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Child Poverty in Scotland

It is a pleasure to follow the hon. Member for Glasgow, Central (Mr. Sarwar), and I congratulate him and his Select Committee on producing its excellent and well-researched reports on poverty in Scotland and on child poverty in Scotland. I also welcome the Government’s allocation of this afternoon for this debate. The extent of child poverty in Scotland has reduced in recent years—there is no doubt about that—but despite that reduction, the level is still high by international standards. One in four children, or 250,000, live in poverty, 90 per cent. of them in severe poverty. The statistics also deliver the disappointing news that the good rate of progress achieved in recent years is slowing and, with the UK economy facing a slowdown with poor growth forecasts, concerted action is needed at all levels of government to lift children out of poverty. Poverty is neither a reserved matter nor a devolved one. To tackle it we need co-operation between all levels of government—the UK and Scottish Governments, local authorities, community groups, and charities, and we must work with those who find themselves on low incomes. Action to tackle child poverty necessarily targets parents, attempting to lift children out of poverty by raising family incomes. We also need to increase the incomes of young single adults because they are the parents of the future. Concerted action must be taken by all levels of government. However, today I want to concentrate on the reserved powers—mainly the tax and benefit system. In the Budget, the Chancellor announced an extra £1 billion throughout the UK to tackle child poverty, but that is £2.5 billion less than what most independent estimates believe is required to meet the Government target of eradicating child poverty by 2020. More needs to be done. Specific measures that need to be taken include increasing child benefit and reforming the tax credit system by making the overpayment rules fairer and taking higher earners out of it altogether. We would increase child benefit by £5 for the first child, thus making all families £250 a year better off. That would take about 15,000 Scottish children out of poverty. It would also reach all families, including those who do not claim tax credits. The take-up rate of tax credits is only about 80 per cent., whereas that of child benefit is nearly 100 per cent. The tax credit system needs to be reformed to increase stability and reduce overpayments. We need to return to fixed, six-monthly awards so that people keep the money that is given to them. We should also reverse the burden of proof when overpayments are caused by official errors, introduce a right of appeal to an independent tribunal and simplify the complicated awards notices. We have all met constituents who say that they will never apply for tax credits again because of the debt into which they were forced by being overpaid through no fault of their own. The system must be reformed to give everyone confidence in it instead of causing debt and stress to many on low incomes. Tax credits should also be focused more on those on low incomes by increasing the taper rate and removing the right of high earners to them. Doubling the 10p rate of income tax has obviously hit those on low incomes. We hear about a compensation package but many are not aware of their entitlement to tax credits and I hope that the Government will explain how the promised compensation scheme will take into account those who are entitled to tax credits but do not claim them. The 10p tax hits them, too. It is significant that a high proportion of parents with a disabled child are unemployed, and disabled children are twice as likely to live in poverty as children without disabilities. The parents of disabled children often find it harder to get child care and more needs to be done to help those families find it. More effort must go into improving the take-up of tax credits and benefits and helping people find work.