Clause 5

Child Poverty Bill – in a Public Bill Committee at 4:00 pm on 27th October 2009.

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The persistent poverty target

Photo of Steve Webb Steve Webb Shadow Secretary of State for Work and Pensions

I beg to move amendment 23, in clause 5, page 2, line 37, leave out “2015” and insert “2012”.

Lest I be misunderstood or thought grudging, I should say that I think that the presence of a range of poverty targets in the Bill is entirely welcome—with the exception of the target that we have just discussed. The inclusion of material deprivation is a welcome step, as is the inclusion of persistent poverty in clause 5. They are all good things that future Governments will come to rue, I am sure.

Amendment 23 relates to one of the details of the persistent poverty target, namely the date, set out in clause 5(3), by which the target percentage has to be prescribed by regulations. When I first read the clause, I could not believe what I saw. Here we are in 2009, legislating for a process that we are already meant to be halfway through, and we will be three quarters of the way through the process before we have even decided what the target is on one of the four key measures. That seems a bit slow.

There will be arguments about data, I am sure, and I welcome the fact that, as I understand it, the Government are commissioning what is known in the academic literature as a socking great panel survey, which will be much bigger than what we had before. I remember  working on the British household panel survey in years gone by. Wonderful though it was, it was certainly small. Given the annual panel attrition, and given that we started with only 5,000 households, we soon got to small sample sizes. The idea of basing that indicator on something much bigger gets me salivating. It is entirely a good thing.

Having said that, it is not a good enough excuse to say, “We have to put the panel into the field, and then we have to have another wave and yet another wave. We then have to crunch the numbers and think about it for a few more years, and then we will have a target.” The target should bite on Government policy, but how can it do so if it does not exist until halfway through the remainder of the period?

How can the child poverty commission recommend action that will enable us to hit the targets in clause 5 if it has not decided what they are? Given that we are talking about some of the most difficult poverty to tackle, namely persistent poverty—there is a clue in the title, as it were—leaving the setting of the target until five years down the track seems problematic. It is an oversimplification to say that we would be just leaving the issue; clearly, one would want to be doing something about persistent poverty, anyway, but how much “something” would you need to do, and for which groups? We will not know until 2015. The Minister will say that subsection (3) only says that the regulations should be made not later than 2015, but that is an awful lot of leeway.

Our modest amendment simply brings the target forward to 2012, not because that is the year of the Olympics, but because that gives the Government half as much time as they want—they want six years, and we want to give them three. That is not a very scientific reason either, but we are trying to probe why the Government think that they need six years. The gist of the argument is that the target will be really difficult to meet. We are dealing with intractable, persistent poverty that requires an awful lot of work and concentration of effort. If we do not know what the targets are until halfway through the period, how on earth, in that final five years, are things to be done? Yes, we can start now, but if we do not know the scale of what we are even trying to achieve until six years down the track, what hope have we got of achieving it? I encourage the Committee to accept our amendment.

Photo of Andrew Selous Andrew Selous Shadow Minister (Work and Pensions) 4:15 pm, 27th October 2009

The hon. Gentleman has done the Committee a service in tabling the amendment. I am minded to support it, if he is willing to press it to a Division. He makes an entirely fair point. It is now 2009; it is six years to 2015, which is a long time to wait. If we are to have a definition, we need to know what it is sooner rather than later, so that we can drive policy in a sensible direction. I cannot think of any good reason why the setting of the target should be left so late, so I listen with interest to the Minister’s defence of the 2015 date.

Photo of Stephen Timms Stephen Timms Parliamentary Under-Secretary (Department for Business, Innovation and Skills) (Digital Britain) (also HM Treasury), Financial Secretary (HM Treasury) (also in the Department for Business, Innovation and Skills)

The amendment would require the target to be set before 2012, rather than before 2015. I just point out that the wording in the Bill is “before”, not  “by”. In other words, in order to meet the timetable set out in the Bill, that target would have to be prescribed by regulations made by 2014, so we are not talking about setting the target halfway—the whole halfway, anyway—through the period, although we are talking about a fair chunk of the first half of the decade.

I am grateful to the hon. Member for Northavon for welcoming the inclusion of the persistent poverty target. I agree with him that the number of children below the poverty line in three years out of four is a very important and telling piece of data. The target was welcomed by the witnesses who gave evidence last week, and it will enable us to focus attention on families who spend significant periods of time below the poverty line.

The reason for the delay until 2014—or possibly earlier; the target percentage would have to be set by 2014—is, as the hon. Gentleman anticipated, the new, larger survey. I note that he is salivating over it; let me give him a little more information about it. As he knows, the survey currently used to measure persistent poverty is the British household panel survey. That is being subsumed, from this year, within a new survey, Understanding Society—a larger survey, as he said—which we intend to use to measure persistent poverty in the future. The first full set of data from that survey will be available in 2011, and the second full set in 2012.

