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Poverty (London)

11.30 am

Mr. Frank Dobson (Holborn and St. Pancras): I welcome this opportunity to draw attention to the level and extent of poverty in London and to ways of combating it.

London is the largest city in western Europe. It is a major international centre of finance and communications and our capital city--a city of immense dynamism and prosperity. For that reason, it has for too long been easy for people to ignore the extent and depth of poverty here. The largest concentrations of poverty and deprivation in Britain are here in the capital city. We have deprived neighbourhoods cheek by jowl with some of the richest neighbourhoods in the world. The City of London is probably the most prosperous square mile in the world, and is next to Hackney and Tower Hamlets, not far from Newham, and across the river from Southwark, where many people live in abject poverty.

The comparisons and contrasts to be found in the capital city read like comparisons between the first world and the third world. Infant mortality in Hackney is 10 times as high as in the London borough of Kingston. Someone living in Newham is twice as likely to die before age 75 as someone living in the London borough of Bromley, about 10 miles away. One quarter of all the families in Tower Hamlets live in overcrowded conditions. Half the children in inner London are entitled to free school meals: all this in the capital city of one of the world's leading economies.

The Government, I am glad to say, have an anti-poverty strategy. We need to ensure that the resources devoted to combating poverty are made appropriately available in London. In London we have the machinery and the commitment to pursue that strategy and make it work. That is a job for the new mayor and assembly. It will be necessary to draw up a strategy to tackle poverty, but that alone is not good enough; we must ensure that the strategy is carried out, so that while everyone in London works to make our city a cleaner, healthier, safer and more prosperous place, we must also give top priority to helping the worst-off families and worst-off areas.

Some London neighbourhoods have an unholy combination of high unemployment and low wages and poor working conditions for the people who have a job, high homelessness or, where there is a home, poor housing, high crime and disorder, and high environmental pollution. A few neighbourhoods have the whole rotten lot of those characteristics. Hamlet says:

That unholy mixture gives rise to deprivation, despair and debt. It is estimated that about 300,000 Londoners turn to legal moneylenders, but many more turn to loan sharks. These are the lowest of the low because they victimise people who are already victims. They put poor families in double and treble jeopardy. The legal moneylenders are no better financially because some of them charge real interest rates of 200 to 900 per cent.

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We must save people from accruing such levels of debt. One way of doing so is to promote credit unions, which have a vital role--and could have a bigger role--in helping families. That amounts to a good old traditional socialist way for people to club together to help one another, paying in when they can afford it so that people can borrow when they need it. I am usually in favour of creating employment, but if that would help to put loan sharks out of business, I would be happy to dance on their graves.

We need a combined effort, with credit unions offering alternatives and the police and council trading standards working together to help to save people from the loan sharks. When it comes to legal moneylenders, the Office of Fair Trading should look again at the case for maximum interest rates. I do not wish to appear too much like a class warrior, but it remains the case that the poorer people are, the higher interest rates they have to pay. If people working at the Office of Fair Trading were themselves faced with 200 to 900 per cent. interest rates, they might see more merit in setting a statutory boundary to their proposals.

Most people, unless they are very well off, need to borrow at certain times. Poor people are often so desperate that they have to borrow small sums. A poor family might need to borrow in order to buy clothes for the children at the start of a school term or school year, or kit them out for football or swimming, or even to buy a new pair of shoes. Holidays and home improvements are other examples which credit unions can help with. However, the best way of getting people in deprived areas out of the circle of debt and despair is to get them a job. I have always believed that those who want a job should be able to gain one and that, if they are working for a living, they should be paid a living wage. People should be able to work their way out of poverty. It is not true of everyone, I know, but most people who could do a job would like to have one: they would rather receive money through wages than through benefits. I want a London at work, not a London on benefits.

