Motion to Take Note
My Lords, I am very grateful to the many noble Lords who have put their name down to speak on this Motion, which is very simple. It asks whether we are going to identify the causes of poverty and, by implication, what we are going to do about ending that poverty.
I sent a very simple letter to the noble Lord, Lord Freud, which I hope he will let me share with noble Lords if they want a copy of it. In it I ask whether, when we spend our social pound, it is possible to identify whether the money that we spend, given by the Government, gets people out of poverty or whether it is a device for helping people to be comfortable in poverty and stay in poverty, and therefore not get out of it.
This year marks the 25th anniversary of the Big Issue. I have spent those 25 years trying to answer a question that affects the lives of thousands and thousands of people, not just in the United Kingdom but all over the world: how do you assist people to move on from poverty so that they can start to have a full life? Unfortunately, even that question moves into complexity, as I shall set out.
The Department for Work and Pensions, which operates our social security system, has to do two things at the same time, and that leads to enormous confusion. One thing that it has to do is to make sure that people who are entirely dependent are looked after. That means ensuring that, because they have no means of providing for themselves due to their physical or mental health, their age or any of the other reasons that lead people to being dependent, they are not shifted into work or into another situation. That is a really significant job and we do it pretty well, but we do not do a good enough job, because many people are stuck in a dependent life and live in poverty. Why must dependency necessarily lead to poverty?
So my first question is: why do we need to give people so little that they cannot even have a full life? In fact, what the DWP needs to do is give them more money. A friend of mine has absolutely no life because he is looking after his wife, who has MS. He cannot go on holiday or repair his car and so on. Would it not be wonderful if we gave them another £1,000 a month, or £13,000 a year, so that he could have a quality of life? One reason we do not do that is that there is confusion and complexity surrounding people who move into social security, and it has been like that since the days of Margaret Thatcher. We are told that she very much espoused small business, although not small government. In fact, when she was asked by Willie Whitelaw, “What do you do with nearly 1 million people out of work?”, she did not turn round and say, “Let them have cake”, although she might as well have done; she said, “Let them have benefits”. With that, the sluice-gates were opened and the welfare state—that wonderful, beautiful and profound system that was invented in 1948 and, in its original form, was full of dignity—was totally and utterly destroyed and anybody could be shifted into social security. Therefore, instead of investing to get people out of poverty, an enormous number of people were parked up and warehoused. The DWP therefore has the difficult problem of how to establish whether a person is dependent and what it should it do about it, and how can it move people forward and out of poverty.
When I ask this very simple question of how we move people out of poverty, the simple issue for me is whether we can find a way of dividing it so that we do not have what I call the Toynbee/Dacre syndrome. If you read the Guardian and those articles by Polly Toynbee and people on the left, they will tell you that we do not do enough for the poor, and they will go on and on for decades about it. They never, or very rarely—I am a Guardian reader and I love it, like we all do—seem to ask the question: “How do we get people out of poverty?”. And then of course you have the Paul Dacre school in the Daily Mail, which believes that people on social security are all scroungers. That is a mirror of what needs to be faced up to, when the interesting thing is that we could get together as a House and as a Parliament and begin the process of dismantling poverty.
I am involved in a conference next year, to which I hope all your Lordships will come, based on what we call the PECC principle, which is prevention, emergency, coping and cure—it is as simple as that. I have my lovely children up in the Gallery. What I do with them is prevent them falling into poverty, so I give them ballet lessons, violin lessons—you name it, they get it all; they go all over the world; their lives are enriched; I do not leave it just to the school. That is prevention and we do it. The house we live in is full of people whose parents have prevented them falling into poverty or, if they have been in poverty, have helped them get out of it.
I am sorry. If somebody falls into an emergency, which is the “E” of PECC, and they end up in prison or on social security, they are often stuck there. Then there is the “C”, which is coping—so you have prevention, emergency, coping and cure. Eighty per cent of the money that the Government and charities spend is on emergency and coping. We do not get the big bucks in prevention and we do not get the big bucks in cure. I have joined the House of Lords because I am very interested in the idea that we should be a Chamber that not only looks carefully at the causes of poverty but begins to change the way in which we work with the poor and we give them support. If we could get the able-bodied, like certain members of my own family, out of social security, we could give more money to the people who are stuck and who need us.
We need also to start looking at the way in which the Government budget. I have asked the noble Lord, Lord Freud, whether he would consider doing our budgets in a different way. Why do we have this rather strange thing? We have these government Budgets and people balance their budgets but often, by balancing the budget, they are simply passing the problem on to another budget. I suggest that we develop an almost holistic view of budgeting, so that we can begin this process of dismantlement.
We must recognise the problem. If I had a wonderful chance tomorrow to help Theresa May with her upcoming work, I would say to her, “What are you going to do about the fact that we spend, and have spent, billions and billions yet we keep people isolated and lost in poverty?”. Millions of people in Britain love the idea that anyone on social security needs to be supported, and I agree with that. However, let us support the people who desperately need us and get the other ones mobile and moving. When we give a social pound, let us ask whether it gets people out of poverty or simply leaves them poor. I beg to move.
My Lords, I apologise to the noble Lord, Lord Bird, and the House because I had to dash to get here from chairing a Select Committee upstairs and I left my notes upstairs. I am by no means as good an extemporary speaker as the noble Lord, who did have a bit of paper in his hand though it was clear that he was speaking from his heart and his head rather than what was written on the page. I will attempt to emulate him, but if my articulation is not as great as his I hope the House will forgive me.
The noble Lord, Lord Bird, termed this debate “the causes of poverty”. Clearly we are concerned about the causes of poverty—the statistics and the incidence of policy, on which we have some useful briefing—but he is really concerned about getting people out of poverty and, therefore, the amelioration or, indeed, the cure of poverty. In the great debate that we have been having over the past few weeks, the United Kingdom was constantly proclaimed as the fifth-largest economy and one of the richest countries in the world. It is therefore an indictment of this nation that it still has a level of poverty—in both relative and absolute terms—which has not changed much over the years. While relative poverty is the usual measure that Governments use to target changes in poverty levels, the reality for millions of our citizens, including many of our young citizens, is that real poverty means lack of a proper home, lack of a job, lack of support, and a desperate lifestyle on our streets and in inadequate accommodation around our cities and towns. That is an indictment of the fifth-largest economy and one of the richest countries in the world and we need to do something about it. I know that the noble Lord, Lord Bird, has spent a large part of his life attempting to do that, and I hope that Members of this House will emulate him.
We know, in a sense, about the cause of many people’s individual poverty. It is because they have had a life of insecurity. They may have missed out on education, have had a terrible family life, suffer from mental and physical illness, have been through bouts of, if not constant, addiction to drink, drugs, gambling or whatever. So we know quite a lot about the individuals.
However, poverty is not just an individual situation. Both the state and the charitable sector attempt to help people in poverty but they do not always help them out of poverty, as the noble Lord has said. One of the causes of continuing levels of poverty in this country is that we have a number of serious dysfunctions in large parts of our economy and society. Some noble Lords will have heard me rant at various stages about the total dysfunction of our housing market. Inadequate affordable housing, particularly for single people and young people in our cities, is a major cause of them falling into poverty. If they manage to find accommodation, the rents they have to pay eat into what little income they have and keep them in poverty.
Only the other day I was talking about the hugely dysfunctional bottom end of our labour market. At the worst end, as we discussed on Friday, there are instances of what can be classified as modern slavery. It goes through inadequate working conditions, zero-hours contracts, uncertain work and extremely uncertain levels of wages.
Historically, much of our system of taxation and social security was built on people being in a job or not in a job, whereas a large proportion of people who fall into poverty at any given time, and some who are in persistent poverty, are actually not in a constant-income situation or anything like it. Some may move from one to the other. The sudden move from working for 30 years in a factory to being redundant is dramatic and, of course, many of those we find on our streets, for example, are actually people who have ended service for this country in the Armed Forces and have been unable to cope with the sudden change into civilian life.
Those are the individual and specific cases, but they reflect a dysfunction for which this House and this and all previous Governments have been in part responsible. The changes we have made in the social security system have not addressed this problem. None of the changes we have attempted to make in the housing market has addressed this problem, and we have allowed the labour market to seriously exacerbate the issue of people falling into poverty because they are not in anything like permanent, full-time or well-rewarded jobs.
However, it is not all a problem for the state alone. I am probably a greater supporter of the big state than the noble Lord and many other noble Lords on the Benches opposite—I think that the big state has a serious role to play here—but I throw my mind back to when this country first became concerned about poverty in early Victorian times. In those days there was the friendly society movement, organisations which turned into trade unions, insurance companies, co-ops and building societies. They were all collective self-help organisations on the ground upwards which actually ensured that a significant proportion of our working class got out of poverty because of collective action at that level. When the previous Prime Minister talked about the big society I thought that he had got a germ of an idea of going back to that. Regrettably, that became a cover for outsourcing and privatisation and has actually disappeared from the lexicon of the Government’s rhetoric. It needs to come back, and we need not only a big state but a big society where local help can be given to the poor, and to help people avoid falling into poverty or to help them out of it.
My Lords, it is a pleasure to follow the noble Lord, Lord Whitty, and to contribute to this debate. The noble Lord, Lord Bird, made a very robust and passionate speech, and his enthusiasm and fresh thinking is welcome in this House. I have been studying this area of policy for longer than I care to remember, and I think it is important that from time to time we step back and look at what we have achieved and what challenges lie ahead. I will certainly come to the noble Lord’s conference: as long as the conference fee is not too high I will happily come and look at prevention, emergency-coping and cure. I am slightly worried about the use of the word “cure”, but be that as it may, I will stand shoulder to shoulder with him in raising the issue. I congratulate him on using the word “poverty”, because we in this House sometimes pussyfoot around with all sorts of euphemisms for poverty. Politicians do not like talking about it, but 15% to 20% of our population experience poverty and we should face up to that more directly.
I ask the noble Lord to bear in mind, in the course of his developing thinking, that we need a proper network of social protection across the United Kingdom. I think he accepted that when he said that, when people are in need, have no options and are inescapably caught in household circumstances over which they have no control, the state has to step in and provide protection and support to allow them to trade out of their circumstances in the best way they can. It is not an easy thing to do, because individual circumstances are so diverse and the state cannot discriminate but has to have common systems that are available equally to all citizens. I ask him to bear in mind that the social protection system that we have in this country should deal with the redistribution of income throughout individuals’ lifetimes as well as taking snapshots and looking at individual circumstances.
The noble Lord is, I think, in danger of falling foul of one of the myths to which Professor John Hills referred in his excellent book Good Times, Bad Times—namely, that those in dependency are all the same people all the time, and it is a question of “them over there” who are in dependency and “us over here” who are paying the taxes. That is completely contrary to the facts. You need only to recognise that in every three-month period a million people go into work and a million come out of it to see that there is an evolving pattern of falling in and out of poverty and in and out of benefits. Therefore, it is a complete myth to think that people on benefits never change and that they are always there and always costing money. However, that myth is sometimes fostered in the newspapers. The kind of prejudice visited on those in dependency is like the prejudice which we talked about, very usefully, when we discussed the fourth Oral Question earlier today.
We have to deal with that prejudice and we have to deal with the ignorance about the scale of the money that is spent on social security and the social protection network. If you include education, health, pensions and all the other bits and pieces of state support that are available—and have been available, certainly to me and my generation, with defined benefit pensions and all the rest—the amount of money spent actually looking after those in dependency is very small. In his book, John Hills calculates that if you take social protection over that broad gamut of policy areas, for every £12.50 that is spent on social protection, £1 is spent on supporting people who are in dependency, on jobseeker’s allowance and the like. So we need to get the balance right here and understand that, although these figures sound like enormous sums of money when they are dealt with in pounds sterling at today’s prices, if they are taken in the totality of the public spend of £735,000 million, or whatever it is, it is money well spent on providing social protection available to all of us, given that not many families in this country will not need to access healthcare, pension provision, education and the like at one time or another. Therefore, I appeal to the noble Lord to make sure that he does not fall foul of the myths that exist in this area.
