Child Poverty Bill

My Lords, I have been somewhat of a bystander during the successful progress of the Bill, but it might be worth my making a technical contribution in support of this group of amendments from my familiarity with the issue when responsible for the work of the Joseph Rowntree Foundation. Joseph Rowntree and his son, Seebohm Rowntree, pioneered the task of measuring poverty more than 100 years ago, and the Joseph Rowntree Foundation has had to grapple for years with the question of which measurement—before housing costs or after housing costs—is the most sensible. We concluded that the after housing costs measure was better. Let me explain why. Suppose that a tenant’s income is a little below the poverty line of 60 per cent median income and their rent rises. Their housing benefit—or local housing allowance, as it is now to be—will go up to cover the extra rent. Their before housing costs total income will now include the extra housing benefit, which can take them above the poverty line. Apparently, they will have escaped poverty, but in reality, all the extra income goes on the extra rent. The tenant has seen no material change in their situation, but the before housing costs measure creates a false impression of the tenant’s relative poverty. The after housing costs measure represents the true picture. To reinforce the case made by the noble Baroness, Lady Thomas of Winchester, it is also necessary to go for the after housing costs measure if we are to make accurate comparisons of poverty in different parts of the UK. A low-income tenant in a privately rented flat in London might receive housing benefit, or local housing allowance, of £200 a week. A low-income council tenant in, say, Hull, might receive housing benefit of £50 a week. Before housing costs, it appears that the London tenant is £150 richer than the Hull tenant, but the reality is that, after paying rent of £200 in London and £50 in Hull, the two tenants are just as poor as each other. It is the after housing costs measure which reveals the true position. The before housing costs measure understates poverty in London and other high-cost areas. I know that there has been discussion of the value of using the before housing costs measure as the main measure because it is compatible with European practice and makes international comparisons easier. Most European social security systems contribute towards housing costs on the basis of fixed allowances that do not march directly in line with rents. The difference arises because of the UK’s extraordinary variation in rent levels between different areas—between, yes, London and, say, Hull—and between different kinds of landlords, councils, housing associations and private landlords. Those wide variations do not occur to anything like the same degree in most other European countries, and it is those variations which require us to have our special housing benefit—local housing allowance—system, which is highly sensitive to actual rent levels. That means that in the UK, we need the extra measurement of poverty that comes only with the use of the after housing costs measure. I support the amendments.