Westminster Hall Debates – Deprivation/Child Poverty Thursday 19 June 2008

Terry Rooney (Bradford North, Labour)
I was rather hoping that Jenny Willott would be here today, because she took part in the Committee's deliberations, but as she is now a Liberal Democrat Front-Bench spokesperson and dealing with the same subject, I understand why she is not present. Our congratulations go to her; she has been a valued member of the Committee since 2005.
We are here to discuss the Government response to the Select Committee's report. I might as well get the bad news out of the way first: the Committee found the response very disappointing. It was complacent, defensive and a restatement of existing policies, despite being published two days after the latest child poverty figures came out showing an increase of 100,000 children in poverty. Perhaps existing policy is not working. We need to put that on the record at the start.
I accept that there were significant announcements in last year's autumn performance report and the 2008 Budget, which we hope will take 650,000 to 700,000 children out of poverty. However, there is still enormous pressure to deliver on the 50 per cent. reduction target for 2010. No doubt the Committee will return to the subject and remain watchful and vigilant, as I am sure the Minister would expect it to be.
This debate is particularly relevant when we look not only at the less than 60 per cent. of average earnings definition of poverty but the material deprivation figures, especially given what is happening at the moment in food and fuel prices. That will obviously have a significant impact on material deprivation, although it might not have an impact on incomes. We need to recognise that it is an ongoing and serious issue for families on low incomes.
I shall talk first about the education aspects of our report. The Government have long recognised that we need to deal with generational inequalities, worklessness and similar problems. The key to breaking that cycle is getting today's poor children the best education possible.
It might be against the law, but it is a fact that many schools send letters home to parents saying that a school trip can go ahead only if contributions are received. The parent have the right to refuse to make a contribution, but if they do not make a contribution and the trip gets cancelled, word soon gets around about who has denied the rest of the class that opportunity. No matter how much that practice is against the law, it is happening. I have nine grandchildren, and they experience it week in, week out and month in, month out. It really is a problem. Children's education is incomplete when, because of poverty, they are unable to take advantage of those educational opportunities.
The practice extends further. Because things like music lessons are charged for in our schools, the vast majority of poor children are denied that opportunity because their parents cannot afford to pay. The cost is significant, but music lessons are part of that rounded educational experience that children should be getting, above and beyond the national curriculum.
Most poor children are self-excluded from extra-curricular activities, because they need to have games kit and equipment, such as cricket bats or whatever, and the family budget does not stretch to those items. The total educational experience is just not there for those children, and that leads to diminution in their happiness and performance at school, increased truancy and other effects. The child poverty unit is, as my right hon. Friend the Minister knows, the result of a partnership with the Department for Children, Schools and Families. This problem with extra-curricular activities is a key issue for it.
The other side of this problem is that, although we know that children in poor families have worse records of truancy, achievement and everything else, we have a benefits system that penalises their parents if they endeavour to take educational courses themselves. The 16-hour rule is far too rigid, stringent and perfidious and, as I say, it penalises parents who want to improve their life and better themselves through education. That is not a good message to send to children, is it?
Quite rightly, the state spends a fortune—billions of pounds—on supporting students into higher education. They then become higher earners and will, we hope, enhance and develop the economy, but those who are at the bottom of the pile get punished and penalised for taking educational courses. I know that there were some announcements in the Budget, particularly about lone parents, and I know that there are pilots running to help 16 and 17-year-olds who are not in education, employment or training. Generally speaking, however, the benefits system penalises those who try to improve their education and thus their employability.
I understand the argument that it is not the job of the welfare system to support students, but when people are trying to improve their employability and thus their ability to lift themselves and their family out of poverty—particularly when we are talking about courses in basic subjects such as maths and English—a degree of flexibility is needed in the rules and regulations. Perhaps that is an area that might be looked at further.
I would like to state some basic facts about child care. Only a third of those who are entitled to child care tax credit take it; that is an incredibly low take-up. Nationally, 22 per cent. of child care places are vacant. There are all sorts of problems, especially in London, with the cost of child care, including fees having to be paid up front, with some outfits even demanding a term's fees in advance. All of those costs militate against people getting child care.
