Child Poverty Bill

My Lords, I referred to this general area when the Minister asked me whether our view on financial targeting would change. This amendment effectively introduces an additional financial target. Its aim is to set out as reliable a figure as possible, given the state of the data, for the kind of really persistent poverty which concerns the electorate. It is designed to be a rock-bottom measure of long-term poverty combined with long-term deprivation. One central issue of concern with the financial targets set out in the Bill is the lack of reliability of the data. The income data on which we rely come in the main from the Government’s Family Resources Survey. Each year it questions around 25,000 households. There is of course an issue about the reliability of the responses. That is a point we shall pick up on in another amendment. By definition, a survey only records an individual’s income at a certain point. For instance, if I am in between jobs, I can record nil income and be counted as poor. Not surprisingly, people move rapidly in and out of these deciles. Peter Saunders at Policy Exchange, in his fascinating paper Poverty of Ambition, points out that more than half of the poorest 10 per cent of households move out of the bottom income decile within 12 months. He informs us that of the 18 per cent of households with incomes below the poverty line in 1991, only 2 per cent were persistently poor in every one of the subsequent 10 years. Temporary drops into income poverty are not what the general public understand to be poverty. Long-term or persistent poverty is covered in Clause 1(1)(d). The trouble is that the measure of income alone seems pretty dubious if you read the IFS report, written for the DWP by a team led by Mike Brewer, entitled The Living Standards of Families with Children Reporting Low Incomes. We have already looked at another report from the IFS today. This report finds a particular problem with self-employed families that have higher living standards than employed families on similar incomes. Additionally, households with children on the lowest incomes do not have the lowest average living standards. The IFS closely examined the number of children in hardship, in particular long-term hardship, using the Families and Children Study and the British Household Panel Survey, known respectively as the FACS and the BHPS in common shorthand. It found that the proportion of children in long-term hardship—that is, three consecutive years—was greater than the proportion in long-term poverty; that is, three years of income poverty. Interestingly, however, the document stated that about one-third of children in poverty for three years never experienced daily living deprivation according to the Families and Children Study; almost one-third never experienced consumer durables deprivation; and much higher proportions were never in hardship according to the other measures. Therefore, a combination of the two measures over a persistent period would allow us to capture that group of children who are at the heart of disadvantage in this country. Once they are clearly targeted, we can focus on how best to help them. I beg to move.