Mr.
Timms: If that happened, it would be picked up by the
survey because the great majority of those children are in households
and will be covered like other children. It is only children in
Yarl’s Wood, for example, who would not be picked
up.
Steve
Webb: That is fair. It is helpful that the Bill is not
solely concerned with the
target. Finally,
on under-representation, I take the Minister’s point that we do
not have control totals for many of the groups. The point about inner
London is probably quite important. Governments notoriously cannot
count how many people live in such areas and I know that it is not
straightforward to do so. Given the correlation between child poverty
and living in inner London, the fact that the weighting is for Greater
London, not for inner and outer London, means that the headline child
poverty numbers are probably too low, albeit perhaps not by
much—I do not know by how much. Will the Minister look at that
again? I
appreciate the seriousness with which the Minister addressed those
concerns, so I beg to ask leave to withdraw the
amendment. Amendment,
by leave, withdrawn.
5
pm
Steve
Webb: I beg to move amendment 28, in clause 6,
page 3, line 14, leave out subsection
(2).
An audible
cheer went up, Mr. Key, when we reached this substantive and
important amendment. Under clause 6, the definition of
“income” may include and exclude all sorts of things, but
the one thing that cannot be deducted is the cost of housing. That is
explicitly prohibited by the Bill. Amendment 28 would remove that
prohibition and allow the child poverty commission, when drawing up the
measure of poverty to target, to consider taking housing costs off.
That is all it would do. It would not even oblige the commission to do
so; it would just let it think about doing so.
What
difference would that make? According to the latest figures, on the
before-housing costs measure, 2.9 million children are living
in poverty, and on the after-housing costs measure, 4 million are. The
difference is huge, and the amendment goes to the nub of the issue.
There are arguments for and against, and they have, conveniently, been
published at the back of the document on households on lower incomes.
The argument for not taking off housing costs is that if someone spends
more on housing because they buy a plusher, nicer, more luxurious
place, that is their choice and the cost should not be deducted because
it makes their life better. If housing costs are just a proxy for
quality, we should not knock them off; however, they are a real measure
of need that cannot be avoided and are different in different parts of
the country, so they should be knocked
off. The
Minister generously told us what his answer would be when he said
during the previous debate that the key argument for using the
before-housing costs measure is that that is what everyone else does,
so we can make international comparisons. However, no one said that we
should not publish before-housing costs measures; no one said that we
should not be able to compare internationally by continuing to generate
before-housing costs numbers. Surely the Bill should be about the best
interests of British children and should be the right target for the
welfare of children in this country. The ability to make comparisons
with other countries should be a secondary consideration, but we can do
that anyway. Using an after-housing costs measure does not preclude
international comparisons because we will calculate the numbers
anyway—all that is involved is two sets of figures, one of which
has housing costs knocked off. There is not even any extra effort
involved. The
question is: which is the best measure of real living standards? There
is a strong London dimension, as the Minister will appreciate, because
average housing costs in the capital are substantially greater than
elsewhere. Most people would not think that that is because of quality.
People who pay high rents for overcrowded rented accommodation in
central London are not having a whale of a time; they just have to find
the money. Deducting the cost of housing seems to be particularly
appropriate in areas where child poverty might be
concentrated—for example, urban
areas. A
further reason why the before-housing costs measure is not the right
one to use is that, perversely, it includes housing benefit. If I lived
in the same house, year after year, and rents, whether council, housing
association or
private, rose faster than inflation, I would be better off on the
measure that the Bill proposes to use because my housing benefit would
go up. How can that be
right? I
hesitate to mention that a third measure is knocking around, which I
have just remembered. The Johnson-Webb measure was proposed in an
economist’s academic paper a while ago. It suggested that an
alternative is to exclude both housing benefit and housing costs. If
including housing benefit in income is a problem because it goes up
when rent goes up, which makes no sense, and knocking off housing costs
is not perfect because it might reflect quality, one could use a
statistic that includes neither, and perhaps bring in housing in
another way, perhaps in material deprivation.
