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half end up unemployed and less than a quarter complete their training with a qualification or even a credit towards one. The Government have decided to cut training for work funding by some 20 per cent. That would be a positive move if the funds were redirected to schemes aimed at getting the long-term unemployed into work, and providing the training that they need to keep them there. But the recent Budget proposals provide little incentive and even less investment. They fail to get to the core of the problem. The much heralded extension of the community action programme has the net result of a reduction in places of some 10,000 compared with the current provision of 50,000 this year.

The introduction of the jobseeker's allowance will deny benefits to some 90,000 people at a time. It will extend means testing and--as is widely argued outside the House--could create disincentives for people to move into work.

The whole tenor of the Budget was to force the jobless from out-of-work benefits and thus into in-work benefits. The JSA and other schemes will have the power to force and coerce the jobless into poorly paid, insecure and dead-end jobs. There is little provision for high-quality training, which is essential to improve employability in the long term.

The one glimmer of light from the raft of the proposed measures to date has been the workstart pilot schemes. The evaluation of the four pilot projects --released, I believe, a month or so ago--shows that nearly 80 per cent. of the participants are likely to be offered permanent jobs. I welcome that. That is an important result from a pilot scheme which shows us what we can do in the future. Sadly, the Government's response in the Budget was to launch yet another pilot scheme involving a mere 5,000 of the long-term unemployed. With nearly 1 million people on the long-term unemployment list, each costing our economy some £9,000 per year in terms of benefits and lost taxes, here was the chance to grasp the nettle, to take some active measures to try to resolve the problem. I wanted to see a national benefit transfer programme introduced: instead of the benefits being paid to the long-term unemployed, they would be transferred to the employers, as a training subsidy, to improve skills and to secure worthwhile, permanent jobs.

I am sorry that the Secretary of State had to leave, but I wrote to him on this very subject in October last year. I urged him to build on the success of the pilot workstart schemes. His Department replied in November, saying that it was too costly. I wrote again and asked him what the costs were-- bearing in mind the fact that it costs us £9, 000 per year for every person who has been unemployed for more than a year. I am advised that my queries have now been passed to the Employment Service. I await its reply with some interest, because we should get to the bottom of the figures and show why it is costing so much when we could be saving so much more.

The Government's proposals to tackle long-term unemployment lack imagination, application and conviction. For example, instead of providing a national insurance contribution rebate for 12 months to employers who take on long-term persons, the Government could have taken on board our policies, which would eliminate the lower rates of employee national insurance contributions, taking 50,000 low-paid workers out of tax altogether.


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To help small businesses--the job creators of the future--the Government could have taken on our proposals to raise the VAT threshold to £60,000, which would take 125,000 small businesses out of the VAT net. But most importantly, to tackle long-term unemployment and the poverty that it causes, there must be a programme of long-term investment: in a citizens service--as we propose--which would provide opportunities for some 250,000 unemployed people to gain skills for the first time, or to share their skills with young people who are inadequately trained or who are becoming long-term unemployed; in public transport and in our public infrastructure to provide jobs now; and in education and high-quality training, to provide the skilled work force that we need if this country is to compete successfully in the global market- place. I can only endorse the conclusion of the Rowntree report. We can bandy the statistics around the House until tomorrow morning, if we so wish, but let us look at the conclusion of the report:

"Market forces, left to themselves, cannot deliver the investment that will most benefit the economy and society as a whole." I urge the Minister to think again, to recognise that mass long-term unemployment is not acceptable in our society and to accept and implement the policies that are at hand to tackle it.

5.37 pm

Mr. Toby Jessel (Twickenham): There must be huge sympathy from the whole House for the long-term unemployed, to which both the motion and the amendment refer. The boredom of long-term unemployment, the feeling of waste, the lack of self-respect, and sometimes the loss of hope, are very severe in their effect on individuals and their families. I for one do not agree that it can simply be resolved by the will to work.

The will to work can sometimes help, but it is not always enough. Many of the long-term unemployed are decent, honourable people who are unemployed through no fault of their own. The causes of their unemployment are several, but they certainly include the world trade recession, which in recent years has had a severe impact on employment in all the main industrialised countries, not only in Europe but throughout the world. Of course, a recession in world trade tends to hit hardest those countries which are dependent on trading if--due to relative over-population for the size of their countries--they have to import and export more in order to survive than more sparsely populated countries such as France or the United States, which are likely to be more self-sufficient. As Britain is one of those over-populated industrialised countries, the world trade recession was certain to bite very hard on us and severely damage employment, with the dreadful effect on individuals and families that I have just described.