Child care is crucial, not just for lone parents but for several other family structures. Having read the documentation, I think that the Treasury has really got a grip of this issue. Its review of child care tax credit and the work that it has published on that subject is spot-on. However, we need some rapid progress.
The Government's response is that it is the responsibility of a local authority to ensure that there is suitable and adequate child care provision in its area. However, when that provision is failing, it is the Government's responsibility to step in and deal with it. The Government simply cannot say to local authorities, "That is your responsibility and if you're not doing it right, get it sorted."
Last week, the Secretary of State for Children, Schools and Families announced that 658 secondary schools were not meeting their targets; they would get seven weeks to come up with an action plan, otherwise they would be taken over. Well, why do we not have the same focus and impetus when dealing with authorities that are failing to deliver adequate child care? The policy on child care is a national one—it is key to our strategy on cutting child poverty—and if local authorities are failing it is up to central Government to deal with that situation, and not to say that it is a problem that must be sorted out by others. Sadly, far too many authorities have been extremely complacent. Billions of pounds of Government money has gone into child care provision, but far too little regard has been paid to holding people to account for delivering what is necessary.
A further point is that although most people are adequately covered by child care provision between 8 am and 6 pm, lone parents in particular tend to work unsocial hours, evenings and weekends, and that is when child care is least likely to be available. The other big group facing difficulties is the parents of disabled children. Getting child care for a disabled child is inordinately expensive. Not only does the child care tax credit go nowhere near covering the cost, but there is a paucity of supply. We know that the family of a disabled child is four times more likely to be in poverty, so we really need to do some serious analysis of how we can resolve that problem. The child care tax credit system will never work. More direct provision is required—a sort of drop-in facility, rather than parents having to go through all the rigmarole. I understand that a review is being done but that no commitments have been made.
Child care tax credit is limited to the first two children. There is no help at all if one has more than two children. Child care costs anything between £80 and £250 a week, depending on where one lives. If parents are getting a bit of cover for two children but have to pay for everything for two other children, moving into work is too uneconomic even to think about.
As I said, the Treasury is conducting a review, I hope in conjunction with the Department for Work and Pensions. I am encouraged by the scenario that it painted of the basis of the review. I hope that we will see some positive results from it, but it is obvious that child care has been a hindrance to moving into work for lone parents in particular, but for others as well. If that is the case—if it is such a key matter—we have to be big enough to say quickly that what we have been doing is wrong and that we will take the necessary action.
The Government's response on the "better off in work" calculation was, frankly, one of the most disappointing aspects of the document. A calculation should be just that. Jobcentre staff should be able to say to a claimant who is considering a prospective job what the difference in their income will be, after expenses—people should be able to see where they are now and where they would be if they were in work. To say, as the Government do, and as they reiterated in their response, that any incidental expenses connected with moving into work will not be taken into account in the calculation is, frankly, to be deceptive. A lone parent with three children immediately faces a bill of about £25 a week for school meals, where previously the children had free school meals. I accept the Government's argument that expenses related to moving into work are variable and that only standard expenses can be calculated, but the cost of school meals is standard, as are the costs of things such as prescriptions and everything else that one loses. For somebody who is on constant medication, that needs to be factored in. Transport costs, too, are constant.
It is insupportable to tell someone that they will be at least £25 a week better off in work when, in practice, they will be £30, £40 or £50 a week worse off. I repeat what we said in the report: that is a deception. Both sides of the equation must be put to people. Otherwise, they will lose confidence in the calculation. They will tell their friends, relatives, neighbours and other mothers at the school, and loss of confidence will rapidly decline into disbelief.
Michael Bourne: Mr Rooney is correct in suggesting in paragraph 8 that cricket is an expensive game to play and that poor children suffer because parents cannot afford the equipment. But nearly all state schools should be able to provide everything that is required to play cricket in extra-curricular activities. After all, the latest School Sport Survey, which ministers are always keen to quote, claims that 90 per cent of all schools offer cricket. The next time this statistic is quoted, Mr Rooney should jump to his feet and challenge his front bench.

