Budget 2007
Helen Goodman (Bishop Auckland) (Lab): I am grateful for this opportunity to take part in the Budget debate. I was pleased to hear all the firm environmental commitments that the Chancellor made last week, but I want to focus on the measures to reduce child poverty. I welcome the decisions that will lift 200,000 children out of poverty, and the recommitment to halving child poverty by 2010 and to abolishing it by 2020. I found the criticism that people could not understand the redistribution in the Budget rather strange. Itis absolutely clear what the Budget is doing; it is redistributing money to families with children. The array of practical measures to support children who are living in poverty and their families is far better and more concrete than anything that has been offered by either the Conservatives or the Liberal Democrats.
It is clear from the criticisms that we have heard that Her Majesty’s Opposition basically do not understand the phenomenon of child poverty, which is presumably why they allowed it to treble under the last Tory Government. It has also become clear to us that the right hon. Member for Chingford and Woodford Green (Mr. Duncan Smith) has completely misled his colleagues by suggesting that family breakdown is the prime cause of child poverty in this country. In January, there was a lot of talk about the UNICEF comparisons of child well-being among members of the Organisation for Economic Co-operation and Development, but I have looked at the more up-to-date comparisons between European countries by Jonathan Bradshaw of York university. They were published in a journal called Social Indicators Research in January this year, and they show that family breakdown isnot the prime cause of child poverty in any of the European countries. Indeed, if we strip out the experience of the United Kingdom, we see that there is a positive correlation between child well-being and the number of single-parent families, with Finland and Sweden at the top of the table.
That large, comprehensive study looked at overall child well-being. It referred to all the European countries and included 51 different variables, which covered the material situation of children, their housing, their health, their subjective well-being, what they thought of their situation, their education, their relationships, their civic participation, and the level of risk and safety for children. The key factors influencing child poverty were found to be income inequality, child poverty itself, obviously, gross domestic product per capita—that is, the overall wealth of a country—social spending and spending on children and families. That is why the strategy announced in the Budget for tackling child poverty is the right course of action.
The key decisions that have been taken are absolutely what are needed to achieve reductions in child poverty. The increase in the child tax credit by £150 over the level of earnings growth, and the increase in the working tax credit threshold by £1,200, will have a significant impact. In my constituency, nearly 4,000 families and nearly 7,000 children will benefit. Those changes to tax credits are worth £2 billion in total, and that will be far more effective than the increase intax allowances proposed by the hon. Member for Cheltenham (Martin Horwood). The problem with raising personal tax allowances as a route to addressing child poverty is that raising such allowances benefits the rich far more than the poor.
Martin Horwood: I beg to differ with the hon. Lady. As the lowest paid pay a higher proportion of the starting rate as income tax, surely they must gain proportionately more by its abolition.
Helen Goodman: The hon. Gentleman clearly did not listen, either to what I said or to what he said himself. I said that raising personal allowances would provide greater benefits for those at the top than for those at the bottom.
David Howarth: I simply do not follow what the hon. Lady is saying; what she says cannot be the case. If we increase the tax allowance at the bottom, that must be more favourable to those at the bottom than to those at the top, given the proportion of income taxed.
Helen Goodman: I am sorry, but the hon. Members for Cheltenham (Martin Horwood) and for Cambridge (David Howarth) are just revealing their complete failure to understand how the tax system works, and how the allowances operate at the top. If we slide all the allowances upwards, there is far greater benefit to the rich than to the poor.
David Howarth: Will the hon. Lady give way?
Helen Goodman: No, I have given way twice,and the hon. Gentlemen simply keep repeating their misunderstandings.
Another benefit of the Government’s approach of putting money into tax credits is the high take-up of tax credits. At the moment, 82 per cent. of those who are eligible claim tax credits, and 97 per cent. of those on incomes of under £10,000 a year claim tax credits, and that is a far more successful record than that of the Tory Government, who operated something called the family income supplement, for which the take-up was roughly 50 per cent. I welcome the increases in child benefit. It is clear that they will have a stronger impact in addressing child poverty than Opposition Members’ rather bizarre suggestion of reintroducing the married couple’s allowance. I simply cannot understand why they want to throw away money that they could use to good purpose, and to reduce child poverty, on people who are happily married, do not need the money, are high up on the income scale and may not even have children.