All over the city as I speak, business people, the Confederation of British Industry, the chambers of commerce, trade unions, the London First organisation, Labour councils and voluntary organisations are all working to make London a more attractive place in which to invest. We need new investors in jobs here. We also need to ensure that when existing firms opt for major investment in new equipment, they do so here rather than going to a green-field site somewhere outside this great city. Such firms want more skilled staff, fewer transport delays and less crime. They want their staff to have better access to decent housing and education. They are unlikely to be attracted by the proposals of one of my rivals for the Labour nomination for mayor who advocates a special London corporation tax. Imposing additional costs on London businesses is the last way to encourage people to invest for the first time or to reinvest in this area.

The mayor and the authority have a massive contribution to make to tackling poverty. As I explained, that will include reducing crime and disorder, improving the transport system and better targeting public funding for regeneration. Our promise to establish a Metropolitan police authority should improve the effectiveness of the Metropolitan police in tackling crime and disorder. Our transport proposals

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for London should bring about improvements and our proposals to establish a London development agency should mean that priorities for regeneration better reflect Londoners' needs.

All our proposals can help London to retain existing jobs and create new ones. We must use London's strengths to tackle its weaknesses. London has huge advantages--that cannot be denied. It is a major centre of communications at a time when our language dominates world communications. London is a major centre for creative industries. Its universities, colleges, research centres and medical schools are coming up with new ideas and initiatives which, if we could lock on to them, could create new jobs with a future in this city. We must do that: we must get jobs and businesses and offer better training.

London is a largely prosperous city in which, officially, about 250,000 people are out of work. They are mainly men and many are young. A hugely disproportionate number of those who are out of work are black and Asian young people. Black people and Asians are twice as likely to be unemployed as other Londoners. That is wrong. Unemployment is not evenly spread: in some London constituencies, 20 per cent. of the male population are out of work; in some wards, it is 40 per cent. In other constituencies, however, unemployment is less than 2 per cent.

Everyone wants London to be cleaner, safer, healthier and more prosperous. Anyone interested in representing London or being the mayor of London--even Lord Archer before his untimely demise--would subscribe to that idea. However, there is a further aspect if one is a socialist and a member of the Labour party: London must be a fairer place. It will be fairer, with prosperity shared properly, only if we recognise the need for that and introduce positive policies to bring it into being.

That is why I propose to establish a medical officer of health for London, who is nothing to do with the national health service and reports to the mayor and the assembly. Health is important in itself, but it is also a major indicator of poverty: ill health is a product of poverty. I want a medical officer of health for London, to monitor the capital's health, identifying in particular those areas in which people are least healthy, which are the places in which people are least wealthy.

Mr. Andrew Dismore (Hendon): My right hon. Friend mentioned inner London's problems. May I--

Mr. Deputy Speaker (Mr. Frank Cook ): Order. This is a 30-minute debate. Without arrangements with the Chairman, interventions are against the rules. There has been no indication that the right hon. Member for Holborn and St. Pancras (Mr. Dobson) is willing to give way.

Mr. Dobson : Thank you, Mr. Deputy Speaker. I shall certainly attempt to deal with the matter that my hon. Friend may have wished to raise. Poverty-stricken neighbourhoods are not confined to inner London. Boroughs such as Newham or Brent--which few are

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aware are in outer London--are, as a whole, deprived. There are also pockets of poverty throughout the capital, which we must tackle, wherever they are.

Mr. Deputy Speaker : Order. Had I known that that was predetermined, I might have been prepared for the event.

Mr. Dobson : It was not predetermined. However, I was aware of the matter that my hon. Friend was likely to raise, which was a logical step from what I was already saying.

The medical officer of health would tackle those things that are systematically making people ill, which include not having a job, being on low wages, having poor working conditions, having nowhere to live or nowhere decent to live and suffering from high levels of crime, disorder and environmental pollution. We must tackle all those issues. That is not a function of the national health service, except as almost a sideline; it is a function of many other organisations in this city. We must bring them together to ensure that we reduce poverty and its evil impact on people's hopes, prospects and health.