When playing cricket at school, all that a youngster needs to provide for himself is sound footwear; the school should supply everything else, plus a decent pitch to play on. (One school in Leeds, when its teams play against other schools, home or away, dishes out white trousers for its players to wear.)

The real problem arises when a promising and keen young cricketer from an impoverished family wishes or is encouraged to join a local cricket club, but fails to do so because he and his family cannot afford even the basic whites, let alone other personal equipment of the kind that other players sport. And then there are membership fees, etc., etc. Sadly there have been many such cases. Could not Mr Rooney start a campaign to provide clubs with a welfare fund, out of public money, to assist the youngsters he speaks of?

John Penrose (Weston-Super-Mare, Conservative)
Does the hon. Gentleman agree that it is not just the end result of the calculation that is gravely flawed, but the fact that it can take up to half an hour to do it, even with the aid of an advanced piece of software and a benefits expert? By that time, any notion of an incentive to work is stone dead on the floor.

Terry Rooney (Bradford North, Labour)
My hon. Friend is absolutely right. There is a link between the minimum wage and the £95 a week disregard in carer's allowance. There is a similar problem with permitted working limits for incapacity benefit. If the two figures do not change at the same time, there can be a period when somebody suddenly finds that they are breaking the rules although they have done nothing wrong. There is an easy solution, and I hope that the Department is considering looking at it just once a year instead of at the point of change.
My hon. Friend Harry Cohen mentioned sanctions. The Minister is well aware of my personal opposition—and, indeed, the Committee's opposition—to moving lone parents on to the jobseeker's allowance regime. I am grateful to him and accept that he has been extremely helpful, as has the Secretary of State, regarding how the regulations will be implemented. A great deal of flexibility will be allowed.
The decision has been made, so that is where we are, but there is still the problem of lone parents who get moved on to the JSA regime being exposed to a much harsher sanctions regime. It does not increase the child poverty numbers if somebody is sanctioned, as they are already in poverty. It just means that they are even deeper in poverty. I hope that the message is going out loud and clear that sanctions must be the last resort.
There is a general problem with sanctions. Too often, people do not know that they are being sanctioned; if they do know, they do not know why; and if they do not know why, they do not know how to put things right. The whole idea of sanctions is to change somebody's behaviour, but if communication is not clear, and if it is not apparent how behaviour can be corrected, the function of the sanction is lost. The research into the sanctions relating to the work-focused interview, which is a serious issue for lone parents, is due in about two weeks. It will be interesting to see what it has to say. I accept that there has to be a sanctions regime, but it has to work and it has to be understood by the claimant as well as the personal adviser or the decision maker.
By the bye, two large contractors who have pathways to work contracts have told me that they get a 40 per cent. no-show of referrals from Jobcentre Plus, but, although they send the names back for a sanction to be considered, nothing happens. One wonders whether these are just teething troubles in the early days, or whether people are saying, "We've got rid of that problem now; it belongs with the contractor so we don't need to do anything." Again, there is different treatment for different groups of clients.
I shall draw my remarks to a close, because I know that other hon. Members want to contribute to the debate. The key issue in relation to child poverty, identified by the Select Committee and by a number of other groups, is the point of change. People have to feel comfortable at the point of change. Too often, we are told that people on benefits are more comfortable with that much lower income—knowing that it is secure and will come every week, and most importantly knowing that the rent is paid and there is a guaranteed roof over their family's head—rather than with the haphazard world of work. A clear majority of lone parents are in work, so for some people it obviously works, but we do not do enough to find out what made it work for them and try to apply those lessons to the people who are left. Too often, we ask people, "Why aren't you pulling your finger out?" instead of trying to marry up the experiences of people who have successfully moved from benefits into work.
The fear that people experience is genuine and heartfelt. We talk a lot in the report about in-work poverty, but the fact is that if people move from benefits into work, their income increases significantly, albeit it might not lift them all the way out of poverty. If people are still nervous about taking that step, there is something wrong with the advice and guidance procedure beforehand. To help, we can be a lot more imaginative with benefit run-ons—there is a run-on on housing benefit, for example. The Work and Pensions Committee has published a report on research on social housing and worklessness in which we say:
"The complex interaction between earnings, housing benefit, tax credits and resulting net income makes it difficult for tenants to fathom the financial consequences of entering work. Difficulties understanding this interaction and being able to compare net income in work compared to out of work were apparent among the people interviewed. Few respondents appeared to be aware of the operation of housing benefit as an in-work benefit, raising concerns about their ability to cover housing costs when in work.
This uncertainty expressed by some respondents about the income implications of entering work was in stark contrast to the certainty of their current situation, which allowed the development of personal strategies for 'getting-by'. Many also drew attention to the insecure nature of the work available to them and contrasted this unfavourably with the stability of benefits"—
despite their paucity. That encapsulates the problem.
Large groups of people are opting for the safety of very low income rather than taking a chance. That is especially true in London, because of the much higher rents there. Part of the problem is lack of knowledge and poor advice and guidance about in-work benefits; part of it is the appalling performance of some local authorities in processing housing benefit claims. The current one-month run-on should last for three months. Within that three months a local authority should have to establish the new claim and, if they do not do so, full run-on should carry on at the local authority's expense and the cost should not be reimbursed by the Exchequer. That would be a direct inducement to improve performance.
We need to get over people's insecurity about the point of change. That applies equally to other issues. Housing benefit is the most spectacular example but there are others, such as entitlements to free school meals and school travel. For example, 57 per cent. of authorities still give clothing grants for school uniform, which people lose if they move into work. People take all those points into account in their minds: they are not stupid and they need to know that moving into work, which is supposedly so good for them, will actually work out.
Finally, I want to make two quick points about steps that we need to take to further increase the rate of progress on child poverty. At every Budget time, we see people almost scratching round to find £1 billion here or £1.5 billion there to try to at least hold the figures steady, so here are my proposals. First, if we enforced equal pay—it is nearly 40 years since the legislation came in—that would do an awful lot to reduce child poverty. Secondly, we have to grasp the nettle and increase the minimum wage by above the rate of inflation or the rate of wage increases. If we had a minimum wage of, say, £7 an hour today and enforced equal pay, we would take about 1.5 million children out of poverty straight away. Society and Government have a joint responsibility and an interest in this issue.
It is outrageous that, today, some 40 years after we passed equal pay legislation, 68,000 claims are pending at an industrial tribunal. In local government alone, some 400,000 claims of a class action nature are waiting; there are others across the public sector and many more in the private sector. Forty years on, we really should be saying, "Enough is enough; everybody's had a chance," and enforcing the legislation.
The two measures that I have mentioned would have a dramatic effect on the child poverty figures. At the end of the day, that is what matters. We are talking about children. Putting it crudely, these are the people who will be paying their national insurance contributions that fund our pensions in retirement and paying for our care in residential homes, or wherever, and they deserve a better chance than they have at the moment.