Secondly, there is the changing technology. I was interested in the reference earlier in the debate to redundancies at BT. I have to declare an interest in BT as it sponsors concerts in which I perform, although I am unpaid. It is, of course, a company which has been greatly involved in modernising its technology and in computerisation, electronics, and so forth. That increase


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in technology will have reduced the number of jobs, but if it has resulted in keeping down the price of telephone calls and the price of BT's other services, it means that its customers have more money in their pockets to spend on other things. That purchasing power will generate employment in other ways. When considering these matters, one should always look at the knock-on effects.

As the Secretary of State said, unemployment is now falling. It is falling quite fast: it has fallen by half a million in the last year or two. That is a very substantial number. It leaves a tragically large number still unemployed, but it is substantial--it is far from negligible. I have been very surprised that not one Opposition Member has shown any pleasure at the fact that unemployment is currently falling quite fast.

The fact that unemployment is falling fast is due, admittedly, to the beginnings of an upturn in world trade, although Britain has come first of the countries in Europe and among the first in the world in that upturn. I believe that the fall in unemployment is at least partly due to the United Kingdom's having come out of the exchange rate mechanism in the summer of 1992, which I advocated and which I believe was the right thing to do. It had to be done--there was no choice, eventually--and I wish that it had been done sooner. That enabled interest rates to drop further than they had already begun to drop, and faster than they would otherwise have dropped.

Increased purchasing power for individuals and companies who were not having to pay out so much in interest increased the profitability of businesses and their propensity to take risks and make positive investment decisions. I am quite sure that coming out of the ERM has been one of the causes of the improvement in our economy, and I am very surprised when sometimes some people seem to deny it. But it is only one of the causes.

Another cause has been the highly successful management of our economy by the present Chancellor of the Exchequer since he took office. We now have a real growth rate of about 4 per cent. per year in our economy, and that is having a substantial impact on the number of people employed and the reduction of unemployment.

I believe that it is very important indeed to keep that reduction in unemployment steady--falling at a fairly steady rate. It is very important not to try to hike it up artificially: if we do, we shall get once again a speeding up of inflation, which will threaten the very unemployment that it is intended to diminish. The inflation will increase the price of British goods sold overseas, which will limit our opportunities to sell overseas and damage the very employment to which both the motion and the amendment refer. It is vital for employment--I am surprised that Opposition Members have not mentioned this--not to allow inflation to let rip, but to keep a very steady and strong hand on the tiller and not be tempted.

I believe that there are three main threats to the drop in unemployment and the improvement in employment. Two of those come from the Labour party. I should be grateful if the hon. Member for Peckham (Ms Harman) would kindly do me the courtesy of listening as I am about to refer to her party policy.

It is very important that the Labour party is not allowed to encourage, by what it says on employment, any increase in inflation. Secondly, it is very important that the party is never allowed, and never given the


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opportunity, to bring in the minimum wage that it has proposed, because that would diminish employment prospects, too. But at least we know where we are with the Labour party on that: it would bring in a minimum wage. We would not bring in a minimum wage. The hon. Member for Eastleigh (Mr. Chidgey), who has just spoken, was of course quite unable to say whether his party would bring in a minimum wage or not. He is sitting on the fence, and his party conference disagreed with the leadership.

Mr. Chidgey: It is perfectly clear to anyone who reads our policy documents that we are in favour of a regional minimum wage. I did not mention it in my speech, however; the hon. Gentleman must have been listening to someone else.

Mr. Jessel: How can we know, if the hon. Gentleman's party conference blatantly contradicts the policy of the leader of his party as to what he would do? But as his party does not stand the remotest chance of ever being in office--indeed, when the general election comes his party is highly likely to lose some seats below the fairly small number that it has- -this is not a matter which is ever likely to be put to the test.

The third threat to employment--a very serious one which has not been mentioned at all in the debate so far--is the enormous industrial growth of the Pacific rim. As in Britain 40 per cent. of our exports go to the European Union and the other 60 per cent. to other parts of the world, this is an extremely serious matter for us, because that 60 per cent. of our exports will be in competition with exports from the Pacific rim countries. So often we hear discussion, both in this House and in European assemblies, about trade within Europe, and there is not nearly enough discussion of Europe's exports to and trade with the rest of the world.

