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My second point is that anybody who looks at this-perhaps I am not the best person to make this argument-will see that London is the epicentre of poverty in the United Kingdom, for a variety of reasons. People might be surprised about that. If you look at the extent to which poverty arises in London, it is clear that the Government will not reach any of their targets unless something dramatic is done to improve the circumstances that apply in London. There is a combination of the worst contra-indicating factors of ethnicity, disability, shortage of part-time work and large families. Noble Lords all know what predisposes low-income household families to suffer. The conditions are all in existence in London-in spades. If that is true of the generality of these factors, housing is the biggest issue of all. When you see the housing benefit system struggle to cope in London, you realise how important the issue is. It is not just regional. The Government will not succeed in what they are trying to do by 2020 unless they address the situation in London.

Finally, I will make a point as a watcher of these things. The statistics on below average income households are very dense. The people who generate the reports issue press releases that make them intelligible to ordinary people. My fear is that, if after housing costs are not treated with the same significance by the Government, the people who write the reports will not emphasise them. The May 2009 figures for households below average income were very clear, when they were explained by the people who produced them, about the significance of the after housing costs measure. If the Government abandon after housing costs in the way that has been suggested in the Bill, my fear is that that the measure will slip off their agenda and it will be much harder for ordinary people trying to make sense of what is going on and to find the trends to mine the raw data for themselves if they do not get explanations from the officials who produce the reports.

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Lord Freud: My Lords, I have a great deal of sympathy with the points raised by the noble Baroness. She is quite right to seek to make these financial targets as accurate a measure as possible for assessing the well-being of children living in the relevant households. I have already spoken about the danger of relying on purely financial measures of child poverty. We will talk in more depth about that. The issue here is the extent to which housing is a freely chosen good for people in the community and to what extent it is effectively imposed on them as forced spending.

The housing boom over the past decade has undoubtedly led to a situation in some areas of the country where high housing costs are not, as the Government insist, a matter of choice for families. This might be true if ample affordable housing was available, but we all know that such accommodation is in critically short supply in many areas of the country. The noble Lord, Lord Kirkwood, mentioned London. He is quite right that London has a terrible problem with supplying affordable housing. It is almost laughable to claim that before housing cost income is a comparable indicator of lifestyle across the country.

I am not convinced that this amendment on its own will calm my concerns about the financial targets. The dangers of relying solely on financial targets will not be avoided completely, no matter how carefully we define the measurement of those targets. After housing costs might indeed be more indicative of disposable incomes, especially in some parts of the country, but the noble Baroness identifies in a later amendment another cost that many would argue is non-discretionary. I can think of many more areas that could be excepted. For example, why is money spent on food basics still to be considered discretionary? Transport costs, as the noble Lord, Lord Kirkwood, mentioned, are also unavoidable in many cases. A dramatic example is childcare, which is often a necessary cost of working. Then there are school uniforms, heating costs and so on.

These amendments are right to try to match the targets that the Bill sets more closely to the deprivation that a child actually feels. I am sceptical about the possibility of defining household income with sufficient precision to make it a direct proxy for child well-being in all cases, but this amendment represents an improvement over what is currently in the Bill-I say that at the risk of being accused again of trying to water down the Bill for our own nefarious purposes. I will be interested to hear the Minister explain why the Government continue to reject such a measure and indeed seek in practice to prevent a future Government from using after housing costs, should that Government wish to do so.

Baroness Afshar: My Lords, I would like to add some more choices that are unavoidable. For many minority households, the only choice is to stay with a relative, leading to unsatisfactory conditions and overcrowding in many houses that minorities live in. I do not want to get into a competition over whether West Yorkshire is poorer or worse, but those of us who visit these households find that, although they do not often have childcare problems because everyone looks after everyone's children, the conditions and the lack

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of privacy drive children out almost as soon as they can leave. This is a serious matter, which needs to be considered.

Lord Eames: My Lords, at the risk of prolonging a discussion that at times does not seem to have exact relevance to the wording of the amendment, let me say that from my own experience the whole question of how we define poverty and deprivation in relation to children covers such a vast area of concerns that this discussion is becoming almost ethereal.

A few minutes ago, the noble Lord, Lord Kirkwood, rightly referred to the fact that there is disparity between geographical areas of the United Kingdom-what would apply in County Antrim would not apply in the streets of Glasgow, and so on. It is equally true-and I feel that this will fast become the real problem in this entire discussion, even when we are looking at future amendments in this Committee-that unless we have a clearer notion of what contributes to the basics in a child's life, irrespective of where that child lives, we are going to get into all sorts of difficulties, which will find their way into the discussion of legislation. Speaking again from my experience of over 43 years of dealing with the pastoral needs of families in my home country, I assure the Committee that we are just scratching the surface of the problem.

