rose to call attention to the objective of tackling poverty through helping people into work and improving life chances, together with incentives and protections; and to move for Papers.
The noble Lord said: My Lords, the subject of this debate—tackling poverty by improving life chances—has been at the heart of Labour’s philosophy since the Labour Party was founded over 100 years ago. Abject poverty in the midst of great wealth was the order of the day for millions of British families whose life chances were blighted by unemployment, wars, lack of education, disease and malnutrition, and in many families early death. It is therefore unsurprising that the party that I have been proud to be a member of for almost 50 years has the elimination of poverty, in all its forms, as its abiding mission.
At the top of my agenda for tackling poverty and improving life chances is the opportunity for employment. In our society, the independence and freedom that a wage packet or salary cheque bestows can liberate the spirit and engender confidence, self-worth and a sense of well-being for the individual and his family. Conversely, unemployment destroys a human being’s sense of dignity and pride, creates a climate of uncertainty and financial turmoil, and generates a poverty of the spirit which denies ambition and aspiration.
The mass unemployment of the 1980s remains indelibly etched in my mind. I was one of the 3 million unemployed at the time. Our Bilston steelworks was closed with the loss of 2,300 jobs. Factory after factory went out of existence, and 40 per cent of the Black Country’s manufacturing base was wiped away. Levels of unemployment ran at 30 per cent, and in some streets it was as high as 50 per cent. Some 35 per cent of our young people were denied their first opportunity of employment since leaving school. Training places were almost non-existent, and the careers service was moribund. A depressing sense of hopelessness and despair pervaded our whole community. Soon poverty made its degrading presence felt, and for many human beings, life chances were abruptly truncated at a crucial stage in their lives. Sadly for others, their life chances ebbed away at the moment of their worklessness, never again to return.
Those are the reasons why the Government’s commitment to full employment should be applauded and enthusiastically encouraged, particularly in a turbulent global economy where many decisions on investment and the employment of British workers are now taken thousands of miles away. It is self-evident that all partners in Britain plc—government, manufacturing industry, the financial and services sectors and trade unions—all have a vital part to play in the operation of the sound and dynamic economy that is axiomatic to a successful trading nation in the 21st century.
The virtuous link of full employment in the pursuit of tackling poverty and improving life chances together with the achievement of increasing national prosperity is an economic and social justice model that should bind us all. We should therefore celebrate the fact that Britain has the highest employment rate in the developed world, higher than the United States, Japan, Germany, France or Italy. We now have the highest level of employment ever recorded in this country, while unemployment continues to fall. Despite the vagaries of recent financial turpitude, Britain now enjoys the lowest unemployment rate in 30 years. It naturally flows from my own experience of unemployment that I want the Government to go further. The 80 per cent full-employment aspirational target recently announced will need a co-operative and sensitive government approach to people on benefits, job seekers and lone parents if the concept of employment for all is going to be a reality.
Social justice and fairness must always dictate how government respond to the needs of the poor, the weak and the vulnerable—the least fortunate in our society. The concept of the strong protecting and defending the weak has a resonance in the conscience of any civilised society. It requires a fair and adequate distribution of wealth and income and a high quality of service provision if the historic moral and social imperative for greater equality in society is to be fulfilled. The resolution of child and family poverty, low pay and income disparities in old age go to the heart of this industrial mission, and I believe that it is right to claim that the work in progress by this Government has achieved greater success than any previous Government in their search for the holy grail.
The chosen method of income distribution that this Government have so far adopted is a combination of universal and targeted benefits to individuals and families, additional weekly income through child, family and working tax credits, pension credits, and the introduction of the minimum wage. A prerequisite for the maximum take-up of these targeted benefits, which are central to the Government’s effectiveness in reaching those in need, is a concerted effort by the Government to communicate knowledge and ensure uncomplicated access to the payments and benefits.
Another beneficial contribution that the Government made to tax fairness in last year’s Budget was the historical reduction to a 20p income tax band which will significantly help millions of families. However, it would be churlish not to acknowledge the self-infliction of electoral damage and unpopularity brought about by the recent abolition of the 10p tax band. I share with all noble Lords our satisfaction that this vexed matter will be addressed.
However, if Labour is to fulfil its historic purpose then more radical plans on wealth, capital gains, income redistribution and taxation will need to be adopted. There is, for instance, a justifiable case for tax increases on the top 10 per cent of income tax payers. In order to show some sympathy and solidarity with the present plight of millions of our citizens who are struggling to pay excessive utility and fuel bills, the Government should introduce a windfall tax on blatant profiteering. They should also refer some food price increases to the Office of Fair Trading and cancel the fuel excise duties proposed in the Budget. These measures would considerably help to heal the hurt felt by electors last Thursday.
I return to my theme of tackling poverty by improving life chances. The Government have made a determined contribution to reducing child poverty. During their term of office an ambitious target has been set to halve child poverty by 2010 and to eradicate it by 2020. Alistair Darling, the Chancellor, made another generous contribution in this year’s difficult Budget of £1 billion to help families on low incomes. If this majestic goal can be achieved, if we can show the determination, the will and the means to succeed, then a human triumph over impoverishment and the immorality of child poverty will be the prize. The elimination of child poverty will illuminate and enrich the life chances and opportunities of millions of our children and young people. The gains for society will be huge—greater social and family cohesion; the abatement of criminality and dishonesty; and a deeper sense of happiness and enjoyment of life and living, both personal and communal. For all these noble achievements, the price must be well worth paying.
