Welfare Reform and Work Bill

Lord Bishop of Durham Excerpts

Monday 25th January 2016 Lords Chamber

Moved by

[The Lord Bishop of Durham]

2: Before Clause 4, insert the following new Clause—
“Child poverty: reporting obligation
(1) The Secretary of State must lay before each House of Parliament an annual report on child poverty.
(2) The report must include information on the percentage of children living in households where—
(a) equivalised net income for the financial year is less than 60% of median equivalised net household income for the most recent financial year;(b) equivalised net income for the financial year is less than 70% of median equivalised net household income for the most recent financial year, and which experience material deprivation;(c) equivalised net income for the financial year is less than 60% of median equivalised net household income for the financial year beginning 1 April 2010, adjusted in a prescribed manner to take account of changes in the value of money since that year; and(d) equivalised net income has been less than 60% of median equivalised net household income in at least 3 of the survey years.(3) For the purposes of subsection (2)(d), the survey years are the calendar years that ends in the financial year addressed in subsection (2)(a) and (b), and the 3 preceding calendar years.”

[The Lord Bishop of Durham]

My Lords, I start, as I began my speech in Committee, by recognising that everyone in this House has a shared commitment to tackling child poverty in this country. We all want to see the end of child poverty; I am sure that no one in this House would want deliberately to keep children in a state of poverty. This debate is, therefore, not about the ends but about how we monitor progress towards that goal. Previously, I expressed my agreement with the Government that to maintain that income poverty alone is an adequate way to measure child poverty is no longer sustainable. I agree that there are other root causes, such as lack of work, low skills, poor housing, family instability and addictions, which must be recognised and tackled. But then we must also remember that many children in poverty are in families where a parent is in work; these children are currently trapped in poverty. I, along with the many organisations that work in this area, remain convinced that financial poverty is a crucial matter that must be recognised and reported on adequately.

It is, of course, possible to overstate the importance of material well-being alone. Many other things matter in children’s lives, including loving parents, good schools and safe neighbourhoods. They are all needed for children to thrive and achieve their potential. But it is also possible to understate the importance of income, or the lack of it—especially among those of us who have plenty, and perhaps take such things for granted. According to the latest deprivation statistics, 1.7 million children live in families that cannot afford to heat their homes properly, 1.3 million children lack the funds to take part in at least one organised activity each week, and 1.1 million children cannot afford to have their friends around for tea or a snack once a fortnight.

We know that money matters, because this is the experience of people in poverty, and of the many organisations and charities that work with them daily. There is also a wealth of academic evidence pointing to the damaging effects that income poverty has on children’s well-being, including their health, education and future employment prospects. We know, for example, that low income impacts on children’s cognitive ability, educational attainment, conduct problems and mental health, with serious implications for their future life chances.

Does the Minister accept that low income is an important influence on children’s outcomes and life chances, as his own department’s review of the evidence concluded in 2014? Can he explain why the Government are studiously ignoring the views of nearly everyone who responded to the consultation on child poverty measurement in 2013? According to a recent analysis by the London School of Economics, 202 out of 203 respondents to that consultation believed that income should be included in the poverty measures.

If I have heard the Minister correctly, the Government’s concern about the current child poverty measures is that they have encouraged an overdependence on income transfers, diverting attention from policies that tackle the root causes of poverty. However, the amendment does not seek to reassert the primacy of the existing child poverty measures: it simply requires that income-based measures of poverty be reported on alongside, and on a level footing with, other life chance indicators, such as worklessness and educational attainment, in order to acknowledge the significance of family income for children’s well-being and future prospects.

Furthermore, the amendment is about indicators for monitoring progress, not about targets or deadlines, so there is not the same risk that it could drive policy in an unhelpful direction. And with all due respect, the temptation to place too much emphasis on income transfers as a means of reducing child poverty is not one that the current Chancellor appears to struggle with. I agree that it is important to tackle the underlying drivers of poverty, but that can be done without abandoning all the existing income-based measures of poverty. The real issue is committing to, and resourcing, an effective long-term strategy to reduce child poverty, rather than finding alternative ways to measure it.

No economic or social indicators are perfect. Let us take the employment statistics. I note that recent trends in employment are encouraging, but those statistics do not allow for the quality of employment, and hide substantial levels of underemployment. Similarly, GDP statistics give equal weight to desirable and undesirable economic activities, and take no account of many priceless commodities. It is no surprise that existing poverty measures have flaws too.

The relative income measure, in particular, has been criticised for showing a decline in poverty during the recent recession. But that is precisely why there are three other measures of poverty in the Child Poverty Act. The absolute poverty measure is not affected by annual variations in median income in the same way. The deprivation measure, which focuses on the affordability of basic necessities, has the added benefit that it captures people’s living standards more directly than low-income measures. Nor can it be manipulated—if that is the right word—by targeted government transfers to low-income households. I therefore encourage the Minister to consider seriously the adoption of a deprivation-based measure of poverty as a way of recognising the importance of material poverty within the proposed set of life chance indicators.

The biggest gap in the proposed set of life chance indicators is that the existence of in-work poverty is completely ignored, even though nearly two-thirds of children in poverty have at least one parent in paid employment. We all agree that work is usually the best route out of poverty for those who are able to work but at present, sadly, it is not sufficient for many parents in low-paid or insecure employment. It seems inconsistent that, while introducing a national living wage and in-work conditionality to encourage people to look for better-paid jobs, any reference to in-work poverty in the indicators is omitted from them, and they will be used to monitor progress. This is why I also support the amendment in the name of the noble Baroness, Lady Lister, to introduce an indicator of in-work poverty alongside the worklessness indicators.