Let me put the position as it affects employment into perspective. Going back 30 or 40 years, everyone was aware of the growing industry in Japan-- first in cameras, then in audio equipment, then in cars--and of how all those were selling all over the world. Then we found it emanating from countries like Taiwan, Hong Kong, and North and South Korea. Now we are into a sort of third wave. Many countries in south-east Asia and the far east are developing industries. I went with a Commonwealth Parliamentary Association delegation to India two years ago. The threat to our export industries from the type of modern industry that one can see in Bangalore, and hence the threat to our employment, is very significant.

In Bangalore there is a factory making a telephone exchange--the size of a rugger ball--which can sell to any village, and the telephoning can all be done now by radio, or at least without wires, through this mini-exchange which costs about £3,000. It is selling now to villages all over Asia, Africa and other parts of the world. There is a huge growth of industry in China and a huge growth in Indonesia, the Philippines, Thailand and all over the far east. It is burgeoning, and it is a huge threat to employment in this country. I believe that the policies of the Government must be directed more to how we are to uphold our employment in future in the face of this tremendous threat to it from the far east and south-east Asia. One of the main causes of poverty, however, has nothing to do with unemployment. The hon. Member for Eastleigh said that unemployment was tied inexorably to


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poverty--or it may have been the other way round--but it is certainly not true that the sole cause of poverty is unemployment or the state of the economy. I find in my constituency that a major cause of poverty is the existence of single-parent families in large numbers. I am not making any kind of moral judgment; I am just saying, as a matter of fact, that they come to my surgery and write to me. I know that they exist in large numbers, and indeed the remarkable document, "Social Trends"--which was published a week ago--refers to the increasing number. One third of births in this country are now out of wedlock, and "Social Trends" says that marriage is a declining institution in this country, as we all know already. Some of the single-parent families are due to deserting husbands or deserting lovers who have jilted their wives or their partners.

Ms Corston: I note the hon. Gentleman's concern about the growth in single-parent families. Will he explain what policies he would support and propose to the Government for improving child care so that those women do not have to be dependent on the state; they sure as hell do not want to be dependent on welfare?

Mr. Jessel: Of course we need more child care. The hon. Lady will have heard the Prime Minister speak of an increase that he intends, as Government policy, in nursery education and, presumably by the same token, in the provision of play groups. But that is to deal with the symptoms rather than the cause of the problem.

The cause of the problem is the increase in the number of single-parent families. In some cases, the women concerned may wish to have children without being married. In other cases, it may happen because they have been seduced. Whether it is intentional or not, it is tending to increase and it is a major cause of poverty. Unless there is some change in that cause of poverty, it is likely to continue. I mention it because it is completely false to attribute all poverty to the state of the economy or to unemployment. I wish to turn from that to the subject of diet.

Mr. Roger Godsiff (Birmingham, Small Heath): I represent a constituency with one of the highest percentages of single-parent families in the country. The hon. Gentleman has referred to, as he sees it, the problem of young ladies being seduced. Would he like to enlighten the House as to what his policy would be to try and stop them being seduced?

Mr. Jessel: I think that I might be called to order by Mr. Deputy Speaker if I attempted to give a full answer to that very interesting question, but I will take the hon. Gentleman aside afterwards, if he wishes, and explain to him the facts of life, which I think go beyond the scope of this debate, if I may say so, Mr. Deputy Speaker. I was about to turn to the factor in poverty of diet. "Social Trends" gives a considerable description of changes in the pattern of diet. I hope, Mr. Deputy Speaker, that you will consider this as relevant because other hon. Members have referred to health and education in the context of poverty and the content of diet undoubtedly affects people's standard of living. It is most interesting to see that in the past 20 years there has been a substantial drop of about two thirds in the consumption of sugar, which was a staple for poor families, and a drop in the consumption of beef, veal and eggs-- the beef and veal, of course, being relatively expensive items and the eggs a


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sort of half-way item. The information about healthy eating, whether in terms of cholesterol or in relation to an excessive intake of calories, has diverted people away from those diets. They are eating instead more fruit, more chicken and more cereals. If more people could be encouraged to have allotments and to grow their own vegetables, if they are in poverty, that would help to relieve their situation. In my constituency, about one third of the allotments are out of use. No one wants to be bothered to grow his own vegetables. People sit in front of the television for hours on end, complaining about their poverty and not growing vegetables when they could do so easily and cheaply. [Interruption.] The president of the National Society of Allotment and Leisure Gardeners Ltd., Lord Wallace of Coslany, is a distinguished Labour Member of the other place. Opposition Members of this House would do well to stop laughing and encourage people who are feeling the pinch--as unfortunately some people are, whether due to unemployment or to other reasons--to go out and take an allotment. That would be a positive step, which could be a healthy activity and at the same time relieve poverty.

