Child Poverty Bill

My Lords, this is a good way to start our deliberations. The aim of the Bill is to drive the long-term sustainable eradication of child poverty, ensuring that tackling child poverty is a priority for everyone. This requires us to make continued progress in tackling child poverty. We are, and will continue to be, held to account on the goal of halving child poverty to 1.7 million children by 2010, but the Bill is predominantly about ensuring that we do not lose sight of the long-term goal. It increases the accountability of the Government for their child poverty goals. It sets out a rigorous process of reporting and accountability that will hold the Government to account. In addition, the Child Poverty Commission will provide valuable expertise and advice to feed into the reports and the strategies on progress. The Bill does not weaken our commitment to tackling child poverty; it strengthens it. The amendment would require the Secretary of State to publish a report within three months of Royal Assent on progress towards the 2010 child poverty target of fewer than 1.7 million children in qualifying households living below the 60 per cent median income threshold. I will explain why the amendment is unnecessary and in fact problematic. First, a report published this year would not provide the definitive statement that noble Lords are looking for on whether the 2010 target will be met, because the data for assessing this will not be available until the HBAI statistics are published in 2012. A report published within three months of Royal Assent would not capture, for example, the impact of the raft of measures introduced since the 2007 Budget that we expect will lift around a further 550,000 children out of poverty. The report would also fail to take into account any measures that may be taken later this year in, for example, a forthcoming Budget or, although we do not anticipate this, an early Budget after the general election. As such, the report demanded by noble Lords would fail to provide an accurate assessment of progress towards the 2010 target and I do not see any particular value in it. However, I would like to reassure noble Lords that the latest child poverty data, for 2008-09, will be made available through the annual publication of the HBAI dataset. Progress against the 2010 target will be evident from that publication, although, as I have just said, this statement will be for 2008-09 and so will not take into account the measures that we put in place in the most recent Budget and the Pre-Budget Report. Finally, there is a practical problem in requiring that a report be published within three months of Royal Assent, as this could fall in the period during a general election, when, obviously, we will be away from the scene for a month. However, I support the noble Lord’s desire to boost transparency in reporting on progress against child poverty targets. Indeed, these are two cornerstones of the Bill. Clause 8 requires the Secretary of State to publish a strategy setting out the measures that will be taken to meet the four child poverty targets in Clauses 2 to 5. To ensure that the Secretary of State reports on the progress in tackling child poverty, Clause 13 requires the Secretary of State to produce and lay before Parliament an annual progress report setting out the progress that has been made in tackling child poverty. Subsection (1)(a) of the clause requires that annual reports report progress against each of the targets, which is exactly what noble Lords are seeking. That will come, with full information and all the appropriate data, but it cannot be delivered within three months of Royal Assent. The first strategy must be laid within 12 months of Royal Assent and the final report within a year of the anniversary of the publication of the strategy. Perhaps I may pick up on some of the additional points that noble Lords have made. The noble Lord, Lord Freud, suggested that the Bill is either a diversionary tactic or a poison pill, although I am not sure why we would want to poison ourselves. However, I assure the noble Lord and others that this is nothing to do with diversionary tactics. This is building on the progress that the Government have made to date in tackling child poverty and setting out a means of moving forward so that we can meet the targets set out in the Bill by 2020. The noble Lord suggested that a mysterious turnaround or cataclysmic event took place in 2004 which changed the progress that we had been making. He spoke of mysterious trends and said that it was vital to understand them. To understand the trends and what is happening, we need to unpick and analyse the data. There is nothing mysterious about that, because there are a number of components. For example, the Institute for Fiscal Studies report Poverty and Inequality in the UK, published in 2009, points out that some of the changes were not statistically significant. It states in respect of the decomposition of the change in child poverty from 2004-05 to 2007-08 that it can help to tell us why child poverty has risen, but it should be pointed out that the overall rise in child poverty before housing costs was not statistically different from zero. The report unpicks various components and states that the rise in child poverty is due to incidence effects: an increased risk of poverty for particular family types, with changes in the composition of families, a decline in worklessness among lone parents and increases in the number of couples in full-time work acting by themselves to reduce poverty. However, other factors need to be taken into account. We need to look at the increase in benefits in relation to the dynamics of inflation and we need to take into account the fact that, over a part of this period, employment levels stayed relatively even. For part of the period, real earnings growth was below inflation. It was also a period when price increases obtained, particularly in food, fuel and energy. To say that somehow we cannot understand what is happening is some way from reality, but we need to unpick the position. This is not just about income transfer, to deal with the point made by the noble Earl, Lord Listowel. Of course income transfers and income are part of tackling poverty, but they are just part of the equation. The key part of the Bill is the requirement to bring forward strategies to address the causes of poverty, better to understand what is happening and the dynamics. A key part of that is not only the engagement of local authorities, which is covered in Part 2, but drilling down on delivery across a whole range of building blocks. That is crucial to our making further progress. The noble and right reverend Lord, Lord Eames, asked about Northern Ireland and the devolved Administrations. The targets will be set in the Bill, with the exception of the persistent poverty target, which is subject to regulation in due course because of the survey arrangements, and they apply to England, Scotland, Wales and Northern Ireland. The devolved Administrations are required to have strategies setting out how they will contribute to the UK targets. How free meals are dealt with is an issue about how income is defined in the surveys. That definition will be common right across the UK. I hope that that has helped the noble and right reverend Lord. At Second Reading, an issue about some of the survey information was raised by the noble Baroness, Lady Blood. There are issues about sample sizes and being able to particularise some components to areas, regions and countries, but the targets will be set in the Bill and will be common throughout the UK. The surveys from which the data are derived will have common definitions of things such as income. I hope that that deals with that point. I think that what I have set down about what would flow from the Bill in terms of reporting requirements should meet what the noble Baroness, Lady Thomas, seeks. I urge noble Lords not to focus on something that would be rammed through in three months’ time, because I do not believe that that would genuinely provide the information and analysis that are appropriate for noble Lords. I conclude by responding further to the noble Lord, Lord Freud, especially on his question of whether this is a diversionary tactic. We know that it will be challenging to meet the 2010 target. The current economic situation—although we now look to be on the mend—has implications that we perhaps do not yet fully understand. I do not know whether the report in Financial Times today is correct, but it suggested that the noble Lord’s party would seek to bring forward a manifesto that effectively watered down the Government’s commitment to ending child poverty by having a whole array of targets, so that it would be hard to identify or measure any progress. If that is the noble Lord’s intent, I would be very interested to hear from him. I would certainly be interested to hear any denial that he may wish to make on that, because that is the backdrop to our discussion of the Bill. If we are trying to undermine and pick away at the bases of the targets, that is the context in which we will debate these matters, although I do not think that that would be the best and most productive use of this opportunity. This is an important Bill, because it is about being clear about a range of targets, each of which has to be met, but it also recognises that it is not only about income and that a whole raft of things impact on poverty. The development of the strategies and the monitoring that will underpin them going forward represent the way in which we as a country can make real progress. On that basis, I hope that the noble Lord will not seek to press his amendment.