John Penrose (Weston-Super-Mare, Conservative)
I congratulate the Chairman of the Committee on securing this well-timed debate, coming as it does shortly after the news that the number of children living in poverty has risen by 100,000 for the second year running. That stark statistic led the End Child Poverty campaign to say that such a poor result will be a setback to the Government's target of halving the number of children living in poverty by 2010. The Committee Chairman has presented a pretty thorough, comprehensive survey of many of the points contained in the Committee's report and, I am sad to say, summarised accurately the Committee's reaction to the Government's response, which we had hoped would be substantially more constructive and engaged than it was. I hope that the Minister will be able to embroider and develop the Government's response and, perhaps, change that perception by the end of this debate.
This problem affects all of us. I am pretty sure that every hon. Member present has pockets of poverty and deprivation in their constituencies, no matter which part of the country they represent. In my constituency of Weston-super-Mare, according to figures released by the Joseph Rowntree Foundation, 19 per cent. of children live in families on out-of-work benefits. That local authority is one of the dozen or so worst in the south-west. In fact, we have seven super-output areas in the bottom 10 per cent. of indices of multiple deprivation, and two super-output areas in the middle of Weston-super-Mare in the bottom 2 per cent. of indices of multiple deprivation. Therefore, the issue affects all hon. Members here today, who will have pockets of severe poverty in their constituencies as well as less badly affected areas.
I want to discuss what we mean by poverty. One of our early recommendations as a Committee was that the Government should change the way in which they measure and report poverty. That might sound like a slightly dry topic, but it has fundamental and profound implications, because poverty, as we all know, is a multifaceted problem: many different factors contribute to it and affect it. Therefore, the Government could pull many different levers to try to improve the situation.
The Government have moved towards viewing poverty through three simultaneous lenses. They use a relative measure, the internationally comparable OECD measure of 60 per cent. of median income, to assess poverty. Whenever we made international comparisons in our report, the Committee used that index as a way of comparing the UK's performance with that of others.
In addition to the relative measure, the Government use material deprivation, which is very closely linked with the indices of multiple deprivation that I was just discussing. Under that measure, it is a question not just of how much money is coming into a household—the income relative to the national median—but what someone can buy with that money. The Chairman of the Committee rightly pointed out that in London, where living costs are high, a person can have the same income as someone who lives in another part of the country, in which the cost of living is lower, and yet be able to afford fewer of the essentials of life and, therefore, be comparatively worse off. That is a particularly important issue given the environment in which we live at the moment, with rising fuel and food prices. Many of the essentials of life are becoming rapidly more expensive. Therefore, material deprivation will become more of an issue. It is appropriate for the Government to consider poverty through that lens as well.
The final measure that the Government use relates to social mobility and the persistence of poverty. Again, that is a crucial measure. It is question not just of whether or not someone's income briefly falls below 60 per cent. of the median, but how long it stays there. If people are temporarily out of work—even if it is only for a week or two—their income could theoretically fall below 60 per cent. of the median. As such people may only be out of work for a week or two before getting another decently paid job, that should not push Government policy in a particular direction. We must address the problem of those who find themselves stuck in poverty for an appreciable length of time because obstacles prevent them from getting out of it.
The Chairman of the Committee made some important points about people who are affected by change and who find it, if not comfortable, comforting to remain in a situation that is stable and safe rather than take the risk of going into work. They may worry about how all the unknowns, which have overcomplicated the benefit system with multiple interactions, will impact on their situation if they take that risk.
It is appropriate for the Government to look at poverty through those three different lenses. It is vital as well because this is not just an academic debate about the causes of poverty. Were we to choose only one of those views of poverty, it would have profound implications on the policies that we pursue to relieve poverty.
For example, were we to choose the relative measure of poverty and say that it is important to minimise the number of people who are below 60 per cent. of the median income, it would unavoidably push us in the direction taken by the Scandinavians to relieve poverty. We would have to have significant rises in taxes to effect substantial rises in benefits, particularly out-of-work benefits and possibly the minimum wage as well. The Government have not gone down that road. It is not Government policy solely to use that method of alleviating poverty, and my party would probably agree with them on that. There are other things that we need to do. With the possible exception of Harry Cohen, who might think that the perfect solution to relieving poverty, there is not a widespread political consensus that that is the only road out of poverty, even though it works for other societies such as those in Scandinavia.
Therefore, it is vital for the Government to be clear about what they are trying to do to alleviate poverty. If they are to hit their target in 2020 of substantially wiping out child poverty—even if as gently and elegantly as they can they are backing away from the notion that they will hit their halfway-point target in 2010—it is essential that we all understand what the Government aim to do. Many of the essential planks in their platform will take effect not between now and 2010 but from 2010 to 2020—in particular, the welfare-to-work reforms.
Those reforms are critical because the Government are effectively saying that they will not rely purely on a Scandinavian attempt to raise taxes and benefits, but on getting more people back into work and off benefits, allowing them to take the step through the point of difference—to which the Chairman of the Committee referred—believing that they will be better off in work. We hope that the "better off in work" calculation will be simple, easy to understand and right. A combination of earnings and in-work benefits, or tax credits, is the way to lift people either out of severe poverty and improve their earnings or to lift them entirely out of poverty over time. I hope that that is a statement of where the Government are going.

