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Suppose that a tenant's income is a little below the poverty line of 60 per cent median income and their rent rises. Their housing benefit-or local housing allowance, as it is now to be-will go up to cover the extra rent. Their before housing costs total income will now include the extra housing benefit, which can take them above the poverty line. Apparently, they will have escaped poverty, but in reality, all the extra income goes on the extra rent. The tenant has seen no material change in their situation, but the before housing costs measure creates a false impression of the tenant's relative poverty. The after housing costs measure represents the true picture.

To reinforce the case made by the noble Baroness, Lady Thomas of Winchester, it is also necessary to go for the after housing costs measure if we are to make accurate comparisons of poverty in different parts of the UK. A low-income tenant in a privately rented flat in London might receive housing benefit, or local housing allowance, of £200 a week. A low-income council tenant in, say, Hull, might receive housing benefit of £50 a week. Before housing costs, it appears that the London tenant is £150 richer than the Hull tenant, but the reality is that, after paying rent of £200 in London and £50 in Hull, the two tenants are just as poor as each other. It is the after housing costs measure which reveals the true position. The before housing costs measure understates poverty in London and other high-cost areas.

I know that there has been discussion of the value of using the before housing costs measure as the main measure because it is compatible with European practice and makes international comparisons easier. Most European social security systems contribute towards housing costs on the basis of fixed allowances that do not march directly in line with rents. The difference arises because of the UK's extraordinary variation in rent levels between different areas-between, yes, London and, say, Hull-and between different kinds of landlords, councils, housing associations and private landlords. Those wide variations do not occur to anything like the same degree in most other European countries, and it is those variations which require us to have our special housing benefit-local housing allowance-system, which is highly sensitive to actual rent levels. That means that in the UK, we need the extra measurement of poverty that comes only with the use of the after housing costs measure. I support the amendments.

Lord Martin of Springburn: My Lords, perhaps I should declare an interest-I am a member of a housing association.

I support any amendment that considers housing and at the same time tries to tackle child poverty. In my previous constituency, there were many non-traditional houses. They were built in good faith. Some of them were multi-storey dwellings, some were maisonettes. Often, there was severe dampness, so income had to go to not only transport but heating, and there was terrible fuel poverty in some of those houses. I recall going to a constituent's house where there was a built-in wardrobe. When the lady took out the clothing that was hung up in the wardrobe it was green with mould. In the west of Scotland they used to pray for a good summer. For a good summer in the west of Scotland you need a lot of prayers, believe me.



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Talking about child poverty, there was a slogan under Prime Minister Blair's Government, "education, education, education". I always used to say, "housing, housing, housing", because how can a young child who is bright at school go home and do their homework with dampness coming down the walls? Rents, not only in London or in the rural areas, but in the larger cities throughout the United Kingdom and indeed the rural areas of the highlands, can be very expensive. The poorer a person is the more they will spend on rent-or a mortgage, for that matter. It is not easy for a family to up sticks and move because often they are in a house that is difficult to live in because it is the best that the local authority can offer.

All credit must go to the housing associations throughout the country, particularly the ones I know. In houses where there was damp, such as I have described, the housing associations took over and, with the help of central Government, who must get credit as well, they were able to put central heating into houses which were non-traditional and give people decent, warm homes. It makes a significant difference for the whole family.

I know what the noble Baroness, Lady Hollis, is saying-do we make this another target, another thing on the wish list? What is the point of having a child poverty Bill if we do not tackle poverty? If we are going to tackle poverty we must make sure that we look at the home that people are living in. That is why we have municipal housing. The reason local authorities started municipal housing all those years ago was because people were living in terrible slums. It had a severe effect on them. Even though they had their job in the mills or the factories, the fact that they were going back to homes that were overcrowded and were not getting decent sunlight and where the children all had to sleep in the same bed led to bad health. If we do not tackle the housing situation in terms of looking at the struggle people have to keep a roof over their heads there is no point in having a child poverty Bill.

Lord Kirkwood of Kirkhope: My Lords, may I briefly raise a couple of points that have been mentioned in the course of this high quality debate? First, people might think this is a technical issue and the noble Lord, Lord Best, has demonstrated that it is indeed a very important technical issue, because when you look at the way in which the difference between before and after housing costs affects individual households, it has a dramatic effect. I am not making a claim for this amendment on the basis of technicalities.

