Child Poverty – Action for Children campaign: April 2023

Dear Constituent,

Thank you for contacting me about child poverty and the Action for Children campaign. I firmly believe that children should grow up in an environment with no limits to their potential. We must continue efforts to reduce poverty, including child poverty.

First of all, thank you for highlighting the statistics for our local area. I would emphasise that my colleagues at the Department for Work and Pensions have been unable to assess the robustness of Loughborough University’s modelling. National Statistics on the number and percentage of children in low-income households are published annually in the 'Households Below Average Income' publication. These remain the most accurate published measurements of low income. In 2019/20, there were 100,000 fewer children in absolute poverty before housing costs compared to 2010, with nearly 1 million fewer workless households and almost 540,000 fewer children living in workless households.

During the pandemic, quick action was taken to support families, with 11.7 m people kept in their jobs through the furlough scheme. Welfare changes worth over £7.4 billion were also swiftly introduced. The Household Support Fund, now worth £2.5 billion, was established, as well as a £63-million local welfare assistance fund, enabling councils to target support towards those struggling to afford food and other essentials. While some of the help you mention was instigated at the start of the pandemic, further support has been introduced as it progressed.

The benefit cap allows for a yearly income of £20,000 outside of London, and £23,000 within London. However, the Chancellor announced during the Autumn Statement 2022 that he will exceptionally increase the cap by 10.1 per cent in 2023/24, in line with inflation, to provide additional support to the most vulnerable.

I would emphasise that claimants with a sustained employment record are, in many cases, able to benefit from a nine-month grace period before the benefit cap applies. Exemptions also apply for the most vulnerable claimants who are entitled to disability benefits and carer benefits.

In addition, this year to support the most vulnerable, there has been a 10.1% increase in benefits as well as specific cost of living payments last year and again this year. Last year, recipients of means tested benefits received a payment of £650 to help with the increased cost of living payments as well as £400 which was universally available and this year payments of £900 will be made per household receiving means tested benefits, to ensure that the most vulnerable will be protected and in addition, there will be further payments made to people receiving certain disability benefits as well as payments to all pensioner households. Full details of the support available can be found on my website here: Support with the Cost of Living | Richard Fuller

More generally, 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; paying Universal Credit childcare costs up front rather than in arrears; and introducing reforms to the childcare sector including changing the mandatory staff-to-child ratio for two-year-olds in early years settings from 1:4 to 1:5.

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.

Thank you again for taking the time to contact me.