Unfortunately, time will not permit a lengthy explanation of other government initiatives dedicated to tackling poverty by improving life chances. Suffice it to say that the Government’s approach to education will find a panoply of policies designed to achieve this objective. One excellent example is the creation of the early years Sure Start health and education centres, a brilliant educational concept and a real success story which provides for multidisciplinary professional teams in specially equipped buildings to welcome babies and small children from socially deprived communities to educational stimulus and healthcare. These youngsters are often born into disadvantaged and dysfunctional families, but parents, single mothers, single fathers, carers and grandparents are all welcomed and encouraged to integrate into the learning, caring and education process, where healthcare, hygiene, debt, financial planning and many other important practical issues for the family are discussed. The confidence and well-being which this intervention and interaction engenders is having a profoundly beneficial effect on the early lives of hundreds of thousands of our young children, whose life chances are daily being transformed.
Education, at every stage of development, imbues empowerment in the individual, the family and the community, transforming lives with knowledge and opening up opportunities for economic and social advancement. Therein rests the real challenge of combating poverty through improving life chances. I pay tribute to the Government for their determined commitment to the value that they place on education and skills, for the improved standards and for the record levels of investment in our schools, colleges and universities. In the words of William Morris,
“the Cause alone is worthy till the good days bring the best”.
That day will come, when all our citizens are more equal and more equally share in the wealth that they have helped to create. That day, we shall celebrate society’s triumph over poverty and despair. I beg to move for Papers.
My Lords, I cannot remember speaking in such an exclusive debate. I know we have had two debates recently on matters touching on poverty, but as my noble friend said, poverty goes to the heart of what brought many of us into politics. I heartily congratulate my noble friend on initiating this debate, because we cannot debate the subject enough. I am glad that my noble friend included both poverty and life chances in his Motion. Of course the two go together; he is absolutely right. All too often we have seen Governments adopt piecemeal responses to problems with a short-term policy solution, but not in the case of poverty. This Labour Government have used 10 years of national prosperity and sustained economic growth to make massive investments to deal with poverty. The battle is not yet won; there is more to be done.
There are two routes to poverty: social and economic. There was a time when simple redistribution would help to lift people out of economic poverty, but not any more. Life has become a lot more complicated than that. That is because the main causes of economic poverty today are lack of work, globalisation and new technology. For some they have created prosperity, for others they have created poverty. We have a choice. We can deal with this by closing our borders and trying to keep the effects outside, or by opening up our borders and participating in globalisation and new technology. Quite rightly, we rejected protectionism and now live in an era of economic liberalism and global engagement. We are engaged in a race to the top and we need the best team that we can get. That means that everybody made poor by this competition has to be enabled to move out of poverty into better jobs. As my noble friend said, skills training, education, tax breaks for jobseekers and the minimum wage provide the means for people to improve themselves.
Moving out of poverty by being more productive improves not only people’s life chances, but the country’s life chances. Once again, this Government have been absolutely consistent and relentless over 10 years in empowering people in this way. Indeed, the public and private sectors have spent record sums on training during this past year. There is more to do. The Leitch report on skills training has to be implemented, education levels raised and everybody given the opportunity to improve their life chances.
The other kind of poverty is social poverty. For as long as I can remember, most of us have been concerned about it, but it has still not gone away. Increased prosperity and people having more power and control over their lives has changed the nature of social poverty, but it still goes on. In its recent consultation, the Joseph Rowntree Foundation identified poverty as,
“a corrosive social evil in an affluent society, underpinning other social problems like homelessness and family breakdown”.
Family breakdown, addiction, indebtedness, dependence, disability, inability to cope—these are all causes of social poverty, and my noble friend spoke about most of them.
Those routes to poverty have been the subject of endless study, but one thing comes across loud and clear: unless you do something to break the cycle, disadvantage is passed on from generation to generation. Every UK birth cohort study, going back to the 1940s, shows that. The way you tackle poverty by improving life chances is to start early. That is why the Government are right to concentrate on getting children out of poverty in order to break that chain of disadvantage. Again, the Government have been consistent, introducing ways of improving the life chances of poor children. My noble friend listed them: Sure Start, child tax credits, Every Child Matters and indeed the Children’s Plan, which we debated just before this debate. The 1 million children whom we hope to lift out of poverty mean 1 million breaks in dependency passed from one generation to the next.
This is not a matter of left or right politics; either you believe it or you do not. There are people on all sides who have looked at the problem and decided that the earlier you break the poverty cycle, the cheaper it is and the more effective it is. Of course attempts can and must be made later in life, but the later you leave it the more difficult and expensive it becomes. Yes, it is complex; a simple agenda of tax cutting would be more populist, but it would do little to break the cycle of poverty. Yes, Governments can deal with the big picture, but poor people are also individuals, as my noble friend Lord Bilston movingly explained.
Problems of this kind are probably best solved locally. So I congratulate the City of Nottingham and Graham Allen MP, chairman of One Nottingham, on launching “Early Intervention in Nottingham” on 28 April. That is the kind of productive partnership between the Government and local authorities that allows anti-poverty strategies to be tailored to local needs. As I said, this is not a matter of left or right. While congratulating Nottingham on its early intervention programme, I also congratulate Iain Duncan Smith MP, who has been calling for an integrated approach to tackling disadvantage that is shared by people across the political divide. He is right. This is a generational matter, and requires sustained political attention across the lifetime of several Parliaments. Indeed, he, Graham Allen and others from all political parties and from none are contributing to a pamphlet about early intervention that is to be published by the Smith Institute next month. I hope that that will inspire more local initiatives and co-operation. Although much has been done, much more remains to be done. I declare an interest as a trustee of the Smith Institute.
As I have tried to show, the Labour Government have consistently been concerned about poverty over the past 10 years, and have consistently tried to tackle it, whether the causes are social or economic. What the Government have probably not done is to explain why they have gone to all of that trouble and expense, and why they have made that sacrifice. Some might have said that the poor are just unfortunate victims of the market and left it there, but the explanation is that we stand for a fairer society. My noble friend described that.
