§ Earl Russell
asked Her Majesty's Government:
Whether they will publish a breakdown of how they arrived at their estimate that "based on a threshold of 60 per cent of median income, after housing costs, there will be a total of 1.2 million children in households lifted out of poverty as a result of measures announced this Parliament" (H.C. Deb., 8 June, col. 383W); and [HL4030]
What changes in levels of employment have been assumed in the calculation that 1.2 million children will be lifted out of poverty; and [HL4031]
What changes in levels of earnings have been assumed in the calculation that 1.2 million children will be lifted out of poverty; and [HL4032]
What effect on child poverty has been attributed to each of their measures individually; and [HL4033]
What part of the expected reduction of child poverty is attributed to parents entering work as a result of government measures; and how much effect is attributed to which measures; and [HL4034]
In calculating reduction in child poverty through the effects of parents entering work, what allowance they have made for the effects of substitution. [HL4035]
§ Lord McIntosh of Haringey
The 1.2 million children lifted out of poverty is an estimate, using the Treasury's tax benefit simulation model, of the impact of the measures announced during this Parliament. It is not a forecast of the change in the number of children living in low income families over the Parliament.
The estimate encompasses the income effect of the measures, with one exception. A small adjustment has been made to allow for increases in employment amongst lone parents, which have already been seen since 1997. Other than this, for the purposes of this estimate, no account has been taken of the possible impact of the tax and benefit measures on earnings or employment.
The impact of each of the key measures on families' incomes is shown in Box 5.1 on page 86 of the March 2000 Economic and Fiscal Strategy Report. This shows that changes in the working families' tax credit and income-related benefits have the biggest impact in the lower deciles of the income distribution.
While it is not possible to break down the impact of the individual measures on child poverty, it is possible to provide some detail on the types of household affected. The estimates suggest that of the 1.2 million children lifted out of poverty, around one-third are in lone parent families and about two-thirds in families with someone in employment.