I have studied this Bill. At the beginning, I thought that it was not very useful in terms of making any difference. After listening to the very good debates in Committee, I changed my mind. This amendment, however, is a litmus test for me for a number of reasons. As my noble friend said in introducing her amendment, it captures the levels of poverty that we are going to have to address to be successful by 2020 at the lower levels of household income. I am convinced about that.

If the Government are only going to use before housing costs that is a change; to date the pressure group community has always been very comfortable with using an informal target-both before and after

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housing costs. Dropping the after housing costs measurement is a significant change. Indeed, I think the researchers in the Joseph Rowntree Foundation or wherever would say that that was so. There is a real risk of the Government being accused of running away from the awkward, inconvenient truth that a million extra people will be caught by the after housing costs amendment. For my money, it is important that the Government should be brave and say, "Yes, we are prepared to take the bad news with the good news", and take both halves of this important equation on board in their targets. I am now absolutely persuaded that these targets are right, and I now want this Bill because it is useful, but it will be worth less as a Bill if we lose the after housing costs. I genuinely feel that very strongly.

The noble Baroness, Lady Hollis, always makes very incisive contributions to these debates, and I value her judgment. This is strange coming from me-I said this in Committee-because I come from south-east Scotland, which is even more rural than the noble Baroness's home patch, but I think that London will be a core part of the debate over the next 10 years. You cannot get away from that. I live in a village with no public transport of any kind; the nearest public transport is seven miles away. Transport is important in its own way and has to be addressed, but it does not come into the same category as the use or disuse-the desuetude, really-of the whole after housing costs argument, which has been such an important part of the way in which this whole subject has been considered over the past 15 to 20 years, to my certain knowledge.

This is not a technical amendment. This is an important amendment that will be an earnest of the Government's good faith in tackling these technical problems properly in the 10 years to come.

Lord Freud: My Lords, the household below average income data show before and after housing costs across a wide range of tables, and important information is contained in each of those two series. As the noble Baroness, Lady Thomas, and the noble Lord, Lord Best, made clear, the key issue is that housing is in extremely short supply in many parts of this country and can be extraordinarily expensive, particularly in the capital. For many households, housing has moved from being an item of choice to being forced expenditure. One can therefore argue that housing can be the lone factor. In other words, it does not follow that we need to look at poverty in the light of people's costs for childcare, disability and so forth, if we accept this group of amendments.

We can obtain vital information about trends when we look at poverty levels after housing costs. It is probably the best proxy to tell us how the poor have fared as a result of housing booms and growing leverage in the economy. It is no accident that the after housing trends for the poor have been worse than the before housing trends in recent years. We have suffered an extraordinary housing boom that was built on unsustainable levels of debt, for which I blame a complacent Government. The effect is that considerably more children are living in poverty on the after housing costs measure than on the before housing costs measure: 4 million, as against 2.9 million, on the latest figures.



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However, the issue changes when we move from useful information for making measurements to statutory targets, as the noble Baroness, Lady Hollis, pointed out. The amendment is not a switch from before housing costs to after housing costs-the noble Lord, Lord Best, seemed to argue that one was preferable; it is a switch to looking at both of them. In this way, we will end up with a ratchet effect between the two measures. Whichever is the worse will become the target, which is highly likely to fluctuate in the difficult times ahead. For that reason, I do not support the amendment.

4 pm

Lord McKenzie of Luton: My Lords, I thank the noble Baroness for moving the amendment. It has been a good but short debate. To a certain extent, we have gone over old ground, as the noble Baroness anticipated when she moved her amendment. I say from the start that the Government are with my noble friend Lady Hollis and the noble Lord, Lord Freud, on this issue. There is a difference between having information which is useful information that could be put into the development of the strategies and something that is an additional target.

We have already had quite a full debate around the questions of whether poverty should be measured before or after housing costs and whether an additional after housing costs target should be added to the Bill. I am afraid, therefore, that the arguments I will make in response to this amendment will not be new; I will briefly reiterate them one last time in the hope of persuading the noble Baroness, Lady Thomas, and her colleagues to accept the Government's point of view.

