverty that I have specified in this amendment. Since we have discussed these in Committee I will not dwell on them at length. The first and last, covering work and training, are essentially uncontentious and are reflected in Clause 8 as key areas for the Secretary of State or the three Secretaries of State to take action in. The other two are not so straightforward. The importance of stable relationships does not seem to be accepted by this Government. The Minister stated that, ""although child poverty is associated with family breakdown, there is no clear causal link".—[Official Report, 19/01/10; cols. GC 171-72.]" I think that is a wilful misinterpretation of the evidence, although I admit that there does not seem to be a lot of it around. However, I was able to uncover one important piece of research that focuses on this question that suggests exactly the opposite. I refer to Stephen Jenkins’s work on Marital Splits and Income Changes over the Longer Term, published by the Institute for Social and Economic Research in February 2008. This found that, after a marital split, all women in the study who did not move into paid work remained below the poverty line for each of the next five years after experiencing the largest initial fall of the group in income. You can take out all those weasel words about correlation and bury them. This is straight cause and effect. The study did not cover splits by cohabitees. It is likely that the impact is amplified for this group because they are less well protected. We await specific research on this. Interestingly, there is some good news in this survey. The secular rise in women’s labour force participation rates, combined with in-work benefit, means that those women who move into work come close to recovering their pre-split incomes after five years. This finding underpins the importance of two of the factors in this amendment: work and reducing relationship breakdowns. It also underpins the equally sophisticated work undertaken by the Child Poverty Action Group, which I quoted in Committee. This research is ground-breaking in the sense that it aims to capture the relative importance of the factors surrounding poverty by using a new statistical technique called structural equation modelling, which was developed in around 2000. The Child Poverty Action Group found that, ""the effect of separation on a couple (whether married or cohabiting) in terms of increasing the risk of poverty was much greater than for any other triggers, including job loss"." Parts of this Government still seem to be in denial about the importance of stable family relationships—certainly, the part of the Government in the Chamber today. Does the Minister agree with Ed Balls, when, at the turn of the year, he said that adult relationships are, ""important for the progress of the children"?" Was that a statement about cause and effect or just another correlation? I would be most interested in the Minister’s response to this pivotal question. I was pleased to provide the references to the Minister’s team for the two important pieces of research to which I have referred, so I look forward to a most informed assessment of them from him. The purpose of paragraph (a) in the amendment is to ensure that we monitor, and have strategies to encourage, family stability whether the parents are married or cohabiting. The evidence that I spelt out in Committee suggests that the greatest concern should lie with the latter. I shall deal with paragraph (c) in the amendment briefly as I have a later amendment that deals with the issue so far as it concerns financial transfers. The aspect I shall deal with now is that of relying on targets which ignore the impact of parental addiction. This is quite different in kind from the other targets and is disgracefully ignored in the Bill. As far as I can see, it does not contain a single reference to addiction. What is the use of a financial target when it ignores the fact that resources will be diverted from the children to feed a parent’s habit? If we ignore this issue, we will make great efforts and spend considerable resources to reduce poverty but many children will simply not see any benefit whatever. The main beneficiaries will be the local drug dealers and off-licences. The target must incorporate an assessment of the impact of addiction. If we had one—as I am proposing—the state would be forced to find a way to deal with this issue and channel resources towards children more effectively. This issue is entirely different in kind from the others, as addictive parents undermine the whole concept of tackling child poverty by measures focused solely on relative household incomes. That is why we need to supplement the financial targets with targets on addiction. Otherwise, the noble Lord, Lord Northbourne—I do not see him in his place—will be calling for the Bill to be renamed the child poverty and delight of drug dealers Bill. I beg to move.