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Poverty (London)

11 am

Ms Karen Buck (Regent's Park and Kensington, North): I am grateful to have the opportunity to discuss issues around the welfare-to-work programme and the Government's agenda for tackling poverty, with particular reference to London.

Before I discuss London, I shall set the debate in context. I support and admire the Government's approach in the past five years to tackling poverty and unemployment. They set themselves the ambitious target of halving child poverty within a decade and abolishing it within a generation, which, as independent organisations such as the Child Poverty Action Group have recognised, is unprecedented. The group said, slightly tongue in cheek, that it had been given a stick with which to beat the Government. The strategy is risky but completely right.

The Government correctly identified that poverty is rooted in several factors, rather than being dependent only on a household's individual financial income. They have adopted a bundle of indicators to establish the efficacy of the measures to tackle poverty. That is the context in which investment in public services has been proposed, in addition to area-based regeneration schemes such as sure start, the new deal for communities and the neighbourhood renewal fund. The Government have also introduced the Tax Credits Bill, on which I shall comment in more detail later. They have given extra help to families who are on benefit through a significant increase in the children's element of income support. Additionally, the child tax credit, which is in the next wave of tax credits, will be introduced next year.

Such measures have had a dramatic impact on poverty throughout the country. Independent experts have confirmed that 1.2 million children have been lifted out of poverty. The communities on which the area-based initiatives have impacted have warmly welcomed them.

London, however, has not benefited as much as it should have from the national strategy. Over recent years, London has enjoyed significant economic success; it has been a booming city, an exciting place in which to live. Both employment and earnings growth has been very strong, and people who have done well in London have experienced some very happy years. The events of 11 September caused a dip in economic confidence but we seem to be bouncing back from that.

However, alongside the success story is a story of poverty, deprivation and unemployment. Progress has been made but not to the extent of other regions. London continues to have the highest percentage of children in poverty in England. Forty-three per cent. of children are in households with incomes below half the national average. The decline in the number of children in poverty has been smaller than in other regions.

After housing costs are taken into account, a much higher proportion of London's population is in the lowest income band: income below £150 a week. Twenty-nine per cent. of Londoners live in households in that band; 24 per cent. of people are in that band in the rest of the United Kingdom.

Of course, London has a disproportionate percentage of its population in the higher income bands, and that is part of the problem when examining the distribution of

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resources. The polarisation of incomes in London is part of the problem of economic inequality. During the debate in the House on Friday, I described the problem as the tyranny of the average, because it leads to a misleading indicator of the state of London's population.

Median average income—that is, the point in income below which half the population fall—is only 1.5 per cent. above the national average. Not including housing, prices are 5.7 per cent. above average, so the evidence suggests that average living standards are lower in London than in the rest of the United Kingdom. I am grateful for that new analysis of the figures, which was produced for the Department for Work and Pensions by the Greater London Authority and the Mayor's Office.

London has a higher proportion of children in workless households than any other region: in some 26 per cent. of households in London there is no adult in employment. Inner London has double the national average of children from lone-parent families, who, as we know, are at the greatest risk of poverty. Since the early 1990s, unemployment in London has consistently been above the British average. Our unemployment rate is the second highest regionally, and is especially severe among black and ethnic minority communities, half of which live in London. The unemployment rate for white Londoners is close to the national average, but the rate for black and ethnic minority Londoners is almost three times the national average.

Some 40 per cent. of the 25 Parliamentary constituencies with the highest unemployment rates in the UK are in London. London's rates of job entry through the new deal are below the national average. Take-up of the working families tax credit, the foundation stone of the Government's welfare-to-work strategy, is lower in London than poverty indicators suggest that it should be. Some 10.2 per cent. of families receive the working families tax credit in London compared with 16.3 per cent. nationally. The disparity is even starker among lone parents: those in London are half as likely to receive the tax credit as those elsewhere in the country. I am grateful to the Association of London Government, the GLA, the Mayor's Office and the House of Commons Library for those statistics.

There is no doubt that we have a serious problem with poverty, deprivation and joblessness in London. I have two purposes in securing the debate, apart from that of putting those facts on the record. The first is to highlight that Londoners need more help to tackle poverty effectively through the employment path and other strategies. The second—I believe that other hon. Members will talk on the subject—is to highlight the fact that aspects of the welfare system are penalising Londoners and must be removed if we are to reduce poverty.

Why is it that, alongside London's vacancies, economic strength and success, there is such a serious problem of poverty and joblessness? Why, with our underlying economic strength, does the take-up of the welfare-to-work programme appear to be less effective in London? I do not fully understand why that is so, although I have some theories. It is time for the Government to carry out serious research to establish the reasons. I ask the Minister to give an assurance on that subject. Whenever we have discussed those issues—

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for example, when considering the Tax Credits Bill—I have been told that the problem is rooted in take-up, and that there is an awareness issue about measures such as the children's tax credit and the working families tax credit.

I do not doubt that take-up is part of the problem. Constituencies such as mine have a high level of social mobility and high population turnover. For many people in houses of multiple occupation, getting the post is a nightmare. Readership of local newspapers is low compared to that in other regions. The multiplicity of media outlets may be exciting but it means that it is difficult to get a message through to people. Also, 130 languages are spoken, so it is especially difficult to reach minority communities, which are among the poorest.

Take-up is undoubtedly an issue, but it is not the only one. The poorer populations of London face structural problems, which means that however much money we pump into take-up campaigns, we will not completely reverse the disparity in the take-up of working families tax credit and in levels of unemployment. It is my assumption that the problem is rooted in joblessness. If we are to cut child and adult poverty—pensioner poverty falls largely under a different category that I am not talking about today—we must get to the heart of the problem of joblessness in London.

Mr. Edward Davey (Kingston and Surbiton): I support the hon. Lady's request to the Government for a special review and study of the issue. Who would she like to be involved, not just from the Government but from the many other players in London, in order to ensure that the study is effective and is undertaken urgently?

Ms Buck : I am grateful to the hon. Gentleman. He is right. Communities have different experiences, and an understanding of the barriers to take-up and participation must be rooted in community experiences. A multiplicity of organisations, including local councils, the London development agency and women's and child care organisations, have an important role to play and should be part of the process. We should listen to them to find out what they regard as problems.