I have listened carefully to what your Lordships have said today. If I may say so, my concern deepens with each speech that I have listened to. What I believe the Government are attempting to do in this Bill has my wholehearted support. However, I do not see the difficulty as lying in the niceties of words or the niceties of various attempts to avoid issues. The real difficulty that we face is in determining what constitutes the human rights of a child and what constitutes a penalty in the life of a child. Therefore, I make a plea at this stage, if I may presume to do so, that we should be careful that we do not get our thoughts hung on one attempt to define the poverty of children. So much contributes to it. The Minister sensed this in his introduction and covered it, but we lost sight of it when we heard various details that subsequently came up. I hope that I am not wrong in that. The longer our debate goes on, particularly in another place, there will be added confusion due to the simple fact that we have failed to understand that there is no simple, solitary, unitary approach to what constitutes the penalty in the life of a child.

4.45 pm

Lord Martin of Springburn: My Lords, I hope that the Committee will forgive me, as this is the first time that I have spoken in Committee in this House. If I stray from the conventions, I hope that noble Lords will put me right. My noble friend Lord Kirkwood mentioned my former constituency of Glasgow North East-it used to be known as Springburn-where I have lived since I was 14 years of age. Even within that part of Glasgow there are many differences between communities. The poverty can be different from one part to another.

I am very sympathetic to the idea that we must put housing into the equation as often as we can. I remember that a friend of mine, a previous Prime Minister, said,

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"Education, education, education". I always used to say to him, "No, it is housing, housing, housing". When I first became an MP, the local authority had in good faith built non-traditional housing. It did not do that on its own; central government told it that unless it built non-traditional housing it would not get grants to rehouse people out of the slums-the slums where I lived in the 1950s. In the 1950s there was a lot of heavy drinking, particularly among the men. They went out drinking because there was no room in their kitchens as families had five or six children. I am not saying that those men acted rightly, but they often used to say that they went to the pub to get a bit of peace and quiet. Many of them stopped drinking when they got a decent house with a garden and separate rooms for their sons and daughters and for the mother and father. They did not have that in the old tenements.

In these non-traditional houses, water used to run down the walls. It is one thing to talk about poverty, taking the rent into consideration, but someone living in a traditional house could heat the house easily. People living in a non-traditional house with water running down the walls had to get extra heating, particularly given the climate in the west of Scotland. You could have cold evenings even without the snow that we have had recently. Sometimes the only thing that they could turn to was paraffin heating, which created more condensation and bigger problems than they had to start with. No one can tell me that that did not lead to problems for children. We are saying that a child living in poverty is unhappy. Therefore, a child living in bad housing is unhappy. I told the previous Prime Minister that there is no point in a clever child coming home from school to do his or her homework if they are living in a very cold house.

At times, I really despair about the media. During the recent by-election in my old constituency, the media churned out statistics on how people in the east end of Glasgow can die earlier than people in India. However, they did not mention the good points. You should look at all the good that is in our communities. I recently counted about 14 community-based housing associations. They involved men and women, with help from central government-I give the Government credit-and the great help of the local authority. The local authority says: "There is no use in us being one big social landlord and we will give the work to the community". Not only did these community-based housing associations become landlords, which was their first job, but as a spin-off they created community halls where the child in poverty could get a decent night's entertainment, whether that be a club, a dance or a disco. It should be remembered that, where there is bad housing, people tend to leave and facilities shut down. That means that the youngster in poverty has to pay bus fares if there is a bus transportation system to get them to a place of entertainment in the city centre, whereas, in more affluent areas, such facilities can be around the corner.

I could go on and on. In one of the poorest parts of my old constituency, which I still keep in touch with, is a district called Possilpark. I am very fond of it, because that is where I served my apprenticeship and

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met my wife Mary. I cannot complain about it. However, a lot of people say: "Possilpark? A terrible place". The poverty was such that people could not afford a community-based housing association in the normal sense. They had to make representations to the Scottish Office and now the devolved Government to get a community-based housing co-operative, which meant that all the funds went back into the association. It is marvellous because, in an area where there are serious problems with drugs and break-ins, elderly people live very safely, because the co-operative has provided not only decent housing but a sense of community spirit, which means that the old folks are well looked after.