We have measured poverty on a before housing costs basis since the 2003 Measuring Child Poverty consultation, and have retained this measure in the Bill. The reasons for this are threefold. First, we consider that the material deprivation measure captures the impact of poor housing on living standards, both because specific measures of housing quality are included in the list of items used for the combined low-income material deprivation measure; and also because, if a family has high housing costs, this will impact on their disposable income, and therefore on whether they can afford other items on the list. So it is not just the two specific housing-related items that are on that list; it is the impact on the rest of the collective items on that list.

Secondly, we consider that there are drawbacks with an after housing costs measure which can understate the relative standard of living that some individuals may have by paying more for better quality accommodation. Thirdly-and I recognise that I might risk the wrath of the noble Baroness in mentioning this-the vast majority of European countries only produce and publish poverty statistics using the before housing costs measure. It is important for our goal to be among the best in Europe in the child poverty stakes that we are able to compare ourselves against these countries. But I accept that the noble Baroness is seeking to add an additional target and not to substitute one.

We consider that the four challenging targets that we have in this Bill already enable us effectively to capture the different facets of poverty. We do not consider that adding a fifth target is beneficial. I should also comment on the 10 per cent target level proposed in

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the amendment. As I noted during Grand Committee, the level of relative poverty after housing costs is 31 per cent or 4 million children. Meeting this target would require a reduction to less than 1.3 million. As a number of noble Lords have recognised, meeting the existing targets in the Bill by 2020 is already extremely ambitious. Including the additional after housing cost target proposed would clearly make the goals set by the Bill even more challenging, with resulting resource implications. To the extent to which the after housing costs measure will understate the relative standards of living of some individuals, we would be using additional resources in an untargeted way.

The Government recognise the importance of ensuring that children live in suitable, good-quality, affordable housing. I say to the noble Lord, Lord Martin, that it is absolutely essential; it is a key part of our strategy. We recognise the detrimental impact of poor housing conditions on children's health and educational development. This is reflected in Clause 8(5)(d), which requires the Secretary of State, in preparing the UK child poverty strategy, to consider what measures ought to be taken in regard to housing. Similarly, Part 2 of the Bill will require 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 that live in poverty in the local areas.

I shall pick up on one or two of the more specific points. The noble Lord, Lord Best, ran through how local housing allowance works and its implications, but I would say that we have four targets in the Bill that the Secretary of State has a duty to meet, and relative income is only one of them. The material deprivation target is key as well, and therefore in making an overall judgment, we have to look at all four targets. The noble Lord, Lord Martin, expressed his support for the mantra of "housing, housing, housing", and I think we all subscribe to that. The Government have already done much in terms of tackling overcrowding by investing to make sure that we address the issue of the lack of affordable housing. Over the two years 2009 to 2011 we will invest around £7.5 billion in affordable housing, and we expect to deliver 112,000 affordable homes. Whether you are for or against the amendment, embedded within the strategy and our approach to tackling child poverty is a strong determination to deal with housing issues. The noble Lord also talked about the need for people to be able to keep warm. He may wish to know that currently one of the items in the material deprivation measure is being able to keep accommodation warm enough in winter, so the issue is addressed specifically in that target.

The noble Baroness, Lady Thomas, and the noble Lord, Lord Best, talked about including housing benefit as income in the before housing costs measure of poverty. It is right that housing benefit is included in the before housing costs calculation. Households in receipt of housing benefit pay housing costs using their total income, including housing benefit. Households not receiving housing benefit will need to pay housing costs through their total income. The noble Baroness smiles because she has heard it before, but that does not make it any less true. Including housing benefit

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enables like-for-like comparisons between the incomes that households have with which to pay housing costs and to meet their other needs. I agree with my noble friend Lady Hollis that if you are looking at after housing costs, you have to look at issues around transport as well in order to see the total picture.

The noble Lord, Lord Kirkwood, said that not having the after housing cost measure represents a change. The PSA targets are based on the before housing costs measure, which has been established since the 2004 consultation on tackling child poverty, and that is why the Bill also targets the before housing costs measure.

I end by saying that the after housing costs figures are still going to be available and will help to inform the debate and the development of strategies around child poverty. However, what we do not support is making those figures an additional target in the Bill. For the reasons I have advanced, the targets set out in Clauses 2 to 5 measure on the before rather than after housing costs basis and in other ways the strategies set out in the Bill arising from them will ensure that the impact of housing costs on families' living standards is taken into account. On that basis, I hope that the noble Baroness will not press her amendment. If she does, the Government will oppose it.