That sense of fairness is being shared by more and more people. People want fairness with less raw capitalism; they want markets humanised, so as to restrain its worst effects on the poor. That is why some of our best thinkers are now concerned about the limits of markets, and why business is very ill-advised to be using threats such as relocation to extract concessions from the Government regarding tax and regulation, for we are beginning to understand that the cost of all this is increased poverty in our country. This is a time of rising food and fuel prices, where incomes are being squeezed. How far better it is to contribute to what is being done to alleviate poverty, and to work with the Government and charities to reduce it so that we can all help to create a fairer society.
My Lords, I should like to make a few comments in the gap on the speech of the noble Lord, Lord Bilston. I was hoping to be here today but could not be sure, and I am delighted to have sat at his feet and heard his contribution, because the noble Lord introduced into this subject the notion of justice. It is so refreshing, because that word has been singularly lacking in the language of urban regeneration over the past 10 to 15 years.
When I was Bishop of Hull, I was involved with the Single Regeneration Budget; as Bishop of Liverpool, I chaired the New Deal programme for communities. Those initiatives have been excellent in trying to break the cycle of poverty, but if we listen to the language of regeneration it does not capture what the noble Lord, Lord Bilston, has brought to this debate. For example, in regeneration we talk today not of justice or fairness, as the noble Lord, Lord Haskel, said, but about triggers, levers, targets, outcomes and outputs. There is a place for that language—the language of milestones—but it is secondary; the primary language is that of justice and fairness.
In the diocese of Liverpool, 45 per cent of my parishes are in areas of multiple deprivation. I believe that we can tackle these issues only if we have a sense of justice, and, as the noble Lord, Lord Haskel, said, if that is across parties. The language is there, but it needs to be brought to the forefront. That Single Regeneration Budget initiative was very much business-led, with a little community awareness, whereas the New Deal programme for communities was very much community-led, with some business awareness. What we need to regenerate our cities and break the cycle of poverty is, in fact, the twin engine of community and local business leadership.
I salute the initiatives we have had over the past 10 years but, in thinking further about regenerating our cities, renewing our communities and restoring justice, I would encourage us to look at creating real jobs in a real economy, supported by both local businesses and the local community. I thank your Lordships for the opportunity to intervene in this way.
My Lords, I welcome the opportunity to take part in the debate from these Benches, and I start by thanking the right reverend Prelate the Bishop of Liverpool for his very welcome contribution. A little later, I will talk about the persistence of deprivation in particular areas of this country. However, since he spoke movingly about Liverpool I might point that on the recent indices of deprivation that the Department for Communities and Local Government has just published for England, five out of the 12 most deprived local areas are in Liverpool. I am afraid that all five were, again, in the top 12 in those same figures in 2004, which starkly illustrates the persistence and concentration of deprivation in certain areas.
Despite all of the Government’s efforts—and I will come in a minute to what the noble Lord, Lord Haskel, was saying—in many areas their policies are, unfortunately, not really working. I want to inject that note into the debate and to identify and look at whether the policies are working and to support the very constructive tone of the debate. Our aims are all the same, but after 11 years of Labour government we need to take a long, hard look at which policies are working, and for whom, and which are not.
Like the noble Lord, Lord Haskel, these Benches reject protectionism—he is right about that—and like him we say that there are limits to the market. The climate in this country is changing fast. It is important that we all accept and understand that. The culture of greed, the bonus culture in the City and the idea that one should not talk about social justice are changing fast. We should all be aware how fast that climate is changing.
I thank the noble Lord, Lord Bilston, for introducing the debate. He may not remember, and I am sure he will not—but I do—that 35 years ago, when he was just Dennis Turner, he beat me for the nomination for Halesowen and Stourbridge. Perhaps he does remember that. I think that I had three nominations. He may not have had so many but he did better and very nearly won the seat. He then went on to win Wolverhampton South East, formerly Bilston, on which I congratulate him, which he represented for many years, and about which he spoke movingly.
After 11 years of Labour government, more than 9 million people of working age are unemployed or receiving benefit. More than 2.5 million of them are on incapacity benefit, of whom more than a million suffer from mental health problems. That figure has risen dramatically since 1979, when it stood at only 800,000. That is not a party point as successive Governments, both Labour and Conservative, have used incapacity benefit to hide unemployment. Although there is now broad consensus that that is wrong, we are dealing with a legacy of very long-term under- investment in people.
We believe that work is good for most people. It is the best route out of poverty and provides benefits in terms of confidence and mental well-being. But people trapped in long-term inactivity, many of them in areas and regions of deep-seated deprivation and economic decline, as I said, need a helping hand into work, not a kick in the teeth when they are down. I am afraid that is the risk with the way in which, from time to time, the Government present their programme to get people off incapacity benefit. By chasing cheap headlines in the Tory tabloids, they make people without jobs defensive and fearful that their meagre benefits will be cut, instead of encouraging them to engage constructively and take up the help on offer. By playing fast and loose with ministerial undertakings—I am afraid that I have to say this—given during the passage of the Welfare Reform Act, they are in danger of getting a good policy a bad name.
As well as focusing on the evidence of persistent regional deprivation, I also want to talk about aspects of the alarm call in the report of the Merits of Statutory Instruments Committee on the Employment and Support Allowance Regulations, published last week, which stated:
“These Regulations are drawn to the special attention of the House on the ground that they give rise to issues of public policy likely to be of interest to the House”.
Your Lordships will know that is Merits of Statutory Instruments Committee-ese for showing the DWP the yellow card.