Barry Sheerman (Huddersfield, Labour)
Would the hon. Gentleman couch that in terms of the broad philosophy that David Freud has brought to Government policy in the Department for Work and Pensions and other Departments? He says that so many of our interventions to get people out of long-term sickness, disability and unemployment are very short-term—they last 12 weeks and then there is the revolving door and so on. Does the hon. Gentleman think that one of the answers is more concentrated help over a longer period, and not being fussy about who the agents are to supply that change?

John Penrose (Weston-Super-Mare, Conservative)
I agree with large parts of the Freud report. The hon. Gentleman is right to say that Freud recommends introducing far more variety of supply into the welfare-to-work arena so that more organisations, particular those in the third and charitable sectors, can get involved in getting people in hard-to-reach groups back to work. Also, we must ensure that organisations are paid by results over an extended period. It is not enough to give someone a couple of brief courses, get them into a job and then wash our hands of them. We must ensure that the job is sustainable and that the person remains in work for an appreciable period. In a previous report, the Committee recommended that the person should be in work for at least a year before the welfare-to-work agency receives full payment. That would help to ensure that the problems mentioned by the hon. Gentleman are avoided.

Philip Hollobone (Kettering, Conservative)
My hon. Friend made the point earlier that the "better off in work" calculation should be simple. Should it not be as simple as possible? Almost from the first step, when getting on or off benefits, it should be a question of one, two or three presses of a button to do the calculation. If we can make the process really simple—almost from the first calculation that is done—it would encourage people to say with confidence, "I would be better off in work and off benefits."