Baroness Thomas of Winchester: My Lords, I thank all noble Lords who have taken part in this short debate, particularly the noble Lord, Lord Best, whose experience in this field is unparalleled. I wonder why we have not heard some of the arguments set out today from the academic institutions and lobby groups; that is, all those who know about these figures in detail. I do not think one can compare housing with transport, and I answered the point in my opening speech when I quoted Doreen Kenny from the Greater London Authority, who has talked about the difficulties people face travelling quite a long way into London and having to cope with childcare and so on. It is not as easy as it sounds. There are many different forms of transport, and a lot of people cycle these days. I mention the noble Lord, Lord Freud, who I even saw cycling on the stage of the National Theatre, although it was in fact someone who was playing him in a production that was well worth seeing. Housing and transport cannot be equated.

I was puzzled by the noble Lord's argument about fluctuating house prices, because I do not think they make that big a difference to the figures collected. Just because house prices go up or down a bit, that does not mean the after housing costs will become unstable. I find that a very curious argument. Let us face it, the after housing costs will be worse for whichever Government are in power because more children are captured. That means more children are living in poverty, and they are the children we want this Bill to address. That is the reason I shall press this amendment. I beg to test the opinion of the House.

4.10 pm

Division on Amendment 2

Contents 89; Not-Contents 142.

Amendment 2 disagreed.



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Division No. 1


CONTENTS

Addington, L.
Alliance, L.
Alton of Liverpool, L.
Ashdown of Norton-sub-Hamdon, L.
Avebury, L.
Barker, B.
Best, L.
Bonham-Carter of Yarnbury, B.
Bradford, Bp.
Bradshaw, L.
Bristol, Bp.
Butler-Sloss, B.
Cameron of Dillington, L.
Carlile of Berriew, L.
Chidgey, L.
Clement-Jones, L.
Cobbold, L.
Cotter, L.
Cox, B.
Craig of Radley, L.
Dear, L.
Deech, B.
Dholakia, L.
Dykes, L.
Eames, L.
Erroll, E.
Fearn, L.
Garden of Frognal, B.
Goodhart, L.
Hamwee, B.
Harries of Pentregarth, L.
Harris of Richmond, B.
Haskins, L.
Howe of Idlicote, B.
Hylton, L.
Inge, L.
Kirkwood of Kirkhope, L.
Lester of Herne Hill, L.
Listowel, E.
Livsey of Talgarth, L.
Maclennan of Rogart, L.
McNally, L.
Maddock, B.
Manchester, Bp.
Mar, C.
Mar and Kellie, E.
Martin of Springburn, L.
Masham of Ilton, B.
Methuen, L.
Murphy, B.
Naseby, L.
Neuberger, B.
Newby, L.
Nicholson of Winterbourne, B.
Northover, B.
O'Loan, B.
Palmer, L.
Patel, L.
Ramsbotham, L.
Razzall, L.
Redesdale, L.
Rees-Mogg, L.
Rennard, L.
Rix, L.
Roberts of Llandudno, L. [Teller]
Rodgers of Quarry Bank, L.
Sandwich, E.
Scott of Needham Market, B.
Shutt of Greetland, L.
Smith of Clifton, L.
Smith of Kelvin, L.
Steel of Aikwood, L.
Taverne, L.
Tenby, V.
Teverson, L.
Thomas of Gresford, L.
Thomas of Walliswood, B.
Thomas of Winchester, B.
Tope, L.
Tyler, L.
Vallance of Tummel, L.
Wallace of Saltaire, L.
Wallace of Tankerness, L.
Walmsley, B. [Teller]
Walpole, L.
Walton of Detchant, L.
Warnock, B.
Williams of Crosby, B.
Young of Hornsey, B.

