Child Poverty Bill

My Lords, I thank the noble Baroness, Lady Thomas of Winchester, for her amendment, which has given us a chance to have a quite moving discussion on a very important issue. I will deal with the detail in a moment. The noble Lord, Lord Martin, made the case far more eloquently than I could for decent and affordable housing and talked about the wider impact on the family and on poverty if that is not available. As he explained, it can have a rather perverse impact on communities; in his experience, the worse the housing the greater the common cause for people to get together to build their own community. He talked about access to work and social behaviour and gave the example of people going down the pub because the house was too uncomfortable to stay in, with all that that leads to. This is an absolutely crucial issue. Clause 8, which we will come on to, deals with the UK strategies that must be brought forward. It particularises the building blocks—the fundamental causes—of poverty, although not necessarily all of them. The strategies must address those. Clause 8(5)(d) deals with, ""housing, the built or natural environment, and the promotion of social inclusion"." That is absolutely key. This is probably not the time to debate the history of council house building, but I will say that I cut my political teeth in a council; we used to debate Parker Morris standards and we built council housing in those days. The noble and right reverend Lord, Lord Eames, made the hugely important point that there is a risk that, if we unpick all these issues, we will miss the totality. However, we recognise that child poverty is multifaceted and complex. We must address it by looking at the building blocks and seeing them in the context of the whole. That is what, we hope, the strategy will drive. The noble Baroness, Lady Afshar, talked about overcrowding and its impact in causing children to leave home. Again, that is something that I recognise. I could take noble Lords to places in Luton where housing associations were set up by mothers who had lost their kids to London because they had fallen out after a row and there was no other safe haven. These issues are hugely important. The amendment would include in the Bill a target for relative low income measured after housing costs. The other amendments are consequential and would ensure that the target was referred to alongside the existing targets as and where appropriate throughout the Bill. The new target imposed by Amendment 6 would be in addition to the relative low-income before housing costs target in Clause 2 and the other targets in Clauses 3 to 5. The questions of whether poverty should be measured before or after housing costs, and the impact of housing quality on children’s outcomes, were debated at length in the other place. These are issues that a number of noble Lords feel very strongly about, as we have heard, particularly the noble Baroness. Let me make it clear that the Government recognise the importance of ensuring that children live in suitable, good-quality housing that is affordable and of the impact of housing conditions on children’s health and educational development. For this reason the Government have placed, and will continue to place, significant focus on the availability of affordable homes. For example, the latest investment of £290 million at the end of November, delivering almost 5,500 more affordable homes across 149 local authority areas, brought the total government help for housebuilding since June to £1.8 billion. As the noble Earl, Lord Listowel, said, there is still a gap between housing need and the housing that is available. I have referred to recent investment and, at Second Reading, I referred to the decent homes standard. Since 1997, more than £23 billion of public and private money has been invested in improving social housing. By the end of 2010, we expect that 95 per cent of social homes will meet the decent homes standard. There has been a substantial net reduction of 1.4 million families in non-decent homes among the poorest households since 1997. Our further ambition is to build an additional 3 million homes by 2020. Over the next three years, a further £3.4 billion will be provided to support decent homes delivery, along with a further £1.9 billion of PFI credits. We are aware of the challenge and we have made progress, but there is more to do. Clause 8(5)(d) states that, in preparing the UK child poverty strategy, the Secretary of State must consider what measures ought to be taken with regard to housing. As with each of the areas listed in Clause 8(5), work is under way to analyse the impact of housing on child poverty and to inform the first child poverty strategy. This analysis will determine the key priorities for this policy area and, subsequently, appropriate monitoring arrangements. The duties in Part 2 will drive local authorities and their delivery partners to address housing issues where these arise in local areas. This picks up on a point that a number of noble Lords made about disparities between and within regions. The engagement of local authorities and their needs assessments will be a key driver for making sure that these matters are addressed in the strategy. As I said, the duties in Part 2 will drive local authorities and their delivery partners to address housing issues where these arise in their local areas. For example, we