Households Below Average Incomes Statistics — House of Lords, 2019-03-28
Topic: Social Welfare
Maeve Christina Mary Sherlock (Labour, Centre-left): My Lords, I thank the Minister for repeating that Statement and for advance sight of it, but, not for the first time, I rather wish Lords Ministers were allowed to make their own Statements. I do not blame the Minister for the rather partisan nature of that; I suspect it may be aimed more at the Secretary of State’s Back-Benchers than at this House. None the less, since she has had to put that on the record, I am now obliged to repudiate it before we can get on to talking about poverty figures. Bear with me while I do that briefly, then we can talk about what was actually in the Statement Since the Secretary of State chose to attack what she called "Labour’s welfare splurge" and what we called lifting children out of poverty, I have to put to rest once and for all that old canard that the Government were forced to cut spending on the poor because of Labour’s record. A detailed study, by Ruth Lupton et al, of the coalition Government found that, "the poor bore the brunt of its changes to direct taxes, tax credits and benefits" Meanwhile, with the exception of the richest 5%, those in the top half of the distribution were net gainers from the changes "Perhaps surprisingly, overall the ‘welfare’ cuts and more generous tax allowances balanced each other out, contributing nothing to deficit reduction" Those coalition austerity cuts were not needed to reduce the deficit or to do anything about Labour’s spending in the past; they were to pay for tax cuts. The benefits of those tax cuts are felt primarily by higher earners. If you increase the personal allowance, someone earning £80,000 a year benefits from all of it. A single mum working 35 hours a week during term time at the minimum wage does not earn enough to benefit at all I have now taken a deep breath and will move on to today’s Statement. One thing that the HBAI—households by average income—does is to give us an interesting sense of perspective, and I want to remind us of that today. It tells us that, to lie in the top half of the income distribution, a single individual last year needed a net income over £17,700. A single individual with an annual net household income of over £34,900 would be in the top decile. In other words, he or she would have an income higher than 90% of the population. We all tend to assume that other people earn similar amounts to us and that is a really good reminder that, if that is what the average is, think what the poor are living on The Minister mentioned relative poverty today. Normally, Ministers in this Government end up talking about absolute poverty because it is the only figure they can find that does not appear to be rising. Under these figures, they have not looked at the international measure, which is relative poverty, but even today’s figures show that the number of children living in absolute poverty before housing costs increased by 300,000 and after housing costs by 200,000. It is staggering to see absolute poverty rising in our country But that is inevitable. Ministers may not wish to come into politics to make people poorer, but I am afraid that if one wills the ends one must will the means. It is inevitable that, if you keep cutting benefits to children, families with children will get poorer. The benefit freeze alone will now save the Government some £4.4 billion a year. That is £4.4 billion that has gone into the Treasury and come from the pockets of some of the poorest families in our country. That means that the Government have cut the value of all the main means-tested working age benefits—all the classic ways in which people keep body and soul together, including personal allowance, income support, jobseeker’s allowance, ESA, housing benefit, universal credit, lower disabled child addition—I could go on. According to the Joseph Rowntree Foundation, the effect of the benefit freeze carrying on for yet another year next year means that families will lose another £560 a year on average Perhaps even more surprising is that these figures show that the number of pensioners living in poverty actually rose by 100,000 last year, which means that it has increased by 400,000 since 2010. What are the Government planning to do about that I have three questions for the Minister. The last Labour Government set out to reduce and eventually eliminate child poverty. They had a clear strategy. What is now the Government’s strategy? Do they aim to reduce child poverty? If so, by how much, by when and on what measure? Or do they think it acceptable that 30% of British children are growing up below the poverty line, half of whom are under five Secondly, given that the Government repeatedly stress the importance of people being in work, what will they do about the fact that the proportion of poor children who are in working families has risen again, to 70% Finally, will the Government please rethink the benefit freeze? If they would invest just enough to stop it now and not continue it for another year, that could make a real difference to some of the poorest families. These families have suffered enough. When food bank use is at record levels and we keep reading about teachers having to bring in food and clothes to schools simply to help children be well enough, clothed enough and fed enough to learn, surely something has to be done. Please will the Government act?