29 October 2007

Rt Hon Peter Hain MP

Secretary of State for Work and Pensions

Barnardo’s ‘Paying the Price of Poverty’ seminar, London

Monday, 29th October 2007

[Check against delivery]

I would like to thank Martin and Barnardo’s for the opportunity to speak here today.

This is the fourth conference with child poverty as its theme that I’ve spoken at this month: I’m at another one on Wednesday.

It is crucial that Barnardo’s, One Parent Families-Gingerbread, the Child Poverty Action Group, the TUC keep making the case for the central importance of this issue.

And I will continue to keep it high on the political agenda because where we put it there in 1999.

We are dealing with the legacy of the 1990’s which saw the United Kingdom suffering the highest levels of child poverty of nearly all other industrialised nations.

Over a period of 20 years, the proportion of children living in relative low-income households had more than doubled.

In 1997 there were 3.4 million children living in poverty - one in three children.

That was intolerable then and it is intolerable now that any child should be living in poverty.

And that’s why we set the challenging target to halve child poverty by 2010 and to eradicate by 2020. 

I know that the whole issue of targets set by government has a mixed press.

Let me make it absolutely clear.

They remain commitments.

Achieving them remains a priority for the Prime Minister.

And a priority for me.

I also welcome the thrust of the research outlined today: there are a number of aspects of child poverty that currently do not get the attention that they merit and the costs to society as whole is one.

Indeed the focus on poverty measured exclusively - and understandably in the public mind - in terms of material deprivation can mask other factors that must be taken into account when coming up with strategies to eradicate it.

For example there is the relationship between parental employment patterns, poverty and the impact on their children’s health.

There is increasing evidence, not just from the UK but from other industrialised countries like the United States, Canada and Scandinavia, that being out of work is bad for health and well being.

There is a direct correlation between child obesity - measured through relative Body Mass Index at age seven - and low income.

The prevalence of psychiatric disorders among children aged 5-15 in families whose parents have never worked is almost double that of children with parents in low skilled jobs and around five times greater than those with parents in professional occupations.

A study published in the British Medical Journal showed that the death rate from all external causes for children of parents classified as never having worked or as long term unemployed was 13.1 times that for children whose parents are professionals.

Overall rates of death from injury and poisoning in children has fallen in England and Wales over the past 20 years, except for rates in children in families in which no adult is in paid employment.

As well as health, there are issues around educational achievement and self esteem that are part of the cycle of child poverty that have to be broken.

In other words there are cross cutting factors at work and we have to address those.

As part of that process, I can announce today that we are setting up a new Child Poverty Unit in Government.

This will bring together the relevant parts of the Department for Work and Pensions and the Department for Children, Schools and Families to form an overarching, strategic body to drive the agenda forward across Government.

It will bring together local government and government agencies.

It will have a strong child poverty research and analysis role.

The key to its success will be to work with all the stakeholders.

The Unit will also provide stakeholders, who have a key role to play in our child poverty commitments, with a single point of contact. They will be able to work even more closely with us, and will allow Government to react more quickly and flexibly to their suggestions and needs as well as in developing policy.

And I am delighted to confirm that Neera Sharma will join the Unit on secondment from Barnardo’s

We have already introduced reforms to the tax and benefit system, which will mean that from April 2009, households with children in the poorest fifth of the population will be £4,000 better off than in 1997.

The announcement in the Pre Budget Report on Child Maintenance Disregard and Child Tax Credit will have a real impact.

The measures equate to more than £2,000 extra a year for some of the poorest families and will lift a further 100,000 children out of poverty.

In addition to make further progress on the long-term goal of 2020, we have also announced a number of Public Service Agreements aimed at improving outcomes for children and young people:

Narrow the gap in eduactional achievement between children from lower income and disadvantaged backgrounds and their peers.

Raise the educational achievement of all children and young people.

Improve the health and well-being of children and young people.

By 2010-2011, we will be investing an additional £2bn a year on public services to alleviate child poverty and break cycles of deprivation, including spending on childcare, on early years and childcare support, schooling in deprived areas, educational attainment, haelth inequalities, emotional well-being, disabled children and school transport.