Joblessness in London is at the heart of the problem. It is the reason why Londoners cannot break free from poverty and use the working families tax credit as a stepping stone out of poverty. The welfare-to-work strategy, in all its forms, is not working as well in London as it is elsewhere. That is not a criticism of the programme or its policies, which I back 100 per cent. It is an argument for a more focused look at why the strategy is not as effective in London.

Let us take the example of the new deal. Figures provided by the Centre for Economic and Social Inclusion show that the job-entry rate through the new deal in London is below the national average, with central London districts such as mine and, I am sad to say, that of my hon. Friend the Member for Hammersmith and Fulham (Mr. Coleman) performing particularly badly. That is partly because London handles a high proportion of unemployed people with multiple disadvantages, including those who have

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experienced homelessness, the prison system, mental health or drug problems and those with literacy or language problems. The Government could do more to address that important issue.

The agencies of delivery, particularly the Employment Service, have a disproportionate difficulty in recruiting and retaining the staff necessary to guide those with multiple disadvantages through support programmes and into work. If the new deal and Jobcentre Plus are to deliver to Londoners and contribute to cutting poverty through work, extra resources will be needed to pay personal advisers better in order to retain them longer.

I regularly go to my local Employment Service and sit in on interviews. I am saddened by the fact that good people do not stay. They move in order to earn more, and I do not blame them; they are not paid terribly well. We need to keep people of especially high quality in London, so that we can use their skills to develop properly tailored packages for the people who need them, especially lone parents.

We need to overcome the barrier of child care. The proportion of lone parents in the capital is much higher than in the rest of the country. I am grateful to the Library for its excellent research on the subject. Lone parents are much less likely to have family support networks that provide informal child care. Only 18 per cent. of pre-school children in inner London are looked after by grandparents compared with 34 per cent. across the country. The need for child care is greater, particularly for lone parents, yet the provision of affordable child care is significantly lower.

Although there have been improvements in recent years—the national child care strategy is a welcome development—the Daycare Trust said last Friday that the imbalance between quality child care places and need was particularly severe, with a place for fewer than one child in seven. Last summer, the Daycare Trust carried out an analysis of day care costs and found a shortfall between the cost of child care in London and the subsidy from the working families tax credit: it is £40 a week for a nursery place and £33 a week for a child minder, which is £6 or £7 more than in the rest of the country. We must accept that the cost of providing nurseries in London is far greater, especially in respect of capital costs and recruitment and retention of child care staff. Unfortunately, the flat-rate child care component in the working families tax credit, which will be carried through in the new tax credits legislation, will not be enough to allow parents, particularly lone parents who want to enter the workplace, to access child care.

Some evidence—it is mostly anecdotal but it is supported by the Daycare Trust—shows that the child care component of the working families tax credit is leading to some perverse incentives in London and elsewhere, whereby the costs of child care are ratcheted up to the level of the working families tax credit supplement. In my constituency some people in need have lost places as an unintended and perverse consequence of working families tax credit. Welcome as the child care component is there is no substitute for a dramatic extension of child care places, which will have to be funded by capital. Otherwise, there will be child

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care inflation and we will never catch up with it. Access to child care places remains inadequate and needs further development.

Housing costs have been endlessly debated in this Chamber and elsewhere by others and by me. London is engulfed in a housing crisis with three times the level of overcrowding than in any other part of the country. A significant increase in the number of families in temporary accommodation is another factor relevant to the poverty and welfare-to-work debate. Families in severe housing need are in poverty. For 60,000 households, the cost of private rented and temporary accommodation makes working impossible. Rents are about £300 a week. It is virtually impossible for people to find work that will pay while they face that housing difficulty. While we continue to try to unlock the housing crisis through supply, it is essential to provide special new deal-type provision for families in temporary accommodation, who are expected, through no fault of their own, to pay prohibitive rents and are unlikely to take up work opportunities.

Mr. Edward Davey : Does the hon. Lady agree that the ceilings on housing benefit, which restrict the rents that attract it, need to be raised?

Ms Buck : I am coming to that matter, which I feel passionately about.

Families in London on income support mortgage interest relief generally face higher mortgage costs than those in the rest of the country, so they face a higher risk of getting into debt if they get a job. The Government have extended the linking rule to mortgage interest relief, which is a positive step. I doubt whether the Minister can answer immediately, but I would like to know whether the extension of the linking rule has helped low-income homeowners to move into work. We must do more to help such people to return to work.

Considerable evidence suggests that good area-based partnerships between local authorities, the private sector, the Employment Service and community organisations have been effective in underpinning welfare-to-work strategies. Employment zones in London have been particularly successful, but there are too few of them. The level of deprivation and poverty in London strongly justifies a further extension of area-based initiatives, including employment zones. It is unfortunate that the Government's index of deprivation—a formula for distributing resources for area-based regeneration initiatives—has recently disadvantaged London. The Association of London Government calculated that under the old formula, we would have been £140 million better off. My hon. Friends and I will continue to press the Government to redress the inadequacies of the index of multiple deprivation.

I am aware that other colleagues want to speak, but I want to finish by emphasising two policy issues that hurt Londoners disproportionately, rather than focusing on the failure to make full use of the welfare-to-work programme. First, council tax benefit restrictions are impacting on households in high-value areas. People did not move there through choice, so they are suffering an unfair penalty. I hope that the Minister will deal with that in more detail later.

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Secondly, housing benefit restrictions in London are particularly difficult for families on low incomes. They have to find £15, £20 or £25 a week out of their own pockets to sustain a tenancy on which a housing benefit restriction has been placed, as has been demonstrated by research in Brent. Housing benefit restrictions are also fuelling the flow into temporary accommodation and homelessness. It is false economics to impose housing benefit restrictions to prevent people in high-value accommodation from being funded by the public purse. Some such provision needs to be made—we cannot afford to subsidise people in penthouses in Marble Arch—but the principle has gone too far, particularly as the supply of private rented accommodation for families on low income has halved in the past five years, causing hardship and fuelling the housing crisis. It is time for action on both those fronts to relieve poverty.

I love London, its buzz and its dynamism. It has been an exciting place to live recently. Population growth and an exciting young multi-ethnic population have driven its success, but we cannot continue to tolerate the scale and intensity of poverty and deprivation in London. It causes hardship, and there is a danger that it will act as a drag on economic success. Getting more people into work is the best means of tackling poverty. There must be targeting of welfare-to-work strategies to ensure that they deliver in the capital.

