Child Poverty Bill

My Lords, I thank the noble Baroness, Lady Thomas, for her amendment. I suspect that she has anticipated my response, but if she will allow I shall give it anyway. The effect of this amendment is to equivalise net household income to take into account the costs of disability, when measuring progress on the four child poverty targets contained in the Bill. The rationale behind the amendment is that households with a disabled member, be that a disabled adult or a disabled child, often incur extra disability-related costs, which affects the amount of income they have to maintain their standard of living. We touched on the issue at Second Reading debate, and a very similar amendment was debated in Committee in the other place. We recognise that families with a disabled member are significantly more likely to be in poverty than families with no disabled member. That is not acceptable, and the strategies that this Bill requires must address that issue. However, as the noble Baroness acknowledged, the links between disability and poverty are many and complex. Analysis by the Institute for Fiscal Studies suggests that it is not the presence of disability which makes families with a disabled member more likely to experience poverty; it is related to other factors, such as being in a workless household or lone parent family. The Child Poverty Unit has carried out a thorough review of the evidence base to help us better understand the causes of poverty, including analysing which groups are most at risk of poverty. We anticipate that the strategy required by Clause 8 will outline whether specific action to meet the needs of the most vulnerable groups of children and families, including children in families with a disabled member, is required. This could include, for example, addressing the particular issues facing these families such as the difficulties in finding suitable childcare for disabled children, particularly older disabled children. We are confident that the strategies will help to address the issues facing these families. Indeed, it will be very difficult to meet the child poverty targets without considering particular measures for the groups most at risk of poverty. As an aside at this juncture, arising from a conversation that I had this morning, I am trying to set up a mini-seminar with the Child Poverty Unit between Committee and Report to give it an opportunity to better and more fully explain the sort of work that it is doing. That may help to inform our deliberations further. I would also draw noble Lords’ attention to the draft regulations relating to the local needs assessment to be made under powers in Clause 21. A draft of these regulations was provided in the Peers’ information pack, although I stress that we are currently working with partners in local government to develop these further. Noble Lords will note that the list of matters to be considered in a local needs assessment includes, on page 48, the number and proportion of children who live in a family where a child is disabled. The intention is to ensure that local authorities take the needs of disabled families into account when preparing their local child poverty strategies, which Clause 22 requires to be based on the needs assessment. Returning to the amendment, I would like to be absolutely clear that we recognise that the issue of equivalising incomes to take account of the costs of disability is a difficult one. We recognise that there are additional costs associated with disability. However, as mentioned at Second Reading, research shows these vary significantly in level and nature, and there is no general agreement on how to measure these costs. Therefore, while we understand the difficulties of this issue, there is currently no generally agreed method to equivalise income to take account of the costs associated with disability. I reassure noble Lords that this does not mean that the extra costs of disability are not picked up at all by the child poverty measures in the Bill. The combined low income and material deprivation indicator, set out in Clause 3, allows a fuller assessment of the living standards of those households facing particular difficulties due to high living costs, including those associated with disability. This indicator will capture families who have an income that is higher than that captured by the relative low income target, but who have a lower standard of living because of additional costs, such as those related to disability. I hope noble Lords will understand that due to the variable nature of the costs associated with disability, it is difficult to equivalise income to take into account the costs of disability in the way proposed by the amendment. The noble Baroness referred to the data about whether we included DLA and the fact that it did not make much difference to the outcome of the assessment. That is, in part, because it has an impact on median income as well as the income of individual households. The noble Baroness referred to the take-up of disability benefits. A good deal of work is being done to improve take-up of benefits. The Pension, Disability and Carers Service is taking the lead in discussing changes to the delivery of benefit advice and has met the Department of Health to explore practical ways of delivering benefit advice closer to the point of diagnosis—for example, in hospitals. From 2008 we would expect everyone with a long-term condition or need for support and their carers routinely to receive information about their condition that includes sign-posting people to information and advice about benefits. In the five years to February 2009, the number of people receiving DLA increased by nearly 16 per cent—by more than 3 per cent in the last 12 months alone—and take-up of attendance allowance increased by around 2.4 per cent in the last 12 months. Progress is being made. The noble Lord, Lord Freud, asked whether it is possible under the Bill to change what is included as income. The answer to that is yes, because what is regarded as the income of the household for a financial year is the subject of regulations—it takes us back to our discussion of the provision at Clause 6(1). The regulations would again be subject to affirmative resolution. We have circulated draft regulations with the caveat that discussion is still going on. A process is therefore in place and the items set down in Clause 6(1) are the subject of regulation. I could not conceive of the noble Lord having the opportunity to promote these things, but if they ever came his way, there is a mechanism for government to change these matters. I hope that the noble Baroness will withdraw her amendment.