expect the needs assessment process to identify the quality of housing experienced by families with children living in poverty in the local area. The Government recognise the importance of housing costs to families’ disposable incomes and the impact of those costs on their overall living standards. However, there are a number of reasons why the Government have chosen to use before housing costs measures of poverty in the Bill. First, measures of housing quality, specifically the number of bedrooms relative to the number of children and whether families can keep their homes in a decent state of decoration, are currently included in the list of items used for the combined low-income and material deprivation measure in Clause 3, as the noble Baroness recognised when she moved her amendment. So if a child is experiencing poor housing, that will be reflected in the material deprivation score. More important is the fact that the material deprivation measure will also pick up whether families cannot afford other items on the list. That could be because they have expenses such as high housing costs that take up a large proportion of their income, which means that they have less disposable income available to spend on other goods and services. The position does not rest only on those two particular items; it depends on the rest of the items set out in the material deprivation list as well. We will come on to talk about the costs incurred by disabled people shortly, but we would expect those extra costs to impact on the deprivation score over other items. This is illustrated by looking at the child poverty statistics as set out in the HBAI series by region. For example, as the noble Lord, Lord Kirkwood, said, it can clearly be seen in London that using the combined relative low-income and material deprivation measure shows a far higher average risk of poverty than using the relative low-income measure for this region would suggest. This highlights in particular the high housing costs of living in London and the impact of those costs on remaining available income. Secondly, it is important to note the drawbacks associated with an after housing costs measure. Measuring income after housing costs can understate the relative standard of living that some individuals may have by paying more for better-quality accommodation. The noble Lord, Lord Freud, raised the interesting issue of the element of choice that people currently have in what is a difficult market situation, but clearly some people still exercise that choice. Conversely, income measures that do not deduct housing costs may overstate the living standards of those whose housing costs are high relative to the quality of their accommodation. It is for this reason that the combined low-income and material deprivation measure is an important improvement because it takes into consideration both income and living standards. We should also bear in mind the argument that has been made by my noble friend Lady Hollis—it was reiterated by the noble Lord, Lord Northbourne—about high housing costs potentially running alongside cheap transport, whereas cheaper housing usually comes with higher transport costs. The challenge of going down this path was outlined by the noble Lord, Lord Freud: where do we draw the line on this process? The noble Baroness pointed out that a measure of poverty that deducts housing costs should therefore potentially also deduct transport costs and that we do not have the data available to do this accurately. In addition, because the cost of many other items varies between and within regions, adjusting our income measure to take account of them all would be extremely difficult, if not impossible, to achieve and would result in an overly complicated measure. Given the drawbacks associated with an after housing costs measure, we consider that the material deprivation indicator is a better way of capturing the impact that housing costs have on living standards. I acknowledge that the amendment would not change the current approach to measuring child poverty. Instead, it would add a further target to the Bill that we do not consider would be beneficial. We appreciate the importance of having a range of targets to enable us effectively to capture the different facets of poverty, which is why we have included four comprehensive targets covering different measures of financial poverty. However, for the reasons that I have set out, we consider that having a relative low-income indicator for housing costs in conjunction with a combined low-income and material deprivation indicator ensures that we are effectively capturing the particular issue of affordability of housing in the targets and through consideration of the issue in the national strategy and by local authorities undertaking their duties under Part 2 of the Bill. The noble Baroness said that the Government used to include both before housing costs and after housing costs and asked why there was a change. The original child poverty PSA was to quarter child poverty by 2004-05 on both BHC and AHC measures. It is true that after this the Government changed to focus on before housing costs. This was before the extensive Measuring Child Poverty consultation in 2003-04, which arrived at the long-term measure of child poverty. It was decided to focus on before housing costs, only because of the inclusion of the combined low-income and material—