Child Poverty Bill

My Lords, I am interested in the approach that the noble Lord, Lord Freud, takes. I encourage him to continue to freshen up the debate; it is a long time since I have heard anyone tackle benefits from the direction of talking about the black economy. I start with a question of terminology. Can we talk about the "informal economy" rather than anything else? I do not want to be too correct about this, but it is more comfortable language. I have a technical question for the Minister. We are now in Clause 6 and looking at the interpretation of terms used in relation to targets. It is not clear to me whether these are affirmative or negative procedure regulations. It would be helpful to know that, and I would be reassured if they were affirmative rather than negative. Turning to the amendment, how on earth is this to be done? Leaving aside some of the side issues, I understand that the substantive point, as the noble Lord was arguing from an interesting and useful point of view, is whether we can really find out what is going on with household incomes in future. We are right in this Committee to look at ways to improve our knowledge about that. This is wider than just financial benefit levels, although we have had some useful debates about that in the past. If we are going to look at the informal economy, what measures are we going to use? How is this to be done? We know a bit about the University of Essex expanding its longitudinal survey of Britain, and there may be opportunities to get things done differently. I am puzzled by how to begin to determine, on any kind of basis, any kind of valid information that we could act upon. So my first point regards functionality. Supposing that we could do this, we might be able to target money away from those errant families that are in the informal economy. Actually, I think you should ring the police, or at least the benefit fraud unit, if there are people in the informal economy. That is my next point: if we are trying to encourage people to take up entitlements to benefits, absolutely the last thing you want to do is send a tax inspector round. A Treasury report was written for the Government in 2000 by Lord Grabiner, a distinguished Member of this House. I have a copy of it here. It is all about enforcement, and rightly so. It contains estimates of the extent of the problem, and the problem is great, which I do not think anyone denies. The headings under the summary of recommendations are "Prevention", "Detection", "Punishment" and "Publicity". That does not sit comfortably with the eradication of child poverty, and I do not know how the two things would mesh in a way that would work. This is a tax issue more than anything else. I think we have all known for a long while that self-employment is porous, and it is more so at the high end than at the low end. I suspect that GDP percentage losses to the economy occur at the high end, among the people who are rather wealthy, rather than among people who are self-employed as hairdressers or whatever, who are trying to rub along and make ends meet. I am being prompted to say that it will be happening with barristers and the like. So there is disproportionality in that, but the point that the noble Lord makes about self-employment is understood and accepted. I agree with the noble Lord that getting more information about what is happening with family incomes is the right thing to do, but I would want to know about the overhanging, and sometimes astonishing, levels of debt. If we are to look at the wider picture, we need to look at both sides. Of course, there are people who might be understating, moonlighting or ghosting, or whatever the terms are, in the informal economy, and HMRC deals with them daily, but we should also look at credit card debt, which has become fantastically inflated over the past five or 10 years. That also has to be weighed up, and it would be interesting to do so in order better to target benefits in the future. I welcome the fact that we are taking a broad look at all this afresh and drilling into it, but how do you prevent people being frightened off claiming means-tested benefits to which they are absolutely entitled? If you have all the information that you want, it might make the problem harder to solve than the noble Lord may think, according to what he said when introducing his amendment.