Of course expectations change. Going back 50 years, people's idea of poverty was completely different. Today, everyone expects to have a television, for example. I believe--and the Minister will correct me if I am wrong--that more than 40 per cent. of pensioners in this country now run cars, or more than 40 per cent. of pensioner households, including married couples who are pensioners, whereas 20 years ago the figure was only about 20 per cent. That is a remarkable social change and shows that an increasing number of pensioners are not in poverty.

I like to think of elderly people driving around in cars, making visits and going to see their children and grandchildren, which they can do more easily thanks to the large number of main roads that we have built, as these days most people live in a different place from their grown-up children and their grandchildren. It is a fact about the pensioners' standard of life, which contradicts those who say that this country is living in poverty, that so many pensioners now own cars.

Likewise, I have found from our Library here in the House of Commons, which sent me a paper on the matter this morning, that 57 per cent. of households have access to a video, which would never have been the case 20 years ago as there were not any around; that 78 per cent. of the poorest 20 per cent. have access to a freezer; that 85 per cent. of the poorest 20 per cent. have a fridge; that 73 per cent. have central heating in their house or their flat; and that 72 per cent. have a telephone.

Some people are therefore exaggerating the amount of poverty in this country. It remains a serious problem for some people, and we must strive to continue the improvement in our economy, so as to mitigate poverty, but I believe, with Abraham Lincoln, that one cannot strengthen the weak by weakening the strong. The egalitarian policies of the Opposition will, in the end, not benefit those who are in poverty, but will have the reverse effect. So I hope that the House will, by a decisive majority, support the Government amendment and reject the Opposition motion.


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5.57 pm

Ms Mildred Gordon (Bow and Poplar): I was very surprised to hear the Secretary of State for Social Security trot out that hoary old phrase, "the politics of envy". I think it was indicative of his callous approach to the problems of poor people. Does he condemn poor people as being envious, when they aspire to have good clothing, good diet, good education and a neat warm home for their children? When richer people rightly want to give their children the best of everything, that is described as a laudable ambition. When unfortunate people sleeping in the streets envy those of us in our warm beds, are we to condemn that?

It has been my opinion for a long time that working-class people do not demand enough. They are too easily satisfied. They are not envious enough. They set their sights too low and they allow themselves to be ripped off time and again by this Government. Pensioners whose pensions are no longer linked to wages have been ripped off by the Government. Women pensioners, whose pensions are lower than those of men, will be ripped off by losing five years of their entitlement. That will add to the number of women who are living in poverty, and it is women who are the largest proportion of the poor.

When those who have paid national health insurance contributions all their lives are old and need help from the health service, they often find that the help that is needed in hospitals and in the community is no longer there. Those who paid their national insurance contributions in the expectation that, if they were ever unemployed, they would be taken care of by the safety net of the welfare state will now lose half their entitlement. All those people are being ripped off by the Government.

Conservatives rubbished the Rowntree report as left-wing propaganda, but very few noticed that it was in fact in full agreement with a series of reports on deprivation published the previous week by the Department of the Environment. The Department of the Environment has not exactly been known for left-wing propaganda. Its reports set out the stark facts of poverty at the beginning of the 1990s. They showed that 20 per cent. of households, or approximately 20 million people, are living in poverty, and that includes one third of the country's children. They also showed that 10 million people in Britain live in inadequate housing, which means, for example, that their homes are unheated or damp or that older children have to share bedrooms. Seven million people go without essential clothing such as warm waterproof coats or solid shoes because of lack of money, and 5 million are not properly fed by today's standards. We should be taking those standards into account, something that many Conservative Members have not done.

The Rowntree report argued that, left to themselves, market mechanisms will not deliver levels of education, training and investment in human capital that are optimal for the economy and society as a whole. Similarly, the Department of the Environment's reports stated on the basis of past trends that any economic recovery in the 1990s will have very limited impact on the numbers experiencing poverty and deprivation.