In the minute that is left to me, I want to say that this is a very important moment. That is another reason why I am pleased that we are having this debate this morning. A new Government are being formed. I hope fervently that we keep the present ministerial team on this subject area. In my view, any changes would be disastrous. As people know, I am a fervent advocate of delivering universal credit, which I think, if it was a bit better funded, would deliver a lot of the things to which the noble Lord, Lord Bird, aspires. I welcome what the new Prime Minister said on the steps of No. 10 Downing Street about trimming back austerity, because I think that austerity has been part of the problem and one of the causes of poverty. I argue that we should focus on two things for the rest of this Parliament, the first being that we should deliver universal credit in the best and most efficient way we can. The other important Conservative manifesto promise was to halve the disability employment rate. That, too, is an important part of the programme. These two things should be priorities for us in the months and years ahead.
I repeat that I am very willing to contribute to anything the noble Lord, Lord Bird, is doing in this area, and share his enthusiasm. I wish him luck in achieving some of the ends that he set out this morning.
My Lords, I, too, thank the noble Lord, Lord Bird, for introducing this important issue of tackling the causes of poverty. We learn from the briefing notes that the noble Baroness, Lady Lister, makes it clear in her textbook that it is almost impossible to define poverty. That is part of the complexity with which we have to wrestle because, as poverty is relative, it is very hard to design appropriate responses.
In my trade, we have two phrases: we talk about the poor and about the poor in spirit. The word for spirit means power, and I want to look at to what extent to be poor and in poverty means to be lacking in power—the kind of power that allows you to feel good about yourself and to have security of work, security of a living place and security of contributing to society. How do we bless people with a sense of power over their lives, for themselves and those around them, and to make a contribution to society?
Clearly, one way of giving people power is financial. Many noble Lords in this Chamber know far more than I do about universal credit and how to design and refine systems that financially contribute to giving people power. But the gist of what I want to suggest is that, alongside this, there needs to be another kind of empowerment, without which the shelling out of money will not be very effective. I invite noble Lords to think about how we give people the kind of confidence, resilience and capacity to use money well if it comes in the form of benefits—and we can argue what level those should be—but also how to enable people not to suffer from the terrible deprivation of being isolated, lonely and depressed through being in poverty. I have a couple of examples and a couple of questions for the Minister and a little picture to finish.
First, how do we give people the power of confidence? Let me give one little example. In Derby, where I work, we have a very good college—Derby College—which has schemes to help people who are between work, or looking for work, to learn skills and to equip them with the confidence to get into the labour market. That is absolutely essential when people are powerless and out of work. The problem with that laudable scheme is funding. There does not seem to be a joined-up strategy; part of the response, alongside benefits, is to enable people through opportunities to learn and to grow in skills and confidence while they are out of the workplace. I invite the Minister to comment on the extent to which this needs to be part of a deliberate strategy to enable people to be upskilled and encouraged through learning when they are between work and simply on benefits.
The second thing, besides the power that confidence gives, is the power of belonging. Isolation is one of the cruellest things that I come across in my pastoral ministry; when people are in real poverty, they do not have the means to engage with people, to go out, to connect. Members of the House will know that churches and faith groups provide all kinds of drop-in centres, lunch centres and places for people to meet and belong, but some of the skilled centres, such as citizens advice bureaux, are pulling back for financial reasons. People need help to think about where they are at, what they might be about and what options are open. More and more of the burden is falling on the voluntary and faith sector, as the professionals such as citizens advice bureaux are under-resourced. If we are going to deliver that, we need more joined-up partnerships with local authorities so that our efforts—and there is lots of energy there—are well directed. To what extent might the Government consider issuing guidelines to encourage local authorities, when there are issues about citizens advice and so on, to look at other models of partnership with willing potential partners who perhaps need the resources to play this key role in order to give people not just confidence but a sense of belonging and of being equipped to handle the pain and stress of poverty?
I want to finish with one little picture. In north-east Derbyshire, there is enormous, real poverty. I think of a former mining village where children—in 21st-century UK—are hungry. In the school holidays, there is a very practical problem relating to poverty, because children who had free school meals then have no food; in their homes, there are empty larders and empty fridges. The church in that village is running a breakfast club. It is a very simple activity that provides real help for real poverty in real time. Parents and carers and those who suffer poverty with the children can get involved as volunteers and have that sense of belonging, contributing, learning skills and growing in confidence. The voluntary energy of the church and other voluntary groups in the community means that they are pitching in to address that issue, to build confidence and a positive way for people to go alongside the benefits, or lack of them, in this situation. We should celebrate that.
Besides negotiating about the amount of money we give people, how can we more formally encourage, in the ecology of dealing with poverty, that kind of comradeship, community and collective action, as the noble Lord, Lord Whitty, said, at grass-roots level? How can that be encouraged? How can the Government challenge local authorities to look for that, to support it and to develop it? Without that, the money invested will be much more uneven in what it delivers.
My Lords, the noble Lord, Lord Bird, has in his own right done something extremely positive by creating a mechanism whereby individuals can find their way out of poverty and, hopefully, reach a point where they can be gainfully employed.
Poverty, as has been said, is not easy to define, but anybody who has run a constituency advice centre in a deprived area over the years very soon learns that it is made up of a range of components. There are people who are solely dependent on benefits, there are people who have the capacity to work and can earn money themselves and there are people in the middle who need a bit of both. Of course, it is a cycle, as was said, because the same group of people is never necessarily always unemployed. The last job I did in government was as Employment Minister; every month we would get the figures, and there is a churn. Some people are unemployed this month, but they may not be unemployed again for another six years, 10 years, or six months—they come and go. But there are people who, for a variety of reasons such as disability or mental illness, just do not have the capacity to work. A growing number who become carers are probably excluded from working, even though they have the personal capability to do so. We understand the dilemmas. Some people recommend raising the level of benefits, but that would probably mean that another group of people would not find it worth their while to work. It is a tremendously difficult subject.
The Motion asks us to take note of the case for tackling the causes of poverty, and I should like to focus on one issue about which I feel very strongly. What is the point of spending billions and billions of pounds on further and higher education and on the most immensely complicated scientific research if people still leave school unable to read and write? Let us not say that we have no literacy issues in this country—that is not true. In my last job I only dealt with children post-school, but I at least ring-fenced the funds after 2008 to try to keep a focus on that. It is immeasurably more complicated to teach a person beyond school age to read and write, but there are ways. The Union Learning Fund, which a number of noble Lords will be aware of, goes into workplaces to teach people in their 40s and 50s to read and write. They are taught under the umbrella of computers so as not to embarrass senior people—after all, some are grandfathers. What are we doing as a country if we are still allowing people to leave school unable to read and write? Can anybody explain to me what the options are for such people? There will always be people who can live on their wits and find a way of making money, but let us face it, folks—my Lords—it is the general ordinary person we are talking about, and if that child coming out of school does not have those basic skills, they are unemployable, effectively, for life.
We pride ourselves in this country on the help we give to the international community and we spend lots of money on defence and other worthy issues such as social security and health, but we still allow—I think this is a national scandal—people to come out of school without the basic literacy and numeracy skills. The Motion is asking us about tackling the causes of poverty in the United Kingdom, and I submit that that is one cause. It is preventable, largely. It is an emergency, in my view. There is a cure if we get our schooling system right. We all know what can happen in a classroom if there is a bit of bullying or a pupil is picked on—the teacher may be overburdened with 30 or 40 pupils—they are stuck at the back, they will not admit it, they become rebellious and they turn to anger in their teenage years out of frustration.
I hope the Minister will take this to his colleagues in the Department for Education. It is a fundamental opportunity. If we concentrate on that issue, we could prevent an entire generation of young people going into the system where they will never succeed or reach their full potential. I accept that it takes time, but the Motion talks about tackling the causes, and lack of literacy and numeracy is one of the causes of poverty. We have not solved it in this country and I hope we will put our minds to it, because we have proved in the past on other issues that, if we put our minds to it, we can succeed.
My Lords, I thank the noble Lord, Lord Bird, for giving us this opportunity to discuss this subject and for his passionate introduction of his own views to enable us to focus our minds on the causes of poverty.
I am not an expert and I do not think that I will be able to provide the answers or guide your Lordships to the causes but I come here with an experience of poverty. I grew up in abject, third-world poverty, which makes poverty in this country seem fairly mild. Growing up, that reality was about four things for people like me, in order to survive: beg, steal, borrow and hustle. That was the reality and that is the reality for most people across the world who are dealing with famine, disasters—manmade and natural—and starvation. Growing up here, aged 12, I was delighted to be sharing a home with 18 other people, in six rooms, where we had to share beds; there was one cooker on the landing, a tin bath for which we had to queue at certain times during the week, and an outside toilet. For me, that was almost luxury.
Today in 2016 we have a different picture and we have to address that. Before I try to do that, I want to say that I am very grateful to all the people who have helped me along the way—because that is what this is about. Tackling poverty relies on people such as the noble Lord, Lord Bird, and the many others—the thousands and millions of people—who seek to help others to come out of poverty in the way that I have. I am grateful for that.
Poverty has been around for ever and I despair as to whether we can ever eradicate it. We know that Governments, philanthropists, charities, Churches and other voluntary bodies are genuinely committed to supporting measures to ease the pain and meet the immediate needs but they are not able to go all the way—that extra mile—to get people out of poverty in a self-sustained, permanent way.
Britain has always been an unequal and divided society. Each day, the gap has widened between the haves and the have-nots. They inhabit and experience different realities. The contrasts are stark, and we know them well: obscene personal wealth juxtaposed with impoverished households; cities and towns versus rural areas and the countryside; and London and the south versus the rest. There is also what I call soft power, as opposed to no power—we have heard a bit about the issue of power already—by which I mean the networks operating in our society to ensure that power, resources and access to opportunities stay within the privileged and nepotistic circles of who you know, and which exist to override fairness, justice and merit.
This debate is very timely. Yesterday, a new Prime Minister—full of optimism and good will—told the world how she would focus attention on everyone in the country, whatever their background or circumstances, and on building a fairer Britain. She did not promise to end poverty, but she emphasised that she would give particular attention to those who find it difficult to “manage” their lives, which is a beautiful way of describing poverty. Can she do it? Will she do it? We have been around this before in this House. We hear promises, but they do not necessarily materialise in the way we would like them to.
Our political leaders should be blunt about and up front with rage at the fact that 4 million Britons live in long-term poverty, with little prospect of enjoying access to the opportunities to succeed in life that are afforded to others in one of the richest countries in the world. Many of our leaders do not have a real-life understanding of the day-to-day experiences of people who struggle to feed themselves and their children, otherwise we would not be talking about needing to hear from those who find it difficult to manage their lives. I am sure that the noble Lord, Lord Bird, knows many people who could talk to the Prime Minister about managing their lives—being able to pay their bills, turn on the lights and put bread on the table, without being pushed down the road to the loan sharks—while trying to acquire some personal self-esteem, pride and dignity for themselves.
In this time-limited debate, I want to focus a little on education, which has already been mentioned. This subject is key to enabling the next generation to work its way out of poverty. As I said earlier, people rely on all the support they receive from many sources to help them along the way. Essential education provision, from cradle to grave, is critical for the life chances of every individual, and in building confident, inclusive and coherent communities.
My time is running out, but let me just say that the sort of leadership qualities we need were described, very expertly and inspirationally, by the most reverend Primate the Archbishop of Canterbury in his recent speech following the referendum. He pointed to the upsurge in the number of reported race and xenophobic incidents, and described how the recent coming together of young people of all faiths and of none had generated a strong sense of hope and energy for the future. People coming together in such a way will generate a passion and a pathway for healing and reconciliation in some of our divided communities. He went on to propose ideas about how to deal with the fundamental issues together and how to offer people hope. We must hang on to the hope, and look forward to having the will to do something to end poverty.
My Lords, I draw your attention to my entry in the register of interests.
I am pleased to be able to take part in this debate, on which I congratulate the noble Lord, Lord Bird. His call to action is welcome and refreshing, and his track record on this subject speaks for itself, because this is about a hand up, rather than a handout. I also pay tribute to the noble Baroness, Lady Sharp, who will make her valedictory speech later. Her passion and commitment to education—as we have already heard, education could have a major impact on the causes of poverty—have been unrelenting, and we thank her for that.
