John Hutton – 2006 Speech on Child Poverty

Below is the text of the speech made by John Hutton, the then Secretary of State for Work and Pensions, to the Joseph Rowntree Foundation on 6th July 2006.

I’m grateful to Ann and Donald for the opportunity to join you today. I very much welcome this report. It is a comprehensive analysis of the issues. It highlights, rightly, the important progress we have made. But, as we have seen, it also makes clear the scale of the challenge we face if we are to meet our historic goal of eliminating child poverty by 2020.

As a Government we remain absolutely committed to this goal – and we are ready to meet it.

That is why I have made tackling child poverty my Department’s number one priority. We’re already reviewing the work of the entire Department – to assess what more we can do. And last week we appointed Lisa Harker to advise us as we work towards a renewed strategy this Autumn.

Child poverty is the principal determinant of life chances. Children born into poverty are more likely to die prematurely. They are less likely to attend school regularly – or get qualifications and go to college; more likely to be forced into the worst jobs – if any job at all; and more likely both to be victims of crime and to offend themselves.

When in 1999 this Government made the decision that it would act to end child poverty in a generation – we were not simply responding to an obvious moral imperative to act – though this was clear. We were also seeking to address the huge social and economic cost of poverty to our society. Social mobility – the opportunity to progress – to have the chance to be all you can be – must be the hallmark of any decent society. If this is true then poverty is its number one enemy. The social and economic exclusion that poverty inevitably generates undermine our society and can fuel an endless cycle of deprivation. As Joseph Rowntree Foundation research has suggested, one million children growing up poor, on average, could produce an additional 120,000 poor children in the next generation.

I believe there are five key areas where we need to make more rapid progress.

Firstly, to further improve the targeting and tailoring of our employment support – to help all those who can work do so – whether someone is a lone parent or in a couple.

Secondly, to provide the right financial support – balancing incentives to move into work with support for those who can’t.

Thirdly, to renew our cross-Government drive against social exclusion – with public services that offer ever greater choice and flexibility to meet individuals’ needs.

Fourthly, to tackle in-work poverty, with better skills and progression in the workplace and a renewed strategy to support partners of those in work.

And fifthly, to ensure that our reforms to the Child Support system have the greatest possible impact on our child poverty ambitions.

I’d like to say just a few words about each.

First and foremost, if we are to achieve a lasting reduction in child poverty we need to ensure that, whereever possible, people have the opportunity to work, so they can provide for themselves. This is the fundamental premise on which the Welfare State was built – and it’s underpinned our welfare reforms – from the New Deal and Jobcentre Plus – to the Welfare Reform Bill introduced to Parliament earlier this week. It was right then. It is the right way now for us to proceed.

Since 1997, the number of children living in workless households has fallen by over 370,000, yet the UK still has the highest proportion of all children living in workless families anywhere in Europe.

Our Welfare Reforms offer new opportunities to turn this around. Underpinned by the extension of Pathways to Work nationwide, they offer new and ever more tailored support to help Incapacity Benefit recipients return to work – and a measured increase in obligations on lone parents to talk to a personal adviser about the options open to them; to be actively engaged in the process of returning to work.

Children of lone parents not in work are over five times more likely to be in poverty than children of lone parents in full-time employment. If we can reach our 70% employment aspiration it will mean a further 200,000 children lifted out of poverty. So we must monitor the effectiveness of our lone parent interventions and potentially consider further support and incentives to help get more lone parents into work.

We also need to go further in modernising our welfare delivery – which is why our Cities Strategy will improve the tailoring of employment support – by empowering local communities and rewarding local providers who are successful in helping people move off benefit and into work.

We’ve developed a new child poverty proofing tool which we are using to assess and maximise the impact all our existing and future policies have on child poverty. But that is just the start. If we are serious about ultimately eradicating child poverty, we must be prepared to take the necessary decisions that allow faster progress to be made. That is why we want to make the welfare state better targeted at helping families with children in the years ahead. I have asked the Welfare Reform Minister, Jim Murphy, to explore whether and how we can refocus our employment programmes, as well as the delivery of our future reforms, so they make helping parents back into work their number one priority.