The report also stated that,
“a number of organisations have written to the Committee to express considerable concern that the Regulations do not meet with their understanding of the Government’s intention … The Regulations are complex and claimants may find it difficult to understand the operation of this allowance. The Government need to do more to explain how this system will work and to address the concerns of interest groups that are in a position to offer significant assistance in helping claimants understand the new system”.
I do not propose to ask the Minister to comment on each of the bodies individually but I am sure that he will respond generally to the points that we make.
These organisations—the Disability Benefits Consortium, the citizens advice bureau, the Child Poverty Action Group and the Disability Alliance—have written in and make the very effective and powerful points. Their main point is that the ESA rate for single people of £89.50 does not exceed the current rate of incapacity benefit, contrary to government undertakings given during the course of the Bill, and earned income and tax may have a perverse effect on a benefit designed to help people back into work. They are also worried about the potentially negative effect of these changes on households which include children, and restrictions on disabled students pursuing a course of study.
The Government say that they do not accept that the rates which have been announced are incompatible with Statements made to Parliament:
“The rate of £84.50 for those in the work-related activity component is above the rate of long-term Incapacity Benefit (£81.35) at the time the statements were made”.
Those are weasel words if ever I heard any and the Disability Benefits Consortium’s letter makes that point. It says:
“We believe that the regulations … do not fulfil important commitments and reassurances given to ourselves and to Parliamentarians”.
The Disability Benefits Consortium thinks that up to 40,000 children could be affected by a fall in income from the family from these changes and that that is completely contrary to the Government’s commitment to eradicate child poverty. To quote the noble Lord, Lord McKenzie:
“We have made it clear that, in the main phase, the basic allowance will be above the long-term IB rate”.—[Official Report, 20/2/07; col. GC 9.]
As I have already stated, the figures do not seem to back that up. The consortium also says:
“The basic allowance of ESA is £60.50. But during the initial 13 week assessment phase under 25 year olds will receive a lower amount of £47.95. For those eventually entitled to the main phase, they will have had to survive for 3 months at £36.55 less than it is ultimately decided is their necessary weekly income”.
On passported benefits, the consortium says:
“The starkest injustice for this group of contribution based claimants results from how permitted work earnings will be treated in calculations for Housing Benefit and Council Tax Benefit entitlement”.
“The difference amounts to over two and a half thousand pounds per year. It is against the principle of national insurance for those who have paid into the system to be left worse off as a result by such a massive amount”.
The CAB is equally concerned. It focuses on passported benefits—and there is obviously a more general problem with the benefits system on the complex nature of means-testing—and points out:
“Under the new arrangements, people who are in receipt of income-related ESA will be automatically passported to these benefits; people whose only income is ESA(C) will have to apply separately for each one”.
So that is a separate means test, making the claiming process for this group of low-income, disabled people much more difficult than necessary. It concludes:
“We believe it is an absolute and essential requirement of any legislation that it should be demonstrably fair and we are concerned that ESA does not meet this criteria”.
The CAB is at the sharp end and has to deal with the problem on the ground.
Finally, the Child Poverty Action Group, which again is very close to the action, if I can put it like that,
“are concerned that some of the most severely disabled claimants may be subject to unnecessary stress and difficulty in the assessment of their entitlement to Employment and Support Allowance, because the regulations do not provide that they are automatically treated as having a limited capability for work”.
Those are detailed but important points and, as I said, there is a great danger that a good policy will get a bad name unless these very real concerns from very reputable organisations are seriously addressed.
I turn now to the regional dimension and the persistence of unemployment, on which I touched previously. We have obviously talked a little bit about how incapacity benefit is a form of hidden unemployment but it is also quite interesting to look at the actual published unemployment rates over the past 11 years. In general, there has been a very worthwhile fall, but the problem is it has not been equal throughout the country. The 10 constituencies that have the highest unemployment rates are Birmingham Ladywood, Birmingham Sparkwood, Liverpool Riverside, Birmingham Hodge Hill, Manchester Central, Liverpool Walton, Leeds Central, Middlesbrough, Bethnal Green and Bow and Birmingham Erdington; and the pattern is continued lower down. Those with the highest unemployment rates today are also the ones where the fall in unemployment since Labour came to power has been the lowest. In every single one of those constituencies, the fall in unemployment has been less than the national average over the past 11 years.
I give just one further example. I thought I would look at the former constituency of the noble Lord, Lord Bilston, about which he spoke so movingly. Wolverhampton South East, where unemployment is now 13th highest in the country, was 577th in the league table of how fast unemployment has fallen since Labour came to power. The places with the biggest problems, which are the Labour heartlands, are the places that have suffered the least improvement. That must be a very worrying pattern.
I touched on the index of multiple deprivation briefly in response to the right reverend Prelate. We had one in 2004 and one in 2007. The index of deprived areas is a multiple deprivation measure. The two key points are income and employment deprivation, which are obviously related. They account for about half the definition. The problem, again, is persistent and concentrated deprivation in certain regions. Both in 2004 and 2007, no fewer than 46 out of the 50 most deprived areas were in the three regions of the north-west, Yorkshire and the Humber and the north-east, with a very heavy concentration in the north-west. That is not changing. Again, if one looks at the unemployment figures at the other end—the places where the improvement has been fastest—one sees that they are constituencies such as Boris’s and Dave’s, if I can put it that way, which are Henley and Witney. The rich areas and the Home Counties have had the fastest improvement. It has been unfortunate that, while overall there has been some progress particularly on child poverty, it has not been getting through to the areas that really need it and the areas that really matter.