Although Government policies have made things bad in the country as a whole, the situation is far, far worse in Tower Hamlets where my constituency is located. There, 38 per cent. of households are forced to live on the


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breadline, and 46 per cent. of children-- almost half--live in households without any earners and which are dependent for survival on benefits and the help of their families. They have little future to look forward to.

In the east end of London, for every 100 16 and 17-year-olds with a job, 74 are unemployed and 25 are on a Government scheme. Some of those youngsters have been on a number of training schemes, with no job at the end of the line. Half the young population is unlikely to get work in the foreseeable future, and the situation is no better for many of their parents. Thirty- five per cent. of men between 55 and retirement age in the east end have been thrown on the scrap heap and are unemployed and have little prospect of ever working again. The household of the poor child is often also the household of the unemployed older sibling and the redundant father, and there is no role model of anyone in gainful employment. It is no wonder that people become deeply depressed.

However, in the sea of poverty and despair in Tower Hamlets live and work some of the wealthiest people in our society, in what was planned to be "Manhattan on the Water" on the Isle of Dogs. Billions of pounds of public money were poured into it. The Government's policy of voodoo economics has caused some of the greatest social polarisation and poverty that this country has ever had the misfortune to witness, and nowhere is it more glaring than in my constituency on the Isle of Dogs.

Recent research points to the fact that countries such as Japan, where inequalities are fewer than in Britain, have less ill-health among the lower-paid and a longer expectation of life. The hon. Member for Teignbridge (Mr. Nicholls) was incorrect when he tried to point out that absolute poverty was the important factor. Because people in some countries live happily on a handful of olives, bread, oil and some rice and nuts, we cannot expect the same in a European country. Conditions are very different.

Conservative Members should take into account the fact that it is not only the shortage of money but relative poverty and inequality that create the stresses which add to breakdown in health. Poverty is relative--that is the important point that the Minister and most Conservative Members have failed to recognise. If that were not so, how would the hon. Member for Teignbridge and other Conservative Members explain the fact that, after decades of rising expectation of life, the trend has now gone into reverse for men in lower-income groups between the ages of 15 and 44? The chances of dying before the age of 65 increased for men in those groups in the 1980s. Even though the average expectation of life is 79 years for women and 73 for men, among the poorest people, men are more unhealthy and dying younger than those at the opposite end of the income scale. Their life expectancy is 10 years less. Poor people are also 75 per cent. more at risk after surgery than rich people.

That inequality in health begins at birth, or even before. There is now an increase in the number of babies born with a low birth weight in poorer families and there is higher infant mortality and infant illness in deprived groups. The baby of an unskilled manual worker is one and a half times more likely to die in the first year of life than the baby of a professional worker or manager. That is a dreadful statistic.

Asthma is a major problem in my constituency. It is partly due to air pollution, but also due to other social conditions. The number of children with asthma has


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almost doubled and two thirds of them come from poor families living in cold, damp houses. The poorest children are twice as likely to die from respiratory diseases as children from social class 1. The Black report showed that material deprivation played a major part in causing ill-health. It is true that poor people have always been less healthy than the rich, for obvious reasons, but since the 1980s the gap has grown wider. That is the disgraceful fact. Stress, unemployment, financial worries, the inability to afford normal social activities--small things such as buying birthday and Christmas presents become very important when one cannot afford them, and repairing broken equipment such as a cooker or fridge is a cause of worry when one has no financial reserves-- and the hopelessness of long-term unemployment all bring on depression.

It has been mentioned that the suicide rate has increased by 75 per cent. in Scotland. Young unemployed men are 10 to 15 times more likely to attempt suicide than others and, in some areas, suicide is the third most frequent cause of death in young men after heart disease and cancer. That is not a very good reflection of our society.

When people without hope who are living in poverty and despair are put side by side with those who flaunt their wealth, the former are often seduced into looking for scapegoats and the fascists are only too willing to provide scapegoats, as we saw in Millwall not too long ago. I warn the Government that if the gap between rich and poor continues to increase, the problem will spread to the rest of the country, just as it has spread in Tower Hamlets. All the police and private security guards will not be enough to prevent the breakdown of society.

Despite the philosophy of the previous Prime Minister and this Government-- I believe that the previous Prime Minister said that there was no such thing as society--society is about far more than feeding the greed of the men at the top. The overwhelming majority of my constituents and the British public are appalled that £23 million is being given to the heads of electricity companies, while we have children begging in our streets.

