PARLIAMENTARY DEBATE
Child Poverty - 28 June 2021 (Commons/Commons Chamber)

Throughout the pandemic, our priority has been to protect the most vulnerable, which is why we spent an additional £7.4 billion last year to strengthen the welfare safety support for working-age people. Our ambition is to help parents return to work as quickly as possible, as there is clear evidence of the importance of having parents in work for reducing the risk of child poverty. That is why we are spending over £30 billion on a comprehensive plan for jobs.

I thank the Minister for his answer, but 60% of kids in my constituency are living in poverty, and over 4.2 million live in poverty across the country. The numbers have gone up by 700,000 since 2010, and the Government’s limited extension to the local support grants does not make up for the cuts to universal credit, which will mean that families are £1,000 a year worse off from September. Is it not time that the Minister reconsidered that decision and made sure that families do not lose £1,000 from September, so that more children are not forced into poverty?

I thank the hon. Lady for her question. We are wholly committed to supporting families with children. We spent an estimated £111 billion, including £7.4 billion on covid-related measures, on working-age welfare in 2020-21. In addition, as the hon. Lady referenced, we introduced the covid local support grant. We have now extended that grant with an additional £160 million in funding between 21 June and 30 September. That brings the total funding package to £429 million. For the hon. Lady’s constituency—I reference Tower Hamlets London Borough Council—it means an overall funding package of over £3 million.

What we have been hearing from the Government is, frankly, rubbish. In Leeds East alone, 11,000 children—that is approaching half of all children—live in poverty. It is not getting better for the children of Harehills, and it is not getting better for the children of Cross Gates, Gipton, Seacroft or anywhere else; it is getting worse. Poverty levels went up by 25% in the five years before the pandemic, and it is going to get worse when £20 of universal credit is taken away from families in October. I dare the Minister today to come to the food banks of Leeds East and tell people in my community why the Tory party thinks that their children should be forced into further poverty this winter.

Recent statistics show that before the covid-19 pandemic, we were in a strong position, with rising incomes and 1.3 million fewer people, including 300,000 fewer children, in absolute poverty, after housing costs, compared with 2010. There were also over 600,000 fewer children in workless households. Our long-term ambition is to support economic recovery across our United Kingdom, and our new plan for jobs is already supporting people to move into and to progress in work.

In-work poverty has hit a record high and the vast majority of the millions of children in poverty have working parents, but the Government’s response is to cut universal credit this September. There is no sign of an employment Bill to improve conditions at work, and they have also frozen help with housing costs. What is the Government’s plan to tackle in-work poverty? A good way to start would be to cancel that cut to universal credit this September.

I thank the hon. Gentleman for that question. As our economy improves, we will increasingly focus our support on in-work progression to improve opportunities for those in low-paid work and support them towards financial independence. As part of our comprehensive £30 billion plan for jobs, there is an extra 13,500 work coaches, the kickstart scheme, the restart scheme, SWAP—the sector-based work academy programme—and our in-work progression commission, which will report shortly on the barriers to progression for those on persistent low pay and recommend a strategy for overcoming them.

I would remind the Minister that universal credit is an in-work benefit and it is means-tested. If people do progress, they will not be eligible for that support, so it is not an argument for proceeding with that cut in September.

Can I ask the Minister about a significant barrier to work, which is childcare? He will know that soaring childcare costs have to be paid up front, but universal credit is paid in arrears, leaving parents in debt. I recently met the campaign Mums on a Mission, which has been forced to bring legal action to try to make the system work for parents. More people would be able to work the hours they wanted if we got this right, but do Ministers understand just how significant a problem this is?

The hon. Gentleman knows that I will not be able to comment on live litigation, but what I would say is that we do have a comprehensive childcare offer, both as a Government and specifically as a Department. I would also say that, unlike the previous benefit system, in which childcare costs could be up to 70% recoverable, in universal credit the figure is 85%, so it is a far more generous system.

The Joseph Rowntree Foundation has told the Work and Pensions Committee that cutting £20 a week from universal credit in October will reduce unemployment support to the lowest level for over 30 years at exactly the point when unemployment is being increased by the ending of the furlough scheme, and that it will also pull 400,000 people, including many children, below the poverty line. What assessment will the Minister make of the impact of that cut on child poverty before the cut goes ahead?

The first thing I would say is that the Government have always been clear that the £20 increase to universal credit was a temporary measure to support households most affected by the economic shock of covid-19, and that decisions on whether to extend support would be made as the economic and health picture became clearer. There have been significant positive developments in the public health situation since the increase was first announced, with the vaccine roll-out now significantly gathering pace. I say to the right hon. Gentleman that any look at measures of that kind in terms of forecasting is purely speculative, but it is our expectation that this additional financial support and other direct covid support will end once our economy has opened.