11.21 am

Sir Sydney Chapman (Chipping Barnet): I am grateful to be called to speak in this short debate. I congratulate the hon. Member for Regent's Park and Kensington, North (Ms Buck) on securing it and on her magnificent speech, which deserves a wider audience. She spoke up magnificently for London.

I shall add a few statistics of my own to the range that the hon. Lady provided, but I shall keep my contribution short because of her comprehensive speech. She is right about the existence of great areas of deprivation in our capital city, which may be concealed by overall statistics. Every London borough has poverty and deprivation. Even wards in my borough include deprived areas sitting cheek by jowl with prosperous areas in the leafy suburbs. An integrated approach is necessary to tackle poverty in London and, indeed, throughout the country.

The hon. Lady properly focused on poverty and people but I am convinced that the problem is accentuated if the environment in which people reside is in a disgraceful condition. I do not exaggerate but parts of our inner cities are an environmental disgrace to any nation that calls itself civilised.

Let me begin with the prosperous borough of Kensington and Chelsea, a royal borough. I understand that two of its wards are among the 10 per cent. most deprived in England and they are next to seven wards that are among the least deprived. That underlines how poverty can be found around the corner from prosperous areas.

I want to draw attention to data collected recently by the King's Fund, which created a sick list by finding out where the most unhealthy areas of the country were and by putting together the first ever league of the nation's 120 health authorities. In that league, Lambeth, Southwark and Lewisham health authority is 111th and

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East London and the City health authority is 118th, which means that two of the 10 sickest health authorities can be found in our capital city.

I am always interested to receive correspondence from our Mayor, Ken Livingstone. He sends me a lot, as I expect he does to every Member of Parliament who represents London. Like the hon. Member for Regent's Park and Kensington, North, he drew attention to the Department for Work and Pensions survey. It is from 1998 and there may be new figures, but these are the most recent that I have. The context is that in any list of regions and household disposable income, London comes top, just ahead of the south-east and the east. The survey shows that, once account is taken of housing costs and household composition, average incomes in London are no higher than those in the rest of the United Kingdom, and incomes at the lower end of the distribution are significantly lower. One frightening statistic that it behoves us all to address is that in our capital city, 5.1 per cent. of the white population is unemployed but no less than 13.5 per cent. of the minority ethnic group population is unemployed.

Ms Diane Abbott (Hackney, North and Stoke Newington): Does the hon. Gentleman accept that black and Asian young unemployed people are less likely to register at an unemployment agency and that those figures underestimate the level of disparity between white and black unemployment in London?

Sir Sydney Chapman : The hon. Lady makes a valid point. I would not presume to say categorically that she is right but I suspect that she is.

Mr. Cook—[Interruption.] Mr. Deputy Speaker, I do apologise. I took advice and was told to call you by name but that must have changed. My final point is that we must all tackle poverty in a comprehensive and integrated way. That is not a criticism but there is a possible weakness in the Government's strategy for tackling poverty. Much greater interdepartmental co-operation is necessary. I understand that the Government have to divide governance into different Departments but I am slightly concerned that in tackling poverty, interdepartmental co-ordination is not as good as it should be.

11.28 am

Mr. Iain Coleman (Hammersmith and Fulham): Thank you, Mr. Deputy Speaker, for calling me in this important debate to highlight the problems of poverty, deprivation and social exclusion in London. I congratulate my hon. Friend the Member for Regent's Park and Kensington, North (Ms Buck) on securing the debate. Her record in promoting the cause of our capital city and its residents is second to none in the current Parliament and one of which she can be rightly proud.

My hon. Friend has already referred to the issue that I want to raise. It is relatively small in terms of the number of people that it affects, although that does not mean that it is not important. The issue is the effect that the council tax benefit restriction scheme has on many of my constituents.

Highly regressive, mean-spirited and vindictive legislation was introduced in 1998 by, I regret to say, a Labour Government. Anyone who is entitled to council

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tax benefit has his or her benefit capped at band E. The Government made a welcome concession: anyone in receipt of full council tax benefit when the measure was introduced was given transitional relief. Many of us heralded that protection, and we were assured that the measure's effects would be carefully monitored and open to constant review.

The consultation paper that proposed the introduction of the measure assumed that claimants who owned their properties could release some capital value and make up the difference between council tax benefit and their liability above band E. That assumption begs the question why long-term residents in high capital value areas should be forced against their will to move from home, away from families and friends, while residents in other parts of the country are not so penalised. Research carried out by, among others, the Association of London Government has demonstrated beyond question that the majority of those caught by the measure live in London and rent their accommodation.

The practical effect is that many families on means-tested benefits are forced to suffer because of the geographical location of their accommodation. Current council tax rates in my borough are £1,128 for band E, £1,333 for band F, £1,538 for band G and £1,846 for band H. That means that families living in band F properties in Hammersmith and Fulham who are not protected by transitional relief—those who were not in receipt of full council tax benefit as of 1 April 1998—need to find from their already meagre benefits an extra £205 a year or £4 a week. For a band G household, the costs are £410 a year or nearly £8 a week, and for a family living in a band H property—there are quite a few—the costs are £718 a year or a staggering £14 a week.

That inevitably places families who are already trapped by poverty into a spiral of even greater financial difficulties. In practice, they must choose whether to heat their home, pay their rent or eat and clothe themselves and their families adequately. When I first raised the matter in 1998, we were able to prove beyond doubt that the measure disproportionately affected households in London.

For my local authority, strict criteria govern the allocation of social housing. Applicants on the housing register are entitled to only one reasonable offer of accommodation, and those that refuse that offer are deemed to be intentionally homeless. Nearly all the new affordable housing developments in my borough will be caught by the legislation.

Lord Falconer, the Minister for Housing and Planning, recently visited a relatively new housing development created by Shepherds Bush housing association in my constituency. Every one of the two-bedroom houses in that development is banded at band F, and larger accommodation at band G. Applicants who may have waited many years for their offer of permanent accommodation are faced with the choice of turning down their only chance of a new home or meeting an extra tax burden that applicants living outside London would almost certainly not face. Similar developments in Birmingham, Liverpool, Newcastle or almost any other major town and city in this country would not be so adversely affected. The measure is also a major deterrent to anyone who has received transitional relief from 1 April 1998 and wants to return to work.