I do not propose to go into the 10p tax mistake today, although the noble Lord touched on it. It was not a reduction; I do not think that a 10p tax rate is the very best way to help people out of poverty. Our position is that that should not be changed unless and until measures have been taken particularly to increase the tax thresholds and to take more people out of tax altogether at the bottom. That is the right way to do it. I suppose that I had better ask the noble Lord, since the architect of new Labour has very helpfully made the point today, whether he agrees that scrapping the 10p starting rate in tax was a big mistake.
It is not surprising that the problems or disillusionment that we saw last week were most striking in what I call the Labour heartlands. We understand why they feel let down. From the statistics that we have seen, and from the points that the noble Lord, Lord Bilston, made, we can see that, for all the good intentions, achievement has lagged well behind that in the poorest regions of our country. I look forward very much to hearing what the Minister has to say, not just on the individual initiatives, but in particular on how they can be linked to long-term investment in our regions. It is much more about regional policy. It is no good telling people to stop shirking and start working if they live in places where there are very few worthwhile jobs within reach. Somehow, that form of joined-up government really needs to start.
My Lords, as the noble Lord, Lord Haskel, remarked towards the beginning of this very short but very valuable debate, this is the third debate on poverty in two months. I congratulate the noble Lord, Lord Bilston, on achieving it, not least because, if the debate of the most reverend Primate the Archbishop of Canterbury, for which alas I was absent, showed nothing else, it showed that the Government would do well to concentrate on the reasons why there are so many people, and therefore children, in our society in poverty, rather than pouring out ever-increasing amounts of money which go only to paper over a dismal set of statistics—statistics, which in this case mean people.
Putting people first, the number living in severe poverty defined as less than 40 per cent of the median income has risen by 600,000 since 1997. If you measure this after housing costs the situation is even worse: alongside the low unemployment figures mentioned by the noble Lord, Lord Bilston, those in severe poverty stand at the highest level for the same period, 30 years, at 5.2 million people or 8.7 per cent of the population. The Minister may dispute this—I have no doubt that he will try—but those figures are based on his department’s own data.
As was pointed out in previous debates, the average income of the poorest 10 per cent is lower than it was in 2001, which one can set against the fact that the average incomes of the richest 10 per cent have risen by more than £2,000 a year. Even the Prime Minister’s Strategy Unit has been forced to admit in Strategic Priorities for the UK in 2006 that,
“the very poorest have not shared in recent growth”.
You can say that again.
It is axiomatic that poorer parents mean poorer children, and the Government are right to seek to eliminate child poverty by 2020, and to halve it by 2010. To make this meaningful you have to define your terms, which is one of the few things I remember from my economics lessons all those years ago. The Government define poverty as households having less than 60 per cent of the median income, adjusting for family size. After falling for several years, child poverty, on this basis, it is now rising, last year by 100,000. As I pointed out in the first debate in this series, it is hardly surprising that when income is rising, so does the poverty level, so the Government are working with one hand tied behind their back. Perhaps the Government expect median income to fall. No, I am not being serious, but I am serious in saying that tackling poverty is the duty of any and every Government.
It was not helpful in this context for the Prime Minister to say on the “Today” programme on 30 April:
“We’re about to take a million people out of poverty”.
Only yesterday at PMQs this was translated to, “We have taken 1 million children out of poverty”.
Using the definition that the Government use and I have just described, I should have thought that the true figures are that, as of today, 600,000 have been lifted out of poverty since 1998-99. Will the Minister take this opportunity to clear up what I hope from his point of view is a confusion in my mind?
However, pouring money into the system is only a stop gap. As the median wage increases, so more and more money is required. It is all very well as a start to do what the Chancellor committed the Government to do in his recent budget, to which I referred late last night. I will not repeat that reference except to say that it was extremely generous but helpful to meeting the target that from October 2009 child benefit will be disregarded in calculating income for housing and council tax benefit. I applaud that as I did last night.
The Chancellor also wants to be innovative in the approach to increasing parental employment and raising incomes and is initiating pilots to look for solutions to the problem. Pilots are all very well when one has no idea what might happen, but in this case there is an existing formulation. There is no need to reinvent the wheel. The Government already subcontract job finding for difficult-to-place people from job centres to charities, which is having some success in places such as Brixham, for example. The problem is though that these contracts are not long enough and are paid for in rather strange lumps. In a debate some time ago the Minister said that he would look into this and come back to me. It may be that my memory is at fault, but I cannot recall him ever doing so. I do not want to dilate, like the noble Lord, Lord Oakeshott, on the fallout from the Welfare Reform Bill, but I will happily repeat, as I said several times during consideration of that Bill, that it was a sensible and well intentioned measure, because work is certainly the best way that I know out of impoverishment.
Returning to the wider aspects of this debate, there is much more that could and should be done to take people out of poverty. The risk has hardly changed since 1997 for children in two-parent families, and actually rose last year from 21 per cent to 23 per cent. The Government should take responsibility for that and propose solutions. Even worse, poverty among working-age adults rose by some 700,000 last year to 7.2 million and has risen overall since 1997. What are the Government doing to address that horrendous situation?
Unless the Minister wishes to dispute my figures, he and I—at least, I hope that it is he and I, not just I—await this year’s report, Households Below Average Income, which should have come out in March, but was subsequently due to come out last Thursday—presumably because it would be a good day to bury bad news. Ministers in another place have now told my honourable friends that the statistics will not come out until June. Why, for goodness’ sake?
Unlike the noble Lord, Lord Oakeshott, I believe that the answer to poverty lies at the input end of the equation, rather than the output end. I agree with the right reverend Prelate the Bishop of Liverpool that much of this should be tackled locally, but it is the Government who set the parameters most of the time for local activity. Why is it, for example, that parenting skills are getting less and less from generation to generation? I am all for teaching parenting in schools, but on the evidence that I have, which I admit is flimsy, it is not yet working. I am sure that other noble Lords with better knowledge of education than mine would be able to correct me if I am wrong.