Poverty in this city has grown; the inequalities of wealth in this country have grown; and the fact that the inequalities between neighbourhoods have grown at the same time has frequently been ignored. The contrasts have become more grotesque and demeaning for our city and our country. We must reduce the inequalities, partly for the benefit of those who are suffering in the worst-off neighbourhoods, but partly for the benefit of us all.

Some people have warned me that I should not talk about tackling inequality because the idea is perhaps unfashionable and unacceptable to those who are comfortably off, but that has never been my view of my fellow citizens. Those who are badly off want to be better off, but most decent people who are comfortably off do not like the idea that fellow citizens live in deplorable conditions, do not have jobs, are on low wages, have poor working conditions, are subject to high levels of crime and disorder and live in a polluted environment. I have always believed that most decent people want everyone to have a decent standard of living and a proper chance to play his or her part as a fully active citizen in our society and in this city.

It has been the proud effort of the Labour party in London for 100 years to try to tackle poverty. We have achieved enormous success in that the general level is so much better than it used to be, but the inequalities between the worst-off areas and the best-off are simply unsustainable--to use a fashionable word. We cannot have a sound and decent society, or a sound and decent city, unless we tackle those inequalities. Together with many colleagues here, I look forward to working in partnership with people all over London to bring about the changes that we all want.

11.47 am

The Parliamentary Under-Secretary of State for Social Security (Mr. Hugh Bayley ): I congratulate my right hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson) on seeking and securing this important debate. He has made a characteristically

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trenchant speech full of detail and practical proposals on how to tackle poverty in the capital. Many of his proposals are on issues that the Government are tackling because he raised them in Cabinet when he was in the Government. He raised the real problem of the misery caused by loan sharks who bear down on poor people. The social exclusion unit has an action team on financial exclusion because of the lead that he gave in the Government. He is right to emphasise that the best escape route from poverty for the vast majority of people of working age is to find work. That is why London needs the kind of leadership that produces an environment in which jobs are created and opportunities are provided.

In addressing the problem of poverty in the capital, my right hon. Friend is right to stress the capital's strengths. It is a great financial centre, a home to business and a global leader in communications, arts and culture. It is one of the truly great cities, and because it has those strengths it has the ability, with the right leadership, to provide a solution to the problem of poverty. The strategy to deal with poverty in the capital will be one of the key issues in the election for London's mayor. Tackling poverty is obviously important to the one household in three in inner London that depends on means-tested benefits.

The problem is not simply for the inner city. If we pull back the net curtains in the suburbs or in prosperous parts of the inner city, we find poverty there, too. My right hon. Friend may represent an inner-London seat, but he has a long track record of sticking up for people on low incomes throughout the capital, as I know because I lived for a long time in Camden, in his constituency. He raised such issues when he was leader of Camden council, on behalf of both the people of Camden and Londoners as a whole. When he was first elected to it, the London borough of Camden was the only council in the capital that provided free travel to pensioners. Through his work, he spread travel concessions Londonwide. He did that even though people from Camden paid for a large part of it through the London equalisation scheme, because it was the right thing to do. It was right for pensioners throughout the capital, including in outer London, to have the benefits that they had in Camden.

Cutting poverty is not only an issue for the poor, because the existence of poverty in the capital imposes costs on people who are not poor. There are the direct costs of providing services for the poor, and indirect costs such as the quality of education provided in London's schools, the state of public open spaces and the fear of crime. Although the vast majority of the poor are decent, law-abiding citizens, crime in the capital costs people on higher incomes through their insurance premiums. It is in the interest of all Londoners, rich and poor alike, to use the capital's strengths to reduce the number of people living in poverty.

When people look back in years to come at the Conservative Government in the last decades of the 20th century, one thing will stand out dramatically: the alarming increase in child poverty. When the Conservatives took office in 1979, one child in 10 lived in a family in poverty. By 1997, one child in three lived in a household on less than half the average income after

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housing costs. In London, because of high rents and the high cost of living, the situation is much worse even than that: 44 per cent.--almost half of all the children in London, or 680,000 children--live in families with less than half the average income.

