THE Bishop of Durham has led a the House of Lords in defeating the Government over plans to down-play income-related measures of child poverty levels.

Peers voted by 290 to 198, a majority of 92, to back an amendment to the Welfare Reform and Work Bill proposed by the Bishop of Durham which forces Ministers to present a report to Parliament each year setting out the percentage of children in low income households.

The Rt Rev Paul Butler said the income-related situation needed to be recorded so that it could be assessed with other measurements of deprivation.

Work and Pensions Minister Lord Freud said that "life chances" indicators were a better way of monitoring what was happening, and of directing Government resources most effectively to tackle the problem.

The Bishop accused ministers of "studiously ignoring" the views of almost everyone who responded to a Government consultation process on the issue in 2013.

He said: "We all want to see the end of child poverty. This is about how we monitor progress towards that goal.

"Financial poverty is a crucial matter that must be recognised and reported on adequately."

The Bishop said he accepted income levels could not be the only measurement of the situation, but were still highly significant.

"It is also possible to understate the importance of income, or the lack of it, especially among those of us who have plenty," he added.

"According to the latest deprivation statistics, 1.7 million children live in families who cannot afford to heat their home properly, 1.3 million children lack the funds to take part in at least one organised activity each week, and 1.1 million children cannot afford to have their friends around for tea or a snack once a fortnight.

"There is also a wealth of academic evidence pointing to the damaging effect income poverty has on children's wellbeing, including their health, education and future employment prospects.

"Low income is an important influence on children's outcomes and life chances.

"The Government's concern with the current child poverty measures is that they have encouraged an over-dependence on income transfers, diverting attention from policies that tackle the root causes of poverty.

"However, this amendment does not seek to reassert the primacy of the existing child poverty measures. It simply requires that income-based measures of poverty be reported on, alongside and on a level footing with other life chance indicators, such as worklessness and educational attainment, in order to acknowledge the significance of family income for children's wellbeing and future prospects."

Sarah Lambert, head of policy at the National Autistic Society, said later: "We're pleased that Lord Freud has committed to report on progress towards reducing the disability employment gap. But ministers need to make sure this is more than rhetoric by backing it up in law as part of the Bill.

"The Government should also be monitoring employment levels for different disabilities, so the individual barriers each group faces can be highlighted and addressed. In the case of autism, where just 15 per cent of adults are in full-time paid employment, the issue is often lack of support and awareness of the condition among employers.

"We welcome the Government's commitment to halve the disability employment gap this parliament and will be monitoring their progress closely."

Lord Freud said the Government's aim was to tackle the root causes of child poverty more effectively.

"There will always be natural variations in income levels in society. However, having less money than someone else does not necessarily mean that an individual is in poverty. Income measures don't take this into account effectively.

"Income measures focus on the economics of poverty and ignore the human dimensions - the social causes, the reasons people can get stuck in poverty, but even as economic indicators they're flawed, they are an indirect and imperfect indicator of poverty.

"They do not account for the full needs of the family, or other financial deductions that reflect a family's true financial situation, such as the amount of debt a family has, or even their non-income based resources, such as the benefits from education like the pupil premium.

"Households who have large savings or capital can still count as being in income poverty.

"This means that income measures can only provide a partial reflection of a family's economic wellbeing.

"There are other weaknesses too, for example the measures are based on current parental income and do not incentivise action to prevent poor children from becoming poor adults."

The amendment passed ensures ministers must tell Parliament on an annual basis how many children are living in households where the equivalised net income is 60 or 70 per cent below the median household.

Lord Freud said the move was not needed as income-related statistics would still be collated, but opposition peers warned this practice could be quietly stopped in the future.

Later, independent crossbencher Lord Ramsbotham urged ministers to report on maternal nutrition in workless households in England and assess the cumulative impact on "health and wellbeing" of benefit cuts.

He said the information could be used to improve the life chances of children and invest the nation's money in its future more wisely.

But Lord Freud, warning against "target-itis", said the demand could act as a distraction from the Government's aim of tackling the root causes of poverty, including worklessness and educational attainment.

Later, Lord Freud announced that the Government would be exempting recipients of carer's allowance from the proposed benefit cap.

The minister said the Government valued the contribution carers made to society and was taking further steps to support them.

Ministers had carefully considered the position of carers and the people they cared for in relation to the benefit cap.

It had been decided to exempt recipients of the allowance from the benefit cap and an amendment would be brought forward at the Bill's third reading.

Labour's Baroness Pitkeathley, who had been pressing for a change of heart, swiftly welcomed the minister's comments.

Lady Pitkeathley said she was delighted that there had been recognition of the contribution carers made and their inability to mitigate the impact of the proposed cap, which would have been "unfair and counter-productive" for them.