Social Security: Child Poverty

My Lords, social security provides a safety net to support families when they need it most. This is why we have removed the two-child limit, lifting 450,000 children out of poverty, and delivered the first ever sustained rise in the standard allowance of universal credit. While important, our ambition on child poverty goes beyond social security. We are taking substantive action on the drivers of poverty by cutting the cost of essentials and making work pay.

My Lords, the child poverty strategy demonstrates, as has my noble friend, the importance of social security, described recently by Minister Johnson as “the bedrock of our welfare state ”.—[Official Report, Commons, 30/6/26; col. 875.] Yet political debate is dominated by the negative false narrative of ballooning wasteful spending. Can my noble friend therefore say what the Government might do to combat this narrative and highlight the value of social security as a vital public service that invests in our society and the security of its people?

My noble friend is right. We want to make sure that the social security system is there to support all families when they need it, while taking action to make sure that work pays. Our ambition is that social security provides a safety net where needed and that it supports families to increase income through work where possible. At the same time, the Government are committed to ensuring that welfare spending remains on a sustainable path. We set a new welfare cap at the Autumn Budget 2024 to ensure that welfare spending remains under control over the course of this Parliament. Overall, forecast welfare spending is virtually unchanged from the last OBR assessment, increasing by only 0.1% in 2029-30. Tackling child poverty requires investment, including in our social security system. The cost of failing to tackle poverty is too high, both for children and for the country. This Government are investing up front to avoid those costs of failure.

My Lords, what role will work play in alleviating poverty in this country, given that work has benefits beyond the financial difference it makes to a family household?

The noble Lord is right. We want to see everyone who can work working. That is why we have taken a number of actions to fix our broken social security system and to get people into work, particularly when it comes to targeting the over 1 million NEETs—young people not in education, employment or training—and giving them a start. For instance, the new youth jobs grant incentivises employers to take on young people who have been on universal credit for over 18 months, giving them jobs, with a £3,000 grant.

My Lords, it is hugely welcome that all children in families receiving universal credit will be eligible for free school meals from September, but we know that many who are already eligible do not receive their free school meal for a whole host of reasons, including stigma. Will the Government consider adopting auto-enrolment to ensure that no child who needs this meal misses their chance of receiving it?

The noble Baroness is right about the impact of free school meals. The unprecedented expansion of free school meals that this Government are implementing will lift 100,000 children out of poverty by the final year of this Parliament, which is equivalent to increasing each family’s income by £500 a year. On auto-enrolment, extending free school meals to all households in receipt of universal credit will make it easier for parents to understand their entitlement. We are updating the eligibility checking system, which will make it easier for local authorities and schools to check whether children are eligible. We are closely monitoring this and will consider further action if necessary.

Are the Government aware that about 25% of those who fall into the NEET category are people who have been to university and have had further education or training?

That is absolutely the case. Alan Milburn’s interim report set out starkly the real stickiness there. When young people do not go into work or finish a course of education or training, there is a stickiness that we need to combat. We are determined to stop failing our young people, our communities and our economy. That is why we commissioned the Milburn report and we await his final report and recommendations.

My Lords, the Government’s scrapping of the two-child limit will see half a million children lifted out of poverty. As 40% of the attainment gap is created before children start school and is driven by poverty, does my noble friend the Minister agree that the lifting of the two-child limit will raise attainment and hugely improve the life chances of children born into poor families?

My noble friend is absolutely on the button. This is about not just improving the lives of children in poverty but future-proofing our country, our economy and our society. We have taken the decision to pull the single biggest lever that we could to tackle child poverty. By this move alone, as my noble friend said, we will lift 450,000 children out of poverty by the end of this Parliament. Our child poverty strategy not only deals with the two-child limit but shows how we can boost families’ income through employment, drive down the cost of essentials so that parents can meet their children’s fundamental needs and give them the best start in life, and strengthen local support so that families can access vital services.

My Lords, I have spoken before in this House about the poverty-shame nexus: the deep relationship between financial hardship and the psychological and social experience of shame. Can the Minister tell us what the Government are doing to address not only material financial hardship through social security but the psychological and social aspects?

The right reverend Prelate touches on a really important point: the shame and stigma of being in poverty. That is why we are taking steps such as removing the two-child limit and extending free school meals so that, when children go to school, they have a hunger to learn rather than a hunger in their bellies. It is important that we are lifting people out of poverty, but the best thing we can do is to make work pay and put people into good, decent jobs, so that young children in those families understand that the way to success is through education, employment and training.

My Lords, alleviating need is of critical importance. Protecting the vulnerable in society is a critical piece of what we do. Can the Minister help me understand how the Government define poverty? I speak from personal experience.

The rather esoteric answer is in the recent baseline report, which sets out how we are going to monitor the child poverty strategy. We follow two headline metrics: relative low income, which understands the breadth of the problem, and deep material poverty, which understands that, in some cases, it is about how the basic items needed for survival cannot be accessed because of poverty. By using those two metrics, alongside a number of contextual indicators which look at household employment, debt and costs, we will be able to properly understand poverty in the round.

My Lords, the main role of social security in reducing child poverty is to act as a cash lifeline. It supplements or replaces earnings so that children can have a more stable standard of living. Can the Minister elaborate on what he said before, as to how it could work in practice when combined with decent wages, affordable housing and childcare? Benefits alone cannot solve every cause of poverty.

I am pleased to say that I agree entirely with the noble Lord. We are taking a cross-government, holistic approach to sorting out this problem. That goes as far as our £39 billion 10-year programme for more social and affordable housing, so that we can tackle some of the outrageous things we have seen around the use of temporary accommodation and make sure that people have access to a good standard of living.

My Lords, one small but significant way of contributing to the life chances of young people would be the automatic release of unclaimed child trust funds. What consideration are the Government giving to doing that?

It is always a delight to hear from those in the party opposite on this, because of their childlike wonder and astonishment as they discover new features and issues in a system that they designed and have overseen for quite some time. I am happy to write to the noble Earl with more details on that scenario. We are considering all the ways to ensure that we have an affordable welfare bill, including making sure that we have efficiencies across the board.