Asked by: Baroness Primarolo (Labour - Life peer)
Question to the Department for Work and Pensions:
To ask Her Majesty's Government, further to the reply by Baroness Buscombe on 17 June (HL Deb, col 653), how many children living in absolute poverty in a household where the adult is (1) self-employed, and (2) in part-time employment, will benefit from the “£1.7 billion a year cash boost to our welfare system”; and by how much the family income will increase per annum in those households.
Answered by Baroness Buscombe
The change announced in the Budget will enable working parents and people with disabilities on Universal Credit to keep £630 extra income each year or around £12 per week.
HM Treasury’s distributional analysis, published alongside Budget 2018, shows the cumulative effect on household incomes of policies on welfare, tax, and public service spending measures. Because different measures often interact with each other, this cumulative assessment provides the best representation of the overall intended policy effect. This shows that the Government’s decisions have benefited households throughout the income distribution, with the poorest households gaining the most as a percentage of net income.
DWP has not conducted research into the impact of Universal Credit on household poverty. Estimates of the number and proportion of individuals in relative low income are published in the National Statistics Households Below Average Income (HBAI) series, available on gov.uk.
The latest annual publication was on 2017/18 data and we will continue to monitor relative low income rates in future publications. We are committed to building a country that works for everyone – not just the privileged few. We know that work is the best route out of poverty and Universal Credit is designed to strengthen incentives for parents to move into and progress in work. The impact of Universal Credit cannot be considered in isolation; it is a key component of a broader strategy to move Britain to a higher wage, lower welfare, lower tax society.
Asked by: Baroness Primarolo (Labour - Life peer)
Question to the Department for Work and Pensions:
To ask Her Majesty's Government how many children live in a household where the adult employed is in part-time employment and are living in absolute poverty (1) before housing costs, and (2) after housing costs.
Answered by Baroness Buscombe
National statistics on the number of children in absolute poverty in a family where the adults are in part time employment only can be calculated from figures published in the annual "Households Below Average Income" publication.
In 2017/18, the number of children in absolute poverty in families where the adult or adults were in part-time employment only, was 400,000 before housing costs, and 700,000 after housing costs
Asked by: Baroness Primarolo (Labour - Life peer)
Question to the Department for Work and Pensions:
To ask Her Majesty's Government how many children who live in a household where at least one adult is employed are currently living in absolute poverty after housing costs.
Answered by Baroness Buscombe
National statistics on the number of children in absolute poverty in a family where at least one adult is employed can be calculated from figures published in the annual "Households Below Average Income" publication.
In 2017/18, 2.5m children were in absolute poverty (after housing costs) in families with at least one adult in employment. However, nearly half of these families are in part time work only, or are self-employed
Asked by: Baroness Primarolo (Labour - Life peer)
Question to the Department for Work and Pensions:
To ask Her Majesty's Government how many children live in a household where the adult is self-employed and are living in absolute poverty (1) before housing costs, and (2) after housing costs.
Answered by Baroness Buscombe
National statistics on the number of children in absolute poverty, in couple families where at least one adult is in full-time self-employment, can be calculated from figures published in the annual "Households Below Average Income" publication.
In 2017/18, the number of children in absolute poverty, in couple families where at least one adult was in full-time self-employment, was 400,000 before housing costs and 500,000 after housing costs.
Asked by: Baroness Primarolo (Labour - Life peer)
Question to the Department for Work and Pensions:
To ask Her Majesty's Government, further to the answer by Baroness Buscombe on 17 June (HL Deb, col 652), what is their definition of "absolute poverty".
Answered by Baroness Buscombe
Government definitions of low income households are set out in the annual National Statistics publication Households Below Average Income. Someone is in absolute low income (commonly referred to as ‘absolute poverty’), if they are in a household that received less than 60% of the UK median equivalised net household income in 2010/11, adjusted for inflation.
Absolute low income is measured both before and after housing costs. Housing costs include; rent (gross of housing benefit); water rates, community water charges and council water charges; mortgage interest payments; structural insurance premiums (for owner occupiers); ground rent and service charges.
Asked by: Baroness Primarolo (Labour - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government further to the Written Answer by Lord Young of Cookham on 21 May (HL15607), whether the figures given for total take-home pay, child benefit and tax credits for a family of two adults, one of whom is aged 25 or over and works 35 hours per week and receives the National Minimum Wage or National Living Wage, were adjusted for inflation to allow for accurate comparisons between years; and if not, whether they will provide such figures.
Answered by Lord Young of Cookham
The figures in HL15607 were shown in cash terms. The table below shows the same table in April 2019 prices, adjusted using the Consumer Prices Index and rounded to the nearest £5.
Table 1: Total take-home pay, Child Benefit, and tax credits in April 2019 prices for a family with two adults, one of whom is aged 25 or over and works 35 hours per week and receives the National Minimum Wage or National Living Wage
Year | £ per annum |
2010-11 | 20,275 |
2011-12 | 20,150 |
2012-13 | 19,970 |
2013-14 | 19,925 |
2014-15 | 19,885 |
2015-16 | 20,290 |
2016-17 | 20,670 |
2017-18 | 20,400 |
2018-19 | 20,185 |
2019-20 | 20,135 |
The table above is true for a family with a particular set of circumstances. On average real household disposable income per person is 6.7% higher than at the start of 2010 – meaning people have more money to spend than they did in 2010. Since unemployment has fallen 48% since 2010, families are also significantly more likely to have at least one person in work now than in 2010.
