To ask the Secretary of State for Environment, Food and Rural Affairs what estimate has been made of the proportion of (a) English farming households and (b) households in rural areas with incomes below the Department for Work and Pensions' low income threshold. (187440)

The only source of farm household income data measures income before tax is deducted. The official DWP low income threshold is based on income after tax. One would expect the number below 60 per cent. of the median to be lower after tax as the tax system is designed to reduce some of the inequalities in income. Household income data for rural households are not available so the answer to part (b) is based on working age adults living in low income households. Therefore, the answers given in part (a) and part (b) are not directly comparable. In addition it should be noted that the data used to answer part (a) are based on the English population while those in part (b) are based on incomes in the United Kingdom.

(a) English farming households—before deduction of tax

For the population as a whole, the Government have a preferred measure of “low income” defined as 60 per cent. of the median equivalised income for all UK households after tax. It may be presented either before housing costs or after housing costs. The Farm Business Survey is not able to provide figures for household income net of tax, so farm household incomes cannot be compared directly with the low income threshold. Instead they are compared with a modified low income threshold defined as 60 per cent. of the England median, equivalised income before tax (and before housing costs). This has been calculated from 2004-05 Family Resources Survey data. Table 1 shows that:

i. the mean income for farm households was higher than the national mean but the median income was about the same;

ii. both mean and median farm incomes were lower than for the population of self-employed households; and

iii. 31 per cent. of farm households were below the modified low income threshold (gross before housing costs) in 2005-06 compared with 21 per cent. for all households and 18 per cent. for self-employed households.

Updated data will be available from the 2006-07 Farm Business Survey later in 2008.

(b) Households in rural areas—after deduction of tax

Table 2 shows the percentage of working age people living in England in households with an income of 60 per cent. below the UK median. Figures are broken down by DEFRA's local authority classification. The classification divides local authorities into the following six categories:

i. Rural-80: districts with at least 80 per cent. of their population in rural settlements and larger market towns;

ii. Rural-50: districts with at least 50 per cent. but less than 80 per cent. of their population in rural settlements and larger market towns;

iii. Significant Rural: districts with more than 37,000 people or more than 26 per cent. of their population in rural settlements and larger market towns;

iv. Other Urban: districts with fewer than 37,000 people or less than 26 per cent. of their population in rural settlements and larger market towns;

v. Large Urban: districts with either 50,000 people or 50 per cent. of their population in one of 17 urban areas with a population between 250,000 and 750,000;

vi. Major Urban: districts with either 100,000 people or 50 per cent. of their population in urban areas with a population of more than 750,000.