Child Poverty Bill

My Lords, this amendment is designed to do two things. First, it aims to lay a duty on the Secretary of State to ensure that major lacunae in the data are not simply accepted but are taken into account; indeed, it should reinforce the considerable efforts that the Government are now making to get a handle on the informal economy. Secondly, it aims to ensure that non-financial support for families is not actively discouraged. I accept that great efforts are made to ensure that the survey data are as accurate as possible. Nevertheless, there are still major discrepancies. The Institute for Fiscal Studies, in its report to the DWP The Living Standards of Families with Children Reporting Low Incomes, laid out some of the issues, particularly those surrounding the much higher standard of living of the self-employed than the survey data would suggest. Its observation, which I quoted in Grand Committee, is worth referring to again: ""A substantial number of families manage to remain out of hardship even during prolonged periods of poverty. Indeed the length of poverty is not strongly related to the likelihood of hardship, which is contrary to the view that households can generally maintain their living standards for a short period of time after entering poverty"." Work on the informal economy is a somewhat arcane field. One of the leaders in it is Professor Friedrich Schneider, at the Johannes Kepler University. He estimates that the informal economy’s share of gross domestic product is likely to be 10.9 per cent in the UK in this year alone. That is a massive amount of undeclared activity—in the region of £140 billion. Clearly it covers a multitude of activity, from underdeclared earnings, or tax evasion, to illegal activity such as drug dealing, to welfare fraud. Nevertheless, some of it will inevitably be distorting the data on which the child poverty strategy are based. The risk is that we worry about children who are living in families that are actually comfortably off but are careful to disguise the sources of their wealth. Strategies to help those children would, therefore, effectively be steering resources away from children who were living in households in genuine need. This amendment is designed to reinforce the importance of the work of the Office for National Statistics in this area. To judge by its 2005 report Identifying Sources on Entrepreneurship and the Informal Economy, it is already getting to grips with the issue in assessing the relevant data sets. In the years to come, this amendment should encourage significantly further advances. The second aspect that this amendment is designed to encourage is the valuation of support that may be in kind rather than in cash. I am indebted to a briefing from the Minister’s team for informing me how the survey data already put a value on many passported and in-kind benefits, such as free school meals. My concern arises from a series of recommendations in the 2009 OECD report Doing Better for Children, which concluded that support for some of the hardest-to-help families can be better delivered in kind than in cash. I pick out the key issue in a quotation from the report: ""Children at greater risk may benefit more from in-kind services because their parents may not be capable of functioning as agents acting in the best interests of their children with income transfers"." If this is true, we need a child poverty measurement basis that does not discriminate against in-kind services and where such services would do a better job because they would not count in the battle against child poverty. The amendment would make sure that valuable interventions such as these were not ruled out purely for reasons of measurement. I beg to move.