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I hope that the Minister will allow me to express a word of caution about disappearing down the long dark tunnel of institutional change at the United Nations. It can be very long indeed and we do not have enough time to disappear down it. Why do we not make use of the G20 meetings to be held this year, which will bring together people who emit something like 80 to 85 per cent of the world's carbon emissions? Can we not use that mechanism, which exists and is stated to be the primary institution for the co-ordination of international economic issues, as the main way to start building up some of the building blocks that will be needed by the end of the year?

Lord Hunt of Kings Heath: My Lords, the noble Lord speaks with great authority in cautioning me about being overoptimistic about reform of UN institutions. I very much take that point. None the less, the experience at Copenhagen has clearly concentrated minds. We should not dissuade the UN Secretary-General from at least looking at the issues and seeking to make changes. We must hope that processes will be put in place at Mexico that will allow decisions to be made in a more realistic environment. The G20 countries will be important in that regard and I do not seek to underestimate the role that those groupings can play. The noble Lord is absolutely right about monitoring, reporting and verification. It is very important that we have institutions of integrity that are transparent and can command confidence-I have no doubt about that. However, it is important to acknowledge that in the Copenhagen accord we are for the first time seeing developed as well as developing countries subject to monitoring, reporting and verification.

I have not sought to be overoptimistic. The Statement that I repeated made clear our disappointment. I share the view of the noble Lord, Lord Smith, that if we are overpessimistic about what has been achieved, there is a risk that people will think that we simply cannot succeed. We must take what came out of the accord, build on that and redouble our efforts over the next few months.

Lord Reay: My Lords, it is ironic that we are today being warned by the Minister of all the dangers of global warming when the capital is being told to brace itself for one of the heaviest falls of snow that we are ever likely to face. Surely it is equally ironic that the Met Office-in one of those long-range forecasts that one would have thought they would have abandoned by now, so unsuccessful have they been-only a few months ago told us to expect a mild winter. The inputs of the Met Office are one of the pillars on which the whole IPCC rests. No doubt the Government hope that their record with 100-year forecasts will be better than their record with 100-day forecasts-although for the life of me I see no reason to expect that.

I will ask two questions about the two funds that the Statement refers to. First, will any conditions be attached to the disbursement of the funds? If not, how

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will we know whether they have any effect on reducing carbon emissions anywhere? If conditions are to be attached, what will they be? Secondly, who will take the decisions regarding the distribution of those funds to developing countries?

Lord Hunt of Kings Heath: My Lords, on the question of the Met Office, the noble Lord raised an issue of science. The Government believe that there is overwhelming scientific evidence for climate change and that we have to base our policies and decisions on that basis. The fact that we face a lot of snow at the moment does not detract from the overwhelming scientific evidence.

I cannot answer the questions about funding, because the details will need to be worked through. However, I take the noble Lord's point that we must ensure that the funding is used in an acceptable way. That will be the subject of further discussion in the weeks ahead.

Child Poverty Bill

Second Reading (Continued)

6.23 pm

The Lord Bishop of Leicester: My Lords, in spite of our discussions on climate change and terrorism, the debate that now resumes on the Child Poverty Bill is surely a matter of equal moment to our national life. Any society will be judged on the way that it treats its most poor and vulnerable, and political consensus on the need to tackle child poverty is vital to our national well-being.

I declare an interest as chair of the Children's Society. In July 2001, the General Synod of the Church of England reaffirmed its commitment to the practice of justice through ensuring that, within society, the needs of each person and family, especially the needs of children, are met. I anticipate that the right reverend Prelate the Bishop of Hereford will have more to say about the church's responsibilities for children in his maiden speech in a few moments.

One of the most striking aspects of contemporary British society has been the growing gap, which has been referred to already, between the rich and poor. Most recently, the Children's Society's Good Childhood Inquiry concluded that the well-being of all our children is directly proportionate to the levels of inequality embedded in our society. We need to tackle not only child poverty, but also the inequality that results from our excessively individualistic style of life. A year ago, I was privileged to be part of that inquiry panel, whose report was debated in this House last February. The inquiry received many submissions from individuals, groups and organisations; but also, more importantly, heard from many children themselves about their concerns and hopes for their childhoods. The report had a good deal to say about child poverty and its causes, and for this reason I unapologetically rehearse one or two of its findings today, in the hope that, as the Bill progresses through your Lordships' House, some of the voices heard and issues raised in the inquiry may find expression in the legislation that we pass.