I must add my congratulations to our Prime Minister, Theresa May, with whom I have worked in the past on social justice issues. My first-hand experience tells me that her commitment to tackling the root causes of poverty in the most effective way possible has a long history, and I hope it will result in a good destiny for those we are trying to help.
This is the nub of the issue. Many on the left and the right of politics were taken aback when the Joseph Rowntree Foundation found that the Labour Government’s child poverty strategy—albeit that they had the very best of intentions—had started to run into trouble as early as 2004-05. The key turning point was well before the recession, when poverty, unemployment and property repossessions all started to rise. That child poverty strategy, based very largely on income transfers, had in place measures and targets which enabled the Government to monitor their progress. It was through reporting on their own measures and targets that it became objectively clear that a new approach was needed.
This Government are in the process of bringing about the radical change needed to tackle poverty effectively. I would be very interested to hear about progress to achieve this from the Minister. It will come as no surprise to anybody in this House that I fervently believe that one of the best routes out of poverty is to have a job which pays a decent living. We also need to embed in the education system and its curriculum the fact that we want to prepare our young people for work. We need to teach young people to learn and to earn a living—and the earlier we start this, the better, because prevention is better and more cost effective than a cure.
I was thinking about two aspects of this change process in particular. First, I am a passionate believer in this Government’s shift of focus to life chances and regret that I was unable to speak in the very good debate on this subject led by my noble friend Lord Farmer in May of this year. I believe that the much-anticipated life chances strategy was to be unveiled straight after the referendum result. Of course, the Government have had one or two even more pressing priorities since then. Can my noble friend the Minister give us some indication of when we can expect to hear about this vital aspect of their agenda, as mentioned in the Queen’s Speech and, if I understand correctly, in the outgoing Prime Minister’s last Cabinet meeting?
Secondly, and related to this, the Welfare Reform and Work Act introduced new measures on educational attainment and employment so that progress, or indeed regress, could be tracked. Income-based measures have also been retained but targets were dropped because they cannot be guaranteed to drive effective action to improve life chances. I am of course summing up hours of expert debate in this Chamber, so I hope that noble Lords will bear with my somewhat crude synopsis.
It is vital that the impacts of government and other policy and wider socioeconomic developments can be accurately discerned through measurement. However, we cannot go from simple income measures to equally simple educational and employment measures and expect to gain a sufficiently rich picture of the actual state of the lives of the very many people who are struggling with the effects of poverty in this country today. We need to develop—and continue to develop—the best indicators in these broad areas as well as in issues such as family breakdown, lack of skills, drug and alcohol addiction, poor mental health and personal indebtedness. That is a long and certainly not exhaustive list of what is increasingly referred to as social metrics.
My noble friend Lady Stroud recently set up a Social Metrics Commission with the intention of having something that, as she said,
“incentivised the right behaviours for government, incentivised the right behaviours for people in disadvantaged backgrounds, and genuinely tracked a group of vulnerable people, that we were concerned about, and who without any other form of external intervention, were not going to move”.
I believe her aim is that the commission, which is wholly independent of government, should come up with an authoritative set of indicators which will act as challenges to policymakers as to where they should focus. Can the Minister inform the House of his view on the importance of developing such a set of metrics? Will this help to drive the paradigm shift which is surely needed, if the welcome words of our new Prime Minister are to translate into the necessary action to transform our society?
There are some factors influencing poverty which we cannot measure but which, when they are missing, certainly have an impact on the poverty bottom line. I talk about financial poverty, but in my experience there are other poverties: there is a poverty of aspiration, where people just believe aspiration is for everyone else and not for them; there is a poverty of inspiration, and we have a responsibility to inspire people to believe that life can be better and that they can do it; and there is a poverty of determination—why should I bother? We should and must bother to make sure that we identify the causes of poverty and do something about it, so that people can really aspire to a better life.
My Lords, I thank the noble Lord, Lord Bird, for providing this timely opportunity to grapple with this huge and complex issue. The political events of the last few weeks have led to much soul searching about the growing gulf between the haves and the have-nots in our society. I want to focus my remarks on education and housing. Getting these right is key to avoiding further misery, saves greater costs in the long term and strikes at the heart of the social inequalities that were given voice, I believe, in the outcome of last month’s referendum. I should declare an interest as chair of the National Housing Federation.
I believe passionately in the redeeming, transformative power of education. It is key to social mobility. Because of my interest in higher education, I am encouraged to see the most recent figures from the Universities and Colleges Admissions Service, which show that the least advantaged young people in England are now 65% more likely to go to university or college than they were in 2006. This is vital for social mobility and social justice. Can the Minister tell us what is being done to continue the investment in getting those from the most disadvantaged backgrounds into higher education?
However, in tackling the causes of poverty, we have to start with early education. Evidence shows that high-quality early education is one of the most important determinants of a child’s life chances. It is key to tackling the attainment gap that emerges early among disadvantaged children, and is fundamental if we are to transform the economic and social potential of future generations.
Graham Allen MP, whose work in this area I admire greatly, has made persuasive arguments for meeting the cost of early intervention, to avoid the greater costs later when things go wrong. Can the Minister tell us whether any progress has been made in simplifying childcare funding to make it easier for parents to understand and access it?
For children to thrive from their earliest years, they need a secure home environment. We know that families in persistent poverty are often struggling with high living costs, with low-quality and insecure housing the only option available to them. The Social Mobility and Child Poverty Commission notes that 1.5 million children are in poverty because their working parents do not earn enough to secure a basic standard of living.
The problem is that we are not building enough houses. As the pressure on our limited housing stock grows, so rent and house prices rise. Insecure or bad-quality housing has a direct impact on all other areas of people’s lives, including on the ability to get and keep a job, and on health. Poor-quality housing and overcrowding damages health. Pressure on local authority housing lists means families are stuck in temporary accommodation, often unsuitable for children, and tensions rise over housing allocations.
The statistics speak for themselves. According to the Government’s own figures, with housing costs excluded, 15% of people in this country are living in poverty. Once housing is added, the figure rises to 20%. That is 12.9 million people. In the first quarter of this year, some 71,540 households were in temporary accommodation arranged by local authorities—a rise of about 11% on the same period last year. In the same quarter, around 14,780 households in England were accepted as homeless—an increase of about 9%. Housebuilding starts in England for the first quarter of the year were 9% lower than the same time last year, and completions are also down.
We can do something about this. I contend that to tackle poverty we need to solve the housing crisis. To do that we must significantly increase the number of new homes we build each year. The right housing and support enables vulnerable families to break chaotic patterns of living and gain the benefits of settled accommodation in the longer term. When this happens across communities, it has a multiplier effect, creating safer neighbourhoods, boosting social capital and reducing demands on acute health and care services. Providing affordable, secure and good-quality rented accommodation can have a positive impact on people’s lives and help lift them out of poverty.
The case for investing in affordable housing is overwhelming. The housing associations I represent are ready and willing to work with the Government to deliver the homes this country needs. In 2014-15, they built 50,000 homes. That is more than one in three of the new homes in England. Their declared aim is to build 120,000 homes each year across all tenures by 2033.
Our new Prime Minister has recognised this need, acknowledging that we must do far more to get more houses built. Will the Minister urge the Prime Minister to look to housing associations as the sector which has both the desire and the capability to build our homes—the homes we need to tackle poverty across the country? What is being done to meet the targets for increasing our housing stock?
Two-thirds of poor children are in working families, and it is these same families who will be hit by the cuts to universal credit announced in last year’s summer Budget. Given that the latest figures show that there are 200,000 more children in poverty than in the previous year, I am deeply concerned that we seem to have lost track of the Government’s proposed life chances strategy. Can the Minister shed any light on its current status? Now, more than ever, we need in place a clear and adequately funded commitment to tackle the causes of poverty, reduce social inequality and heal the divisions in our society.
Finally, I congratulate my friend, the noble Baroness, Lady Sharp of Guildford, on her heroic championing of higher and further education during her hugely successful parliamentary career, and wish her all the best in her retirement from this House.
My Lords, I am delighted that this debate is happening and congratulate my noble friend on securing it and on his passionate opening speech. I shall concentrate on action rather than analysis, bring in a global perspective and make three points. The first is simply the importance of listening to poor people and working with them. Some years ago, the World Bank published a fascinating study covering a number of countries, which demonstrated what I guess we already know: poor people often well understand their predicament, have good ideas about how to get out of it and what needs to be done, and those ideas are often very different from what the authorities think needs to be done. They are simply not heard; other people make decisions about them; they are invisible. As the World Bank concluded, poor people are able partners.
Let me illustrate this. Many poor people have to be ingenious managers of their situation. I was struck by the words of the noble Lord, Lord Ouseley, talking about the situation he was in, where the routes out were begging, borrowing, stealing and blagging. In another recent study, authors looking at poor people’s experiences in three or four countries demonstrated that, on average, they use between eight and 10 financial instruments to get by. What do they mean by that? They borrow from neighbours, friends and microfinance institutions; they use credit with suppliers; they sell and buy assets; they save money with different schemes; they pay in advance; they send remittances to their home village; and they use so-called money guard schemes, whereby you give money to a neighbour for safekeeping, just in case you are tempted to spend it, and they do the same for you. That is an enormous amount to keep up with on top of a very stressful existence. It reminds us that people are endlessly resourceful and that we should work with them, their abilities and perspectives. The central point is that traditional approaches to policy simply do not do that, and need to be adapted to do so.
Grameen Bank, which was the first microfinance institution in the world, providing small loans to poor people to enable them to get on with their lives, was set up largely on the basis of traditional banking rules. After a period it started to fail and, to its great credit, it changed the way it worked, adapting to how poor people actually behaved and thought about their situation, offering loans on a rather different basis from its original intention. In other words, it supported what people were doing rather than seeking to impose different patterns of behaviour. It treated them as able partners. That raises the question whether our systems not only ignore people and make decisions for them, but seek to impose different ways of behaving and do not treat poor people as partners.
My second point concerns joined-up action. By that I could just mean joined-up policy and government, but I mean joined-up action. Let me tell the House about BRAC, a very large local NGO in Bangladesh focused on working with the ultra-poor. It does so by providing education classes for women, offering health services, even though it is not a health institution, and developing microfinance. Every time it discovers a new barrier to people gaining greater prosperity, it develops a new way of approaching it. It realised that people getting microfinance loans needed shops, so it started some. It runs schools, a hospital and a university. It is building up the infrastructure as it recognises the need to do so.
We may well say that that is all very well in Bangladesh because there was not much there in the first place, and it is being built up incrementally. However, this is precisely the approach my noble friend Lord Mawson has been using in St Paul’s Way. I think he will speak to the House about it later. He has moved on from improving education to housing and working with local employers and the local health system. In our case, it is even harder going—I expect my noble friend will talk about it—because of all the barriers put in the way of people trying to build up infrastructure in this way. Central to this approach is learning by doing. It is about small-scale experiments and learning, not a grand plan.
Thirdly, we need good evidence-based policy that enables and facilitates such developments. There is some. Let me illustrate this with health. Poor health often accompanies and can cause poverty. I have a great brief from the Faculty of Public Health, which I am not going to read. I shall highlight one point, which is that recent research by Michael Marmot and others shows that we need a coherent set of interventions throughout the whole life cycle to improve and sustain the population’s health. It is the package that counts; it is not pick and mix, a bit of this and a bit of that. That package needs to include everything from early-years education and family support to reducing inequalities in access to healthcare.
In summary, looking forward, we need the new Government, who say that they aim to leave no one behind, to put a completely new emphasis on the capabilities of poor people, on supporting what people are doing for themselves and on rigorous evidence and understanding. There are models to copy. I have already cited my noble friend Lord Mawson; there is also the noble Lord, Lord Bird, and new approaches are coming along.
Finally, like other noble Lords, I am very much looking forward to the valedictory speech by the noble Baroness, Lady Sharp of Guildford.
My Lords, I am grateful to the noble Lord, Lord Bird, for initiating what has proved to be a very timely debate, given the commitment made by our new Prime Minister yesterday evening. I applaud the work the noble Lord has been doing over such a long time with the Big Issue and with fighting poverty. I congratulate him on his determination to use his time in this Chamber to continue that fight.