I learn more about the ideas of the Bill when I listen to the Minister. However, all that I can say is that it is hard to define child poverty. One family can have X income, while another family can receive exactly the same but the child is deprived because of serious problems in that family-it could be alcohol, drugs or even buying luxuries rather than food to put on the table. Many things go on in families for which it is difficult to legislate, create a Bill and say, "We have eradicated the problem".

I say this as someone who came from the old tenements in Glasgow, which, by the way, were terrible slums. They were a disgrace, but the community was absolutely marvellous. I could count some 24 relatives in three different tenement closes. There was a sense of security and belonging, which was fantastic. At the same time, there are many problems that we must look at. When we put housing into the equation, if a child lives in a decent home, if the rent is not high and the parents are relaxed, the child is happier. If the mother and father are worrying about where the next shilling is coming from because they have to pay a big mortgage, the child will be unhappy. We are tackling child poverty because we want children to be happy. Housing must always be in the equation. Thank you.

The Earl of Listowel: My Lords, I am prompted by what all speakers have said to support the amendment and I ask that it be at least given very careful consideration. The noble Baroness, Lady Afshar, pointed to overcrowding and the noble Lord, Lord Martin, spoke eloquently of his experience in Glasgow. I have followed this issue over the years and I must say-I declare an interest as a landlord-that we have singularly failed to provide adequate housing for many of our people, which is a great national dishonour. Unfortunately, the pressures are there for that to carry on. We have not built as many homes as we intended to. It is important to be a home owner now, which makes it difficult to develop new areas because everyone is understandably afraid of the impact that that might have on the value of their property. This is just one factor.

As my noble and right reverend friend Lord Eames said, we should see the child as a whole and not overemphasise any particular one of their needs. However, perhaps we need this particular indicator to ensure that we do not continue to fail families as we clearly have done, although I pay tribute to the Government for reducing the numbers of families living in temporary accommodation, which I think is below 100,000 now, and for their heavy investment in social housing.

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5 pm

Lord McKenzie of Luton: My Lords, I thank the noble Baroness, Lady Thomas of Winchester, for her amendment, which has given us a chance to have a quite moving discussion on a very important issue. I will deal with the detail in a moment.

The noble Lord, Lord Martin, made the case far more eloquently than I could for decent and affordable housing and talked about the wider impact on the family and on poverty if that is not available. As he explained, it can have a rather perverse impact on communities; in his experience, the worse the housing the greater the common cause for people to get together to build their own community. He talked about access to work and social behaviour and gave the example of people going down the pub because the house was too uncomfortable to stay in, with all that that leads to. This is an absolutely crucial issue.

Clause 8, which we will come on to, deals with the UK strategies that must be brought forward. It particularises the building blocks-the fundamental causes-of poverty, although not necessarily all of them. The strategies must address those. Clause 8(5)(d) deals with,

That is absolutely key. This is probably not the time to debate the history of council house building, but I will say that I cut my political teeth in a council; we used to debate Parker Morris standards and we built council housing in those days.

The noble and right reverend Lord, Lord Eames, made the hugely important point that there is a risk that, if we unpick all these issues, we will miss the totality. However, we recognise that child poverty is multifaceted and complex. We must address it by looking at the building blocks and seeing them in the context of the whole. That is what, we hope, the strategy will drive.

The noble Baroness, Lady Afshar, talked about overcrowding and its impact in causing children to leave home. Again, that is something that I recognise. I could take noble Lords to places in Luton where housing associations were set up by mothers who had lost their kids to London because they had fallen out after a row and there was no other safe haven. These issues are hugely important.

The amendment would include in the Bill a target for relative low income measured after housing costs. The other amendments are consequential and would ensure that the target was referred to alongside the existing targets as and where appropriate throughout the Bill. The new target imposed by Amendment 6 would be in addition to the relative low-income before housing costs target in Clause 2 and the other targets in Clauses 3 to 5.

The questions of whether poverty should be measured before or after housing costs, and the impact of housing quality on children's outcomes, were debated at length in the other place. These are issues that a number of noble Lords feel very strongly about, as we have heard, particularly the noble Baroness. Let me make it clear that the Government recognise the importance

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of ensuring that children live in suitable, good-quality housing that is affordable and of the impact of housing conditions on children's health and educational development.

For this reason the Government have placed, and will continue to place, significant focus on the availability of affordable homes. For example, the latest investment of £290 million at the end of November, delivering almost 5,500 more affordable homes across 149 local authority areas, brought the total government help for housebuilding since June to £1.8 billion. As the noble Earl, Lord Listowel, said, there is still a gap between housing need and the housing that is available. I have referred to recent investment and, at Second Reading, I referred to the decent homes standard. Since 1997, more than £23 billion of public and private money has been invested in improving social housing. By the end of 2010, we expect that 95 per cent of social homes will meet the decent homes standard.