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One of the most striking things about the evidence received from children was how frequently they mentioned their basic needs. More than 5,000 children responded to the inquiry about their lives. The three topics that they talked most about were friends, family and what was termed their material needs. They spoke mostly about the importance of having a home, a bed, clothes, warmth, food and water. Interestingly, far more children talked about those things than mentioned what we might call material wants such as money and possessions. The central theme of the Good Childhood Inquiry panel's final report is the relationship between poverty and inequality. Noble Lords will be aware that, after the United States, Britain is the most unequal of the rich countries, and we all now understand how tragically this affects our children. The Good Childhood Inquiry panel argued that even more must be redistributed from the rich to the poor if we are to end child poverty once and for all. The evidence here is very clear: this is an issue that children themselves are concerned about.

We know that the relationship between poverty and inequality has a profound effect on children's well-being. However, this is not just about material disadvantage, but also about the ways in which it interacts with other forms of disadvantage to impact on children's life experiences and opportunities. Put starkly, poverty shortens lives. A girl in Manchester can expect to live six years fewer than a girl in Kensington, Chelsea or Westminster. Children in the inner-city schools of Leicester, where some 70 per cent may be on free school meals and where, in one school, 46 languages are spoken, can expect a life six years shorter than that of their near neighbours in the suburbs of the city. Evidence suggests that the experience of poverty in early years can also have a long-term impact on children's cognitive development and educational attainment. A child's cognitive development at 22 months is a strong predictor of future attainment, but the effect of poverty outweighs ability so greatly that, by the age of six, low-achieving children from more advantaged homes will outperform high-achieving children from less advantaged homes. By the end of compulsory education, the divergence is stark. Only 33 per cent of those eligible for free school meals achieve five good GCSEs, compared to 61 per cent of their peers.

The Children's Society works directly with some of the children most likely to experience poverty in our society, including disabled children, children from Traveller, Gypsy and Roma families, and children living in families seeking asylum. Sadly, many of these children do not live in the family units counted as qualifying households in the Bill and its associated guidance. If the aim of the Bill to eliminate child poverty by 2020 is to stand any chance of success, we must include those groups that are the most disadvantaged. I will illustrate their needs by focusing on children living in families seeking asylum. Families claiming asylum are given benefits at 70 per cent of income support levels. They are not allowed to work. When a family is refused asylum, the Government have the power to stop all money and accommodation for the family when they believe that that family is not taking reasonable steps to leave the United Kingdom. Even when recognised as refugees, children can spend years in temporary accommodation or in unaffordable and insecure private rented

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accommodation-usually the poorest quality available. When granted asylum, families have 28 days to leave their accommodation and find somewhere else to live. This is an intensely vulnerable time for families, which can lead to destitution.

A recent survey carried out by the Children's Society, in association with its West Midlands Destitution project, uncovered stories of children growing up in households without any food, heating or toys, mothers who felt forced to prostitute themselves to survive, and young people in care-cut off from any help at 18 -becoming homeless.

My concern is that some of these children and families who are at the greatest risk of living in poverty are not captured by existing data based on qualifying households. Not all children live in qualifying households, and those who do not are often the poorest. Existing surveys of household income do not include data on some of these groups. Surely these children are poor by any measure of poverty, and yet they are excluded from the targets of the Bill. That cannot be right, and I urge the Government to set out how they intend to tackle child poverty for all children and to consider targeted measures for these particular groups, over and above the scope of the general targets.

The Children's Society is not just a campaigning organisation, but strives to tackle the issues at a local level through its practice base. The organisation currently operates 25 children's centres across England in a range of settings, and offers employment and training advice to parents as part of the core offer. The staff see at first hand, over and over again, the difference that this can make to children and families. Their approach is to ensure that the most disadvantaged and excluded children and families receive these services, because financial insecurity can be a real block to parents accessing services.

Therefore, I welcome the provisions in the Bill that place duties on local authorities to measure child poverty in their area and develop a strategy to combat it. It is vital that local authorities work with local partners, including the voluntary sector, to deliver effective local services that will help to break the cycle of poverty and reduce inequality.

Of course we welcome the commitment of the Government to deliver this Bill, but we urge them to go further. It is vital that children's voices are heard in this debate about their poverty. The Government must go further to address the links between poverty and inequality in our society and need to widen the scope of those they survey as living in poverty to include some of the poorest in our society. I hope that the Government will find innovative ways to work locally in partnership with strong public, private and voluntary-sector organisations to deliver the goals of this Bill.

I look forward to taking part in further debates as the Bill makes progress through your Lordships' House.