As noble Lords are aware, this is my last speech in this Chamber. I was introduced in October 1998, so I have served nearly 18 years and, as many noble Lords know, I am leaving because my husband has just celebrated his 85th birthday and I want to spend more time doing things with him: going to plays and concerts, travelling, seeing friends, reading books—not papers—and even perhaps watching television more often. In saying farewell, I want to say what a privilege it has been to be a Member of this Chamber over this time and how much I have valued the companionship and intellectual stimulus that it has given me. I would like to add a special note of thanks to the staff of the House: the clerks, many of whom I have got to know through work on Select Committees; the officers under Black Rod who are for ever helpful, patient and courteous; and the catering staff who have looked after me and my guests so well over the years. Thank you very much.
The subject of today’s debate is to take note of the causes of poverty. I have spent much of my time in this Chamber on issues of education, being a Front-Bench spokesperson for the Liberal Democrats between 2000 and 2010 and pursuing in particular the cause of part-time, further and adult education. It therefore seems appropriate that I should say a few words about education, or perhaps more importantly the lack of education, as a cause of poverty. This becomes increasingly relevant in this world of globalisation, where we observe a growing dichotomy between the well-qualified who hold down professional and managerial jobs and those with low or no educational qualifications who move in and out of low-paid jobs, often on zero-hours contracts and earning the minimum wage. Many call it the “hour- glass economy” and it helps to explain the phenomenon we see these days of poverty among those who are fully employed. As I think two other speakers have mentioned—the noble Baroness, Lady Warwick, certainly raised it—it is reckoned that 20% of UK full-time employees are in low-paid jobs and 1.5 million children live in families with working parents who do not earn enough to provide for their basic needs.
I first became conscious of how important education and qualifications were to earnings and prosperity when I worked in the early 1980s in the National Economic Development Office—as ever, pursuing the causes of the UK’s poor productivity performance. Even then the UK was notable, as an advanced industrialised country, for the very large number of its young people leaving education with low or no qualifications, and for the small number qualifying with intermediate technician-level skills. Industries that were recording chronic skills shortages in those days—engineering, construction, computing and digital technologies—are the same industries where we see the same chronic skill shortages today. It is surely an indictment that, after 35 years of skills policies, we are still failing to fill those vacancies with homegrown trainees and relying on skilled workers from other countries to fill the gap for us. Why, after all these years of education initiatives and increasing numbers gaining their five As to Cs at GCSE, do we, according to the OECD, come bottom of our eight immediate competitors in literacy and numeracy skills among 16 to 24 year-olds? As the noble Lord, Lord Empey, mentioned, literacy and numeracy are still a big issue in this country.
I tentatively suggest three answers to these questions. First, there is the failure to reform the secondary school curriculum, which to my mind remains too academic, modelled as it is on the old grammar school curriculum. We know that many young people find it easier to learn abstract concepts from practical experience rather than by cognitive reasoning, yet much practical learning has been banished from that curriculum. Too many young people end up demotivated by their secondary school experience, put off classrooms and learning and anxious to get out into the world and earn real money, but—and this is vital—with low expectations and aspirations. I thought the Tomlinson committee, set up in the early 2000s to tackle this issue, had the right solutions: to put the practical alongside the academic and allow the individual some leeway to mix and match. Recently, the Sainsbury review of skills training has come out suggesting the introduction of a strong vocational route as a choice for post-16 education. This is attractive, but it does not meet the issue of the demotivation of those between the ages of 12 and 16 in secondary schools.
My second reason for why we are not meeting these challenges is a cultural one. Vocational education is seen as second best to academic, as illustrated by the fact that, when questioned, 80% of parents thought apprenticeships were a brilliant idea but only 15% of them thought they were suitable for their own children. Many young people who are disillusioned with school will go on to further education colleges, but colleges are still regarded as second rank. It is absurd, given that they often take from schools some of the more challenging young people who need that extra year to take GCSEs, that they should receive less funding per pupil than their school and sixth-form counterparts and do not qualify for the pupil premium. As the noble Baroness, Lady Wolf, has shown so poignantly, for those who stay on at college after the age of 19 to pursue these sought-after intermediate and technician-level qualifications, average funding levels in 2012 were £2,150 compared with the average fees received by universities in that year of £8,400. If we really value these vocational qualifications, we must be prepared to resource them.
Finally, I blame the constant churn of policy—a complaint that is echoed in more or less every school and college in this country. We have initiative after initiative, the one introduced before the other has had time to bed down but undoing and making void all the efforts that have gone into adapting the first to the needs of the institution. Every time you rip up the foundations and build afresh, everything is on hold for a year or so. A prime example is what is currently happening to apprenticeships. The Government have cast aside the institutions—the sector skills councils, which used to set up the apprenticeship qualification requirements, or frameworks, as they are called—and instead have given employers the task of setting up a whole lot of new frameworks. Many of the new frameworks are still in the process of being formulated and accredited, and nobody seems to be clear about when they will come into play. At the same time, we are introducing the apprenticeship levy with, as yet, no clear guidelines as to how it is to operate or work. The result at the moment is quite chaotic and threatens to destabilise the whole system. It may work out, but there is huge uncertainty around it.
I recognise that the lack of education is only one of the elements causing poverty, but it is one which the politicians have found perhaps most amenable to policy manipulation. As an academic, I was classed as an institutionalist, which meant that I saw change more often achieved by evolution rather than by revolution. My experience in this House has reinforced this conviction. If we are to make a dent in current levels of poverty in the fast-changing world in which we now live, we need to improve levels of educational achievement. However, we cannot change things overnight. We need—in spite of all that Mr Gove has said—to heed the experts, to build on the foundations that are already there, and to be realistic about resources, bearing in mind that expenditures on education today, if well spent, are an investment for the future and for future generations.
My Lords, it is a great privilege on behalf of all noble Lords to thank the noble Baroness, Lady Sharp of Guildford, for her nearly 18 years of service to this House, and not least for that pertinent and passionate valedictory speech, which went to the heart of many of the issues we are debating today. I am constantly amazed at the sheer talent and expertise that is on display in this Chamber, of which she has just demonstrated an outstanding example. Her scholarly contributions to this place, particularly her steadfast championing of adult and further education, have been greatly valued, especially during her time as a Front-Bench spokesperson.
As the first woman candidate to be elected for the SDP she has always been something of a pioneer, helping with the early development of biotechnology and encouraging investment in science—work I know she is proud of. Noble Lords may also be interested to hear that, following her graduation from Newnham College, Cambridge, the noble Baroness, Lady Sharp, worked on the Board of Trade, dealing with overseas territories, which is where she met her husband. It is perhaps sad and slightly ironic that she is leaving this place just at the very time when we need the skills that she could have brought to bear. On behalf of all the Members of this House, I thank her again for her service and wish her well for the coming years.
I, too, thank the noble Lord, Lord Bird, for this important debate and pay tribute to the inspirational work that he has committed so much of his life to. We in the Churches share many of his concerns. Part of our response has been in providing immediate, short-term through food banks and other charitable schemes, which is essential as we respond to immediate needs. But of course this debate is about the longer-term response and how we address the causes of poverty. Part of that has been dealt with in our response through the growth of credit unions and debt-counselling schemes. The charity Christians Against Poverty worked with nearly 13,000 clients last year, with money advice, debt relief and programmes to support people in overcoming addictions and dependencies. The Living Room, a charity in Stevenage and St Albans in my diocese, is also making a significant impact by supporting people who are overcoming addictions, which are often a significant cause of poverty.
At the moment, there are a number of government proposals that have great potential to ameliorate the causes of poverty—for example, the Help to Save scheme, which is aimed at providing the essential financial buffer that protects poor families from the entrapment of debt. Talk of extra resources for family mediation is welcome, although it must become a reality. I know that there is a Private Member’s Bill in the other place which would seek to create a breathing space for families struggling under the burden of debt. That would be a great step forward and is something that I hope the Government are actively considering.
However, one of the major underlying causes of poverty on which I will focus for a few minutes is insecure housing—something that has already been addressed by the noble Lord, Lord Whitty, and the noble Baroness, Lady Warwick of Undercliffe. At the moment, all the indications are that this is becoming a more serious problem—it is getting worse. Without the security of an established base, the chances of holding down sustainable employment, of developing a stable family life or of people establishing themselves within the support networks of a local community are greatly diminished.
A stable home creates the platform from which other causes of poverty can be properly tackled, but this stability is on the decline. House prices are rising faster than average income, partly due to the fact that we are simply not building enough new housing. The amount of new social housing is falling, just as private rents are rising well beyond the reach of many low-income families. Short-term, insecure tenancies are fast becoming the norm, while local authorities are finding it increasingly difficult to provide stable housing for vulnerable families. Statistics released earlier in the year show that homelessness is rising: 2015 saw a 19% rise in the number of households outside London who had to be placed in temporary accommodation by local authorities.
The provision of stable homes for low-income families must become an integral part of the life chances agenda. Starter homes may be beneficial for some but they are not viable for those living in poverty. The investment in shared ownership is welcome but it does not go far enough. The Housing and Planning Act will cut off local authority routes to securing social rents, and the situation will only worsen if construction and development are hit badly by Brexit, as early indicators suggest they could well be. Just yesterday, the biggest housebuilder in the UK indicated that it will consider slowing the rate of construction if investment falls.
We need fresh thinking, whether it is around direct government investment in housing projects, freeing up councils to invest in new social housing stock or making changes to the private rental market to encourage long-term rents—for example, through government-backed social letting agencies.
I warmly welcome yesterday’s comments from our new Prime Minister in which she said that her belief in a union of all citizens means,
“fighting against the burning injustice that ... If you’re young you will find it harder than ever before to own your own home”.
But words must be accompanied by deeds. Will the Minister tell your Lordships’ House what changes Her Majesty’s Government will make to ensure that all people can find adequate and suitable housing as we seek to address this very fundamental cause of poverty?
My Lords, I, too, want to congratulate my noble friend Lord Bird on having secured this important debate and on the passion that he has brought to it. I say to the noble Baroness, Lady Sharp, that I was struck during her speech by her wisdom, her ability to have an overview and her knowledge of detail, for it is in the detail that the devil lies and where things unravel. I add my thanks to those offered to her for her constant kindness to everybody across the House and her willingness at all times to share that wisdom and give advice. She has often saved us from falling into bear traps, as we would have done had we not sought her advice.
I want to address poverty of opportunity and of aspiration, particularly aspiration destroyed when bereavement pushes children into the vicious circle of poverty. We know that about 3.9 million children are in poverty in this country, which means about nine children in every school classroom or 28% of our school population. Two-thirds of them are in homes where at least one parent is in work.
Children are denied by financial poverty the opportunity to expand their horizons by participating fully in society; but much more importantly, they are denied such an opportunity when bereavement hits. They have an even higher incidence of mental health problems. Children bereaved through suicide are more likely to attempt suicide. Those who have experienced a sudden and traumatic death demonstrate a threefold incidence of developing a psychosis in childhood or in young age. When they are in a home in financial poverty, they develop anxiety about the basic needs for their home being met. When their parent has mental health problems and is workless, possibly self-medicating with drugs or alcohol, it is the child who bears the responsibility of trying to hold the home together. When one parent has died, that can become particularly difficult. Many such children suffer from a sense of low esteem—about one in five feels a failure—but they often also feel guilty and somehow responsible for the death of that parent.
Children in poverty are significantly less likely to achieve five GCSEs at those good grades of A* to C, but that is knocked even further if they are also bereaved. Girls who are bereaved of a sibling fall behind by at least one grade across the board. Such children find it much harder to concentrate and to learn, and feel mistrustful of the future. They are often anxious that, while they are at school, the other surviving parent may suddenly die or be killed—relating to their previous experience.