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It is contrary to the Government's aim of combating social exclusion and promoting welfare for work, and cannot be justified.

From 2 July 2001, arrangements were put in place for local authorities to provide additional assistance to anyone whose housing and council tax benefit is restricted, if they are satisfied that the person in need requires such financial assistance with their housing costs. According to answers to recent parliamentary questions, the Government seem to believe that the new discretion means that they no longer need to monitor the effects of the council tax benefit restriction scheme, which they promised to do when it was introduced in 1998.

That assumption is entirely specious. First, the majority of the financial discretion awarded to local authorities from July to April in this financial year would have to come from already hard-pressed local authority budgets, which are in no position to take on extra burdens. Secondly, only £15 million of the £37.5 million is Government funded. Thirdly, the new hardship fund is entirely at local authorities' discretion, and it does not represent a fair or strategic approach to dealing with poverty. My local authority is considering using it, although—I do not know what my hon. Friend the Member for Regent's Park and Kensington, North thinks—her two local authorities are unlikely to use it.

The saving to the Treasury as a consequence of the measure is £7 million a year, which is a pathetically small amount of money in terms of the misery that it causes to people who are already struggling in difficult financial circumstances. It adds a further layer of complication to an already complicated system that is beyond the comprehension of many claimants and constituents. It is a Tory measure written by a Tory Government, and it should be consigned to the dustbin by this Labour Government without further delay.

Several hon. Members rose—

Mr. Deputy Speaker (Mr. Frank Cook): Order. I alert hon. Members to the fact that it is common practice during a 90-minute debate to give the two Opposition spokespeople and the Minister 30 minutes to conclude the debate. The 30 minutes is distributed equitably: in three blocks of 10 minutes. Three hon. Members are currently seeking to catch my eye, and little time is left. I therefore appeal to hon. Members to bear that practice in mind when making their speeches.

11.36 am

Andrew Selous (South-West Bedfordshire): I too congratulate the hon. Member for Regent's Park and Kensington, North (Ms Buck) on securing the debate. I have the privilege of serving with her on the Select Committee on Work and Pensions, and I know that she takes a serious interest in these matters.

I shall begin by saluting the Government's commitment to tackling poverty and disadvantage both in London and elsewhere; their intention is admirable. Significant factors that affect our society mean that those are difficult matters to change in a short time. We know from Department for Work and Pensions figures that between 1994 and 1999 there has not been consistent change in the number of children living in

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poverty. We also know that the number of working-age people in poverty in London and elsewhere has remained broadly constant. One reason why that has happened is because the world of work has changed. The opportunity to earn significant sums of money in the capital is available to some sectors of the population but not to all. The advent of two-earner households has also had a significant impact on income distribution.

I shall be brief because I know that time is short. The hon. Member for Regent's Park and Kensington, North discussed the decline in the supply of private rented accommodation, which is worrying. Private rented accommodation often provides the flexibility that people need in different stages of their lives as they progress in their careers and need to move around, and the Government must take its decline seriously. I urge them to consider schemes by which they can increase the supply of private rented accommodation. Whether that can be done through tax breaks to encourage more private landlords to rent part or all of their houses is for them to consider, but they must consider the issue given the decline in social housing provided by the local authority sector.

As the hon. Member for Regent's Park and Kensington, North rightly said, it is important that we take an integrated approach to poverty in London. There is an important role, about which we have a heard a great deal this morning, for the Government, there is an extremely important role for local authorities, and there are important roles for community organisations and personal initiatives. She and I visited a deprived area of south-east Amsterdam last week. I was struck by the way in which different community organisations, churches and faith groups were working with local authorities and regeneration project managers. I commend the integrated approach because it provides a personal, one-to-one element that perhaps only community organisations and churches can provide. Such an approach can change lives by turning problems around.

The hon. Member for Regent's Park and Kensington, North mentioned ethnicity, which is an important subject given that 130 languages are spoken in London. Like her, I am concerned that the regional call centres advocated by the Department for Work and Pensions to deal with London residents' problems will be situated outside London. We must ensure that their staff have the languages required. I am unsure how we will get speakers of the many languages in London to work in regional call centres outside London. Perhaps the Minister will enlighten us on that.

The roots of poverty in London, as elsewhere, often start to grow in the early years of a child's life, during which they may have been neglected or abused. The shadow Home Secretary, my hon. Friend the Member for West Dorset (Mr. Letwin), recently made a speech in which he discussed a conveyor belt that goes through a sequence of events that often ends in hardened criminality. Shockingly, more than 25 per cent. of children are currently living in single-parent families. As a nation we pay £15 billion a year picking up the costs of family break-up. I suggest that we do more in the capital, and elsewhere, to support families in their early years, which would include both measures such as the working families tax credit and practical help.

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Organisations such as Homestart offer practical advice and help to families on a weekly basis. A couple of hours a week of help that is a phone call away cannot be provided by the state or local authority , but I know from my constituency that such help can change the lives of stressed families with young children. We must see what we can do to help families to stay together because we have the highest level of divorce in Europe, and it is higher in London than in other parts of the country. Anything that we can do to help families stay together is important.

We have discussed getting unemployed people back into work. Work is key because it is the major escalator to get people out of poverty. Having been to the Netherlands with me last week, the hon. Member for Regent's Park and Kensington, North will, like me, have been struck by the massive range of organisations that helps unemployed people to get back into work. The Netherlands is a laboratory. Help is delivered on a local basis. Many organisations work alongside the state sector, and I commend that approach to the Government.

11.43 am

Glenda Jackson (Hampstead and Highgate): I congratulate my hon. Friend the Member for Regent's Park and Kensington, North (Ms Buck) on securing the debate, and join the hon. Member for Chipping Barnet (Sir Sydney Chapman) in sincerely congratulating her on a remarkable speech. She produced statistical evidence that shows that poverty in London is severe. It is unnecessary for the rest of us to go through those numbers again.

I endorse the two points that were made by my hon. Friend on the take-up of the working families tax credit. I must place on the record that my constituency is not exclusively inhabited by millionaires. It contains two of the most deprived wards in the United Kingdom, and my borough contains many similar wards. As the hon. Member for Chipping Barnet said, pockets of severe deprivation sometimes exist within individual wards. Poverty lives cheek by jowl with wealth. There is a gap in people's understanding of the working families tax credit, how they can apply for it and the benefits that it can bring.