There are
variations, but the key point is that both sets of
figures—before-housing costs and after-housing costs—will
be published. That has been the case for years, and should continue. We
are not precluding putting that information in the public domain, but
what should future Governments be
targeting?
Mr.
Stuart: The hon. Gentleman makes an extremely powerful
case. May I take him back to his point about international comparisons?
Is it true that because of the shortage of houses and problems with
housing in this country—I will not rehash this morning’s
debate—we have a particular problem with the cost of housing for
those on low
incomes?
Steve
Webb: Certainly, the British housing market is very
different from everywhere else in western Europe. Housing impacts on
people’s living standards in this country in a very particular
way. It is entirely legitimate to look across Europe on a harmonised
definition—I have no problem with that—but if we want to
know what is happening to people’s real living standards, it
does not seem right simply to ignore their housing. I have said all
that I need to say on that point, and I hope that the Committee will
support the
amendment.
Andrew
Selous: The Minister gave us an early glimpse of
what he was going to say in his response to the previous group of
amendments. I recognise that we need to have a measure of poverty that
we can use to draw comparisons with other EU countries. Indeed, we had
that debate this morning, which was necessary. The hon. Member for
Northavon and my hon. Friend the Member for Beverley and Holderness are
right to point out that the after-housing costs measure is probably
what families focus on. They want to know how much they have to live on
to cover food, clothing, heat and so on once they have paid for their
accommodation. I accept what the hon. Member for Northavon says in that
respect. We know that both sets of figures will be published. They will
be available and child poverty lobby groups will draw attention to both
sets, and particularly to the after-housing costs
set. I
will listen with interest to what the Minister says. The hon. Member
for Northavon makes a valid point when he says that his amendment is
permissive rather than prescriptive. It would not require anything to
be done; it would merely remove a prohibition from clause 6.
On that basis, I think that the case for his amendment is persuasive,
but I will listen to hear if the Minister has any especially good
arguments up his sleeve for why we should leave the clause as it
is.
Mr.
Timms: Unfortunately, my briefing does not cover the
Webb-Johnson methodology so, sadly, it will be neglected in my
response. The
Committee has heard what the amendment would do. We have used a
before-housing costs measure of child poverty since the consultation on
measuring child poverty in 2003 but, as I have already emphasised, the
households below average income data series continues to present child
poverty estimates using both before and after-housing costs measures of
poverty, and our intention is for that to
continue. I
have mentioned one of my reasons to the Committee, but there is
another. The most telling consideration is that income is measured
before housing costs to allow comparisons with other European
countries, which measure poverty in that way. There is a dynamic in the
Bill that we aim to be among the best in Europe. The target that we
have set for relative poverty would place us as the best in Europe at
the moment. In setting the targets—clause 6 is about
interpretation of terms used in relation to targets—we should
use the before-housing cost measure to enable those comparisons to be
made and for us to have a sense of whether or not we are achieving a
position of being the best in Europe. The hon. Member for Northavon
said that we could still look at that data. However, I turn that round.
We will still be able to see the after-housing cost data and make
whatever use of them we wish, but in terms of the target, it is right
that we compile the figures in a way that can be compared with
others. As
we all know from this morning’s debate, measures of housing
quality are included in the combined low income and material
deprivation measure. If a child is experiencing poor housing, that will
be reflected in their material deprivation score. Families who cannot
afford things because they have high housing costs will be picked up in
the material deprivation measure as well. The measure reflects the
impact of high housing costs and a family’s ability to afford
decent housing. The hon. Member for Northavon is right about the impact
of high housing costs on child poverty—my hon. Friend the Member
for Regent's Park and Kensington, North frequently makes that point.
Through the low income and material deprivation measures, we are able
to track that impact because paying out a lot of money for housing
curtails the ability to afford other things.