The Marmot review, about which my noble friend Lord Crisp has already spoken, relates the evidence of poor physical health and increased risk of life-limiting illnesses in children born into poverty, with significantly shorter life expectancy. A boy born in Kensington has a life expectancy of 84 years, but a boy born in Islington has one of 75 years. The BMA has produced a report on growing up in the UK that looks at these issues. The problem in bereavement is often that one parent has had to give up work anyway to look after the person who was dying or to take on childcare responsibilities, and their ability to provide care is eroded if they are poor. Funeral costs present a major problem. Forty-seven per cent of claims for the Social Fund funeral payment are turned down. I ask the Government to work with undertakers to make sure that they offer the lowest-cost option and inform families of the risk of not receiving benefits, because the average funeral debt among those struggling to pay is £1,318.
Unmarried parents face other problems when their partner dies. Sadly, almost half of young people under the age of 35 believe that cohabiting couples have the same rights as married couples, but they do not. When a young parent is bereaved of a partner through a sudden cause and is unprepared, there is strong evidence that their outcomes are far worse in both financial and mental impacts. The loss of income is of course significant. A parent may have been included in their partner’s benefit claim, so there may be delays in activating it.
I know that the Minister has taken seriously the problems of bereaved children and taken steps to ensure that requirements in relation to seeking work can be relaxed for the first six months following the death of a spouse and up to three subsequent periods of a month. I know that he is aware that forcing people into work can increase parental stress levels and have an adverse knock-on effect on bereaved children, and therefore on their life chances. However, I hope the Government will address a specific problem relating to the widowed parent’s allowance. It will be affected by universal credit because it is treated as income other than earnings and is therefore taxable. It means that some people receiving universal credit and the widowed parent’s allowance could end up paying out £12.48 a week rather than receiving benefits. It is an anomaly which I hope the Government will address.
Children are resilient; 10% are very resilient, but 15% are highly vulnerable. Bereavement pushes them into the trap of poverty. I hope that every time an adult is dying we will all think: think patient, think child.
My Lords, I thank my colleague, the noble Lord, Lord Bird, for securing time for this debate. Tackling the causes of poverty in the United Kingdom will have brought many of us in this place and the other place into politics. I have seen the appalling effects of entrenched poverty up close. Working alongside prisoners, I know that it is sadly true that there is a clear bias against the disadvantaged in our society through societal factors.
The primary job of government, after the defence of the realm and the maintenance of law and order, is to improve the wealth of society. However, raw GDP growth alone does not translate into the betterment of society unless we have an economy that works for all. The engine to give everyone a solid start in life and the opportunities they need to thrive comes primarily through the education system.
It is a fitting tribute to the previous Prime Minister, who worked so hard to improve social mobility, that his last act was to create a number of new free schools. I must also pay credit to Michael Gove and Nicky Morgan in this noble endeavour, for they have shown themselves to be fearless in reforming a rigid structure and removing the logjams to enable the natural knowledge of our youth to flow. Free schools work so well because the principles behind them are sound. Teachers, parents and headmasters know far more about how to improve the scores of their schools and pupils than does a highly centralised and unwieldy government machine.
This is why I have always supported devolution of soft powers to regions, nations, schools, local authorities and people. I am passionate about giving people real chances to change their lives by shifting power down the chain as close as possible to those whom it affects. Being more in control of your destiny sharpens your mind; it encourages a sense of responsibility in the decisions that you make.
I support the moves taken by this Government to increase access to higher education by abolishing the cap on student numbers and creating more free schools. I was very encouraged to hear the words of the new Prime Minister yesterday. Theresa has been a dear friend for many years, and I know that her promises to the disadvantaged were not empty pledges but the solid basis on which her political platform has always been formed. Like me, she was, and is, a genuine one-nation Tory. As such she will have a tough job ahead of her but I am more than confident that she will be up to the task.
First, she must carry on with the education revolution originally started by Michael Gove, which I have already touched upon. Secondly, she must fix our broken planning system. Hereditary wealth predominantly passes through housing. I support parents having the right to leave a family home to their children, but our absurdly tight planning system effectively fences off home ownership.
To establish yourself, have a family and have the confidence to invest and plan, homeownership is vital. An existence where you have no certainty creates unacceptable levels of stress and results in a larger amount of income going towards accommodation. We all know how much pressure there is on housing here in our great capital city, and here we sit in one of the most densely packed boroughs of the United Kingdom. Relaxing the rules on green-belt land would allow us to build some of the 200,000 extra homes we need every year here in London. For families who are desperate to get on the housing ladder, the Government must act. I am sure the Minister will pay due attention to this important issue.
Perhaps I may finish on a final point which is more of a reflection than a policy. I have lived long enough—as, no doubt, have some of my noble friends—to remember the tremendous building efforts that went on during the latter half of the last century. The Government did not just employ people, they created the fiscal space for businesses to expand their workforces. The deficit is high but borrowing rates are at the lowest they have been in living memory. It could be a worthwhile and long-term move to take advantage of these rates to invest in shovel-ready projects while we have the chance.
My Lords, I thank the noble Lord, Lord Bird, for securing this debate. I posit that if he had started his great invention now, he would have started it around the internet. The internet has transformed how we think about everything in our society, but I challenge that it has not yet disrupted, encouraged and inspired us to think about brave new solutions in tackling the causes of poverty.
I feel immensely lucky. I have been an entrepreneur and worked in technology my whole life. I did this based on the most incredible luxuries of privilege and education that you could imagine. However, I believe most deeply that the internet enables people of any background to have access to the same opportunities of education and entrepreneurship for the least cost with the simplest mechanisms, but we are not putting it at the heart of how we think about addressing some of these complex challenges.
Both data and stories point to these ideas. First, on data, as many noble Lords may know—I feel I have become like white noise with these statistics—there are still 12.6 million adults in this country who do not use the internet on a regular basis and cannot get the benefits of being online. It is not only some noble Lords in this Chamber but many millions of people from many different backgrounds. If you map the rates of low internet usage with the areas of deepest deprivation, they are practically layered on top of each other. I cite Torbay, Boston and East Lindsey as places where there is extreme digital disadvantage and social isolation.
Not only this, but women, who often tend to face the brunt of many of the complex aspects of poverty, also tend to lack basic digital skills. Therefore, while being faced with the multi-challenging dimensions of, perhaps, addiction or family disruption, they also face a lack of ability to use any technology to help them.
In addition, families who are using the internet are saving up to £516 a year. We all heard our new Prime Minister talk most boldly about helping people who are just getting by, and I cannot think of a quicker weapon than to give people access to saving £516 a year using the internet. It is fundamental and important.
The charity I co-founded, Doteveryone, has worked out what we call the social return on investment for tackling the digital deficit. We looked at all the indicators that improve when you help people use technology: you are more likely to find a job—90% of jobs are only advertised online—and yet 1 million unemployed people cannot use the internet; the things that happen when you gain confidence; health outcomes; finding relevant information to help in your daily life; and some of the savings that I have talked about. We have valued what people gain from being online, and what we gain from them being online, at £1,064 per person. If you were to wrap that up in a number for the economy, it would be about £76 billion. These are not trivial numbers.
However, it is not only the data but also the projects and the places that I feel lucky to have seen, most particularly since I started doing work on digital skills in 2009. I should like to talk briefly about Knowle West in Bristol, which was one of the first places I visited when I was appointed digital champion by Gordon Brown. I thought I was going to find things to be very different from what I actually took away from there. When I arrived, the local buses into Knowle West had just been stopped. It was the poorest ward in Bristol. I was going to see the media centre. Even I, an internet entrepreneur, thought, “Really? A media centre? Is that what they need in Knowle West? Surely they need transport links”.
More fool me. The media centre had led to a massive upskilling of the local population. On the point made by the noble Baroness, Lady Sharp, the skills crisis was being addressed through a tenacious local entrepreneur and they were building websites. The lack of buses had led to them campaigning online to have them reinstated.
I am not a techno-Utopian. Not every problem is solved by using the internet. However, I could see from that experience that it gave the local people the tools to empower them to build the things that they wanted—local websites selling vegetables from the gardens that they were creating in the area, and campaigns to bring back the buses. It was a powerful and relatively low-cost way of addressing the massively complex challenges that that community faced.
I have two suggestions for the Government. First, having wildly failed to secure much money from them to build basic digital skills in this country, I would like to throw in the mix that 58% of charities in the UK still do not have basic digital skills, and these are the very organisations that we are relying on to help address the causes of poverty. I implore the Government to help the charitable sector itself become digitally robust. Secondly, no other organisations have more to gain from more people being online than some of the large platform-based technology companies—Google, Facebook and others. We need them to do more to address skills in this country, and to help the internet reach the places it is most failing right now. I also implore the Government to put pressure on Google and Facebook to help us become a more connected country. We need it now more than ever.
My Lords, it is a privilege and an honour to follow the noble Baroness, who has done so much for digital literacy in this country. I entirely agree with her last suggestion that people in the charity field should improve their digital skills. The Charity Commission should also improve its website. I have been there and it is a nightmare.
The noble Lord, Lord Bird, started by saying that poverty is a complex issue. He has done a great deal about it; I have done nothing similar but I did a great deal of measuring of poverty when I was an active economist.
It is striking that when we started thinking about poverty, we thought first in terms of nutrition—do people have enough money to buy enough food for subsistence?—and all the measurements started in terms of calories. When Charles Booth was wandering around the streets of east London, he spotted poverty when he saw children playing truant from school. He put his emphasis on what it was that made those children truant. He was looking at a new-generation problem, and it turned out that their parents did not have enough money to pay the fees for primary school education because, despite England being a rich country in those halcyon Victorian days, we did not have free primary education.
Starting from there, what we have heard in the debate is that poverty is a complex issue because lots of different things are mixed up with it. At bottom, it is about a lack of spendable income. Money in your hand can solve a lot of problems. Around 40 years ago I was doing some work in connection with Peter Townsend’s pioneering efforts to measure poverty. He pointed out that national insurance, or whatever income supplement there was at the time, was inadequate and should have been 15% higher. I think that a universal law for measuring poverty is that the poverty level is always 15% higher than whatever the Government pay. We know that Governments are always slightly meaner than they need to be.
We also have problems around aspirations, problems around disability and the problems faced by carers, whose lives are blighted because they do not have enough money to have any kind of life outside caring. We need to view poverty as a multidimensional issue which Professor Amartya Sen—as many people will be aware—in the course of his lifelong work explained in terms of the notion of capabilities. We would like people to be capable of many things throughout their life, whether that is good health, activity, the pursuit of knowledge or the pursuit of happiness, whatever it might be. In a sense, the poor are those who do not achieve many of the capabilities that should be available to them.
We have spent too much time using a false measurement of poverty, which was established by the European Union; that is, 60% of median income. I think that is the silliest thing I have seen in my life. I know of no income distribution in any country where the distribution of income is such that no one is under 60% of median income. There always will be people living at that level. It depends on how high the median income is. Now that we have Brexited, I hope that one of the few things the Government could do is set up a proper measurement of poverty that really accounts for how many poor people there are, how many poor children, and how many different ways people are poor, and whether it due to dependence, disability, a lack of digital skills, inadequate housing and so on.
We must recognise that this is a complex problem that requires a suitably rational allocation of money. Of course money is not plentiful; it is always scarce, so we have to be careful about how it is allocated. We must also look beyond current poverty to the lifetime chances of people in poverty. The investment required in children’s health and education is possibly one of the highest-paying that could be made in removing poverty. Tackling poverty is a complex and multifaceted task. I am sure that the Minister will tell us in his reply how universal credit will take care of most problems. I am sure that it will, but I repeat my fundamental law: add 15% to whatever you were going to give in universal credit, and your problems might then be solved.
Let me say lastly that when we look at poverty in the UK, we must not forget that the real poverty is elsewhere. We must not slacken our efforts to fight poverty around the world as well.
My Lords, the first task that falls to me today is to say thank you from these Benches to my noble friend Lady Sharp for all her hard work on behalf of these Benches. I have many an anecdote about working with my noble friend which we do not have time for, but one of my favourites involved a young and bumptious MP telling us what he wanted done, but after leaving the room, he discovered several minutes later what we were going to do. It was a certain MP from the Oxfordshire area whom I hope is still smarting from the experience. But all my anecdotes pale into insignificance next to a comment that was made quietly by my noble friend Lady Northover as she sat beside my noble friend. She said, “You don’t have to go, you know”. Apparently my noble friend is going to go, but she will be missed. We hope that her retirement is as much fun as she thinks it will be, but if she wants to make a comeback—if Frank Sinatra could do it, I am sure that an exception will be made for her.