Children born into poor families are much more likely to be poor throughout their lives and to die in poverty. They are also more likely to die earlier. When my right hon. Friend was Secretary of State for Health, he published a report, "Saving Lives: Our Healthier Nation, which made it clear that a young male born in social classes 1 and 2 was likely to live five years longer than someone born in social classes 4 and 5.

Last year, my right hon. Friend the Prime Minister made a pledge to the nation that we would seek to eradicate child poverty within a generation. It will not be easy to do so. When he published our proposals, people were aghast at the clarity with which we set out the indicators, but we believe that it can be done. Indeed, my Department is making a contribution through the reforms that it is making to the benefits system--not least, after years of its being frozen under the Conservatives, we have introduced the largest ever increase in child benefit. From April this year, parents will receive Euro15 a week for the first child and Euro10 a week for any others.

The Department of Social Security cannot eliminate poverty on its own. If we simply increase benefits, we shall lock more people into the poverty trap. The Conservative Government were extremely good at doing that: they doubled expenditure on benefits in real terms, yet they more than doubled the number of people locked out of work and into poverty. All Departments have a part to play, including the Departments for Education and Employment, of Health and of Social Security.

Nowhere is there a better example of that than in the Department of Health. The report "Saving Lives: Our Healthier Nation makes it quite clear that the most disadvantaged are those who suffer most from poor health. Poor health is linked to community factors such as poverty, low wages, unemployment, poor education, substandard housing, pollution and crime. To tackle poverty, we need a community response: the sort of response that has been provided by the health action zones. For instance, in Lambeth, Southwark and Lewisham, the "How's the Baby Feeding? project is providing a partnership between the NHS and local people. Local mothers are providing guidance to other parents on feeding their children.

The health action zone in east London and the City has built a partnership with private sector sponsors such as Canary Wharf Ltd. and some pharmaceutical companies. It is addressing the issue of ethnic diversity in London by ensuring that health services are available in the 50 different languages spoken in the east of London. Indeed, my right hon. Friend the Secretary of State for Social Security launched his poverty strategy at the Bromley-by-Bow centre, which links health services with other community support.

The Brent health action zone provides food co-operatives, welfare benefits advice and improvements to the school health service. My right hon. Friend the Member for Holborn and St. Pancras not only talks about poverty; he has a track record over many years of

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tackling the problems of poverty within the capital. I cannot think of anyone better to lead an effective and sustained assault on poverty in the capital. His track record shows that. My right hon. Friend the Prime Minister is strongly committed to eradicating child poverty, and he is keen that someone with a track record such as that of my right hon. Friend should lead such a strategy in London.

If we are really to achieve our goal of eradicating child poverty, we need such an assault because 18 per cent. of all the children in Britain living in poverty live in the capital. If we do not tackle the problem there, we shall not achieve our national objective. We need to be clear why such an increase in poverty took place under the Conservative Government. It was primarily because they permitted such a huge increase--it more than doubled--in the number of families of working age in which no one had a job. We must reverse that trend.

We have made a start. We are reversing that trend with the new deal that my right hon. Friend the Secretary of State for Social Security helped to introduce immediately after the election. The new deal has already enabled 200,000 people to move from welfare to work, 30,000 of whom live in the capital. We have made an important start in the two and a half years since we formed the Government, but much more needs to be done. Of the 20 most deprived communities in Britain, 13 are in London. Three of the 10 local authorities with the highest unemployment rates are in the capital.

To tackle those problems, we need to create jobs. We need to create the conditions that encourage businesses to create jobs. That will not be helped by the proposal to levy a higher rate of corporation tax on businesses in London than on those elsewhere in the country. It will be helped by the constructive partnerships that my right hon. Friend proposes and that he has a track record of leading in the capital over many years.

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