NOT CONTENTS

Acton, L.
Ahmed, L.
Archer of Sandwell, L.
Bach, L.
Barnett, L.
Bassam of Brighton, L. [Teller]
Bew, L.
Bhattacharyya, L.
Bilston, L.
Blood, B.
Borrie, L.
Boyd of Duncansby, L.
Bradley, L.
Brett, L.
Broers, L.
Brooke of Alverthorpe, L.
Brookman, L.
Campbell-Savours, L.
Christopher, L.
Clark of Windermere, L.
Cohen of Pimlico, B.
Corston, B.
Craigavon, V.
Crawley, B.
Crisp, L.
Davidson of Glen Clova, L.
Davies of Coity, L.
Davies of Oldham, L. [Teller]
Desai, L.
Donoughue, L.
D'Souza, B.
Dubs, L.
Eatwell, L.
Elystan-Morgan, L.
Evans of Parkside, L.
Evans of Watford, L.
Farrington of Ribbleton, B.
Faulkner of Worcester, L.
Filkin, L.
Foster of Bishop Auckland, L.
Foulkes of Cumnock, L.
Gale, B.
Gibson of Market Rasen, B.
Giddens, L.
Golding, B.
Gordon of Strathblane, L.
Gould of Potternewton, B.


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Grantchester, L.
Grocott, L.
Hameed, L.
Hannay of Chiswick, L.
Harris of Haringey, L.
Harrison, L.
Hart of Chilton, L.
Haskel, L.
Haworth, L.
Henig, B.
Hilton of Eggardon, B.
Hollis of Heigham, B.
Howarth of Breckland, B.
Howarth of Newport, L.
Howells of St. Davids, B.
Howie of Troon, L.
Hoyle, L.
Hughes of Woodside, L.
Hunt of Kings Heath, L.
Irvine of Lairg, L.
Jay of Paddington, B.
Jones, L.
Jones of Whitchurch, B.
Judd, L.
Kilclooney, L.
King of West Bromwich, L.
Kinnock, L.
Kirkhill, L.
Laird, L.
Lea of Crondall, L.
Levy, L.
Lipsey, L.
McDonagh, B.
Macdonald of Tradeston, L.
McIntosh of Hudnall, B.
MacKenzie of Culkein, L.
Mackenzie of Framwellgate, L.
McKenzie of Luton, L.
Massey of Darwen, B.
Mawson, L.
Maxton, L.
Montgomery of Alamein, V.
Morgan, L.
Morgan of Drefelin, B.
Morris of Aberavon, L.
Morris of Handsworth, L.
Morris of Yardley, B.
O'Neill of Clackmannan, L.
Ouseley, L.
Oxburgh, L.
Patel of Blackburn, L.
Patel of Bradford, L.
Paul, L.
Pendry, L.
Pitkeathley, B.
Plant of Highfield, L.
Ponsonby of Shulbrede, L.
Powell of Bayswater, L.
Puttnam, L.
Radice, L.
Rea, L.
Rendell of Babergh, B.
Richard, L.
Rogan, L.
Rosser, L.
Rowlands, L.
Royall of Blaisdon, B.
Sawyer, L.
Scotland of Asthal, B.
Sewel, L.
Sheldon, L.
Smith of Gilmorehill, B.
Smith of Leigh, L.
Snape, L.
Soley, L.
Stone of Blackheath, L.
Strabolgi, L.
Symons of Vernham Dean, B.
Tanlaw, L.
Taylor of Blackburn, L.
Taylor of Bolton, B.
Temple-Morris, L.
Thornton, B.
Tomlinson, L.
Tunnicliffe, L.
Turner of Camden, B.
Uddin, B.
Warner, L.
Watson of Invergowrie, L.
Whitaker, B.
Wilkins, B.
Williams of Elvel, L.
Williamson of Horton, L.
Woolmer of Leeds, L.
Young of Old Scone, B.
4.21 pm

Amendment 3

Moved by Lord Wallace of Tankerness

3: Clause 1, page 1, line 11, at end insert-

"( ) The duty referred to in subsection (1) shall be actionable in the courts.

( ) The court may make such order in relation to such an action (including an award of damages) as it considers appropriate.

( ) "The court" means-

(a) the High Court or County Court,

(b) in Scotland, the Court of Session or the Sheriff Court."

Lord Wallace of Tankerness: My Lords, obviously, if the important duties set out and placed on the Secretary of State in Clause 1(1) are to be more than aspirations, it is important that they should be enforceable. Indeed, it has been accepted and acknowledged that the Bill and the duty under Clause 1 are legally enforceable in the courts of the United Kingdom by way of judicial review. In a letter to the Law Society of Scotland on 24 February this year, the Minister confirmed this, saying:

"The duty in section 1 is legally enforceable by anyone in the United Kingdom".


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