I shall address the amendments. I am sure the noble Lord will come back to me on some of these issues as I go through my remarks. Amendment 25, in the names of the noble Earl, Lord Listowel, and the noble Baroness, Lady Grey-Thompson, seeks to expand the report to include data on children living in households with low relative income combined with the other three income measures in the current Act, as we have discussed. The reason that we do not want to include those is that they fail to tackle the root causes of child poverty and focus on symptoms, which we want to replace. I will set out my argument in full. The effect of Amendment 46, in the names of the noble Baroness, Lady Sherlock and the noble Lord, Lord McKenzie, is wider still. It would prevent the repeal of those measures from the Child Poverty Act 2010.
I shall try to explain why we find the four income-related measures unfit for purpose, particularly as regards treating them as targets. The income measures they are based on are a poor test of whether children’s lives are really improving. As my noble friend Lady Stroud pointed out, in the past, they have shown child poverty falling when the economy was in recession. Much more importantly, when you look at them as a driver of decisions by a Government, they are inherently unpredictable and would lead a Government to spend finite resources on action that does not produce the best results for children.
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I will illustrate the point about unpredictability by referring to the kind of commentary we have seen from external experts. The noble Lord, Lord McKenzie, will remember, as I do, when we passed that Act that an external expert estimated that the Government could meet their relative child poverty target by spending an extra £19 billion a year in financial transfers by 2020. In a separate analysis, it erroneously forecast an increase in the number of children in relative income poverty to the tune of 500,000 children. That is an enormous margin of error when the number of children in relative low income is 2.3 million, which would need to be reduced by about 1 million to fall below the current target of less than 10%. So £19 billion to do that, that kind of error rate, two years out, and you are asking a Government to take decisions with that kind of sum attached to them—and the forecast is wrong. I am not getting at the external people who made these forecasts—it was the IFS, which I think is the best organisation to do the forecasting—but I am illustrating that they are inherently unpredictable a couple of years out.
When the financial implications of having those measures as targets are that large, I do not think anyone would expect a Government to handle that level of forecasting unpredictability when dealing with this problem. Instead, the Government should be incentivised to focus their actions and finite resources on the root causes of child poverty, where they can
be sure to make the biggest impact. This is about transforming lives, not just moving families £1 above the poverty line.
Another thing to remember when we look at these measures as targets is that we are the only country in the world with a target in law to eradicate child poverty. Lots of countries use the OECD equivalised measures. We are the only country to have put it in as a legal target. I emphasise that we want to achieve the right outcomes for our children but I firmly believe that these amendments would not help us progress towards that common aim in the most effective way possible.
A number of noble Lords have mentioned the evidence review that we published in 2014. It makes it clear that worklessness and educational attainment are the factors that have the biggest impact on child poverty and children’s life chances. I will talk about work in a moment when I come to Amendments 24 and 26. A good education is the bedrock for future success in life. At the heart of our determination to improve children’s life chances and social mobility is a commitment that all children, regardless of background, are extended the educational opportunities that allow them to fulfil their potential. To pick up the query from the noble Baronesses, Lady Lister and Lady Blackstone, the evidence review found that the most important driver of poverty was worklessness.