John Penrose (Weston-Super-Mare, Conservative)
I could not agree more with my hon. Friend. Two things would need to happen for that to be achieved. An incredibly complicated piece of software must be updated in enormous and excruciating detail every time there is a benefits change to simplify the calculation. However, we can only go so far in improving that software to try to reduce the number of keystrokes in the way he describes. The fundamental problem is trying to model the effects of an appallingly complicated benefits system with multiple interactions and interdependencies. In an earlier report, one of the Committee's conclusions was that only a limited amount can be done by improving the software. We will need to simplify dramatically the benefits system and its interaction with tax credits before we will make much headway. It is fundamental, but that is the way that we need to head.
May I finish off this point about the Government's overall approach to poverty by pressing the Minister on a particular question? As I understand it, the Government have committed themselves to three ways of viewing poverty and have, therefore, committed themselves to the policy outcomes and approach that I have just been describing. As I mentioned, one of those ways of assessing poverty is the internationally comparable OECD measure of 60 per cent. of median income. I had thought that that measure was part of the Government's approach; indeed, it appears throughout our report, and every time we made an international comparison, that was the measure that we used. However, in a recent debate about poverty—it was about pensioner poverty, but child poverty and pensioner poverty clearly share a common definition of poverty—two of the Minister's departmental colleagues sought to rubbish that measure of poverty. They said that the calculations by EUROSTAT, which seeks to make international comparisons, are somehow not to be believed.
I appreciate that the Minister's colleagues were probably seeking to avoid embarrassment on the Floor of the House because they were being accused at the time of having engineered a situation in which Britain's pensioners were worse off than those anywhere else in the EU, apart from Latvia, Cyprus and Spain. However, the Under-Secretary of State for Work and Pensions, Mr. Plaskitt, said:
"The EUROSTAT survey measures the median income of each country and that of pensioners. The UK is relatively well-off so our poverty line is higher, and so our "poorest pensioners" are better off than the "poorest pensioners" in other countries. The motion's claim is therefore spurious."—[Hansard, 4 June 2008; Vol. 476, c. 880.]
In the same debate, the Minister for Pensions Reform said:
"Because we are a wealthier country, our poverty level in the EUROSTAT statistics is set higher than that for most European countries. That is the way the EUROSTAT statistics are set...Our pensioners are therefore much better off than those in most other countries."—[Hansard, 4 June 2008; Vol. 476, c. 848.]
I hope that the Minister will clarify the situation. The whole point of the measure using 60 per cent. of median income, which the Government and his Department have used until now, is that it is internationally comparable. It allows international comparisons to be made and conclusions to be drawn in the way that the Committee has just done in its report. It is therefore a little awkward, to put it politely, for the Government to want to have their cake and eat it by using those international comparisons when they show the Government's record in a flattering light, but back-pedalling rapidly when they come up with conclusions that Ministers do not like. Perhaps the Minister could therefore make it clear that the Government remain committed to that measure of poverty as one of the three that they use and that his colleagues were perhaps paddling rather furiously to avoid embarrassment on the Floor of the House, rather than necessarily being bang on in their representation of Government policy at the time.
The Chairman of the Committee has covered the points made in the report in fairly comprehensive detail, so I shall focus on just one additional issue—child care. Child care is clearly one of the most important obstacles to taking parents and their children out of poverty. Although the Government have managed to engineer a substantial increase in the number of child care places over the past few years, that increase has come at a cost. There is not just the financial cost, although the Government have clearly come up with extra money to finance child care places. In increasing the number of places, however, they have also dramatically increased the amount of regulation, red tape and bureaucracy, as well as the expectations, surrounding child care places.
There are sometimes excellent reasons for the changes. Some have happened because of child protection issues and because we have needed to ensure that Criminal Records Bureau checks on child care providers are done correctly. In other cases, the concern has been to improve the quality of child care, and that has led to regulations governing child care providers' minimum qualifications and the minimum ratios of child care providers to children. As a result of such provisions, however, the number and range of child care providers has been dramatically reduced as fewer organisations have been able to provide the care envisioned in the Government's guidelines, which have become substantially tougher and more serious. The cost of child care has also grown dramatically, and one direct result of that, which we can all see, is that child-minding provision has declined dramatically.
As the Chairman of the Committee said, we have therefore ended up not only with an increase in the number of child care places, but with a dramatic increase in the number of vacancies and unused places, which now account for about 22 per cent. of places up and down the country. I suspect, as do many others, that that means that we have a monolithic, bureaucratic, over-engineered set of providers providing what the Government have defined as the right kind of care, which will, however, almost inevitably not match what parents want and need.