What are the Government doing to raise the aspirations of young people? I agree with the noble Lord, Lord Haskell, that they should recognise that educational failure begins at an early age. Teaching reading using synthetic phonics in the past helped all children to read more quickly and helped those from poorer backgrounds most of all—closing the attainment gap. But that method has largely disappeared. Teaching should encompass standards, literacy, reading, mathematics and, above all, discipline. Here, government diktat means that teachers are trying to operate in handcuffs. This must stop.
I think that the Government approve of new academies but are a little blinkered on them. Academies ought to be financed and run not only by philanthropists and teachers, but by educational charities, companies, even trade unions and parents—and they should be open to all within the system. The academies should be targeted at the poorest pupils through a pupil premium. That is done in schools like Millfield, so why should it not be done in the state sector?
Even the pupil most unconnected with education has a small spark of interest in something—it may be games, computers, racing cars or even my favourite subject, bridge. I do not know and it does not matter. Education should bring such interests to the fore, otherwise teachers are just trying unsuccessfully to cram facts into children, which I like to call “inducation”.
Why not make sure that prisoners are better educated? I do not know the figures, but a lot of people in prison are illiterate and know no simple maths. Why not make the Prison Service responsible for reducing the rate of prisoners’ reoffending? Why not bring the two stages of prison and probation closer together? Should not the market in offender management be available to many more organisations outside the state sector? At the end of the day, however, people need money to survive, and state money should be a temporary leg-up, not a long-term support service—except, of course, for the severely disabled.
We need to tackle the high cost of credit in the doorstep lending sector. One way of doing that would be by teaching financial literacy to all 11 to 18 year-olds. As the Financial Services Authority has found, the average person could gain up to £700 a year by making better financial decisions. It goes without saying that this would have a disproportionate effect on the poorest in society.
I have a dream, which I hope can be fulfilled in my lifetime. Every time a salesman says, “Of course you can afford it, it is only 5 per cent”, the automatic response is, “Yes, but what is the APR?”, and the person who asks that question understands the answer. I should also like to see credit card companies giving much clearer information to the public about the cost of credit card debt.
We all know that bad health and poverty go together. The Minister should talk to his noble friend Lord Darzi about his proposal for super-sized GPs’ surgeries. Does this not mean fewer surgeries overall, and how will that help?
I conclude that, although there is much more to tackling poverty than the world of work, the noble Lord, Lord Bilston, has done the House a great service by raising the subject this afternoon.
My Lords, I congratulate my noble friend Lord Bilston on securing this important debate and thank him for his thoughtful and powerful speech, particularly concerning the importance of work and—in his terminology—the “poverty of the spirit” created by unemployment. I welcome the chance to set out the Government’s impressive record in tackling poverty, because, over the past 11 years and across every measure, we have helped millions out of poverty.
Tackling poverty is at the heart of the Labour mantra and of this Government’s strategy. From Keir Hardie to Clem Attlee and on to Tony Blair and Gordon Brown, the Labour Party has championed the cause of the poor: challenging the notion that poverty is a symptom of birth or breeding; helping everyone to realise their talents; and encouraging social mobility and opportunity for all. As my noble friend Lord Haskel said, this is the cause that called many of us to politics. In order to create a fair and inclusive society and achieve social justice for all, we must—and we will—continue to help the poorest and improve their life chances.
In tackling poverty, we seek to tackle more than material poverty. Poverty brings with it a collection of disadvantages that affect life chances. Poverty can stunt aspirations, with today’s poor children too likely to become tomorrow’s poor adults. It can limit educational chances and restrict health and happiness. Areas of deprivation can foster crime, drug abuse and fear—keeping local communities apart and preventing people feeling safe. Poverty is not acceptable and, under this Government, is not inevitable. In the past decade, we have made great strides forward. We have a solid platform to build on, but there is more to do.
I say in particular to the noble Lord, Lord Skelmersdale, that this is in stark contrast to the previous Tory Administration. Poverty rose dramatically under 18 years of Conservative rule. By 1997, child poverty had doubled. Unemployment during those 18 years reached more than 3 million, and millions of poor pensioners were left to survive on less than £69 a week. Had we simply uprated the tax and benefit system that we inherited, there might have been 1.7 million more children living in poverty than there are today.
We have reversed this record, setting ambitious goals and taking action to reduce and even eradicate poverty. We are taking radical action to eradicate child poverty by 2020, with tax credits and support for parents helping children out of poverty. Employment is up by 3 million since 1997; we have the highest employment in this country’s history. Targeted support has lifted more than 1 million pensioners out of relative poverty and today no pensioner should live on less than £124 a week. For the first time in this country’s history, we can look forward with greater confidence to securing full employment, eradicating child poverty and delivering justice to pensioners.
I pick up the point made by the noble Lord, Lord Skelmersdale—we have heard it before from the Conservatives—about people in severe poverty, defined as 40 per cent of median household income. As he is well aware, the national statistics caveat data on this category. The Child Poverty Action Group has said that the figures are dodgy, as indeed has the IFS. It is not a sensible base on which to measure poverty.
Over a decade ago, the UK had the highest child poverty rate in the industrialised world. More than one in four children lived in poverty. By pledging to eradicate child poverty by 2020, we have set one of the most ambitious policy objectives of any Government in the world. So far, we have lifted 600,000 children out of poverty, and we remain committed to the target of halving child poverty by 2010 on the way to eradicating it by 2020.