And over the Comprehensive Spending Review, we will invest £1bn of housing spending on housing for families with children.

The next step is to achieve full employment as the heart of our anti-poverty strategy.

Work is the way out of poverty and increasing numbers of vulnerable people, particularly lone parents recognise that and want to work.

Every day around 500 lone parents across the country get into work with the help of Jobcentre Plus – some 335,000 more than in 1997.

But we need to go further and that is why the proposals set out in the Green paper, ‘In Work Better Off’ are so important

Let me make it clear from the outset that I recognise the particular difficulties that lone parents face.

There will be lone parents for whom work is simply not an option and I will ensure that they will be protected.

But I want to do all that I can to help the majority of lone parents who want to work because they know that independence in work is so much better for them and their families than dependence on benefits.

The reality is that the child of a lone parent on benefit is five times more likely to be in poverty than one in work.

The availability of high quality childcare is therefore crucial and we aim to have that in place by 2010.

This will mean all schools operating extended hours by 2010, providing a core offer of activities with at least half of primary schools and a third of secondary schools doing so by 2008.

By 2010, all secondary schools will offer access on weekdays between 8 – 6 pm, all year round, to a wide range of enriching study support activities and out of hours tuition including IT, drama, music and sport.

For lone parents moving onto Jobseeker’s Allowance, Jobcentre Plus advisers will take into account individual circumstances which could include specific childcare needs, domestic emergencies or bereavement when assessing availability for work.

Let me be absolutely clear.

I have no interest in compelling lone parents, or anyone else for that matter, into jobs in which they and their families will be worse off because that would increase, not reduce, child poverty.

That’s why comprehensive and affordable child care is so important.

That’s why the minimum wage is so important.

That’s why the expansion of In Work Credit that Gordon Brown announced at the TUC Conference last month is so important.

That’s why ensuring that lone parents know that Housing and Council Tax benefits are In Work benefits as well is so important.

How do we make sure that people who need to turn their and their children’s lives around are able to do it?

We will provide a strong package of support for lone parents.

On that basis there would be grounds for strengthening lone parents’ responsibility to look for work as the next logical step.

 

That is why we propose that conditionality will come in age 12 and then 7.

Finally I want to deal with those who pedal the notion that there is a quick fix to what they describe as ‘Making British Poverty history’ by importing the Wisconsin model from the USA.

I have just returned from the USA where I had very useful engagement with key welfare players there.

We have looked at their experience.

We were over here back in the late 1990s to look at the lessons from the 1996 reforms and the Wisconsin model.

We implemented some reforms on the back of it - the integration of benefit and jobcentre operations bringing together benefits and work-focused activities.

The other parts of the story in the US - a strong economy, the introduction of the Tax Credits and an increase in the minimum wage - all played a part there.

We learnt from those too.

But we have a different welfare settlement than the USA. And I believe there are real human impacts of that kind of reform that have to be taken into account when looking at the reform balance sheet.

We have simple points of difference with Wisconsin: for example, requiring mothers to work or train when their child is 12 weeks-old, is not, in our view, best for the child.

We still believe the state should provide basic support and housing for people looking for work so would not go to time-limiting of benefits.

In addition, in the aftermath of 1996 reforms, poverty rates in Wisconsin have been rising: for all Wisconsin residents from 10.2 percent in 2005 to 11.0 percent in 2006 and the child poverty rate increased from 13.9 percent in 2005 to 14.9 percent in 2006.

Wisconsin’s overall poverty rate in 1994 was 9%, in 2004 it had risen to 11%.

Similarly, inequality rose in the USA from 45.5 in 1996 to 47.9 in 2005. And absolute poverty went up - from 11.2% in 2000 to 12.7% in 2005. 

The point is – as we both know - the reforms of 1996 were for then, and we need solutions for now and the future.

I said at the outset that I make no apology for standing by the ending child poverty target because throughout my political life I have fought for social justice.

Child poverty is an affront to social justice.

No one should rest until it is eradicated.

I know you won’t.

And neither will I.