§ Lord Craigmyleasked Her Majesty's Government:
What plans they have to bring up-to-date the McClements scale (which has been used to calculate net equivalised income since the 1970s). [HL2286]
§ The Parliamentary Under-Secretary of State, Department of Social Security (Baroness Hollis of Heigham)The McClements scale is used in Government Statistical Service income distribution statistics published by DSS and by the Office for National Statistics. Statistical methodology is reviewed regularly. The use of the McClements scale was last formally reviewed in 1995–96 as part of the Methodological Review of the Households Below Average Income (HBAI) series. Before this, research published by the Institute for Fiscal Studies in 1993 suggested that the McClements scale was not less valid than it had been when first estimated.
HBAI results are extensively tested for sensitivity to the equivalence scale used and sensitive results are flagged in the published tables; in general, the picture of changes over time is robust to the choice of equivalence scale. The Methodological Review recommended that this sensitivity testing should continue. The consultation on the review also endorsed the view of the HBAI statisticians that adequate sensitivity testing was more important than the choice of the central scale, given that all methodologies for producing equivalence scales have weaknesses. DSS statisticians therefore have no plans to update the McClements scale, but will continue to keep this and other aspects of methodology under review.
The Methodological Review recommended that an additional scale which attributes extra costs to disabled people should be included in the testing. The results of this additional testing are in Appendix 4 of Households Below Average Income 1979–1996/7. Copies of both the Methodological Review report and the HBAI publication are held in the Library.