Our strategy focuses on four areas: targeting benefits at the poorest; supporting parents into work; ensuring that communities are safe, sustainable places where families can thrive; and improving the life chances of poor children. Tax credits currently benefit 6 million families and 10 million children. Since 1997, we have invested more than £21 billion in child care services, and this year the Chancellor announced an extra £950 million to tackle child poverty. These are all measures that have helped to reduce child poverty and they show that even in today’s tight fiscal environment, eliminating child poverty remains our priority. Tackling child poverty is not an easy task, but it is the right thing to do. It is a moral imperative that we break the intergenerational cycles that see children born poor and grow up poor, and then see their own children denied the chance to fulfil their potential.
We know that work is the best route out of poverty, and the Government are committed to supporting people in finding work, staying in work and progressing so that they can build a sustainable future for themselves and their families. It is important that we remain committed to this if we are to meet the aspiration of 80 per cent employment, to which my noble friend Lord Bilston referred. As he said, today more people are in work than ever before—29.5 million from the latest figures. That is up 456,000 over the past year and is the second highest employment rate in the G7.
The claimant unemployment rate of 2.5 per cent is the lowest since April 1975. Since 1997, employment is up by nearly 3 million. It is up in every region and every country of the UK; it is up in the neighbourhoods and cities neglected by the party opposite; it is up for disadvantaged groups, with 300,000 more lone parents in work—1 million are now in work for the first time ever—and 900,000 more disabled people in work. There are 1 million more people in work from ethnic minorities and 1.5 million more older workers in work. The number of job vacancies remains at over 670,000.
All that did not happen by chance; it happened because we took the right decisions about the fiscal and monetary framework on which our economic stability is founded and the sometimes painful decision to eschew faster progress in order to secure sustainability in the funding of our public services in the long run. My noble friend Lord Haskel stressed the importance of getting the economy right and embracing globalism, rather than wishing that it would simply go away. It also happened because we put in place active programmes to help individuals to move towards and into the labour market. More than 1.85 million people have been helped into work through the New Deal programmes. Building on their success, the introduction of the flexible New Deal will establish a new unified approach to all jobseekers, whatever their age, skills or barriers to work. A key component of this approach will be skills screening and the opportunity for jobseekers to access work-related skills training. In short, there will be flexible, individually tailored support to ensure that no one is left out and no one is written off.
We want disabled people to be able to make the same seamless transition from school to continuing education, training and employment as their non-disabled peers. Work Preparation, Workstep, Access to Work and Pathways are just some of the DWP programmes helping people into work. I saw that at first hand in Norwich just last week. I spoke to a woman who had been out of the job market for 15 years. She had been trapped in her home because of a fear that people with mobile phones were spying on her. With support from one of our third sector providers and funding from Access to Work, she is now in employment. She is gaining promotion in that job and her life is immeasurably better.
These things are happening up and down our country in a quiet and unreported way, day in and day out. Frankly, they would not have happened before this Government came to office. They happened because we are helping to make work pay through the national minimum wage, the working tax credit and the upcoming “better off in work” credit. I acknowledge that we have more to do in helping benefit claimants understand, but under the current tax and benefit system there are very few circumstances in which an individual receives less money from earnings and in-work financial support than they would receive in out-of-work benefits.
Although our record demonstrates that we are the party of opportunity and aspiration for all, we are not complacent. We will continue to ensure that we have an enabling welfare state, one that provides the opportunity to get back into the labour market and contribute to society and the security of an essential safety net for those who have fallen on hard times. Our goal is a welfare state that is a way out of worklessness and a way up the career ladder but not a way of life. We are extending, modernising and personalising the support we offer. However, there is a condition. We do not apologise for it, and I would not characterise it as the noble Lord, Lord Oakeshott, did. In return for providing employment skills and financial support, we expect more of those who can work to look for work and to train for it.
Achieving full employment depends not only on a sound economy and willing and trained employees but on the engagement of employers. Local employment partnerships will ensure that disadvantaged customers get the right training and support so they can stay in work and progress their careers, benefiting themselves and their employers. Through these partnerships we aim to see 250,000 more people in work by 2010.
My noble friend Lord Haskel referred to the work of OneNottingham, which I think is part of the cities strategies. I have had the chance to see some of the enlightened work going on there. We also heard from the right reverend Prelate the Bishop of Liverpool about his experience in local regeneration schemes. We believe that the approach of the cities strategies—which should involve all stakeholders, including the business community, local councils, Jobcentre Plus and others— ensures that the community is at the heart of these arrangements. That is crucial to their success.
There has been a reduction of people on incapacity benefit. We are, as the noble Lord is aware, replacing it with the employment and support allowance so that the emphasis is not on what somebody cannot do but on what they can do. That is a very important change. There is increasing recognition that work, good work, is not only the best route out of poverty but good for health and individual self-esteem. Part of the challenge is therefore to secure safe and healthy workplaces to prevent individuals falling out of work in the first place.
The noble Lord went on to talk about the employment and support allowance, which we will soon have the opportunity to debate fully. Again, I would not accept his analysis of the situation. There will be engagement with those in the work-related support group so that they will, we hope, access the labour market before they have been on the benefit a year. For people in the support group for whom that conditionality is not present, they will be either £3.15 a week better off or, for some, £15.75 a week better off in comparison to their position on incapacity benefit. We are expecting to be paying out in total nearly £400 million more in benefits over the next five years of the employment and support allowance compared to the existing incapacity benefit arrangements.
I think I have dealt with the issue of Liverpool and the city strategy. The noble Lord, Lord Skelmersdale, commented on short-term contracts to charities in Brixton. In February 2008 we set out our commissioning strategy for the delivery of employment programmes which will see us moving towards longer contracts and payments tied more closely to outcomes. That seems to me exactly the right thing to do.