As the eminent sociologist Peter Townsend has said:

"poverty kills, this is not a political opinion, it is not a social comment, it is a scientific fact".

6.9 pm

Mr. David Lidington (Aylesbury): Anyone who has even a passing acquaintance with the areas of inner London represented by the hon. Member for Bow and Poplar (Ms Gordon) will have some sympathy for the passion with which she spoke about the problems there. Although I represent a constituency which is--in average terms--much more prosperous, pockets of it mirror at least some of the problems which she described. Indeed, when I contested another inner-London seat next door to the constituency of the hon. Member for Peckham (Ms Harman) in 1987, I remember being moved and impressed by the scale and the history of the social and economic problems that I saw in north Lambeth.

The disagreement between Conservative and Opposition Members today is not over the importance of finding the right mix of policies with which to tackle the challenges posed to our country by unemployment and poverty. There is--I believe--common ground and common motivation on that front. The difference between


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us lies in our analysis of which policies would be most effective in ameliorating those severe and deep-rooted problems.

Some Labour Members have expressed some recognition of the fact that the problems which we are debating go deep into the history and social structure of the country. The hon. Member for Barrow and Furness (Mr. Hutton) spoke about the importance of family circumstances, and he touched on racial discrimination. Indeed, several hon. Members, Labour and Conservative, have focused on the way in which poverty and unemployment, especially long-term unemployment, have become concentrated in particular parts of the country, sometimes in very small neighbourhoods in towns and cities. That should warn us that there is no quick fix.

Roughly 35 million people are unemployed in the developed countries which are members of the Organisation for Economic Co-operation and Development. That is certainly the highest level since such records were kept. The incidence of unemployment, especially of long-term unemployment, is higher in Europe than in North America or Australasia. Indeed, the problems of unemployment are more severe and, if anything, tending to worsen, in the nations of continental Europe which pursue the policies advocated by many Labour Members. Conversely, in the United Kingdom, unemployment is falling sharply, and falling well ahead of the trend in most of the rest of the continent.

I shall speak a little about the Rowntree report, which, rightly, has been at the heart of much of the debate so far. I do not dismiss the report's findings out of hand, but it needs to be looked at critically. My doubts were first stimulated when I considered a paragraph and a graph on--I think --page 9, that sought to compare the position in the United Kingdom with that in other industrial countries. I found that a set of international comparisons compared different countries over different periods of years.

The graph ran from 1977 to 1990 for the United Kingdom, it ran from 1983 to 1990 for Germany, and for France it ran from 1984 to 1989. For other countries, the period studied and used for the purposes of comparison varied from as little as four to as many as 18 years. The author may be a reputable academic, but that failure to compare like with like suggests flaws in the methodology of the report. My doubts were reinforced when I considered the evidence relating specifically to the United Kingdom. I saw a great reliance placed on one particular measure of wealth--the survey of households receiving below average incomes. That survey, with its strengths and weaknesses, shows that only half of the so-called lowest tenth of the population are dependent on income-related benefits.

As my right hon. Friend the Secretary of State pointed out, about half those who reported to the survey that they had an income of zero or less spent more than the average for the nation as a whole. In addition, the Rowntree report does not provide any thorough analysis of the movement in and out of the different deciles which it tabulates.

Perhaps most important of all, there are no costings whatever in the report. Of the menu of policy options, some are attractive, and some I have grave reservations about, but, in every case, what is needed and what the


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report does not provide is a clear economic analysis of the tax measures needed to finance those policy changes, and an outline of the effect that any such changes in this country's fiscal arrangements would have on the broader economy. Money can be spent only once. When it is taken out of the pockets of the workers to pay for what the Government of the day consider desirable projects, it cannot be spent on other forms of consumption or savings. We need, too, to look at the survey of households in the Rowntree report alongside other measures of wealth and income--notably, some of the measures in the report in the 1995 social trends survey. My right hon. Friend the Secretary of State pointed out earlier that ownership of consumer goods has grown significantly, even among the lowest tenth of the population with regard to income. However, when one looks elsewhere in the social trends survey at records of wage rises during the 1980s, a very different and much less gloomy picture appears than that described by Opposition Members.