I hope that I can persuade the hon. Gentleman that it would be technically impossible to comply with his proposal, which is that the target be set before 2012. We will simply not have the second set of data by then, and once we receive it, it will need to be analysed if we are to come up with a sensible and intelligent target for persistent poverty. We could argue that we need more than two years of data, but we want to deal with the issue on the basis of the first two years. I hope that the Committee accepts that we need at least two years of data if we are to come up with a sensible target.

Photo of Graham Stuart Graham Stuart Conservative, Beverley and Holderness

Obviously, the data required for the purposes of subsection (3) do not currently exist. What data do the Government have that would be relevant?

Photo of Stephen Timms Stephen Timms Parliamentary Under-Secretary (Department for Business, Innovation and Skills) (Digital Britain) (also HM Treasury), Financial Secretary (HM Treasury) (also in the Department for Business, Innovation and Skills)

We do have data. They depend on whether one uses the McClements measure, or the OECD equivalence scale. However, the most recent data indicate that 1.4 million children—10 per cent. of all UK children—were in persistent poverty from 2004 to 2007. That proportion is down by 7 per cent. from 1997 to 2000. We have therefore made good progress on that measure, but, as I have said, there will be a discontinuity in the survey, and we need to assess the new survey before we can sensibly set a target; otherwise, we will be setting it in the dark.

Photo of Graham Stuart Graham Stuart Conservative, Beverley and Holderness

If we have a reasonably robust number, why do we need to wait, for target-setting purposes, for the welcome and salivatingly delicious extended new survey before setting a target and sending a message to policy makers and Departments about the cross-departmental arrangements that need to be put in place to tackle the issue?

Photo of Stephen Timms Stephen Timms Parliamentary Under-Secretary (Department for Business, Innovation and Skills) (Digital Britain) (also HM Treasury), Financial Secretary (HM Treasury) (also in the Department for Business, Innovation and Skills)

We do so on the basis of the expert advice that we have taken. We simply do not know what the new survey will show. It will be conducted on an entirely different basis, and the numbers will not necessarily be continuous with the previous measure; there could  be a discontinuity in one direction or the other. Until we have seen the data, we just will not know. It might be helpful if I assured the Committee that we seek to deal with the matter as quickly as we can. Neither the Government nor I have an interest in causing delay. The point is purely technical; we need the data before we can credibly set a target. That is the view of those who have advised us on the issue.

Photo of Steve Webb Steve Webb Shadow Secretary of State for Work and Pensions

The Minister said what I thought he would say about the data, but what about the point that we have a perfect storm here? The last target to be set relates to what is arguably the most intractable problem to solve. Is there not a case for bringing forward the target so that we can get on and tackle the intractable problem?

Photo of Stephen Timms Stephen Timms Parliamentary Under-Secretary (Department for Business, Innovation and Skills) (Digital Britain) (also HM Treasury), Financial Secretary (HM Treasury) (also in the Department for Business, Innovation and Skills)

I do not think that we need to delay addressing the problem. When the strategy is produced, within a year of Royal Assent, it will need to address the problem straight away. We will not know the target, or its numerical value, until we have analysed the second wave of data.

Photo of Steve Webb Steve Webb Shadow Secretary of State for Work and Pensions

I appreciate the Minister engaging with the question, but I find his answer one of the least convincing that we have heard. I do not see how one can set out a strategy to meet a target that does not exist. One can have a strategy to tackle persistent poverty, but the target will bring in wholly different sets of people, depending on whether it ends up being 3, 5 or 7 per cent. If the target is “only” 3 per cent., that clearly represents one particular sort of child. If we broaden the measure much more and set a higher target, that might involve interventions in a whole different set of circumstances. We would be completely in the dark if we did not have a target for the first four or five years. The system could be fatally flawed if we do not know the target early on.

As the hon. Member for Beverley and Holderness rightly said, there are data. The British household panel survey goes back to the start of the ’90s. It is not brilliant, and it is not big, but it is not that bad. People have been making academic careers out of it for long enough. I do not see why we should not say, “This new bigger survey will clearly be more detailed, but it is a household survey, as the other one was.” A Government who are serious about such a target will struggle to approach it rationally if it does not exist for five years. Clearly, the Minister will not have his new data in time to meet our target, but a run of 15-odd years of the old data tells him enough to set a rational target. In any case, clause 5 allows the Government to vary the target if they need to, in the light of further information, so the target percentage would be a ballpark figure, not an absolute figure. On that basis, I encourage the Committee to accept the amendment.

Question put, That the amendment be made.

The Committee divided: Ayes 7, Noes 9.

Division number 2 Nimrod Review — Statement — Clause 5

Aye: 7 MPs

No: 9 MPs

Ayes: A-Z by last name

Nos: A-Z by last name

Question accordingly negatived.

Clause 5 ordered to stand part of the Bill.