I turn to joblessness. Much of the available work in London is perceived to be seasonal, temporary or part time, so people are reluctant to move from what they regard as a secure benefits system, not least because of the rents that they must pay. They believe that a job will not give them a permanent income and could lose them housing benefit. I admit that my evidence for that is anecdotal but I have heard it several times. The Government should consider that matter.

We heard of the worries that the hon. Member for Chipping Barnet has about the poverty of the environment, and I strongly agree with him. The particular issue that I would like to discuss is the poverty of aspiration. It is linked to the statistics on unemployment, particularly those relating to ethnic minority groups. However, it is not found exclusively among those groups. In many parts of my constituency, the aspiration not only of young people but of their

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parents is almost nil. Their experience of life, and the facilities that have been offered to them—or, at least, the facilities that they believe that they can access—have been limited for so long that we need to create a targeted programme to begin to break down the barrier of aspiration. To reinforce the comments of my hon. Friend the Member for Regent's Park and Kensington, North, if we do not tackle poverty in London, it will act as a brake on the whole city. That could have far more desperate consequences than a loss of economic vibrancy; it could lead to severe social breakdown.

There needs to be a co-ordinated programme, and I strongly agree with those who have said that the excellent programmes that the Government have set up are not sufficiently interlinked. Only last week, a sure start programme was launched in one of my wards, Gospel Oak. Crèche and nursery facilities are offered there, and mothers were asked what they wanted to know. Representatives from social services, health, education and from those who tackle crime were present.

Such initiatives are intrinsic to developing a sense of aspiration. We want the best for all our children, the best opportunities for all young people and we want those who have been unemployed to have the opportunity to return to employment to make the best use of their particular and individual abilities. However, there are still too many difficulties for people in patching into Government schemes, which have been set up under a range of titles.

The hon. Member for South-West Bedfordshire (Andrew Selous) spoke of Holland as a laboratory, and mentioned the coming together of many organisations to tackle issues. It is extremely difficult for organisations that are in most desperate need of money, including that outside the Government's direct remit—say, lottery funding or the millennium fund—to begin to rekindle a sense of social aspiration. It should be made easier and simpler for organisations from a variety of areas to work together to patch into such funding sources.

Although we have made giant strides in creating a linked-up approach for all Government Departments, there is still too much separation between Departments in tackling these issues. It would not be difficult to link them, and it is essential to do so if we are to tackle poverty of aspiration; it is certainly important if we are to tackle the poverty of the environment. There are situations in my constituency, and, I imagine, in that of every hon. Member in the Chamber, that would not be tolerated in the environment of this building. If we would not accept something, we should expect no one in London to.

The Government will undoubtedly have to look again at the funding that they afford to local authorities in London. A peaceful environment, not besmirched by graffiti and faeces, and in which underpasses are not used as outdoor lavatories, will require funding. Those are not frills or mere externals. Far too many people in the capital have a sense that they are surrounded by an appalling environment because they are worth nothing. That is a root cause for the poverty of aspiration.

I too support the Government for tackling poverty in innovative ways but a great deal more must be done. I hope that my hon. Friend the Minister will pass on our wish for a greater link-up between Departments, which could bring a successful outcome in London.

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11.50 am

Ms Diane Abbott (Hackney, North and Stoke Newington): I too congratulate my hon. Friend the Member for Regent's Park and Kensington, North (Ms Buck) on securing this debate.

On the monitors that are scattered about the House of Commons, the debate is entitled, "Poverty (London)". However, that notion would seem tautologous to many hon. Members. Fourteen years after becoming a Member of Parliament, colleagues from other parts of the country are still under the illusion that London has all the jobs and prosperity, and could not know of the poverty of other regions. If this debate places on record that London has as much absolute poverty as anywhere else, and more than some areas, it will have been worth while.

I am not as lost in admiration for the Government's anti-poverty strategies as some of my colleagues. That may be because I am from the more disreputable end of the London Labour party. Hon. Members have spoken about rich areas being next to poor ones in their constituencies; in Hackney, we have poor areas next to poor areas. We have been the recipients of every variety of anti-poverty scheme and regeneration programme: neighbourhood renewal, sure start, the new deal, the new deal for communities—an alphabet soup of initiatives. In my office, I have files in which I put the Government press release each time a new allocation of money for a new initiative in Hackney is announced.

I agree that each initiative is wonderful, both in its aims and how it is fashioned. However, we have reached a point where it is time to assess this blizzard of initiatives. In Hackney, I have found that those who obtain funding for such initiatives are often those who are good at obtaining funding, rather than good at delivering programmes on the ground.

When I get a press release about a new initiative that has been given money by the Government, I make a point of going to see what is being done. When the staff in my office phone those involved to say, "Diane Abbott wants to see what you are doing with your new deal for communities money," there is a great deal of nervousness at the other end. When I visit, I may find a brand new computer, a new office and consultants who have been taken on using Government money but there is often a paucity of clients.

Without wanting to take anything away from the voluntary sector or from those running the schemes, there is a paucity of human capital for schemes in areas such as Hackney. We need fewer schemes, more co-ordination between them and more attention to be paid to the basic infrastructure that will deliver clients. In Hackney, we have witnessed the almost total collapse of our youth service. We can spend as much money as we like on schemes to deal with issues relating to young people, education and social exclusion, but if there is no youth service to deliver the clientele, such heavily funded schemes will deal with relatively small groups of young people.

My hon. Friend the Member for Regent's Park and Kensington, North spoke at length about tax credits. As the Member of Parliament for the constituency with the highest number of single parents in the country, I want to emphasise what she said about the working families tax credit and its low take-up in London. The

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Government are justly proud of that tax credit's effect nationally but, as an inner-London MP, I have found that it has not had the impact on my constituents that I would have liked it to have. I draw attention to my hon. Friend's comment that the take-up rate for single parents in London is half that for single parents nationally.

During the general election, I had cause to contemplate the disparity between what the Government correctly said about the new schemes and the experience of my poorest constituents. There was a mismatch between the bulging files of press releases announcing new Government initiatives in my office and people's perception of what was being delivered. The failure of the tax credit scheme to engage fully with poverty in London accounts for that mismatch.