Barry Sheerman (Huddersfield, Labour)
The Select Committee on Children, Schools and Families has just returned from two intensive days' work in Copenhagen. What the hon. Gentleman says strikes a particularly discordant note for someone who has just come back from a country that supplies very high-quality early-years care. Does he not agree that if we are to stimulate young children as early as we can, it is the quality of the setting that matters? He would surely agree that part of what the Government are trying to do is to squeeze out below-standard child care. I, too, would like to have my cake and eat it and to have low-cost, stimulating, high-quality care. At this point in the 21st century, however, society can surely no longer accept the fact that poor children go into environments where they are not well stimulated because the pay and training of those who work there is poor.

Ann Winterton (Congleton, Conservative)
Order. Before I call the hon. Gentleman to respond, let me say that interventions should be somewhat briefer. I allowed the previous one to end naturally, but I trust that hon. Members will bear in mind what I have said.

John Penrose (Weston-Super-Mare, Conservative)
I completely agree with the hon. Gentleman's point about the importance of quality. The point that I am trying to make is that although the regulations that the Government have introduced in an effort to achieve their laudable aim have improved quality in some respects—I am sure that hon. Members on both sides of the Chamber would sign up to that aim—they might also accidentally be squeezing out some potentially high-quality providers. I have no problem with squeezing out poor-quality provision—that is absolutely fine—but highly regulated, bureaucratically defined provision can often lead to other, unusual, different kinds of high-quality provision being excluded too. I suspect that that is one of the problems that we are seeing at the moment, which is why we have a mismatch between what parents want and what is being provided, and that has resulted in a large number of underused and vacant places in the existing child care sector.
I was therefore concerned by the Government's response, which did not seem to address the issue or suggest that any material change was in the wind. Clearly, there must be some way of providing a high-quality but far more flexible set of services at an affordable cost or at a different time of day, a different day of the week or a different month of the year. In that way, people who do not want to work from 9 to 5, but at other times of the day, or those who want to continue their jobs during school holidays, would not have to give up their jobs when the existing level of provision caused them child care problems.
I was filled with gloom when I read the Government response. Yesterday, however, the clouds parted, and I saw a ray of sunshine. Two of the Minister's colleagues came to give oral evidence to the Committee on the issue of care. That was part of an inquiry into social care, but there are clear parallels and overlaps with the causes of child poverty, as I am sure that the Minister will understand. The difference between the Government's approach to social care and what they said in response to the Committee's report was stark.
Yesterday, the Under-Secretary of State for Health, Mr. Lewis, who has responsibility for care services, said that the Government were trying to move towards a system of personal budgets and personal accounts, giving people control over the money that is spent and allowing them to choose who provides their care services. He said that the Government were looking at three different models. In one, people would employ their own staff and run their own operation. In the second, they would get the money and pay a traditional care provider to provide a service. In the third, the person would want the maximum ability to articulate their own needs and would want the authorities to settle the bills because they would not want the hassle of the bureaucracy. He then went on to tell the Committee that
"it is not just about choosing from the existing menu. The whole point of giving people personal budgets is to change the provider side. It is to change the menu, not to choose from traditional conventional services. If we are going to create a flexible system, it is not just about giving people power and control, it is also making sure that the provider side, the supply side, is completely different and people can use that money in an innovative and imaginative way."
The Under-Secretary then got the wind in his sails and a couple of pages later started to get very enthusiastic. He said that
"it is about completely reorganising the relationship between the State and the citizen. It is a massive redistribution of power, frankly, from the State to the citizen without leaving the citizen alone."
He finished by saying that
"I think probably personal budgets in the hands of lead professionals, right and responsibility contracts, ruthlessly identifying which families we are talking about would be a major way of tackling child poverty and breaking into generational deprivation, stopping kids drifting into the criminal justice system, supporting good parenting. It has the potential to transform."
That was eye-opening, fresh and new and I thought that it was a potential answer to a great many of the criticisms and concerns outlined in our report. The contrast between what he had to say and the Government's response to the report was very stark, so I hope that the Minister will explain to us either that the Department is examining that approach, to see how it can be applied to child poverty more generally, and particularly to child care issues, or, if it is not, why not. One of the answers I have recounted seems a great one; the other one, as encapsulated in the Government's reply to the report, does not.