The second key area is financial support. Today’s report analysed the cost and effectiveness of increases in benefits and tax credits.

We will always consider raising benefit levels where it is appropriate and affordable to do so.

But even increasing benefits in line with average earnings will do little to help families escape poverty, if median income is increasing at roughly the same rate.

At the heart of our strategy must be an integrated approach that balances incentives to move into work with support for those who can’t. And the DWP is working closely with the Treasury to keep this balance under continuous review.

This is particularly important in supporting the transition into work – where we know, for example, that part-time work is often enough to lift most lone parents out of poverty.

And it means we also need good quality childcare – building on our investment in Surestart and early years education, to deliver universal, affordable childcare for 3 to 14 year olds by 2010.

Thirdly – we need a joined up cross-Government approach – working with the new Taskforce set up by Hilary Armstrong – in a new drive to tackle every facet of social exclusion in our communities – from poor health and education to crime and anti-social behaviour.

Many of the parents of 2020 are still at school. By 2020, it’s estimated that we’ll need 14 million highly skilled workers instead of 9 million today – and we’ll only need 600,000 unskilled jobs – compared with 3.4 million today. If we want the parents of 2020 to bring their children up free from poverty – it’s critical that we get skills and education right now – as we are doing with our programme of investment and reform for schools and colleges; and with the Leitch Review – which will be so important.

Fourthly, education and skills must also be a key part of tackling in-work poverty. Around half of the children living in poverty in Britain today live in a household where an adult is already in work. These are largely couple families who do not work enough hours or earn enough to escape poverty. We must not allow these families to slip through the net. They must receive equal attention as lone parents.

So helping the in-work poor means that we must look at new ways of encouraging second earners into work; continue to ensure that work pays, and do more to improve skills and progression in the labour market. In all of these areas I hope the DWP will be able to do more.

This could include looking at ways in which we can shift the focus of the welfare system towards the family as a whole – with new support for partners added onto pre-existing programmes.

And we need to look at improving awareness and understanding of available benefits such that, for example, more people realise that Housing Benefit and Council Tax Benefit can be claimed in work, where recent evidence has shown this would strengthen incentives to seek employment.

And, as we take forward the Leitch Skills Review, which I mentioned earlier, we must work more closely with employers in developing initiatives like Train to Gain which enables low skilled people in employment the opportunity of in-work training.

Fifthly – child support. International evidence shows that child support income can make a substantial difference to child poverty rates. Joseph Rowntree Foundation analysis published today estimates that in 2000 child support payments reduced child poverty by 10-15% in Italy, Poland, Norway, Belgium and Luxembourg – and by as much as 25% in Switzerland and Austria. By contrast, child support was making one of the smallest contributions to tackling child poverty in the UK – a mere 3%.

The CSA Operational Improvement Plan has the potential to lift maybe 30,000 to 40,000 more children out of poverty by 2010. But it’s clear that our current child support system is a barrier to our efforts in tackling child poverty. The recent NAO report makes this absolutely clear. So this must change. Tackling child poverty will be the first and most critical test that the recommendations in Sir David Henshaw’s report must pass.

Seven years on from setting the target of eradicating child poverty within a generation, we remain absolutely committed to our goal – and we welcome the consensus of ambition now also shared by others across the political spectrum. The debate must now be about the means to get there. Eliminating child poverty can not merely be an aspiration. It must be a clear commitment. And I believe that if we can address the five key areas I’ve outlined today, we’ll be able to make real and sustained progress in ending child poverty in a generation.

As Bill Clinton said: Intelligence is equally distributed between people wherever they are born – but the opportunity to succeed is not.

To put that right would be the greatest achievement of modern progressive politics. To aspire to anything less would be unacceptable. To deliver anything less – equally so.