Let us consider the records of gross wages for people in work during the past 10 years. Stripping out inflation and considering the figures at 1994 prices, the average weekly wage of a nurse in 1981 would have been £188, yet in 1994 it would be £316. For a cleaner, the average weekly wage would have risen from £110 to £180, and wages for a waitress would have risen from £138 in 1981 to £157 in 1994. The same survey estimates net incomes after deductions for tax and additions to income by state benefits. Let us not consider the rich--nobody denies that the wealth of the richer members of society has increased over the past decade--but look at the figures for those on the lowest decile point.

A married man with two children who, in 1981, would have earned £137 net, including earnings and benefits, would have received £174 in 1993, including family credit. The net income of a single woman on the lowest decile point, again with two children, would have risen over the same period from £70 to £172. From those figures, we see the need to treat the despairing noises from the Opposition Benches with extreme caution. We also see evidence that tends to endorse the Government's policy of trying to concentrate money available to be spent on social security towards those people in the greatest need.

Ms Corston: As the hon. Gentleman is talking about incomes in the lowest decile, is he aware that figures released by the Department of Social Security reveal that a single adult in the poorest one tenth of the population, at April 1994 prices and in comparison to 1979, is £364 a year worse off, while a single adult in the richest one tenth of the population is £5,616 better off? That is the scale of the change, and that is what the debate is all about.

Mr. Lidington: The hon. Lady is wrong to assume that an increase in the earnings of the better-off is necessarily a bad thing. It is clear that the evidence I have seen--the hon. Lady did not say which figures she was quoting--from the small print of the Rowntree report and from the broader surveys reported in "Social Trends" shows that the growth in net incomes has taken place across almost every group in society, regardless of whether they started on a low or a high income.


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I acknowledge the fact that we confront real problems in deciding how to spread opportunity among people who have relatively little opportunity at the moment, and, above all, how to get people back into work.

It can be inferred from the Rowntree report that the composition of the lowest decile of the population has changed over the past decade. There are far fewer pensioners in that group. The Rowntree report suggests that the regrettable rise in unemployment in recent years has been responsible for much of the pattern in incomes that it reported.

Mr. Clappison: Has not my hon. Friend touched on a very important point, namely, the improved position of pensioners since 1979? As more and more pensioners have the benefit of occupational pensions and savings which are protected from inflation, does not that mean that, in future, it is likely that pensioners will comprise an ever smaller proportion of the bottom one tenth of the population?

Mr. Lidington: I am grateful to my hon. Friend, as he has put his finger on an extremely significant point. As new pensioners bring with them into retirement the benefit of savings and personal occupational pensions policies to which they have contributed during their working lives, the proportion of pensioners in the lowest income groups will continue to fall.

Having acknowledged the problems, I want to suggest measures which the Government should or should not take to tackle the problems. I want first to consider what the Government should not do. It is vital that they do not abandon a macro-economic policy which gives priority to the need to contain and to reduce inflation.

As my hon. Friend the Member for Hertsmere (Mr. Clappison) said, more pensioners these days can take advantage of income other than the state retirement pension. However, as the Rowntree report states, and as we are all aware from our constituency surgeries, there are still pensioners who are not well off. Often they are pensioners whose income is slightly above the threshold at which they become eligible for various state benefits.

However, those pensioners are very often people who were thrifty during their working lives in the 1960s and early 1970s, and who saved only to find that their life savings were eroded, and almost completely dissolved, by the high rates of inflation of the late 1970s through to the beginning of the 1980s.

It was not the free market that betrayed those people; it was successive Governments who debased the currency for political motives at the expense of those people's savings. Whatever our political allegiance in this House, that experience should mark all of us. There should be a common determination to ensure that such a disastrous state of affairs does not occur again.

Nor do I believe that the Government should succumb to the dangers and temptation of protectionism. There was an episode in the speech by my hon. Friend the Member for Twickenham (Mr. Jessel) in respect of which I feared that he was urging a protectionist course on the House, in--in my view--the mistaken judgment that that would help to protect jobs here.

The growing prosperity of countries, like India, which we have previously described as part of the undeveloped or third world, is something that we should welcome. We should welcome it because it means that millions of


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people in those countries can now seek to aspire to the material standards of living that people in this country and in the rest of the developed world have taken for granted for many years. In addition, growing prosperity in those countries provides market opportunities for British businesses to go out and sell their goods and services to the consumers in those countries. I want the Government not to shut the doors against world trade, but to encourage our businesses to take full advantage of the opportunities as they present themselves.

With regard to what the Government should not do, I warn them against any thought that redistribution is somehow the answer to the problems facing this country.