There has been a substantial net reduction of 1.4 million families in non-decent homes among the poorest households since 1997. Our further ambition is to build an additional 3 million homes by 2020. Over the next three years, a further £3.4 billion will be provided to support decent homes delivery, along with a further £1.9 billion of PFI credits. We are aware of the challenge and we have made progress, but there is more to do.

Clause 8(5)(d) states that, in preparing the UK child poverty strategy, the Secretary of State must consider what measures ought to be taken with regard to housing. As with each of the areas listed in Clause 8(5), work is under way to analyse the impact of housing on child poverty and to inform the first child poverty strategy. This analysis will determine the key priorities for this policy area and, subsequently, appropriate monitoring arrangements.

The duties in Part 2 will drive local authorities and their delivery partners to address housing issues where these arise in local areas. This picks up on a point that a number of noble Lords made about disparities between and within regions. The engagement of local authorities and their needs assessments will be a key driver for making sure that these matters are addressed in the strategy. As I said, the duties in Part 2 will drive local authorities and their delivery partners to address housing issues where these arise in their local areas. For example, we expect the needs assessment process to identify the quality of housing experienced by families with children living in poverty in the local area.

The Government recognise the importance of housing costs to families' disposable incomes and the impact of those costs on their overall living standards. However, there are a number of reasons why the Government have chosen to use before housing costs measures of poverty in the Bill. First, measures of housing quality, specifically the number of bedrooms relative to the number of children and whether families can keep their homes in a decent state of decoration, are currently included in the list of items used for the combined low-income and material deprivation measure in Clause 3, as the noble Baroness recognised when she moved her amendment. So if a child is experiencing poor housing, that will be reflected in the material deprivation score.

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More important is the fact that the material deprivation measure will also pick up whether families cannot afford other items on the list. That could be because they have expenses such as high housing costs that take up a large proportion of their income, which means that they have less disposable income available to spend on other goods and services. The position does not rest only on those two particular items; it depends on the rest of the items set out in the material deprivation list as well. We will come on to talk about the costs incurred by disabled people shortly, but we would expect those extra costs to impact on the deprivation score over other items.

This is illustrated by looking at the child poverty statistics as set out in the HBAI series by region. For example, as the noble Lord, Lord Kirkwood, said, it can clearly be seen in London that using the combined relative low-income and material deprivation measure shows a far higher average risk of poverty than using the relative low-income measure for this region would suggest. This highlights in particular the high housing costs of living in London and the impact of those costs on remaining available income.

Secondly, it is important to note the drawbacks associated with an after housing costs measure. Measuring income after housing costs can understate the relative standard of living that some individuals may have by paying more for better-quality accommodation. The noble Lord, Lord Freud, raised the interesting issue of the element of choice that people currently have in what is a difficult market situation, but clearly some people still exercise that choice. Conversely, income measures that do not deduct housing costs may overstate the living standards of those whose housing costs are high relative to the quality of their accommodation. It is for this reason that the combined low-income and material deprivation measure is an important improvement because it takes into consideration both income and living standards.

We should also bear in mind the argument that has been made by my noble friend Lady Hollis-it was reiterated by the noble Lord, Lord Northbourne-about high housing costs potentially running alongside cheap transport, whereas cheaper housing usually comes with higher transport costs. The challenge of going down this path was outlined by the noble Lord, Lord Freud: where do we draw the line on this process? The noble Baroness pointed out that a measure of poverty that deducts housing costs should therefore potentially also deduct transport costs and that we do not have the data available to do this accurately. In addition, because the cost of many other items varies between and within regions, adjusting our income measure to take account of them all would be extremely difficult, if not impossible, to achieve and would result in an overly complicated measure. Given the drawbacks associated with an after-housing-costs measure, we consider that the material deprivation indicator is a better way of capturing the impact that housing costs have on living standards.

I acknowledge that the amendment would not change the current approach to measuring child poverty. Instead, it would add a further target to the Bill that we do not consider would be beneficial. We appreciate the

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importance of having a range of targets to enable us effectively to capture the different facets of poverty, which is why we have included four comprehensive targets covering different measures of financial poverty. However, for the reasons that I have set out, we consider that having a relative low-income indicator for housing costs in conjunction with a combined low-income and material deprivation indicator ensures that we are effectively capturing the particular issue of affordability of housing in the targets and through consideration of the issue in the national strategy and by local authorities undertaking their duties under Part 2 of the Bill.

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