6.33 pm

Baroness Hollis of Heigham: My Lords, poverty, like wealth, is too often inherited, unmerited and unearned-especially for children. We all know which children are poor and in what families they live-large

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families with two parents churning between no or low-paid work. Others have a lone parent, a disabled parent, a BME parent or an unemployed parent-usually a mixture of them all.

Therefore, this Bill is about income and outcomes for children. It seeks to turn the Government's aspiration, which I am sure is shared by the House, of halving, then eradicating child poverty, into targets-binding targets. Normally in draft legislation, we do not insert a Clause 1 as a statement of intent. Here we have an entire Bill devoted to it. It cannot be done. It has to be done. It is impossible, but it is essential.

Why? In the other place, much of the debate, as my noble friend mentioned in his opening speech, centred around whether tackling poverty of income should be the objective of the Bill, or whether, given that poor children were by definition within poor families, there were drivers behind that poverty of family income-education, worklessness, debt, addiction, family relationships and poor mental health-which should be tackled first. That argument was run by the noble Lord, Lord Freud.

The Government argued, rightly in my view, that their work in other fields-Sure Start, schools, the New Deal for Lone Parents-have progressed in parallel with their pledge on child poverty, and that therefore it was right that this Bill should remain focused if we are to transform the life chances of every child. Without an assault on income poverty, the successful outcomes that we all want to see-happy, healthy and well-educated children-are infinitely harder, if not impossible, to achieve. We need this Bill, not a different Bill.

However, that does not make the task that this Bill sets for itself any easier. Why is it so difficult-perhaps even impossible-while at the same time essential? There are four tests of poverty in this Bill, and they are mostly problematic, as I want to suggest. The first relates to relative poverty-those at below 60 per cent of national median income. It is of course a statement about inequality at least as much as poverty, as the right reverend Prelate the Bishop of Leicester absolutely rightly said. Fewer children in Greece, I suspect, may be-or are, indeed-below the 60 per cent line. But does that mean that there are fewer children in poverty? No, because I suspect that Greek incomes are lower and, therefore, children above the poverty line in Greece may in real terms be worse off than children in England below the poverty line. In other words, international comparisons-I agree with the noble Lord, Lord Freud-without carefully worked-out equivalences of livings standards between countries are, frankly, a waste of space. Indeed, it is arguable that if you take the total benefit package into account, UK children are in the top three or so of OECD countries.

There is a second problem. Conventionally, benefits for people of working age are increased by inflation. Those in work, however, can normally-I do not mean now-expect to see wages rise each year by 2 per cent above inflation. Those below 60 per cent median, as the noble Baroness, Lady Thomas, rightly said, keep falling behind. To catch up, benefits not only have to be linked to earnings, rather than the RPI, to maintain the status quo-and that is expensive enough-but need actually to increase faster than earnings, in

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order to narrow the relativity gap. Only then will you decrease inequalities. Even if that were acceptable and affordable, if you have several children and only one unskilled earner, what then happens to work incentives? The poverty trap becomes an unemployment trap, unless you revisit the work stop of the 1970s.

Not surprisingly, but unfortunately, therefore, we mostly see a reduction in children in relative poverty where there is recession, where earnings fall and the median bar drops. Thereby, we reduce relative poverty because the country is getting poorer and inequalities close. I am not absolutely sure about this, but that may account for the question of the noble Lord, Lord Freud, as to why attempts to achieve the child poverty targets have done relatively badly since 2004. I suspect that that is due to real wages rising rapidly between 2004 and 2008 and, therefore, the bar has risen faster than children on benefits could keep pace with. That shows the problematic nature of the measure.

This Government admirably have sought to square this circle and make work pay through the minimum wage and tax credits. However, again, if they seek to reduce in-work poverty, as they must, the median bar is raised ever higher and it becomes harder for relatively poor children on benefits to hurdle.

In a sense, the Government have set themselves up to fail. Despite my profound misgivings about the deliverability of the relative poverty target, I do not for a moment believe that it should be discarded. My noble friend reminded us that some 500,000 children have come out of relative poverty, and he hopes that a further 500,000 children shortly will join them. Many lone parents with children under 14, for example, already receive benefits above the 60 per cent median line. But however difficult and demanding it is-and it will be-we have to go further, otherwise children in the bottom quintile will fall further and further behind. As society becomes more unequal, children see themselves as onlookers-the excluded-while other children's well-being rises. I will support anything that increases equality and reduces inequality, as this test does. Therefore, as a test of poverty, the relative poverty measure is flawed, but in terms of social decency, so that children are not left behind, I judge it to be essential.

