Child Poverty Bill

No. Secondly, it is important to note the drawbacks associated with an after-housing-costs measure. As the hon. Member for Northavon said, measuring income after housing costs can understate some individuals' relative standard of living because they pay more for better-quality accommodation. Conversely, income measures that do not deduct housing costs may overstate the living standards of people whose housing costs are high relative to the quality of their accommodation. Therefore, the relative low income indicator before housing costs, in conjunction with the combined low income and material deprivation indicator, ensures that we effectively capture the issue of affordability of housing. Given the drawbacks of the alternatives, we consider the material deprivation indicator to be a better way of capturing the impact of housing costs. The hon. Gentleman asked why housing benefit should be included as income in the before-housing-costs measure of poverty. The obvious answer is that housing benefit is income, but I shall give him a fuller response than that. Households in receipt of housing benefit pay their housing costs using their total income, including housing benefit. Households that do not receive housing benefit need to pay their housing costs from their total income. Including housing benefit enables like-for-like comparison between the incomes that households have with which to pay housing costs and to meet their other needs. To deduct housing benefit from the income of those who receive it would be to underestimate the total income that they had with which to meet their housing costs and other needs.