The government has introduced policies to increase take home pay since 2010 including;
Increasing the Work Allowance in Universal Credit by £1000 from April 2019. This would provide up to an additional £630 per year for households with children and for people with disabilities;
Doubling the amount of free childcare available to working parents of 3 and 4 year olds, saving families using the full 30 hours around £5,000 per year. This is in combination with increasing the amount that working families can claim back in childcare to 85% of their registered childcare costs each month under UC, compared to 70% on the legacy system. For families with two children this could be worth up to £13,000 a year;
Increasing the Marriage Allowance from £1,190 in 2018-19 to £1,250 in 2019-20. The benefit is therefore worth up to £250 in 2019-20. It will continue to increase each time the Personal Allowance is increased.
Asked by: Baroness Primarolo (Labour - Life peer)
Question to the Department for Work and Pensions:
To ask Her Majesty's Government, further to the answer by Baroness Buscombe on 21 May (HL Deb, col 1858), on what evidence they base their statement that “inequality has fallen”; and whether they will publish that evidence.
Answered by Baroness Buscombe
National statistics on income inequality are published annually in the “Households Below Average Income” publication using the Gini coefficient. The Gini coefficient is an international standard technical measure of how incomes are distributed across all individuals. It ranges from 0% (when everyone has identical incomes) to 100% (when all income goes to only one person).
From 2009/10 to 2017/18 income inequality, measured using the before housing cost Gini coefficient, has fallen by 2 percentage points. See the table below for the annual statistics from 2009/10 to 2017/18.
This data is published annually on the “Households Below Average Income” website on gov.uk.
Year | Income inequality (Gini Coefficient. %) |
2009/10 | 36 |
2010/11 | 34 |
2011/12 | 34 |
2012/13 | 34 |
2013/14 | 34 |
2014/15 | 34 |
2015/16 | 35 |
2016/17 | 34 |
2017/18 | 34 |
Asked by: Baroness Primarolo (Labour - Life peer)
Question to the Department for Work and Pensions:
To ask Her Majesty's Government, further to the Written Answer by Lord Agnew of Oulton on 16 May (HL15606), whether they will now answer the question put.
Answered by Baroness Buscombe
The information on numbers of children entering and exiting poverty is not available. However, figures for percentages of children moving in and out of poverty are collected in the Income Dynamics publication. These are available in Table 8.1, and in the table below:
| 2010-2011 to 2011-2012 | 2011-2012 to 2012-2013 | 2012-2013 to 2013-2014 | 2013-2014 to 2014-2015 | 2014-2015 to 2015-2016 | 2015-2016 to 2016-2017 |
% children entering poverty | 6 | 6 | 6 | 7 | 6 | 7 |
% children exiting poverty | 34 | 35 | 37 | 33 | 33 | 35 |
The percentage of children entering poverty is the percentage of only those children who were not in poverty in the earlier year but who were in poverty the following year. The percentage of children exiting poverty is the percentage of only those children who were in poverty in the earlier year but who were out of poverty the following year. Entry and exit rates are very different (since entry / exit rates are expressed as a percentage of only those not previously in poverty / previously in poverty respectively).
The threshold used is 60 per cent of median equivalised household income Before Housing Costs (BHC). Since household incomes are subject to measurement error, and the threshold is subject to sampling and measurement error, the analysis only includes ‘clear’ transitions. For an entry/exit to count, household incomes must cross the 60 per cent of median income threshold and be at least 10 per cent higher / lower than the threshold in the following year.
Asked by: Baroness Primarolo (Labour - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government, further to the answer by Lord Agnew of Oulton on 30 April (HL Deb, col 857), what is the minimum amount that a family with two children under 16 years of age with one adult working full-time on the national minimum wage or national living wage would take home in each year since 2010 if they were claiming child benefit, tax credit, child tax credit and working tax credit.
Answered by Lord Young of Cookham
The figures are shown in table 1 below, rounded to the nearest £5.
Table 1: Total take-home pay, Child Benefit, and tax credits for a family with two adults, one of whom is aged 25 or over and works 35 hours per week and receives the National Minimum Wage or National Living Wage
Year | £ per annum |
2010-11 | 16,805 |
2011-12 | 17,450 |
2012-13 | 17,815 |
2013-14 | 18,205 |
2014-15 | 18,500 |
2015-16 | 18,840 |
2016-17 | 19,250 |
2017-18 | 19,510 |
2018-19 | 19,775 |
2019-20 | 20,135 |
Asked by: Baroness Primarolo (Labour - Life peer)
Question to the Department for Education:
To ask Her Majesty's Government, further to the answer by Lord Agnew of Oulton on 30 April (HL Deb, col 857), how many children have (1) moved out of poverty, and (2) moved into poverty, in each year since 2010 for which figures are available.
Answered by Lord Agnew of Oulton
I issued a letter of correction on 9 May 2019 explaining that my reference to children moving out of poverty since 2010 should have been a reference to the number of children in workless households. There are now 665,000 fewer children in workless households compared with 2010. A copy of my letter has been placed in the Libraries of both Houses.