Clause 6
Child Poverty Bill
5:00 pm
Stephen Timms (Financial Secretary, HM Treasury; East Ham, Labour)
Unfortunately, my briefing does not cover the Webb-Johnson methodology so, sadly, it will be neglected in my response.
The Committee has heard what the amendment would do. We have used a before-housing costs measure of child poverty since the consultation on measuring child poverty in 2003 but, as I have already emphasised, the households below average income data series continues to present child poverty estimates using both before and after-housing costs measures of poverty, and our intention is for that to continue.
I have mentioned one of my reasons to the Committee, but there is another. The most telling consideration is that income is measured before housing costs to allow comparisons with other European countries, which measure poverty in that way. There is a dynamic in the Bill that we aim to be among the best in Europe. The target that we have set for relative poverty would place us as the best in Europe at the moment. In setting the targets—clause 6 is about interpretation of terms used in relation to targets—we should use the before-housing cost measure to enable those comparisons to be made and for us to have a sense of whether or not we are achieving a position of being the best in Europe. The hon. Member for Northavon said that we could still look at that data. However, I turn that round. We will still be able to see the after-housing cost data and make whatever use of them we wish, but in terms of the target, it is right that we compile the figures in a way that can be compared with others.
As we all know from this morning’s debate, measures of housing quality are included in the combined low income and material deprivation measure. If a child is experiencing poor housing, that will be reflected in their material deprivation score. Families who cannot afford things because they have high housing costs will be picked up in the material deprivation measure as well. The measure reflects the impact of high housing costs and a family’s ability to afford decent housing. The hon. Member for Northavon is right about the impact of high housing costs on child poverty—my hon. Friend the Member for Regent's Park and Kensington, North frequently makes that point. Through the low income and material deprivation measures, we are able to track that impact because paying out a lot of money for housing curtails the ability to afford other things.
Finally, as the hon. Member for Northavon mentioned, if one deducts housing costs entirely, those who choose to pay for better quality accommodation could have their relative standard of living understated. In preparing a UK child poverty strategy, we need to consider any housing measures required to tackle child poverty, as set out in clause 8. It is right that the targets are defined as being before housing costs, for the reasons that I have set out, but people will continue to monitor what is happening on an after-housing costs basis and the data will continue to be provided to make that possible.