I propose to take Questions Nos. 84, 96, 123 and 127 together.
The Government's acknowledgement of the serious nature of poverty in Ireland is reflected in the national action plan against poverty and social exclusion, NAP/Inclusion, which provides a clear and strategic basis for tackling the multi-dimensional problem of poverty and social exclusion. This plan contains ambitious targets across a number of areas, the implementation of which will ensure that we are brought further along the road to our overall goal of building a fairer and more equal society. Progress on the implementation of the plan was reported in the first annual report of the office for social inclusion, OSI, which I launched last December. Since then, my officials have held a series of bilateral meetings with the relevant Departments to examine progress on the implementation of targets contained in the plan. A report to the European Commission evaluating the implementation of the plan is currently being prepared by OSI for submission in June 2005.
The most recent statistics on poverty levels in Ireland are derived from the 2003 EU survey on income and living conditions, EU-SILC, which were released earlier this year by the Central Statistics Office. The results from this survey are comparable to the previous Living in Ireland survey, LIIS, in the "risk of poverty" measure but are not for the "consistent poverty" measure due to methodological differences between EU-SILC and LIIS. Both the CSO and the Economic and Social Research Institute, which conducted the earlier surveys, have assured me that the results of the consistent poverty measure are not comparable. It is, therefore, not possible to conclude from them how consistent poverty changed and there is no reason to believe that there has been a worsening in poverty levels in recent years.
However, both surveys identify the groups at risk of poverty, including families with children, especially lone parents and large families on low incomes, those with disabilities, the long-term unemployed and the elderly, especially those living alone, and the extent of consistent poverty among these groups. It should be noted that no one measure will give a perfect picture regarding deprivation, poverty and social inclusion. While the "risk of poverty" rate does allow for comparisons to be made across countries, it is the case that when countries experience rapid economic growth — as in the case of Ireland in the 1990s — relative poverty measures on their own can sometimes be misleading.
Using the risk of poverty measure, for example, relative income poverty in Ireland rose 11.4% between 1994 and 2000 but if we use the same measure and timeframe and increase the poverty line only by consumer prices — the "anchored poverty line approach"— Irish poverty falls by 55.9%. This clearly indicates that, when economic conditions change rapidly, relative poverty trends are not always giving a complete picture of the way that economic change affects people's lives. Similarly, this measure does not take account of the high level of home ownership, especially among the elderly, and consequently the value to households of owning their own home. It also does not reflect access to household allowances in kind such as electricity, fuel, telephone rental and TV licence.
In fact, all incomes have grown significantly, although low incomes have grown at a slower rate than higher incomes. In particular, social transfers rose substantially in real terms, so pensioners, for example, saw their living standards improve markedly but still lagged behind rapidly rising incomes from employment and profits. This is reflected in increases in social welfare spending which grew from €7.8 billion to €12.2 billion between 2001 and 2005. During the same period the lowest social welfare rates have increased by 40% while the consumer price index has increased by just over 13%.
As a result of budget 2005, welfare payments have increased by three times the expected rate of inflation. This demonstrates that considerable progress has been and is being made in alleviating poverty. While the EU SILC results highlighted the problems associated with the measurement of poverty, prior to the release of these results the Cabinet committee on social inclusion had approved the re-evaluation of poverty indicators and this work is now being developed as part of the OSI data strategy.