I scribbled down on a piece of paper what I think was the subtext of the words of the noble Lord, Lord Bird, in opening this debate: work smarter, not harder. That is something I took from his speech. There is a lot of activity around dealing with poverty. The state deals with the containment of the problem and makes an effort to lift people out of it. As noble Lords have been speaking, I gained the clear impression that there is no one cause of poverty; it seems to be more of a cocktail of issues. It is a cocktail that changes slightly for each individual affected by poverty. Several speakers also mentioned education, which leads me into my main contribution.
The fact is that if someone has a hidden disability—I am thinking primarily about dyslexia but it could be many other hidden disabilities: dyscalculia, autism, you name it—they can have a problem engaging properly with the state. It is very difficult to access the benefits that the state can offer. We always think of dyslexia as being a problem primarily in terms of education. That is where the name comes from, so it is obvious. However, my wife would testify to the fact that dyslexics often have incredibly bad short-term memories. In my case it is about getting to appointments and remembering things that are going on. There is no point in writing them down in a diary if you forget to look in the diary.
It is important to note that life today is complicated, which means that people with hidden disabilities are under pressure the whole way through. If someone’s problem is that they cannot understand the written word easily and so they dropped out of the education system early because it was incredibly unfriendly towards them, they are always going to be at a disadvantage. Numerous facts, figures and statistics have been provided for me which show that dyslexics are more prevalent in virtually every area that leads to poverty: homelessness, drug taking—you name it and they are in there. Dyslexics suffer mental health problems because the modern world puts more pressure on them and makes it difficult for them to operate.
How do we deal with this? I think it was the noble Lord, Lord Empey, who said that if we get education right by identifying individuals and providing them with strategies which help them, we will start to reduce the burden. I am glad that the Carter review of teacher training recognises that teachers should be better trained in this area—an approach very like that taken in my Private Member’s Bill, which is going through the legislative process at the moment. I wonder if the two are connected, but I suspect not. If we try to intervene at the primary stage, it will be decades before we feel the benefit and there will always be people who are missed. So is the rest of the system—everything from the DWP to local government—better capable of dealing with people who cannot handle forms, whether they arrive online or in a letter? A quick mental calculation is made and the conclusion is, “Oh! You’re dyspraxic”. Are we actually qualified to help those groups?
Dyslexics are not the only people who have problems with literacy. If we take that group as an example, some 10% of the population—a huge number—are overrepresented in the groups we are trying to deal with. We should train people to deal with these groups, because then we will stand a chance of getting them access to the help that is being offered elsewhere. We are currently providing help they cannot get to. We are wasting effort on both fronts: work smarter, not harder. If someone cannot access the form or cannot understand what time to go in, they will not get the help, even for adult literacy. If we do not know how to market to these groups—to say to an adult who was something of a nightmare at school, “Come in and do a literacy course”, and explain that we will be sympathetic to them and teach them correctly—they are not going to turn up.
If, when it comes to the workplace, we do not allow people to access the written word through the technology which is so readily available now—I must declare an interest as a user of this technology, as well as my business interests—we will compound the problems. We have the ability to change the situation; we merely have to open our minds just enough to allow it to happen.
My Lords, I thank my noble friend Lord Bird for tabling this debate. It is a privilege to speak alongside him because he is a doer, not just a talker. We need more doers in our society. There is too much easy talk about structural solutions to poverty. I want to suggest that one of the generators of poverty in challenging communities across this country is the systems, structures and very processes of government and our continuing inability to encourage joined-up thinking and action in local communities. Let me take noble Lords to one street in a group of housing estates where I have been working for the last 10 years and illustrate what I mean—here, I must declare an interest.
I was asked to intervene in St Paul’s Way, in a challenging housing estate in Tower Hamlets, 10 years ago this year. There had been a murder: a Bengali boy had been set on fire and stories were starting to appear in the press. I was called in by Christine Gilbert, the CEO of Tower Hamlets Council, and asked to spend a day on this street and go back and describe to her what I saw. I arrived to be greeted by a group of West Indian boys with dogs facing up a head teacher behind a very large school fence. The police, with a blue light, had just arrived. The school was in the bottom 10% in the country, the teachers were endlessly playing politics with children’s lives by going on strike, and the 1960s buildings looked a mess. This run-down building stood in the middle of two 1960s housing estates, one with a dominant Bengali community, the other a traditional white East End community, separated by a road, St Paul’s Way. Many teachers in the school had an ideological antipathy towards business; the building was situated 800 yards to the north of Canary Wharf.
Next door to the school was a run-down health centre with 11,000 patients. I quickly suspected, but could not prove at the time, that some dodgy practice was going on, but they were Asian GPs and the MP, George Galloway, was playing politics in the Bengali housing estate across the road, so it might have been seen as insensitive to suggest that all was not well. A politically correct culture, aided and abetted by the public sector, was playing itself out on some of the poorest people in the borough. Opposite the school and health centre was a well-loved local pharmacist, Atul Patel. I discovered that two Bengali girls were going to his shop every Saturday to work with him and he was inspiring them to go on to read pharmacy at university. The teachers in the school opposite, behind three very large fences, knew nothing of this activity and could not see why a successful Asian business entrepreneur, whose life in this country began in poverty, might be of any relevance to a school 73% of whose intake was Bengali.
Local people with rats running through their kitchens had been promised new homes, but 54 schemes later, with £3 million of public money spent, not a home had been built. Every man and his dog had an opinion about what should be built. There was the environment lobby and the disability lobby, and Ken Livingstone wanted 50% social housing, so the business plan would not work. Most of these opinions were held by people who did not live there, with the result that nothing got built; there was just lots of talk and lots of meetings. Christine and I agreed that I should take 16 key players living and working on this street away to a conference centre to try to find a way forward. After two days of relationship building, brilliant facilitation and a joined-up conversation, there was unanimous agreement that none of us could deal with these matters on our own, that we needed to rebuild this community together and create a learning-by-doing culture. We developed a vision to build a campus—a new village—and to connect housing, education and health, business and enterprise. It would be an integrated street, no longer defined by government silos and their attendant dependency culture and mediocrity. We would learn to do it together and encourage aspiration and relationships.
Now, 10 years on, we have worked with local people and built a new £40 million school. Six years ago only 35 families were willing to put their children there. This year 1,200 families have applied. The school was rated outstanding in every regard by Ofsted in 2014 and today has a close working relationship with Atul Patel, who teaches there. Dr Joe Hall has turned around the failing health centre next door with its 11,000 patients. The local housing company is now completing phase 2 of the housing and is building a new primary school for us across the road. In two weeks’ time Professor Brian Cox and I will hold our fifth science summer school at the school, focused on how Britain can become the best place to do science in the world.
I shall give noble Lords a snapshot of what it was like turning around the failing health centre. As we dug into the detail of the GP practice, it came to light that many thousands of patients had been injected with illegal injections over a number of years. Unwittingly, the NHS, in its various manifestations, had followed processes and simply tolerated poor practice for years, without looking too closely at what was really going on. By bringing colleagues together I was able to work with the PCT to remove the failing GPs. Then, against all our advice, Tower Hamlets PCT, because of a new national policy initiative, appointed ATOS to provide GP services. After a couple of years I was called in by the PCT to help this company—good people, but out of their depth—to surrender the contract, having being unable to deliver, for reasons predicted locally at the time but ignored. The PCT then appointed the Bromley-By-Bow GP practice, which the transformation project partners had originally backed, to come in and sort out the mess. Recently it was scored as outstanding by the CQC, the first GP practice in the UK, I think, to achieve this.
Meanwhile, in response to a request by Tower Hamlets PCT, a local housing company built a new £16 million health centre for the GP practice, with agreement from the PCT—because, to be honest, the NHS was just too slow. The PCT then dithered about what it wanted until it was abolished and a national body, NHS Property Services, assumed responsibility for the premises. All local knowledge was lost and with it any understanding as to why we wanted to build an integrated response to health services in the first place. No local memory was involved, and a business plan costing many thousands of pounds was lost in the transfer. We were starting again. NHS Property Services has dithered since this time and the health centre has remained empty for many years, with a mortgage clocking up each month as, all around, new buildings and an aspirational culture has emerged. After a difficult meeting last year in the office of the noble Earl, Lord Howe, at which I encouraged different parts of the NHS to talk to each other, let alone the local community, NHS Property Services finally agreed that the GP practice could move in. I believe that NHS Property Services is currently paying two rents.
Successive Governments have talked about the need for joined-up thinking and action and we all raise our eyes: it is all too difficult. Yet we have done it and demonstrated that it works. I humbly suggest that in this new time, our country can no longer afford to ignore experiences such as this. Our children, who are living in a joined-up, internet age, feel alienated from all these silos. It is time to grasp the nettle. The electorate have given us a clear message to engage with them.
I have a final question for the Minister. As the new Prime Minister seeks to bring the country together, what will the Minister do to bring funding streams together in some of our most fragmented communities? How will he create an organic, learning-by-doing culture?
My Lords, I pay tribute to the noble Lord, Lord Bird, for pursuing this important issue so single-mindedly, building on what he achieved with the Big Issue. Recently, in his Big Issue column, he distinguished between poverty advocates, of whom he was rather critical, and poverty dismantlers. I suspect that he would classify me as a poverty advocate, but I believe that this is a false dichotomy because most poverty advocates also want to dismantle poverty and agree on the need for upstream measures to prevent poverty in the first place. We also believe that we must do what we can to ameliorate poverty in the shorter term, to relieve human suffering, which is very real in this rich country of ours.
Of course, we all agree that we need to tackle the causes of poverty, but there is less agreement on what those causes are, and whether we should seek them primarily in individual agency and behaviour or in structural, societal, economic and political forces. For all their talk of tackling root causes, the Government, who emphasise individual behaviour, tend to conflate and confuse causes, consequences, symptoms and risk factors, and to ignore the distinction between underlying causes and proximate risk factors. So, for example, family breakdown, which the Government often cite as a cause, is a risk factor, but the extent to which it causes poverty varies between societies, reflecting, for instance, labour market, childcare and social security policies.
It has become fashionable to reject the idea that lack of money causes poverty. Of course, it is not an underlying cause. It does not explain why someone has an inadequate income. Nevertheless, money matters. With regard to child poverty, a Joseph Rowntree Foundation evidence review concluded:
“There is strong evidence that households’ financial resources are important for children’s outcomes, and that this relationship”,
is causal, and that even small income changes can have a large cumulative impact over a range of domains affecting children’s well-being and development, including education, which has been mentioned by a number of noble Lords.
Another JRF evidence review challenges the Government’s contention that addiction and debt are significant causes of poverty. It found that,
“the problem of addiction, while severe for those affected, is not common among those that are in poverty—only a small fraction are affected. … Overall … general patterns of drug use and alcohol consumption exhibit little correlation with poverty or social class”.
While there is more of a problem at the extremes, the evidence suggests that disadvantage and exclusion precede severe addiction problems.
Similarly, with regard to debt, the review found that persistently low income and,
“structural features—in particular insecure and low-paid jobs alongside low benefit levels—are important factors leading to indebtedness”.
It also challenges the assumption underlying much policy that so-called welfare dependency is a key causal driver.
An ethnographic study of a food bank that I helped to launch recently puts flesh on these abstract arguments. The author, Kayleigh Garthwaite, observed that,
“for most of the people I met, the reasons that kept them returning to the foodbank were long-term, embedded structural factors such as low income, insecure work or problems in accessing or sustaining their social security benefits”.
And she witnessed the shame and humiliation that they felt at having to go to a food bank to meet their most basic needs.
In emphasising structural causes, I am not denying the agency of people living in poverty, as exemplified by the hard work involved in getting by and/or trying to get out of poverty. I second what the noble Lord, Lord Crisp, said about listening to people in poverty and acknowledging the expertise born of experience. However, an acclaimed cross-national analysis of the causes of poverty by the American sociologist David Brady concluded that, ultimately, poverty is the result of political choices. To quote his final words:
“As long as debates about poverty are more about the poor than about the state and society, poverty will continue to haunt the economic progress of affluent Western democracies”.