Finally, as
the hon. Member for Northavon mentioned, if one deducts housing costs
entirely, those who choose to pay for better quality accommodation
could have their relative standard of living understated. In preparing
a UK child poverty strategy, we need to consider any housing measures
required to tackle child poverty, as set out in clause 8. It is right
that the targets are defined as being before housing costs, for the
reasons that I have set out, but people will continue to monitor what
is happening on an after-housing costs basis and the data will continue
to be provided to make that possible.
Steve
Webb: I am not sure that I am convinced by that. The
Minister seems to be saying, “Well, don’t worry about
knocking off housing costs, because we’ll pick it up some other
way. We’ll pick it up through deprivation, so if people have
high housing costs, the children won’t be able to go on holiday
or have a new pair of shoes.” That is a pretty indirect way of
picking it up, and you would not be able to disentangle the
housing impact from another impact. The family might not be able to go
on holiday because of other costs, so that would not identify the
impact of housing uniquely. I take the Minister’s point that the
after-housing costs numbers will still be published, but targets
matter—as his motto would be. If one targets income before
housing costs, there is not the same policy impetus to tackle the
housing costs of low-income households, as the hon. Member for
South-West Bedfordshire pointed out. If income after housing costs is
targeted, tackling such housing costs becomes a much more explicit
policy objective because the Government will be held to account for it.
What we target matters.
I am also
concerned that the Minister wants to pre-empt the child poverty
commission—he has great faith in it and is going to stuff it
with experts—from even thinking about housing. I cannot see why
he would want to stop the commission from at least looking at whether,
on balance, taking off housing costs gives a better
guide.
Andrew
Selous: I apologise for interrupting the hon.
Gentleman’s flow. Were his amendment to be accepted, what would
be his intention for the targets in clauses 2 to 5? What would be the
practical effect of the amendment? He talked about it having a
permissive character—by allowing the child poverty commission to
do different things—but what does he intend to change in the
targets in clauses 2 to 5.
Steve
Webb: If we are going to create a child poverty
commission, the commission should be asked. Clause 6 is about the
Secretary of State making regulations, presumably on the basis of
expert advice. Therefore, the child poverty commission, when deciding
all the details, should be asked whether deducting housing costs is the
right thing to do. It would then either reaffirm the exact targets as
they stand just after housing costs, or come up with different
thresholds on the basis that a slightly different thing is being
measured. I have a view on what the right answer is, but that is just
my opinion. There is a strong argument that what is being precluded is
worth looking at, so we should not pre-empt the commission and stop it
from looking. I am not saying that it should look at everything, but
housing costs are so fundamental and central to people’s real
living standards that the commission should be able to assess whether
they should be in the
target.
Mr.
Timms: May I press the hon. Gentleman a little on his
point about constraining the commission? The clause specifies what can
be in the targets. The child poverty commission might want to look at a
range of matters, but it is right that the set target should be a
before-housing costs target to make comparisons with other
countries. 5.15
pm
Steve
Webb: We do not need a child poverty Bill with a legally
binding target to make comparisons with other countries—we can
do that anyway. I do not see that anything I am proposing prevents that
from being done. The question is: what should we target? Clause 6(1)(c)
states that regulations may provide for what is to be regarded as
income, and all I am saying is that the child poverty commission should
be able to advise the Secretary
of State that, as the Bill stands, it cannot take off housing costs, but
that it would be a better measure of living standards if it
did.
Mr.
Stuart: The current position is that the after-housing
costs numbers are published. The Minister’s main argument seems
to rest on our targets having to correspond with the international
comparison numbers. Surely, if it is better for this country to use
after-housing costs for our target in statute, that is what we should
have. We would still publish the before-housing costs numbers, which
would allow the international comparisons to be made. We would have all
the information we needed, and a target that best suited the
country’s needs. I do not think that the Minister has really
addressed that central
point.
Steve
Webb: I could not have put it better. On that basis, I
commend the amendment to the
Committee. Question
put, That the amendment be
made. The
Committee divided: Ayes 7, Noes
9.
Division
No.
3] Question
accordingly negatived.
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