According to the latest statistics, there are 1.7 million fewer people in absolute low income compared to 2009/10 - including 400,000 fewer children.
The Government understands that parental employment is the best way to tackle child poverty and improve long-term outcomes for families and children. In 2019/20, children in households where all adults were in work were around six times less likely to be in absolute poverty (before housing costs) than children in a household where nobody works.
To help parents into work, the Plan for Jobs continues to provide broad-ranging support for all jobseekers through the Sector Based Work Academy Programmes (SWAP), Job Entry Targeted Support, and the Restart scheme.
The Government also increased the National Living Wage by 9.7 per cent from April 2023, meaning it has risen from £9.50 per hour to £10.42 per hour. This represents an annual pay rise worth over £1,600 to a full-time worker - the largest cash increase in the UK's National Living Wage ever.
To help parents further, changes to childcare announced in the Spring Budget 2023 mean that the Government is extending 30 hours of childcare a week to working parents of children aged 9 months to 4 years and paying Universal Credit childcare costs up front rather than in arrears.
Moreover, the Government is increasing the Administrative Earnings Threshold from 15 to 18 hours. This is expected to mean that over 100,000 Universal Credit (UC) claimants, including those in work and on lower earnings and non-working or low-earning partners on UC, will receive more regular support from a Work Coach to help them take active steps to move into work or increase their earnings.
These changes are in addition to reforms to the Universal Credit Taper Rate and Work Allowances, saving working families an additional £1,000 per year on average.
To support low-income families further, the Government has increased the value of Healthy Start Food Vouchers to £4.25, helping eligible low-income households buy basic foods like milk, fruit and vitamins. There is also an investment of over £200m a year to continue the Holiday Activities and Food programme, which is already providing enriching activities and healthy meals to children in all English Local Authorities. The Holiday Activity and Food programme benefitted over 685,000 children last summer.
I also welcome the Government's action on energy bills. The Government is maintaining the Energy Price Guarantee (EPG). This guarantee, which includes the temporary suspension of green levies, limits the amount you can be charged per unit of gas or electricity. The current price guarantee, set at £3,000, will support households between now and April 2024. Although energy prices are currently below the level at which EPG payments would be made, it will remain in force until the end of March 2024 to protect households from price spikes, putting in place a safety net for households up and down the country.
Furthermore, at Autumn Statement 2022, the Government announced a substantial package of support for the most vulnerable for the next financial year, including £300 cost of living payments for pensioners, £150 for individuals on disability benefits and £900 for those on means-tested benefits. The Government is also providing £1 billion of extra funding by extending the Household Support Fund to March 2024, bringing the total of the Fund to £2.5 billion.
Benefits also increased by 10.1 per cent from April 2023, in line with inflation.
Extra support was announced as a temporary measure in March 2020 to provide additional support to those likely to be facing the most financial disruption as a result of the public health emergency. Alongside the temporary increase to Universal Credit and Tax Credits, the Government invested over £352 billion in measures to create, support and protect jobs and businesses, introduced mortgage holidays and additional support for renters, and worked with energy suppliers to protect those struggling with energy bills.
I welcome the decision announced at the 2021 Autumn Budget to reduce the UC taper rate from 63 per cent to 55 per cent, as well as increase work allowances in UC by £500 a year. These changes to UC represent an effective tax cut for low-income working households in receipt of UC worth £2.2 billion in 2022-23.
The old income-based child poverty measures, introduced in the Child Poverty Act 2010, did not address the root causes of poverty. That is why the Welfare Reform and Work Act repealed the 2010 measures and introduced new life chances measures of worklessness and educational attainment. Annual reporting on these new measures will ensure action is focused in the areas that the evidence shows are most important for children’s life chances.
Setting targets based on relative income does not encourage policymakers to address the underlying causes of poverty. It led the previous Government to simply spend more and more money on income transfers to lift people just over the poverty threshold, without doing anything about why those people were in poverty in the first place. The relative income measures showed the number of children in relative poverty falling during the last recession because of falling median incomes, but of course, in reality, children were not better off at all.
Ministers have committed to continuing to publish official data annually on low incomes in the Households Below Average Income statistics. These figures include measures of both relative and absolute low income and will be there for all to see.
I am proud of the measures to ensure children are offered nutritious meals to help improve their health and development. Universal free school meals for infants are an excellent way of ensuring children receive a nutritious meal during the day. This not only boosts educational achievement, especially for children from disadvantaged backgrounds but also saves hard-working families hundreds of pounds a year. Many children from disadvantaged backgrounds are entitled to receive free school meals throughout their full-time education.
The Soft Drinks Industry Levy raised £334 million in the financial year 2021/22. This money will go towards doubling the Primary Sports Premium, the creation of a Healthy Pupils Capital Fund to help schools upgrade their sports facilities, give children access to top-quality PE equipment, and giving a funding boost for healthy school breakfast clubs.
Ministers have made clear that the importance of the family is paramount. I agree, which is why I am glad the “family test” has been formalised as part of the impact assessment for all domestic policies, meaning the Government is always thinking about the impact of its actions on families. Additionally, I am proud that the Marriage Allowance recognises marriage in the tax system and means families up and down the country can get a little bit of extra support and financial security.
I very much welcome the publication of the National Food Strategy. I have read with interest the recommendations made in the report, particularly those concerning nutrition for disadvantaged families and children. I am pleased that key recommendations made in the Strategy are being implemented.
Finally, I understand that there are no plans to make an assessment of the potential merits of introducing a £20 uplift to all legacy benefits.