I would like to raise the impact of asylum seekers, economic migrants and illegal immigrants on the London economy and poverty. Economic migrants have helped to make London a great world city. I use the term advisedly; it is regarded as a dirty word in political debate. My parents were economic migrants. Generations of Irish, Jewish and West Indian economic migrants helped to make London the city that it is. Sadly, the number of asylum seekers has increased because of the closing of avenues to legitimate economic migration. The Government are now examining that.

London boroughs are partially compensated for the services that they have to provide for asylum seekers. However, Hackney, Lambeth, Southwark and other London boroughs with a large number of asylum seekers and illegal immigrants are not properly compensated for the effects on delivery of service and on poverty. In the medium and long term, those people have a great deal to contribute to London's economy.

My son goes to school just across the border between Hackney and Islington. He is in year five, in a class of about 30. Only a dozen children in that class were there when he started reception. The turnover is such in many inner-London schools that teachers are teaching a different class by the end of the year. Boroughs and education authorities are not compensated for the strain that that causes the education department. Asylum seekers cannot be considered separately in the fight against poverty in London.

The Government pursued a policy of social inclusion for the population as a whole during their first term, but they pursued a policy of social exclusion for asylum seekers through the vouchers scheme. I am glad that they have abolished that.

There is a link between poverty and education and between poverty and crime. The long-term answer to poverty in London lies partly in raising educational achievement. If one examines educational achievement in London, a disturbing pattern emerges. Every year, certain ethnic minority groups fail to raise their achievement. Many ethnic minority groups in London are narrowing the gap between themselves and white Londoners. Some groups do better than white Londoners, but Afro-Caribbean children figure at the bottom of the league table every year, particularly

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boys. That is not a new problem; there have been Government reports about Afro-Caribbean educational underachievement since the 1980s.

Andrew Selous : Does the hon. Lady agree that more male role models, particularly in primary schools, would be useful for young boys if there is no such role model in their family?

Ms Abbott : I agree. I do not want to expand on that point because the debate is about poverty reduction. Whenever a picture of a failing school is shown on television or in a newspaper, it will feature a group of black or multi-ethnic children. Strategies for raising educational achievement have not focused sufficiently on black underachievement, particularly that of black boys. I urge the Minister to tell her colleagues that educational achievement in the inner cities cannot be raised without focusing on the underachievement of black boys.

J. K. Galbraith, the American economist, referred to private affluence and public squalor. Nowhere is that paradigm more obvious than in London. Where private affluence and public squalor exist, so does crime. Poverty is not an excuse for crime but some estates in London—a terrible nexus of poverty, deprivation and low aspiration—are a breeding ground for crime. If we want to avoid a proliferation of street crime and an increase in gun-related crime on the streets of London, we must deal with the issues that have been raised this morning.

12 noon

Mr. Edward Davey (Kingston and Surbiton): The hon. Member for Regent's Park and Kensington, North (Ms Buck) deserves our thanks for the way in which she has raised the subject. I thought it was one of the most well researched and thoughtful speeches that I have heard in the House. I hope that she will send it to some members of the Cabinet, who should read it. A study of the special issues concerning London is important if the Government want to achieve their targets of halving child poverty by 2010, and abolishing it by 2019.

If the Government are to meet their targets they cannot simply adopt the policies used in the rest of the country. They must urgently get a grip on the special problems in London. That would deal with one of the problems identified by the hon. Member for Hackney, North and Stoke Newington (Ms Abbott). People do not believe that poverty is a problem in London, unless they are London MPs or have a focus on London issues. The perception outside London—even in London sometimes—is that it is not a poor city. The success of London masks its major failure. We must hammer away repeatedly at that false perception.

In the first year of the previous Parliament, the Deputy Prime Minister said that Kingston was a leafy borough. That did not go down well in the Cambridge estate in Norbiton, which is one of the poorest wards in the whole of outer London. We have pockets of severe deprivation, even in the royal borough of Kingston. I am sure that that is the case in many other London boroughs.

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When I pointed out to the Chancellor of the Exchequer that 43 per cent. of children live in households below the official poverty line—one of the most startling figures on London poverty—the Daily Mail published a sketch that lampooned me. Quentin Letts asked:

Of course, when I wrote to the Daily Mail to put the record straight, it did not publish my rejoinder. That sketch shows that many people, in the media and elsewhere, have a false perception of London. Even though the figures are official and well researched, many do not believe them.

The hon. Member for Regent's Park and Kensington, North was right to call for the debate because London is different. The Government have an impressive anti-poverty strategy. I do not agree with every tax and benefit change, but the major thrust of the policy is right. Employment measures such as the sure start programme and many other anti-poverty measures are welcome and deserve praise. However, they are not quite up to the task in London. The hon. Lady gave a clear analysis of the problems with the working families tax credit, which is in many ways the flagship of the Government's strategy to tackle poverty. It fails to deal with poverty in the capital, which is so much greater than elsewhere.

The hon. Lady suggested the direction that the Government should take. She rightly talked about employment; several hon. Members touched on the high levels of unemployment in our black and Asian communities in London. That point has come up time and again in my discussions with Ministers and their advisers about the failure of the new deal to have an impact on high unemployment areas throughout the country, not just in London. The new deal has yet to grasp that problem. Studies and pilots are being undertaken to examine the complexity of the problem but they have not produced a solution.

Some of the points made by the hon. Member for Hackney, North and Stoke Newington should be taken into account but we need to go further than that in dealing with the issue. When I visited the Employment Service in Kingston during the early stages of the new deal, I was shocked by its lack of drive to get the right people for the right jobs, particularly at the gateway stage. The staff, who had been re-trained to prepare for the scheme, did not have the skills to deal with or knowledge about the problems of some of the people coming to them. They were good people and I do not criticise them but I question whether they were right for the job. As the hon. Lady said, we must tackle unemployment among those groups in the capital. We must ensure that we have the people with the right qualities for the job. If that means paying people more, let us pay more.

As the hon. Member for Regent's Park and Kensington, North said, the Government claim that awareness is a vital issue in terms of tax credits. She gave ground to the Government by saying that it is difficult to run take-up campaigns because so many languages are spoken in the capital. However, the issue goes much wider than that. It is about not just awareness but the structure of the tax credit, as the Government like to call the benefit. The Government should look seriously not just at working families tax credits but at other benefits

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such as regional premiums. That would be a major change in Government policy on social security and I would not advocate embarking on such a change without serious research.