What none of those who understandably may press for amendments in Committee in order to go further and faster-5 not 10 per cent of children below the line; AHC rather than BHC-should forget, which I am sure they do not, is that the targets in this Bill are frankly already truly heroic and, if we can achieve them, transformative.

The second test-income combined with material deprivation-is also in my view deeply problematic. It combines in one test both income and expenditure, thus brigading what we used to call primary poverty, which is real enough, with in some cases additional secondary poverty-that of expenditure choice. Research shows that of two families with identical income, one may suffer material deprivation, the other not, according to whether those in one family smoke but those in the other do not, or whether they belong to a credit union or, alternatively, have loans at very high APR figures, which plunges them into debt.

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Expenditure also quite properly reflects people's choices. To put it flippantly for a moment, if I may, a member of my family is below the poverty line on material deprivation indicators while being a higher-rate taxpayer. I realise that the index is weighted both for preference and for widely available goods, and of course it is combined with low income. I also recognise that the material deprivation indicator importantly allows us to pick up people whose income seems nominally high because of their housing or disability benefits but whose expenditure is equally high, or higher, as well. Bedroom overcrowding-a problem that has grown with reformulated families, each partner bringing children into the relationship, and to some degree with immigration-or keeping the house warm, which is important where there is a disabled parent or child, are key examples. However, I have always thought it a somewhat odd list of indicators, originally modelled on the Irish bundle of goods. Household contents insurance, for example, is often a generational choice, and safe play facilities or open space close by are less about income than the built environment, but those are alongside the big ticket items, such as overcrowding, and very modest ones, such as affording the 35p once a fortnight for a baked beans and sausage tea for a friend. I remain somewhat hesitant about this list.

Incidentally, talking about housing-and despite the noble Baroness, Lady Thomas-I think that the Government are absolutely right to go for BHC rather than after housing costs. I absolutely understand the argument that housing costs vary dramatically, but equally it can also be argued that they may reflect a choice of higher quality over other goods. However, an argument that I think has so far not been made is that high housing costs usually run alongside cheap transport. Cheaper housing, outside London, usually comes with higher transport costs, estimated to be on average £20 to £30 a week more-the result of sparsity and poor public transport. AHC weights for London at the expense of the rest of the country. Before housing costs, I believe, more fairly assess country incomes as a whole. If you want AHC, you have to run with it by including transport costs, but in all fairness I do not think that we have the detailed statistics to do so.

Similarly, the noble Baroness, Lady Thomas, raised the issue of DLA and disability costs. However, DLA does not pay for costs; it is assessed on care needs. Someone living at home with severe depression, for example, may be on the middle rate, receiving the DLA care and mobility elements, but have few extra financial costs in the way of diet, heating or appliances. There may be a case for raising DLA, and I would support the noble Baroness on that, but that is not part of this Bill.

The third test, absolute income, is also not trouble-free. It sets a benchmark, an underpinning to relative poverty figures, which I support. We have been using the 1999 figures, and they show that half the cohort of children who were below the poverty line in 1998-99 were by 2009 lifted above that line. We are talking about 1.7 million children, which is a huge achievement. As this benchmark is independent of what is happening to earnings, it is about real standards of living rather than relative ones.

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The difficulty is that, even with RPI built in, every decade or so you have to rebase your figures, otherwise the benchmark gets too far behind generally accepted standards of living, and you therefore build in a jagged edge every time you rebase and do not end up with the consistent statistics that you need to guide policy. However, consultation with the lobby groups showed that they wanted to retain this and I think that they were right.

Persistent poverty, the last of the four tests, is in my view the most important of all. It is the poverty that scars and affects about 10 per cent of our children. A temporary drop into poverty-while, for example, for six months dad draws contributory JSA-will for most families be fairly quickly overcome when they join the world of work and rebuild their lives. If however you are persistently poor, everything is more expensive-each square foot of your living space, the cost of your fuel, your food, your loans, and certainly your ambitions and aspirations. Persistent poverty defeats the parent and denies the child most of the things that make up the good life. It is the one that really matters.

Therefore, I think this is a brave Bill and it is one for which I applaud my noble friend. I edited Opportunity for All on behalf of the Government from its inception to 2005 or so, and 20 or so of our 40 poverty indicators expressed child poverty targets. Those reports sought to measure child outcomes across the field of government activity. This Bill, I believe, completes the jigsaw, turning an aspiration to end child poverty into a commitment, enshrined in law, by which any and every Government rightly should be judged. I think it will be impossibly hard to deliver but we must try. We owe all our children nothing less, for every child matters.

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