Child Poverty Bill

My Lords, this has been a fascinating debate and I thank the noble Lord, Lord Freud, for his amendment. I thought that it would be a rather techie debate beloved of us accountants, but it has been much more profound than that. My noble friend Lady Hollis certainly touched on the circumstances in which you might go about giving in-kind provision rather than cash, as did the noble Earl, Lord Listowel. The starting point of the noble Lord, Lord Freud, is that there is an assertion—by some at least—that in-kind benefits may be a better way of supporting people and helping them out of poverty than cash. The question is whether that is right and how you would go about that, with all the risks and dangers to which my noble friend and the noble Lord, Lord Kirkwood, alluded. A related question is: if in-kind provision rather than cash were determined to be a better route in some circumstances and such in-kind provision were not measured in the targets, would that drive adverse behaviour? One could envisage in some instances a potential conflict between targets and a strategy, but I stress that the Bill is not only about meeting those targets but also about producing and delivering a strategy. It has to touch on a whole range of issues, including the building blocks. I accept that there could be instances of potential conflict between meeting a target on the one hand and delivering on a strategy on the other. That has to be resolved along the way, and may or may not be in relation to in-kind provision. The situation may evolve in the future, but it is not a reason for not having targets; rather, it is a reason for looking at how those potential conflicts can be resolved. The amendment refers to, ""passported benefits and benefits in kind"." When I saw "benefits in kind", I thought that we might at one stage be talking about company-provided vehicles, which is not an unrelated issue. The extent to which those "fringe benefits", as we used to call them, are captured in the statistics is a subject of constant review. Passported cash benefits such as housing benefit and council tax benefit, where eligibility is automatic if an individual is entitled to income support, are included in the measure of income along with all social security benefits. The noble Lord, Lord Freud, touched upon delivering services in kind. The Government are committed to measuring the effects of in-kind provision so that they continue to be considered as policy options in the fight against child poverty. As such, the cash values of certain benefits are included in the measure of household income that is currently used. For example, free school meals, free school milk and free TV licences for those aged 75 and over are captured in the data. In measuring household income, the Government follow the principle that, where receipt of a benefit in kind can on average be accurately captured by the survey, and where the monetary value of that benefit can be sensibly imputed, we attempt to include its value. If receipt cannot be captured satisfactorily, or if the value cannot be established, the value should not be included. This issue was examined in detail as part of a national statistics quality review in 2004. We therefore agree with the objective of including benefits in kind. Attempts are under way to make sure that it is as accurate as possible. The criterion used to assess whether benefits in kind should be included is whether the overwhelming majority of households would be expected to fund the benefit from their own finances had it not been subsidised. It must be quantified with some confidence and allow repeated and consistent comparisons over time. The receipt of benefit must be prevalent enough for its exclusion to lead to significant biases in the HBAI picture of income distribution as it changes over time. Capturing the data needed to measure it must not require disproportionate analytical effort. We support the thrust of the point on measurement that the noble Lord is pressing, but because we include, where feasible, the value of benefits in kind in our measurement of income, the amendment is unnecessary and I ask the noble Lord to withdraw it.