The cost of living in London is higher than elsewhere, yet we have national rates of benefits. We have argued in Parliament for higher housing allowances and a specific London allowance for key public sector workers in London. That is surely relevant to people who are struggling, whether on in-work or out-of-work benefits. If the Government believe that benefit increases across the board is too wide a river to cross, I suggest that they consider the analysis by the hon. Member for Regent's Park and Kensington, North of the costs of child care and consider trials on regional premiums and child care tax credits, which would target some of the capital's problems. The hon. Lady was right to identify the need to look at supply as well as demand.

The hon. Member for Hammersmith and Fulham (Mr. Coleman) made a powerful speech on the problems of the current council tax benefit system and I support all that he said. Many of the examples that he gave also occur in my constituency but my constituents are particularly hit by the shortfall in housing benefits. In advice session after advice session, I see constituents who would like to go into the private rental sector—indeed, I have met private sector landlords who would like to have them as tenants—but who cannot meet the difference between the housing benefit and the actual rent. Their income is not sufficient. It is totally unrealistic to expect them to be able to pay such rents. If we do not overcome that problem, the private sector will not play its part. It is madness to prevent the private rental sector from making a major contribution to the problem. The reform called for by the hon. Member for Regent's Park and Kensington, North has come of age.

The sure start scheme is welcome but is targeted on very small areas. Some of its lessons need to be spread more widely, no more so than in London where some of the problems at which the sure start scheme is aimed exist in spades.

12.10 pm

Mr. Tim Boswell (Daventry): The hon. Member for Regent's Park and Kensington, North (Ms Buck) has rightly won praise from hon. Members of all parties for introducing this fascinating debate and for the range and authority of the statistics that she adduced in a powerful speech. I am pleased to add to that praise. In a previous debate on work and pensions, she cogently talked about the poor take-up of working families tax credit, a point on which she elaborated today. That is an example of the puzzling nature of this subject, which has come out so well in the debate.

If Ministers do nothing else, I hope that they will take seriously our plea for a cool and proper look at what is happening in London and where that differs from other parts of the country. I hope that they will continue to pursue their research into the effectiveness of the various policies. For all the good will that hon. Members of all parties expressed, there was an undertone that some of the policies are not working as well as they might. That applies to other parts of the country, as well as to London.

The debate has been a wonderful way of exploding cynicism about this place. The contributions have been positive, but not always uncritical, including those made by

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Government Members such as the hon. Members for Hammersmith and Fulham (Mr. Coleman), for Hampstead and Highgate (Glenda Jackson), and for Hackney North and Stoke Newington (Ms Abbott). My hon. Friends the Members for Chipping Barnet (Sir Sydney Chapman) and for South-West Bedfordshire (Andrew Selous) also made constructive and generous contributions. We should also remember those hon. Members who silently sat in the Chamber, including my hon. Friend the Member for Cities of London and Westminster (Mr. Field). The debate deserves wider study.

The growing debate about poverty, which has been well exemplified today, has thrown up several general comments. The subject is still inadequately discussed, for which there is a political and structural reason. In the battle for votes, people tend to concentrate on socioeconomic classes B and C, as those are seen as the core battleground. Insufficient attention is given to people in classes D and E. That may be because they do not vote as often. In London in particular, there is a high level of social and physical mobility and those people are often not around to vote. The hon. Member for Hackney, North and Stoke Newington mentioned the change in pupil rolls. The change in electoral rolls is equally kaleidoscopic in London.

I hope that hon. Members will accept that the subject of poverty should not be the prerogative of any one party. I am proud to represent the party of Wilberforce, Shaftesbury and Disraeli. The Conservative voice has a part to play in the discussion, and we should have such discussions more often.

Hon. Members on both sides of the Chamber have acknowledged that the problem is multi-faceted, so it is logical that the policies to tackle it must be multiple and must work together. Several hon. Members have expressed unease that there are so many initiatives that they may trip each other up without achieving much. Ministers have a difficult balance to strike between evaluating their flagship and subsidiary policies, the policies of other Departments, local authorities and the voluntary sector, and ensuring that the orchestra is properly tuned and conducted.

Colleagues have touched on some further outstanding issues. Poverty is a relational as well as a purely functional matter. What has come across strongly in our debate—hon. Members who spend time living or working in London as well as those representing constituencies outside London may not be aware of it—is the sharp differences in economic and social status. Such differences co-exist side by side—not just in north and south Kensington or the City and Tower Hamlets, but often in individual wards. Some signs of prosperity trickling down into other communities can be seen, but we must ensure that the poorer communities become more self-standing and self-sufficient economically. An effective community voice is also important. Poor communities will not be colonised by areas of affluence.

On the wider economic front, several hon. Members have already referred to the hugely changing economic profile of the capital, particularly following the decline of manufacturing industry. Great joblessness co-existing with a huge shortage of labour is a classic mismatch in the labour market; it is a paradox. As the hon. Member for Hampstead and Highgate said, access to education and skills is a problem. Hon. Members will

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know that I have a longstanding interest in adult literacy. Low self-esteem and lack of basic skills are a huge blight on the prospects of individuals.

The cost of housing was rightly mentioned. It is a major worry for many people struggling to work in key service sector jobs. One subject not mentioned so far is transport across the metropolis—the daily worry about access to work. We read today that the Government's latest proposals for partnership on the tube are likely to lead to few tangible results for several years. These are not just economic factors: they interact with the environment and can actively inhibit regeneration.

Disabled people and pensioners form part of my responsibilities as a Front Bencher. Although not the centre of today's debate, they are relevant. The tube is notoriously unfriendly to disabled people and dial-a-ride schemes often stop at sectoral or borough boundaries. Crime blights everyone. The disadvantaged and socially excluded are probably as blighted, if not more so, than others—for example, when hard-earned family transport goes up in smoke. Young families and older people can feel trapped in poor surroundings with a diminished quality of life and little chance to join the economic world.

All those factors feed into problems with the benefit system. It is partly a problem of take-up, which requires further research. Older people's take-up of the minimum income guarantee has been disappointing. Preserving incentives is another problem when the Government find themselves on the treadmill of ever greater means-testing, which inevitably leads to ever higher and unsustainable marginal withdrawal rates for benefit.