The noble Lord asked about the release of the statistics on households below average income. My right honourable friend James Purnell set this out in a Statement a while ago. I think that a small flaw was identified in one of the statistics, which are independent of the Government. That is why further work needs to be done. The hope is that these statistics will now be released in June.
We have not talked much this afternoon about pensioners, as our focus has been mainly on work. However, we are also delivering justice for pensioners, because we want all pensioners to have a decent and secure income in retirement and to share fairly in the rising prosperity of the country. Since 1997, pensioner incomes have risen across the board, with the poorest benefiting the most. Today, for the first time in a period of sustained economic growth, pensioners are less likely to be living in poverty than the population as a whole. We have focused help on the poorest pensioners and the poorest third are £2,100 a year better off. As a result, pensioner poverty has reduced by over a third since 1997, which means more than a million fewer pensioners living in poverty.
The key to that has been the introduction of pension credit, one of the most radical changes to income-related benefits for older people in 50 years. It ensures that no pensioner need live on less than £124 a week and it supports pensioners with savings, second pensions and earnings. Maximising take-up is crucial to tackling poverty levels, which is why we have simplified the claims process, although more needs to be done to ensure that that benefit is fully accessed by those who are entitled to it.
We should not forget free TV licences for the over-75s, free off-peak bus travel, free sight tests and the winter fuel payment. We recognise that rising fuel prices, driven by rising world demand, can have a disproportionate impact on older people, which is why this year the Chancellor announced that older people would receive an extra one-off payment to sit alongside the winter fuel payment. Households with someone over 60 will receive an extra £50 and those with someone over 80 will receive an extra £100. This significant extra support will help more than 8.5 million households or nearly 12 million people. It will ensure that the winter fuel payment continues to provide a significant contribution to winter fuel bills.
Our support is not only through this payment. Energy efficiency programmes, including Warm Front, target fuel-poor households in need of loft or cavity wall insulation, helping to reduce their fuel bills as well as generating carbon savings. Moreover, we have worked with energy suppliers on voluntary agreements, which will mean that the total assistance offered to vulnerable households increases to £150 million a year by 2011.
We are making the biggest reforms in UK pensions in 100 years. For the pensioners of tomorrow, we are reforming the state pension and, in private pensions, our reforms will ensure that everyone can save for a better retirement. These changes will create equality for women and carers in state pension provision within half a generation. We will re-establish the link between the basic state pension and earnings during the next Parliament; our objective is to do it in 2012. We have already reformed SERPS, now S2P, which significantly improves coverage for lower-paid workers and people with parenting and caring responsibilities, typically women. Currently around 2.1 million carers, more than 90 per cent of whom are women, and around 6.1 million low earners, almost 60 per cent of whom are women, are accruing entitlement to S2P. Around 1 million more people will accrue S2P from 2010, approximately 90 per cent of whom will be women. We will pay for this by gradually increasing the state pension age to 68 by 2046.
Private pensions will give all workers the opportunity to save in a pension, encouraged by auto-enrolment by employers. By 2015, this will see up to 9 million people saving more or for the first time and around £10 billion more being saved in pensions.
The past decade has witnessed rising numbers of people in jobs and rising prosperity across the whole of the UK.
My Lords, before the noble Lord sits down, perhaps he could deal with the main thrust of my remarks—which I do not think he did—which was that the most deprived regions and constituencies have not shared fairly in the growing prosperity that we all accept has occurred in this country over the past 11 years. If he does not have time to do that now, will he undertake to look into it and write to me?
My Lords, I am very happy to write to the noble Lord on that, but employment has increased not only right across the country, but in every region and every country in the UK. The noble Lord shakes his head. I will write to him just to reinforce that.
We have achieved a lot, but we know that there is still more to do. The Government's policies are about championing social justice and defeating inequality. We will continue to increase support for those most in need, to help people into work and to improve life chances. We want to ensure that poverty is not a way of life, so that we can continue to build a society based on fairness and on opportunity.
My Lords, before the noble Lord finally sits down, he was good enough to agree with me about the number of children whom the Government have lifted out of poverty. He gave the figure of 600,000—exactly as I did. As I pointed out, yesterday at Prime Minister's Questions, the Prime Minister said that the Government have,
“taken a million children out of poverty”.—[Official Report, Commons, 7/8/08; col. 698.]
I checked that in the House of Commons Hansard this morning. Clearly, the noble Lord will not have an answer now, but I should be very grateful if he would write to me to tell me how he rationalises those two statements.
My Lords, I was probably doing my preparation for Report of the Child Maintenance and Other Payments Bill when Prime Minister's Question Time was on yesterday, but I will certainly look into the matter and ensure that the noble Lord gets a note on it.
My Lords, I express my sincere thanks to all the participants in this very important debate. I thank my noble friend because he has confirmed, as I said in my speech, my faith and support for our Government and what they have achieved in tackling the major issues of poverty and improving our society in the way that they have in the past 11 years. I thank him for enumerating all those wonderful policies that are reaching out to the people whom we seek to be uplifted from the poverty and deprivation that they face.
To the noble Lords, Lord Oakeshott and Lord Skelmersdale, I say that further evidence is here in this debate that we are all committed to the elimination of poverty, to the social justice that flows from it, to the need for this society of ours to create the conditions where people are—as I said in my speech—more equal and wealth is more equally shared.
We should continue to debate these issues, because it is work in progress. No party can claim that it has reached the success that we want to reach for those millions of people in poverty.
“Ah Love! could thou and I with Fate conspire
To grasp this sorry Scheme of Things entire,
Would we not shatter it to bits—and then
Re-mould it nearer to the Heart’s Desire!”.
I beg leave to withdraw the Motion for Papers.
Motion for Papers, by leave, withdrawn.