Child Poverty Bill

A wry smile crosses our faces when it is announced that this Bill is the main business of the day, but in fact it is, in the sense that child poverty is a crucial issue. That view is certainly shared by all those who served on the Committee that considered the Bill. New clause 1 arises from the discussions that we had in Committee about the most appropriate method of measuring poverty. Hon. Members will know that there are in the Bill four measures or targets relating to poverty, which combine various facets of income, material deprivation, persistence of poverty, and relative and absolute poverty. Clearly, it is welcome that the Bill does not settle on a single definition but recognises that poverty is multi-faceted and that one statistic does not do justice to the whole problem. In Committee, we discussed the most appropriate treatment of housing costs. My hon. Friend the Member for Edinburgh, West (John Barrett) and I proposed that, for the purpose of income measures, we should measure income after the deduction of housing costs. One of the arguments that the Treasury Minister who responded to our proposal made against it was that replacing the before-housing-costs measure would cause a problem, because we would not have comparable statistics for use in international comparisons. In other words, if we got rid of the before-housing-costs measure and imposed an after-housing-costs measure, our statistics would not line up with those from other EU countries and the OECD. The point of debates in Committee is to reflect on such issues and then to come back on Report with revised amendments, and that is what we have done in this case. Rather than suggest that we replace the before-housing-costs measure with an after-housing-costs measure, we now suggest in new clause 1 that we do not replace the four existing targets but add a fifth—income after housing costs. That definition will be familiar to the House. It relates to information that is published regularly in the "Households Below Average Income" statistics, so it requires no additional statistical work. The figures are already there, but they would be given the same force as the other four targets in the Bill. I should say in passing that amendments 1 to 20 are consequential to the inclusion of new clause 1, so wherever the Bill lists the four targets, there would be a list of five. The wording of new clause 1 exactly mirrors the target relating to the before-housing-costs measure and would simply insert "after housing costs". Another, slightly more involved, consequential change is that where the Bill says that certain things cannot be deducted, one of which is housing costs, it would have to state that that does not apply to the provisions of the new clause, under which housing costs would be deducted. I have been reflecting on the arguments that the Government might use against making the change proposed in new clause 1. First, however, it is worth making the case for an after-housing-costs measure. We believe that there is added value in looking at people's living standards after they have had to meet their housing costs, first and foremost because housing is a very large part of most people's budget and a very big determinant of their living standards. To look at people's standard of living without taking any account of whether they have high, low or next to no housing costs is to miss a very important part of the picture. Because it is such an important determinant of living standards, the absence from the Bill of an income measure that takes account of housing costs is a significant omission.