The moral of our debate is that we are at the start of the process of discovery. No easy solutions exist off the shelf. Before the debate, many people were probably indisposed to say that London had a problem. We do not want to over-emphasise it or suggest that everything is wrong in the capital. As the hon. Member for Regent's Park and Kensington, North said, many positive aspects of London life should be celebrated. Diversity and vibrancy are part of the equation and we should not view them as problems. We should not, however, sweep away the problems that exist. If we do nothing else, we should all use this debate and its aftermath to reflect seriously on the practical measures that we can take to help. We must remember that the needs must be met and the motivation must come from both inside and outside. We must all feel uneasy about a situation in which those needs co-exist so closely with the signs of success and affluence that are all around us.

12.20 pm

The Parliamentary Under-Secretary of State for Work and Pensions (Maria Eagle) : This has been a superb debate. I join in the chorus of praise for my hon. Friend the Member for Regent's Park and Kensington, North (Ms Buck) for initiating it. It is a shame that it has been restricted to an hour and a half, as we could have talked for much longer.

I should make it clear that as someone who lived in London many moons ago, I am not one of those deluded people who think that there is no poverty in London.

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I have seen it, as has anyone who has lived in London, and it is a simple mistake to think that the bright lights and high incomes extend to every member of the population. They certainly do not, and the Government realise that. London Members will have often come across that mistaken attitude, and they are right to keep saying that poverty affects people who live in London as greatly as anywhere else in the country. They are right also to expect us to address poverty in London as we address it in other parts of the country.

The extent of the poverty that existed in Britain when we came to office in 1997 was one of our biggest challenges. The problem was exacerbated by the policies of the previous Government. During their time in office child poverty doubled and unemployment trebled. Poverty must be a priority. The last Conservative Government did too little to alleviate it. There were problems for pensioners, with widening gaps between the richest and poorest pensioners, unemployment hit 3 million and child poverty was particularly worrying.

Mr. Boswell : Will the Minister give way?

Maria Eagle : If the hon. Gentleman will forgive me, I have so many points to respond to and so few minutes to do that. I am perfectly happy to discuss the matter with him on another occasion.

We believe in equality and opportunity for all, so we could not be satisfied with that appalling situation and would not allow it to continue. We have set out to tackle it and are determined to continue to do so. As many hon. Members said, it is a complex and multi-dimensional problem. We must tackle causes, not just symptoms. Hon. Members on both sides of the Chamber have acknowledged the ambition of our aim, which is to halve child poverty in 10 years and eradicate it in 20. We have taken steps to combat joblessness, which is the main cause of poverty among those of working age, and begun to deal with pensioner poverty. Many hon. Members acknowledged in part the success and good progress that we have made so far. It is important to recognise that we are moving in the right direction, and this is where the value of such a debate is shown. Hon. Members have pointed out issues that it is important for the Government to take into account as we develop policies to bear down on poverty.

I want to deal with some of the points raised by my hon. Friend the Member for Regent's Park and Kensington, North and by others. It will be impossible for me to deal with them all in the time that I have left. If I do not get around to responding to specific points raised by hon. Members, I will of course write to them.

My hon. Friend made a point about the take-up of working families tax credit, which has been echoed by others in the Chamber. People have been puzzled about the disparity between the take-up in London and the take-up elsewhere. Hon. Members asked whether I could promise that serious research would be undertaken into that. Our policies are evaluated rigorously. They are evidence based. We take seriously our commitment to ensure that we make policy on the basis of what works, rather than what we think might work.

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We are looking at take-up and the position of various stakeholders in London. We are carrying out a wide-ranging evaluation programme. Last week, my officials met officials from the Greater London Authority to discuss the problem and they will continue their dialogue with stakeholders throughout London. Such work will continue so that we can learn from the results. We want to know the basis of the problem and how to tackle the important matter of take-up.

My hon. Friend the Member for Regent's Park and Kensington, North referred to aspects of the welfare system that penalise Londoners and that need to be removed. She said that the problem occurred because of joblessness and mentioned some statistics that showed job-entry rates to be below the average. She asked whether problems of recruitment and retention compromised our ability to deliver. We are committed to building on the success of the new deal. Offices in the Benefits Agency and in job centres concentrate on London's recruitment and retention difficulties, but there is no evidence that that compromises our ability to deliver the programmes. That is not the problem but one of the biggest issues is to assist the many people in London who face multiple deprivation.

My hon. Friends the Members for Hackney, North and Stoke Newington (Ms Abbott) and for Hampstead and Highgate (Glenda Jackson) have referred to issues in respect of their constituents. Helping the hardest-to-help groups is more difficult. We are developing policies, particularly the new deal, to tackle the many difficulties faced by groups that are harder to help because they suffer multiple deprivation, whether they are disabled people or people from ethnic minorities. As my hon. Friend the Member for Hackney, North and Stoke Newington said, not all ethnic minorities suffer such problems. Therefore, we cannot say that the problem is one of discrimination or of ethnic minorities finding it harder to access the jobs market. It is not that simple.

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We are continuing to develop our programmes and to target those who are hardest to help. However, the programmes are difficult to design and to evaluate. That is why, for example, the new deal for disabled people and the initiatives to help ethnic minorities and partners are behind the new deals for young people and for the long-term unemployed, which are successful. We know what works. We apply that and see the results. It is more difficult with harder-to-help groups, but to tackle the issue successfully and to get people back into work—the main way out of poverty—we must ensure that we get the more defined programmes right. Clearly, that will have an impact in London.

My hon. Friend the Member for Regent's Park and Kensington, North said that, in London, there is a much higher number of lone parents and less informal child care. She referred to perverse incentives and said that child care credit perhaps led to increases in fees that soak up the extra money that is available. We have no substantive evidence that the child care credit is forcing up the price of child care, although all of us have come across anecdotal evidence of that.

We need to keep a close eye on what is happening. We are examining the costs of formal child care. The working families tax credit limits are not set in stone. We continue to listen to representations in that respect. Indeed, we responded to representations in the previous Budget by raising the limit. We want people to keep talking to us about the matter, although I am not sure about the point made by the hon. Member for Kingston and Surbiton (Mr. Davey) about regional premiums, which would be a nightmare from an administrative point of view. Of course, we must continue to listen to what works.

I am afraid that I am about to run out of time, and I have not managed to get through half the points that were made by hon. Members. I shall write to hon. Members whose points I have not addressed and no doubt we will continue the discussion in the Tea Room.

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