Taken together, the changes that the Chancellor announced this week, and the other measures that he has introduced, will result in a positively redistributive effect over the period from 1997 to 2009. People whose household incomes are in the bottom 10 per cent. will experience, over that period, a rise in income of 27 per cent., whereas those in the top 10 per cent. will have their incomes fall by 1 per cent. A single-earner couple with mean earnings who have two children will get a rise in their income of £320. A single-earner coupleon median incomes with two children will have arise of £500. Contrary to what has been claimed by Opposition Members, a single-earner couple on half median income with no children will also have an increase in their annual income; they will get a riseof £175.
One reason we Labour Members believe that it is important to address child poverty is that disadvantage is translated across the generations. Last week, the Cabinet Office published an interesting paper on families with multiple disadvantages, which showed that children with four experiences of familyproblems had a 70 per cent. risk of suffering multiple disadvantages by the time they were 30 years old. Interestingly, children from the 5 per cent. most disadvantaged households were more than 50 times as likely to suffer problems when they reached the age of 30 as children not in the top 5 per cent., but in the top 50 per cent.
One of the disadvantages that is being looked at is the disadvantage of being the child of a teenage parent. In October, I undertook an experiment, and tried to live on the income support rate for people under 25. Using the information from York university, I found that that gave me £21 a week for food, taking account of everything else for which one might reasonably expect to have to pay. I wanted to see whether or not on that £21 I could have the kind of healthy diet recommended for pregnant women. At the end of the week, I had lost weight. Hon. Members may think that in my case that is not a problem and that there were advantages for me personally, but it is obviously not satisfactory for a pregnant 19-year-old to do so. I was therefore pleased by the improvements to benefits for pregnant young women. First, the Sure Start maternity grant is now £500, and it goes to young mothers on low incomes. Secondly, the payment of child benefit has been extended, and it will begin at week 29, so all mothers will be up to £200 better off.
That sort of practical measure makes a genuine difference to the people who need it most. The Budget documents include measures to help young people who are not in employment, education or training, but may I point out to my hon. Friends a contradiction that should be addressed? At the moment, teenage mothers, if they are still at school, are expected to return to school 18 weeks after the birth of their baby. This April, we will extend maternity leave to 39 weeks, so I suggest that young mothers need at least as much time to adjust to their new role and bond with their babies as older mothers. We should bring targets for those young teenage mothers into line with maternity provision for the rest of the community.
Frequently, what is said about children and child poverty is a way of thinking about how to construct a new and better society. Looking at things from a child’s point of view offers a vantage point from which to offer critiques of society as a whole. It is the child’s position as a future adult that is of interest to politicians. That has always been true—it was true in ancient Sparta, it was true under the Jesuits and it was true for Bismarck. That is largely because we know, or we think we know, that what happens to us as children is a significant influence on our lives when we become adults. It is extremely tempting to believe that by controlling the condition of childhood we can reach into the future and control the society that we want.
I believe, however, that we should be concerned about child poverty for a more important reason. Children are not human becomings—they are human beings. Childhood is part of life. It accounts for about 20 per cent. of life, so it matters in itself, as well as providing a good basis and preparation for adulthood. It needs to be enjoyable and fulfilling. Last year, Shelter and “End Child Poverty” put together a collection of poems written by children living in poverty across the country. If anyone was in any doubt about the importance, urgency and significance of the need to address child poverty, they would not be after reading those poems. I want to end with a poem written for that book by an eight-year-old child in my constituency called Lucas. It is called, “I Can’t Live There”:
“Damp with rats carrying germs,
I wish I wasn’t there.
Leaking roofs, unstable floors, I hate,
To be there.
Teenagers telling me things I shouldn’t know,
I wish I was somewhere else, somewhere,
Where I can live.
Please help me Mr Government,
I beg you, I plea.”
Speech in the House of Commons, 26 March 2007