So, in taking note of the case for tackling the causes of poverty, we need to look not to the actions of the poor and the powerless—and the right reverend Prelate the Bishop of Derby talked about the importance of power—but to the actions of the powerful. Here I welcome very much what the new Prime Minister said yesterday on the doorstep of No. 10.
My Lords, I, too, congratulate and thank the noble Lord, Lord Bird, for securing this debate. Clearly, the impact of his personality and talent outside this House will be mirrored by a similar impact within the House, and we look forward to that over the years.
I also congratulate my good noble friend Lady Sharp on her farewell speech. It summed up much of what we value in the contribution she has made to this place. Over the years we have often marched in the same direction, just occasionally varying but not in any dramatic sense. I wish the noble Baroness well in the years to come.
We have heard one or two very influential, important and informative stories. The story I will now tell does not have the drama of the background of the noble Lord, Lord Ouseley, but I want noble Lords to imagine an eight year-old boy in 1949 backing out of the door of his council house into two pints of milk, which met their nemesis with a crash and a tinkle. In the terms of the day, I deserved a clip on the ear, but did not get one: there was no crying over spilt milk. However, nearly 70 years later, the words are seared in my memory, “That’s one and tuppence”. To younger Members of the House, that is 6p in new money. It was a great source of distress to my mother because one and tuppence counted in her weekly budget to look after her husband and two sons. That is an abiding memory for me.
Not everyone who is the subject of this debate is in the land of poverty, but very often they are on the margins, and they are there now. We must turn our mind to protecting those on the margins. The distress that my mother felt was real, and many families now have a similar risk of falling on the wrong side of the line. Happily, we did not, but we had some support. This relates to the point that has been raised about central government. I am not a great fan of central government, but by 1949 we had the National Health Service. We had public sector housing, and we lived in such a house, and I attended a very good state primary school. All these services require the input of big government. Many other things are required to tackle poverty, but the role of big government is fundamental in each of those three services. I cannot help also just mentioning a service that resulted from 19th-century charity—namely, the Sir John Anderson library, which was a rich treasure trove which my brother and I cherished and used.
As many others have said, education is one of the fundamental ways in which we can try to deal systematically with the issues of those who are deprived, in poverty, or certainly less fortunate than any of us in this House. I want the Minister to reassure me that he will take this point to the Secretary of State for Education, but that is a bit difficult because that position is a moving target at the moment. I suspect that the issue will be addressed by a letter sent to, ‘‘The Secretary of State whomsoever”. However, I want the reassurance that in the years to come—starting tomorrow, with the new Government that we will have—we will pursue some of the existing initiatives which are making a practical difference. They are not huge ideas, such as the initial founding of free primary school education, to which reference has properly been made, but they are things happening now in our education system as a result of government initiatives over the last 15 years. I will simply itemise some of these.
For example, the Government have initiated very strong pressure on ensuring that numeracy and literacy are at the core of education provision, as was said earlier. I shall give only one statistic in this speech: 50% of adult males in prison are either illiterate or innumerate. That is a walking disaster area and must be dealt with—though I have to say, I believe that successive Governments are focusing on this and trying to do something about it.
There are other things happening in education that are perhaps slightly more innovative. The Government have promised, as the other political parties also did at the last general election—I am a good Cross- Bencher—that early education will have an injection of support and funds. That is critical, because those from so-called deprived homes often start school two years behind those who are more fortunate. Early education has been shown to be a significant factor in dealing with that and moving people up the ratings, therefore enabling them to benefit from the education that is available.
Lastly—it is time for me to stop—I will mention educational innovation, of two sorts. One is technical education and I commend and admire the work of the noble Lord, Lord Baker, and the late Lord Dearing in creating university technical colleges; it is a benchmark of what can be done in technical education. I was discussing this with the noble Lord, Lord Baker, yesterday and he said, “Poor white boys—this is the thing that is actually helping them”, and we have the evidence for that.
Secondly, to revert to a point already made by my noble friend Lady Lane-Fox, there is a technology available that is not being adequately used in education—I declare an interest as a non-executive chairman of a company called Frog Education. One of the schools in central Birmingham, which is privileged, is using our technology to identify those young people all over Birmingham who could benefit from particular kinds of educational help. I simply ask that the Government use all these means and more to ensure that we deal properly with the causes of poverty.
My Lords, I also thank the noble Lord, Lord Bird, for arranging this debate and for his powerful and passionate speech. It is good to have passion and long may he do so. I also echo all the sentiments expressed by my noble friend Lady Sharp. When I made my maiden speech in this House it was my noble friend who spoke after me, so I am pleased that I am here now to speak after her. Her contribution in the debate was, in my view, a master class in education; she absolutely nailed it—the secondary school curriculum, vocational education and, of course, the constant churn and changes of policies from successive Governments.
Many noble Lords have said how fitting it is that we have this debate, as yesterday our new PM, on the steps of Downing Street, made some very important commitments. Poverty is real but not essential—yes, we can do something about it, but we must tackle the root causes. To reduce poverty, there is no magic wand; no single response will succeed on its own. Jobs, housing, health, home circumstances, and the choice of individuals themselves all play a key part. But, for me, it has to be education and—as the noble Lord, Lord Sutherland, said—it has to be early years. I have always believed that if we can get education and parenting right, ensure that we develop the talents and abilities of children at a young age, ensure that our education does not leave anyone behind, and identify at an early age any special needs that children might have, then we are on the road to an inclusive society where we can be rid of poverty.
I want to focus on education and home life as the most important factor in reducing poverty. I agree with noble Lords who have spoken before me and decry the prevalence of poverty in this country as a completely unacceptable state of affairs. I am glad that we are able to have an open and frank discussion about poverty and its causes and effects. Not only is it a terrible indictment on the UK that almost a quarter of the population are living in a state of relative or absolute poverty, but it is simply not acceptable. It must be acknowledged that having so many people in Britain living in a state of poverty is a tremendous strain on resources. Not only would reducing that number be a great success in terms of human value and living standards, it would—as the noble Lord, Lord Bird, intimated—reduce resources for other needs.
Poverty is a vicious cycle, and one that will require concerted effort and careful planning to break. Overall poverty levels have stayed fairly flat for the last 25 years but are predicted to rise if we do nothing. In 2015, the Government reported that 2.3 million children are living in poverty. Some, such as Barnardo’s, claim that this is a rather conservative estimate. A Joseph Rowntree Foundation report on child poverty talks of 3.9 million children in 2014-15 being in poverty. However, even if we are to accept the government figure as accurate, 2.3 million is an inexcusable number of young people facing a very difficult start in life. The poverty of these children impacts on their education and school lives greatly, leaving them at a significant educational disadvantage. In fact, there is a 28% disparity between the number of impoverished students achieving five A* to C grades at GCSE level and their wealthier peers, according to Department for Education figures. This is not to mention the other challenges that children from poverty-stricken families face: a higher rate of chronic illness, far fewer opportunities to engage in extra-curricular activities, and pressure to earn money to the detriment of their education, to name but a few. A recent report on the use of crisis support grants claimed that more than half of children receiving these grants believed that their situation was affecting their physical and mental health. It went on to say that two-thirds of families receiving these grants had to cut back on gas, electricity and food, which will of course affect the children even further.
Let me highlight how, through education—particularly in early years—and supporting parents, we can start to reduce poverty. If a child, at the age of four to five years old—the age that they start compulsory education and enter reception class—is academically behind or, say, a complete non-reader, that academic gap, that social gap, gets wider and wider as they progress through mainstream education. As we have seen, they are less likely to do well in their GCSEs, less likely to go on to sixth form or college, less likely to have a successful apprenticeship and, of course, less likely to go on to university and less likely to get a job, let alone a well-paid job. There we have the vicious circle—it starts, and then their children, and their children, often face the same problems. But if you break the circle through education and parenting, you create not a vicious circle but a virtuous circle.
The early years of a child’s life are critically the most important factor in their development and have a significant impact on their future life chances and well-being; poverty has the greatest influence on children’s outcomes. Positive early-years experiences and education give children their best start in life. A positive home environment can have a significant impact on reducing poverty; the home environment is probably the most significant aspect of a child’s early life, and it decides a child’s future path. Midwives, health visitors, GPs, children’s centres, family and parent support workers, outreach workers, child carers and teachers all have a key role in supporting families during childhood. High-quality, early childhood services have wide-ranging benefits for children and are among the most important determinants of positive outcomes for children from disadvantaged backgrounds. Well-resourced, high-quality provision for children and their families during early years has a huge influence on a child’s developmental outcomes, including their attainment when they go to school and in their future adult life. It is also cost-effective: the New Economics Foundation found in research that it carried out that, for every pound invested in Sure Start centres or children’s centres, £4.60 of social value is generated. Well-planned and appropriate early intervention helps to promote social and emotional development, which improves mental and physical health, educational attainment and employment opportunities.
Probably the most important thing we did as a country to support parents and help them in nurturing and supporting their children was the development of Sure Start centres—a complete package for children and families. They were originally set up in the most deprived and disadvantaged communities. They were enormously successful, and children’s centres became the order of the day. Along came the recession, leading to massive cuts to local government funding and the functions and provisions of the centres got reduced or they were closed. In hindsight, what folly.
If there is one thing we can do to reduce poverty it is to ensure that the most disadvantaged communities once again have full-blown Sure Start centres. As the Children’s Commissioner says in her excellent discussion paper Changing the Odds in the Early Years—a must-read for everyone—
“Government has the potential to play a powerful role in encouraging and challenging local authorities to put forward proposals to strengthen support for children, including to reduce poverty in the early years. From the Northern Powerhouse to seaside towns there is an opportunity to put support for children to improve outcomes at the heart of regeneration and devolution”.
I say, “Hear, hear”.
My Lords, it is a great pleasure to respond to this debate for the Opposition. I add my thanks and congratulations to the noble Baroness, Lady Sharp. She has been an extraordinary champion of further education, adult education and the skills agenda. I know that I speak for noble Lords on my side of the House when I say how much we regret her leaving but we wish her every success in the future. She certainly seems to have a very exciting agenda ahead of her. I should also say —I declare an interest as my wife is an adviser to the Education and Training Foundation—that the further education sector will be devastated that it no longer has such a powerful voice in this Chamber. It is striking how few Members of your Lordships’ House really understand this crucial sector.
The noble Lord, Lord Bird, urges us to urge the Government to refocus efforts on tackling the systematic causes of poverty. We have had a very serious debate, and he is to be congratulated. He had a slight dig at my party and, indeed, Polly Toynbee, and what he described as the analysis of the left in dealing with poverty. I thought that my noble friend Lady Lister put it well: we have been consistently concerned about tackling the root causes of poverty, but we cannot ignore the need to alleviate the poverty suffered by so many people in this country. The last Labour Government did not get it all right but they put a lot of emphasis on tackling the root causes of poverty. The Child Poverty Act 2010, which came at the end of our 13 years in government, was the culmination of many efforts.
The noble Lord talked about embracing a holistic view of budgeting, and I could not agree more. The noble Lord, Lord Mawson, set out why we need a holistic view of budgeting when he raised the wretched performance of NHS PropCo, which clearly has separate targets for financial performance from that of the National Health Service. It has almost to be forced to collaborate at local level because the targets it is given are not in its interests. The last Labour Government attempted to deal with some interdepartmental barriers by having cross-departmental targets and public service agreements. They worked to a certain extent, if not perfectly, but the current Government are not very interested in cross-departmental working. Following the decision we made that I think was a mistake, what I am most pleased about in this reshuffle is the fact that higher education is going back into the Department for Education. I welcome that move and hope that it will lead to a much more integrated approach to education than we have had in the last few years. I thought that I would get that off my mind.
We know that the child poverty figures are getting worse. My noble friend Lady Lister talked about food banks, and she is so right. People go to food banks because they have no other choice. The fact that there has been so much additional use of food banks is shameful. However, I pay tribute to the Trussell Trust, the Churches and all the other organisations that are doing such a magnificent job in keeping them going.