I anticipate that the Minister will respond by saying that the existing poverty measures will continue to be published and will be available for everyone to scrutinise each year. However, without a statutory reporting requirement, there will be nothing to stop a future Government or the Office for National Statistics, if it is its decision, from ceasing the annual production of the HBAI statistics at some later date. Dropping these measures also sends a clear message that income-based poverty does not matter to this Government, which, unless I am mistaken, is not their view or the Minister’s view.

In conclusion, first, I thank the Minister for offering to meet with me. My apologies: I could not make it but my daughter’s graduation trumped him. I note that consistently in response to our previous debates, the Minister has argued that the Bill is but one part of the Government’s programme to move towards a society with more people in work, on higher wages and paying lower taxes. He has noted other measures, such as the national living wage, the increasing thresholds for paying tax, and others, stating that these measures combined will raise the living standards of many. Of course, this is disputed by others. However, my point here is that since the Government are confident that their measures will be successful, they need have no fear of a statutory duty to report these income figures. Indeed, they should welcome it as a clear statement measuring their anticipated success. I commend the amendment and beg to move.

[The Earl of Listowel (CB)]

My Lords, I support the right reverend Prelate and thank him for moving this amendment, to which I have added my name. I will mention two principal reasons for my doing so. One is a concern that I think and hope is shared around the House: the changing nature of a Parliament and the experience of families that grow up in poverty. It is very easy to avoid meeting families in poverty. Many of the leaders of this country will perhaps have been educated privately from a young age, and there may have been few reasons for them to come into contact with families in poverty. They may never have worried about where the next meal will come from or whether they can afford to heat their homes, and they may not mix with people who have those worries. My personal experience of course is that I and my family have never had to worry about whether our home could be heated or whether there would be enough money for the next meal. However, the families we are talking about worry about whether they can feed their children and whether they will have to go without a meal to feed their children.

I recently met with Ms Lorna Sculley, who is a 36 year-old and has three boys: the oldest is 15 and the youngest is fairly new-born. She works for 16 hours a week and lives in poverty, so she is one of the “working poor” that the right reverend Prelate described. During her last pregnancy and maternity leave, there were difficulties with her benefit payments, which meant that she got into debt and had difficulty in meeting her rent. She became increasingly desperate. Fortunately, there was a food bank local to her. With the help of the education welfare officer, she was referred to the people running the food bank and she sought their help. Not only did they provide much-needed food for her and her boys but they gave her advice about how to negotiate with the benefit system and to catch up as much as possible. Unfortunately, I think that it is possible to get only a three-month rebate if one has had these sorts of slips, so she could not gain all the money that she needed. She also told me that, because she is working, her boys are not entitled to free school meals and it can be particularly difficult to get severe hardship payments. Her two older boys had destroyed their mattresses by jumping up and down on them but it was hard to get the money to replace them.

--- Later in debate ---

[Lord Freud]

We had this debate in Committee. We all measure this in the same way; we are the only country in the world that has put it in an Act. We are now moving to how other countries treat these statistics. The behaviour of other countries supports in practice what we are doing in leaving these as national statistics, with the commitment I have just made to make sure that they continue to be published.

I have spent time on these points because this Government believe that the measures we opt for really matter. Let none of us be in any doubt that there is an important choice to make with this amendment and with Amendments 8 and 11, which follow. Resources are finite and it is crucial that we prioritise the actions that will make the biggest difference for our children. Do we choose income measures which would disincentivise a range of actions which will actually help improve the life chances of children, and incentivise others which will not tackle the underlying factors at play? Or do we put our wholehearted effort into the areas which can help transform children’s prospects—worklessness and educational attainment? Indeed, I was pleased to note that the right reverend Prelate the Bishop of Durham prioritised his daughter’s graduation, showing what he thinks of educational attainment compared with anything else, for which I commend him. This amendment would end up taking resources away from these areas. I firmly believe that it would end up being detrimental to the transformational actions we want to see.

I think noble Lords will agree that these are the key drivers which the Government must focus on. The evidence behind this is set out in our published 2014 evidence review and I have spoken at length on it on previous occasions and now. The statutory life chances measures of educational attainment and worklessness are the right measures that will incentivise government to bring about real change in children’s lives.

I urge the right reverend Prelate to withdraw the amendment.

[The Lord Bishop of Durham]

I thank the Minister for his very full response, for which I am grateful. If the amendment is technically faulty, my understanding is that it could be redrafted, so that is not a reason for not pressing it. I am grateful to the noble Earl, Lord Listowel, for his support and was moved by his story about Ms Sculley. I am also grateful to the noble Baronesses, Lady Lister, Lady Hollis and Lady Sherlock, for their expressions of support and the points that they made. I hope that the comment of the noble Lord, Lord Northbourne, on family was addressed by the noble Earl, Lord Listowel.

I will not go through all the points that the Minister made, because I think that we fundamentally disagree about the importance of reporting on income statistics. This amendment would not in any way detract from the drivers that the Minister wants around worklessness and educational attainment; those would absolutely still be there. This is simply about a reporting mechanism which we believe is important as part of the monitoring. I say “we” because I have consulted with bodies such as the Child Poverty Action Group, the Children’s Society and many others which work with children and families in poverty day in and day out and are still convinced that this is important information to have alongside tackling the other drivers. Therefore, although I know that the Minister will not be pleased with me, I wish to test the opinion of the House.