Mr. Graham: Why?

Mr. Lidington: I will explain why. Opposition Members should also ask the hon. Member for Glasgow, Garscadden (Mr. Dewar) why, because he took great care to tiptoe around specific commitments to redistributive measures. However, implicit in his critique of the Government, and implicit in the critique of every Opposition Member who has spoken so far, was the idea that somehow our problems could be solved by taking money away from the rich and giving it to the poor.

The hon. Member for Garscadden seems to see himself as a Presbyterian Robin Hood preparing to distribute goodies from the undeserving to the deserving. However, the truth is that there is no phalanx of plutocrats waiting to be milked in order to distribute extra resources to the poor. If serious redistributive policies are followed, that will mean very much higher rates of taxation for middle- income workers and their families.

An interesting analysis in the Organisation for Economic Co-operation and Development study on employment suggests that, for the United Kingdom to provide every family with a basic income of 30 per cent. average earnings, it would take a standard income tax rate of about 37 per cent., together with the abolition of housing benefit, council tax benefit and other income -related benefits.

Frankly, Opposition Members are trying to fool the House and to mislead the British people if they seek to insinuate that a policy of redistribution could begin to tackle the problems which this country confronts without causing the need for very high rates of taxation, with the consequent disincentives to work for the majority of the working population.

What should the Government do? In that regard, I want to refer to several areas of policy.

Mr. Jimmy Wray (Glasgow, Provan): Is it fair that every senior citizen and every gas, electricity and telephone bill payer must pay standing charges? Is it fair that 78 per cent. of Glasgow council tenants receive housing benefit? Is it fair that the Government's policy is to transfer housing stock to Scottish Homes and other housing authorities, thereby leaving local authorities with massive debt? Local authorities have been borrowing for more than 60 years to house a small number of tenants. That situation has been created--

Mr. Deputy Speaker (Mr. Geoffrey Lofthouse): Order. That is a very long intervention.

Mr. Lidington: I am sure that the hon. Member for Glasgow, Provan (Mr. Wray) will try to catch your eye


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later, Mr. Deputy Speaker. To take the first of his points only, not every pensioner lives in poverty. Help for pensioners should be concentrated, through the social security system, on those who are in need, rather than there being a blanket subsidy which benefits dowager duchesses as much as people who need help.

When I urge a course of policy upon the Government, their decisions will be influenced by what can be afforded in a certain year and by the competing demands of the various good causes which present themselves to the Treasury every autumn. However, the key seems to be action to reduce unemployment. More could be done to relieve the burdens on business, which still provide disincentives to recruit extra people.

Only this weekend, I talked to small business men in my constituency. They said that they would like to hire extra workers but that the combination of payroll taxes, form-filling and the regulations that apply to adding to a payroll act as a very significant disincentive. I hope that, as scope becomes available to the Government to reduce taxation again, they will look at ways in which to lift further the tax burden on businesses and encourage them to recruit more people. Deregulation, especially through the new powers in the Deregulation and Contracting Out Act 1994, can play a part.

The Rowntree report and numerous commentators have pointed to the importance of education. It is true that people who have a poor education and few skills are most likely to join the ranks of the unemployed, particularly the long-term unemployed, or to end up in low-paid, insecure jobs.

The answer is certainly not a matter of money: it is a matter of ensuring that choice, rigorous inspection and testing act together to drive up education standards, so that all children, before they reach the labour market, are equipped for the working world in which they will have to live and in which they will have to be prepared to be adaptable throughout their working lives. Much more could be done--for example through Ofsted--to disseminate best practice among schools. In the end, it will be partly a matter of money. I hope that, when the pressures on Government borrowing have been successfully reduced by the tough but correct decisions of the previous two Budgets, the Government will place education firmly at the head of their priorities.

My personal view is that primary education is a higher priority than nursery schools, colleges or universities. It is in the five-to-11 or 12 age group that the crucial learning period takes place. To a great extent, it determines whether a child will succeed in his career.

The hon. Member for Bow and Poplar and I sat on the Education Select Committee inquiry into the disparity of funding between primary and secondary schools. We found that, since the second world war, under Governments and local authorities of both political colours, primary schools had been funded at a much lower level than secondary schools, for no scientific reason but simply because that had always happened. There is a cause that the Government could take up.

The Government must look carefully at their family policy. Again, the Rowntree report mentioned family policy as one cause of the problems of poverty and


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