Oral answer (Lords) on Social Metrics Commission - Jan 29

To ask Her Majesty's Government what assessment they have made of the report A new measure of poverty for the UK, published by the Social Metrics Commission in September 2018.

The Government welcome the work that the Social Metrics Commission has done. Measuring poverty is complex, and this report offers further insight into the nature of that complexity. The Social Metrics Commission report acknowledges that further work needs to be done, particularly around data availability and quality. We want to carefully consider the detail that underpins the methodology that the Social Metrics Commission has employed when this has been made available to us.

My Lords, I congratulate the commission, so ably led by the noble Baroness, Lady Stroud, on achieving such wide support for its innovative relative poverty measure. David Cameron pledged that the Conservative Party would recognise, measure and act on relative poverty, yet now Ministers repeatedly cite only the so-called absolute poverty statistics when challenged. What has changed to negate that pledge, other than the worrying increase in relative poverty since 2011-12, especially among children, and the Government’s regressive social security and other austerity policies that have taken their toll?

My Lords, the Government accept that the current suite of measures is not without limitations. However, the relative poverty line, for example, moves across with average income, which is useful when looking at whether groups are or are not keeping up with the middle of the income distribution over time, but it does not show whether the average income of those on the lowest incomes is improving in real terms. Therefore, if everyone’s income were to double tomorrow, the number of people in relative poverty would be unchanged. The absolute poverty line, on the other hand, moves with inflation, providing a better measure of how the income of those on low incomes compares with the cost of living.

My Lords, do the Government believe that the inclusion of debt and assets and the extra costs of disability and childcare are an improvement to the measure and give us a better understanding of the nature of poverty?

My Lords, this is a very important point. I thank my noble friend for introducing a debate on this very subject last week. It is right that we take note of the unavoidable extra costs of disability and childcare. However, so far as we understand it, the Social Metrics Commission does not include, for example, the unavoidable cost for the elderly of social care. In regard to disability, it is important to note that we spend more than £50 billion a year on benefits to support disabled people and those with health conditions. It is encouraging that 973,000 more disabled people have entered into work in the last five years, and we now have much more generous childcare provision.

My Lords, we share my noble friend’s enthusiasm for the approach adopted by the commission, particularly the focus on relative poverty. This is a measure that takes account of both income and inescapable costs to which the Minister has just referred, such as childcare, housing and the impact of disability. Under the commission’s new measure, there are 14.2 million people in poverty, nearly half of whom are living in families with a disabled person. Do the Government think that this is acceptable? Measuring is all very well, but what are the Government going to do about it?

To answer the last point first, the current measure shows that in 2016-17 23% of people in households where someone was disabled were in poverty, compared with 24% in 2010-11, so that shows that poverty levels among disabled people are not rising. Compared with 2010, there are now 1 million fewer people—300,000 fewer children, 500,000 fewer working-age adults and 200,000 fewer pensioners—in absolute poverty.

My Lords, given the variations in poverty rates across the regions—as much as 10%, according to the report—what plans do the Government have to address the specific causes, issues and needs of the regions and to improve the conditions of those in poverty across the country?

My Lords, it is important to say that we are committed to action that will make a meaningful difference to the lives of disadvantaged children and families, and that goes beyond a focus on the safety net of the welfare system to tackle the root causes of poverty and disadvantage. I am taking a particular interest in debt, working with my honourable friend the Minister for Pensions and Financial Inclusion. We are also very much looking at housing, working across government with the Ministry of Housing, Communities and Local Government. These issues matter very much when looking at the root causes, as does low pay, and that applies not just to the private sector; it is important that we also look at the third sector and other institutions that might not be paying sufficient wages to those whom they employ.

Does the Minister accept that the availability of a new and more informative measure of poverty must be the springboard to new action to alleviate poverty? To start with, will she insist with her colleagues in the MHCLG that their proposal to remove the deprivation factor from the foundation formula for the allocation of grants to local authorities would further impoverish urban communities already impoverished by this Government’s disproportionate reductions in grant, further widen inequality and, indeed, put further pressure on the social security budget?

My Lords, as well as doing the work that I have just referred to, over the coming months we look forward to the release of further information from the Social Metrics Commission and to working with the commission. In particular, the department is keen to be involved in the stakeholder discussions on some of the critical and more complex issues which the noble Lord recognises and which the commission is taking account of in its measures.

My Lords, I would be very grateful if the Minister could tell us what action the Government are taking to help working households which are struggling with the cost of living increases and to stop them falling into poverty.

My Lords, we are supporting those on low incomes through the national living wage, which was increased from £7.50 to £7.83 in April 2018, and this April it will increase again to £8.21. The party opposite may make noises but it did not introduce the national living wage.

Oh!

Noble Lords might laugh but we introduced the national living wage, never mind the minimum wage. We have also raised the personal allowance from £11,500 to £11,850, which will make a basic rate taxpayer £1,075 better off in 2018-19 than in 2010-11. We have doubled the amount of free childcare available to working parents of three and four year-olds to 30 hours a week, saving them in total around £5,000 per child per year.