HISTORIC PRESS RELEASE : Gordon Brown Launches Pre-Budget Report consultation tour, setting new Targets to help lone parents get into work [October 2000]

The press release issued by HM Treasury on 9 October 2000.

Gordon Brown today launched his Pre-Budget Report Consultation Tour by announcing a ‘new world of opportunity and choice for lone parents’ and setting an ambitious target to get the number of lone parents in work in the UK up to the levels of other countries.

He outlined new figures showing that:

• 100,000 lone parents have moved from welfare to work since 1997;
• after decades of rising numbers of lone parents on benefit, the numbers have fallen from 1,015,000 in May 1997 to 910,000 in May 2000 with further falls expected this year taking the proportion of lone parents in work to 50 per cent;
• 150,000 lone parents have received help through the NDLP, with over 55,000 moving into work directly through the New Deal for Lone Parents;
• 228,000 childcare places have already been established. With the planned and new money announced today by Margaret Hodge, new places will cater for 1.6 million children by 2004;
• there are 100,000 (25 per cent) more lone parents claiming WFTC than claimed Family Credit, the benefit it replaced. And 90,000 lone parents receive the childcare element of WFTC, compared with 47,000 who claimed the childcare element of Family Credit.

But the Chancellor said that there is much more to do, since lone parents in the UK are much more likely to be out of paid work and in poverty than elsewhere. Whilst the new figures show an increase in the proportion of lone parents in work from 44 per cent in 1997 to almost 50 per cent today, the UK still lags behind other countries in the ?league table? of international comparisons of the numbers of lone parents in work:

Furthermore, the figures show the UK has:

• low overall lone parent employment rates;
• relatively low full-time employment rates (about 20 per cent compared to around 70 per cent in France and 50 per cent in the US);
• a large, and negative, difference between the employment rates of lone mothers and couple mothers. (Latest figures show almost two-thirds of married mothers are in work in the UK).

More recent figures have shown the UK employment rate climb toward 50 per cent and the US figure is now around 70 per cent.

The Chancellor stressed that the biggest changes are yet to come, with:

• today’s launch by Margaret Hodge of an expansion of child care places to match the already announced expansion;
• second, new and improved arrangements for the Working Families Tax Credit ; the under-16s child credit in WFTC increased from £21.25 to £25.60 in June this year.  With this change the maximum WFTC available for a lone parent with two children increased by £450 a year. A new £4.2m advertising campaign is to be launched this month;
• third, the new £1.5bn Children’s Tax Credit for up to 5 million families; and
• fourth, new pilots for the new Choices programme. This new programme, supported by the National Council for One Parent Families, was announced in Budget 2000 in recognition of the fact that for some lone parents moving into work is a process, not an overnight event.  Under this scheme, which is being piloted this month and will be available nationwide from April 2001, lone parents can choose between:
• going into education or training, where they will receive an extra premium of £15 per week to help with the cost of studying;
• taking a ?mini-job? of less than 16 hours, with help to pay childcare costs in  the first year and a being able to keep the first £20 of their wages without affecting their Income Support;
• taking a job of 16 hours a week or more, and applying for the Working Families Tax Credit, which will give them a guaranteed income of £155 per week for 16 hours or more and £214 for 35 hours or more. They will also get help with childcare costs through the Childcare Tax Credit.

There is no requirement to take up work or undertake training, though lone parents whose children are over 5 will be required to come in for a discussion about the possibilities.  Those with younger children can volunteer for the programme if they wish.

The Chancellor said:

“We want to see a sea change in the opportunities available to lone parents. We want a new world of opportunity and choice for lone parents.

We want to give lone parents real choices, enable them to move from welfare to work and get them and their children off benefits and out of poverty. Our new package of help with child care, extra support through the Working Families Tax Credit and initiatives like Sure Start will help more lone parents combine a job with the vital work of bringing up children and get the number of lone parents in work up to US levels.

This Government is on the side of working mothers and working families, helping them to combine paid work with the vital job of bringing up children.  We are working to give them a real choice, helping them with record increases in child benefit, the Working Families Tax Credit and the new Children’s Tax Credit, a £1.5 billion tax cut for up to 5 million families. We’re tackling child poverty, giving families and mothers genuine choice by making work – the best route out of poverty – pay.

We have looked at alternative proposals for a transferable tax allowance. Under such a scheme, a family with two children on £15,000 a year would receive £965 a year. With the Working Families Tax Credit, the same couple would receive not £965 but £2,200 a year.

Scrapping the WFTC and the New Deal for Lone Parents would deny lone parents the choice of whether to work and would leave millions of children and their parents in poverty.

Over a million low and middle income families would lose more than £24 a week if the WFTC were scrapped.”