The right reverend Prelate the Bishop of Derby referred to the role of the Churches and the voluntary sector. He is right to say that funding constraints have made their job much more difficult. I was interested in the comment of the noble Baroness, Lady Lane-Fox, about digital skills within the charitable sector. That is an area where government could give support, as this is clearly a major challenge. The right revered Prelate also talked about extending and embracing comradeship and community. I think that my party could do with a bit of that at the moment, so we might need to approach him for further counselling and advice over the coming weeks.
The noble Lord, Lord Storey, started his speech with a wide view and then got down to what he really thinks is important—education. I embrace his wide view, but I think that health is really the issue we need to tackle. We are simply reflecting what, following the Alma-Ata declaration in the 1970s, health people used to call intersectoral co-operation. We will not be able to tackle the root causes of poverty unless we take a holistic view. The Government cannot do everything but they can drive a cross-departmental approach, and that is what we want to hear from the Minister. He will be tempted to talk from the viewpoint of his own department. Of course the DWP has a role to play but I would like to see it take a much more proactive role across government in driving forward some of the poverty eradication measures that we need.
In my humble role as a Minister in the DWP, one thing I was very proud of was the appointment of a joint tsar, as we used to call them, in the form of a national director for health, work and well-being, Dame Carol Black. That was a joint appointment between the DWP and the Department of Health. There was a recognition of the hugely close links between health, work and well-being. We need more examples of pulling things together instead of having these rigid barriers that we so regret.
On health, the Marmot review is striking. The noble Lord, Lord Crisp, and the noble Baroness, Lady Finlay, referred to it. The great variation in the length of time that people can expect to live in good health is appalling. The average difference in disability-free life expectancy is 17 years. In other words, people in poorer areas not only die sooner but spend more of their shorter lives with a disability. That is a shocking statistic.
On education, according to the ONS, 43% of people in the UK who left education without any formal qualification experienced poverty at least once between 2011 and 2014. The point made by the noble Lord, Lord Empey, about how many people still suffer from a lack of literacy skills, was very telling.
Here we come back to the noble Baroness, Lady Sharp. Given the need to embrace the skills agenda, why is further education discriminated against? Whenever there are funding reductions, why does the FE sector always take the biggest hit? The Government are very proud of their apprenticeship programme but all the evidence is that many of those apprenticeships are of very low quality and provide a poor education, and it is simply a statistic that is being chased, rather than the kind of quality that we need to see.
There are so many other issues one can talk about. The lack of affordable housing has not featured very much in our discussion, although my noble friend Lady Warwick mentioned it. The lack of affordable housing is surely one of the greatest curses we face and one of the greatest problems when it comes to alleviating poverty.
Where do we go from here? We have had brave words from our new Prime Minister. I think they were warmly welcomed all round the House and in today’s debate. My very simple question to the Minister is: how will the Government translate those words into action? How will they, as the noble Lord, Lord Crisp, said, listen to poor people and work in partnership? How are we going to embrace health and education in our poverty strategy? How will we tackle the issue of affordable homes? How will we pick up the skills agenda? How are the Government going to lead an integrated approach? These seem to be the fundamental questions, which we very much look forward to having answered in the next few minutes.
My Lords, I am responding to this debate in the most unusual circumstances imaginable. I started off with a Whip beside me; she disappeared after a few minutes and then popped up on my telephone screen as my new boss, the Leader of the House—the boss of all of us. So that is unusual. Later, I saw on the screen—I am sorry, I have not been quite as attentive as I normally am—that apparently my other boss, the Secretary of State, Stephen Crabb, has resigned. When the noble Baroness, Lady Sharp, talks about the delights that she is looking forward to—going out in the evening, perhaps watching a bit of TV—I really, really get it. I pay tribute to her, as others have done. She has done this House great service and is appreciated all around the House. We all thank her for what she has done over many years. I am sure the House will understand that when the noble Lord, Lord Hunt, asks me how I am going to translate the words of the Prime Minister into action, I am slightly hamstrung in making firm commitments.
I congratulate the noble Lord, Lord Bird, on securing this debate and bringing to the House’s attention this vital issue—that to dismantle poverty we must tackle its root causes. This sentiment is wholeheartedly endorsed by this Government, as we heard yesterday from the new Prime Minister. We have made a clear commitment to tackling the root causes of poverty and extending opportunity so that everyone, whatever their background, has the chance to realise their full potential.
We demonstrated this when we rejected the narrow, income-based approach that the Child Poverty Act 2010 incentivised. Focusing on moving families above a notional poverty line is not sufficient if we want to address the root causes of disadvantage. Instead, through the Welfare Reform and Work Act, we have introduced two new statutory measures to drive continued action on worklessness and educational attainment. As the noble Lord, Lord Ouseley, pointed out, these are the two factors that can make the biggest difference to the life chances of disadvantaged children and families. We agree with the noble Lord, Lord Bird: we want to tackle some of the deep-rooted and complex social problems that mean people are held back, and the underlying factors that can trap people in poverty.
I will set out the current ways in which we are tackling the causes of poverty in the UK, following the recent publication of the HBAI report, which covers the year to March 2015. I know that noble Lords follow this very closely, as do I. The report showed that average incomes have grown at their fastest rate since 2001-02 and are at a record high, with the average household now receiving £473 a week—an extra £800 a year compared with 2013-14. The average annual income of the poorest fifth of households is also at a record high—around £900 higher in real terms than in 2007-08. Inequality is unchanged, with the Gini coefficient remaining at 34%. Inequality, therefore, remains statistically significantly lower than in 2009-10.
The noble Lord, Lord Crisp, said that poorer people are able to identify what they need to do to get out of poverty. In responding to that, it is really important that we empower people. Empowerment is underlying what we are trying to do with our welfare reforms. We are trying to give claimants responsibility for their own lives. That leads me, as the noble Lord, Lord Kirkwood, would expect, to what we are trying to do with universal credit; that is, to make it very clear that extra work means extra money, which you keep in your pocket. There are strong signs in the evidence that we are collecting that it is starting to transform lives, with people on universal credit moving into work significantly faster and staying longer in those jobs. For every 100 people who would find work under the old JSA system, 113 universal credit claimants would move into a job. There are none of the cliff edges of the old system. As earnings increase, universal credit payments reduce at a steady rate, so that working and earning more are clearly incentivised. Basically, people know where they stand; that is the definition of empowerment.
There is also more coherent support. A Jobcentre Plus work coach remains in touch with the claimant, offering personalised support to increase their hours, earn more and progress in work. These are very early days with regard to this aspect but I expect that it is going to be key as we raise low incomes.
The noble Baroness, Lady Warwick, expressed concern about childcare. As she will be aware, we are now providing 85% of childcare costs in universal credit. There is some complexity in the various areas of provision. We have a cross-ministerial team working on that so that people understand all the different ways in which they can access support with childcare.
The noble Baroness, Lady Finlay, raised the point about treating the widowed parent’s allowance as income in universal credit. The widowed parent’s allowance provides support for normal living expenses, and it would not be appropriate to disregard it as a source of unearned income.
I think the point that was echoed the most was about silos—that is what the noble Lord, Lord Mawson, called them—and all the different ways that services come on a siloed basis. The noble Lord, Lord Bird, spoke about breaking down budgets so that they can be used on a joint basis. The right reverend Prelate the Bishop of Derby talked about models of partnership and how we might provide guidelines on that. The noble Lord, Lord Whitty, also spoke about it. This is the most important single area that we need to get right. As noble Lords will be aware, I have been trying to develop a system to do so, with the development of universal support. It will work as a partnership between ourselves, local authorities and third-sector groups—other bits of government and other bits of public provision—to try to get coherent support for people.
We have built that system and tried it on a couple of barriers: digital exclusion—the noble Baroness, Lady Lane-Fox, will be pleased that we are trying to help people to handle such issues, because the challenge with UC is to be able to handle them—and financial barriers. We have done a lot of experimentation, and we have just completed the report on 11 of the trials. One thing that found is that people need to tackle a number of barriers. Following those trials, we are reviewing the whole way in which we are looking at universal support and at how best to address these and a broader range of barriers. My view—it is a personal view—is that this is really quite a promising development to supplement universal credit, but there is a long way to go.
On life chances, we know that work is the best route out of poverty. The Child Poverty Transitions report that came out in June 2015 found that 74% of poor children in workless families that moved into full employment exited poverty, and the highest poverty exit rate was for children living in families that went from part-time to full-time employment. One of the really good statistics is the dramatic fall in the number of children living in workless households, which is down by 449,000 since 2010. My noble friend Lady Stedman-Scott spoke about how we measure this, and she referred to the work of our noble friend Lady Stroud in setting up the Social Metrics Commission. That is a very interesting approach, which we have never had before. We have had the IFS, which tries to assess the fiscal impact of government measures, but no one has tried to measure the social impact of government measures. It is extraordinarily ambitious to try to do so, but if anyone can do it, my noble friend Lady Stroud can. We will watch that, and if it is promising, we will clearly find it of great value.
The noble Lord, Lord Empey, said that it was important that people should leave school being able to read and write. There have been improvements. The move to using phonics more rigorously means that an additional 125,000 pupils are on track to read effectively. Last year, four out of five children achieved the national expected standard, or higher, in reading and writing and maths at key stage 2.
I should not pass up this opportunity to point out today’s IFS analysis—I do not know how many noble Lords have seen it—on what has happened to income inequality for families with children. It describes the fall in the numbers of children in workless households as “remarkable”. I cite that because it is very rare to get a quote from the IFS saying this is going the right way. The IFS gives the example that, for the poorest fifth of children, household worklessness has fallen from 60% to 37% over the past 20 years. Most interestingly, it highlights how earnings make up a much higher proportion of the household income of poorer children than they did 20 years ago, and how that income has grown over the period.
A number of noble Lords raised the critical issue of education. It clearly is critical, and the Government regard it as such. Since the pupil premium was introduced in 2011, the disadvantage attainment gap has narrowed by 7.1% at key stage 2 and by 6.6% at key stage 4. Our commitment to protect the pupil premium at current rates means we will provide billions of pounds of additional funds for schools to continue to boost the attainment of their disadvantaged pupils. Our ambition, as reflected in the education White Paper in March, is to ensure that every child and young person can access world-class provision, achieving the best for his or her ability, regardless of location, prior attainment or background.
Let me pick up a few of the points made about housing, which was another issue raised by several noble Lords—the noble Baroness, Lady Warwick, the noble Lord, Lord Whitty, and the right reverend Prelate the Bishop of St Albans—including the importance of having the right housing to tackle poverty. Everybody needs the security and stability of a decent affordable home, and it is a government priority to increase the provision of affordable homes. We have doubled the housing budget to more than £20 billion over the next five years. That includes £8 billion for affordable housing, which will deliver 400,000 affordable housing starts.
The point raised by the noble Lord, Lord Hunt, about bringing together health and work was well made. This goes beyond universal support, at one level, but we could look at it in that context. We still enjoy the benefit of Dame Carol’s expertise; she is undertaking a review of addiction. We have set up a joint health and work unit, staffed by colleagues from both the Department of Health and the DWP, with the aim of pulling together our approach on health and work.
Work, education and health issues are right in the centre of the Government’s sights when it comes to tackling the fundamentals of poverty. I hope that the noble Lord, Lord Bird, feels reassured that at least the questions he is asking are the same as the ones the Government are trying to answer.
My Lords, thank you very much for the past two and a half to three hours. It has been an absolutely wonderful experience for me, a new Lord, who is obsessed with the tyranny of poverty and the life sentence—the death sentence—it often gives the people I come from, who have experienced so much poverty. I think I can outdo even the noble Lord, Lord Ouseley—we can compare notes afterwards—on who has had a more rotten life, or a more rotten beginning.
Some people get me wrong when I say that there is too much emphasis on keeping the poor comfortable or making them more comfortable. I do not mean that I want to get rid of the social security system. I want to help people who need help to get out of poverty, and to help those who are incapable of getting out of poverty to do so. Just because people are dependent on the state, they should not be in poverty. It is absolutely criminal that we have people who are dependent and do not get enough.
Anyway, God bless all your Lordships. I have never met the noble Baroness, Lady Sharp, but she comes from Guildford, which is just around the corner from where I was banged up for three years, so we have a connection. I really wish her the best, so God bless her and her husband.