"The gross national product does not allow for the health of our children, the quality of their education or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials. It measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion to our country. It measures everything, in short, except that which makes life worthwhile."
Mr. Paul Keetch (Hereford) (LD):
I will tailor my remarks appropriately as I am anxious to hear the Minister's response. It is a pleasure to follow the hon. Member for Birmingham, Selly Oak (Lynne Jones). I agreed with much of what she said, including the quote from Bobby Kennedy and her remarks on Hall Green. I have found myself with her in the Division Lobby many
times during the past three Parliaments. It seems that she has often followed the Liberal Democrat view of things, perhaps more astutely on occasion than her Labour Government would have liked.
Mr. Keetch: I have no doubt that the electorate will hear that point. The hon. Lady has certainly been a great parliamentarian, and the House of Commons will be the worse for her not being in it after the election. She said that the debate would be topical literally as the Prime Minister returned from the palace and the general election was called. The debate is important because there is a feeling, certainly among the charities with which I have spoken, that if we are not careful the election might see a new Government come in who will not give the same priority to poverty and inequality that Labour has done in the past 13 years. I congratulate the Labour party on what it has done in many areas in those years. It has poured billions into tackling child poverty, but there is a real fear that the recession will undo some of that work or at least set it back.
Although child poverty has decreased under the Government, pensioner poverty has not fallen to the same extent. Poverty among working, childless adults has increased to its highest level for 40 years. In addition, the Government's third term has seen a rise in income inequality, with the poorest fifth of the population experiencing a fall in income. The Institute for Fiscal Studies has stated, for example, that the gap between the income of the rich and the poor is now the highest it has been since its comparable time series began in 1961, the year I was born, and inequalities in wealth are even greater than those in income.
The hon. Lady mentioned the Child Poverty Act 2010, which we of course supported. However, we are concerned that the Government have watered down the goal of "eradicating" child poverty by 2020. Instead, the Act now states that no more than 10 per cent. of children should be in poverty. By our maths, that means that the Government are resigned to accepting that around 1 million children will still live in some form of poverty in future. The recession has seen inequality and poverty continue to rise in certain groups, as they did in the past few years when the UK was booming, so what will be the effects when we tackle the problems ahead?
The targets of halving child poverty by 2010 and eradicating it by 2020 were set out by Tony Blair in 1999, but the interim target was missed in 2005-06 and, unsurprisingly, it looks as though the 2010 target will be missed as well. When times were good it was easy to pick off the low-hanging fruit, meaning those who were only a few percentage points below the poverty line or who were perhaps on a low income temporarily and would quickly find another job, or who were poor simply for one reason, rather than for complex, multiple reasons. However, now that times are harder, we are concerned that the good work that has been done so far will stall and perhaps start to go backwards, particularly if there is a new Administration after 6 May who will place less emphasis on tackling child poverty than the current Government have done.
We have seen some recent changes on pensioner poverty, one of which has been to the state earnings-related pension scheme. The second state pension scheme has effectively been frozen for 2009-10, meaning that around 9 million pensioners will have a real-terms cut in their pension payments this year, amounting to around £515 million.
Dr. William McCrea (South Antrim) (DUP): With the breaking of the earnings link, the gap whereby our pensioners have fallen behind basic pay is certainly significant. Therefore, surely we need a substantial rise in the basic state pension, and then the link with earnings.
Mr. Keetch: The hon. Gentleman is absolutely right and makes a good point, and I will mention in a few moments some specific things my party would like to see done. We certainly oppose the recent freeze, as we do not believe that pensioners should be the first to feel the pain of the recession. Freezing parts of the state pension would be a blow to those pensioners who already live on or near the poverty line. The woeful inadequacy of the basic state pension is a legacy of successive Governments. Since the link to which he referred was broken 30 years ago, the pension has simply withered away, and the Government have done nothing to reverse that trend. The whole pensions edifice is built on a totally inadequate foundation, and until that problem is addressed all other pension reform will be merely tinkering at the edges.
Four million pensioners are poor enough to be entitled to means-tested pension credit, and that number will rise to encompass half of all pensioners by 2050. Is that something we ought to be proud of? About one third of those who are entitled to claim pension credit do not do so, partly because of the complexity of the system and partly because they do not want to spend their lives asking for handouts.
The Liberal Democrat party is the only party that has pledged to restore the earnings link immediately rather than by the end of the next Parliament or beyond, and we would like a target to be enshrined in legislation to eradicate pensioner poverty in the same way that this Government set a target on child poverty in the 2010 Act. We believe that a decent state pension is the key to a solid foundation for retirement, and our goal is to introduce a citizens pension that would give people a full pension regardless of their contributions. It would gradually be raised high enough to lift people out of means-testing.
Several other policies would be particularly beneficial to pensioners. For example, we propose that the personal tax allowance be raised to £10,000 for everyone-the hon. Member for Birmingham, Selly Oak referred to this-so that no pensioner with total income below that amount would pay any income tax. That would benefit most tax-paying pensioners to the tune of some £100. We also propose to abolish council tax and replace it with a local income tax that is based on the ability to pay, which would be of huge benefit to most pensioners. They would pay less under a local income tax than they do under council tax.
My party welcomes the Government's plan to auto-enrol workers in personal accounts under the new National Employment Savings Trust scheme, as only one half of today's work force is currently paying into a private
pension. However, that will work only if the Government are prepared to ensure that employer contributions are at a much higher level. The proposed contribution levels for personal accounts do not go far enough to ensure decent provision.
Poverty among working-age adults without dependent children is now at its highest since data were first collected in 1961. That is because the Government have focused their policies overwhelmingly on families with children. We understand that, but we should not disadvantage families who do not have children.
Of course, some of the biggest casualties of the recession have been young people. More than 700,000 18 to 24-year-olds are out of work, and that can be a real disadvantage for them as they start their working lives. We need to intervene and offer help far earlier than we do. My party has pledged to offer young people access to further education, internships and train-to-work programmes after 90 days out of work. We do not think it is right to abandon young people, often in the midst of their first attempts to find work and start a career, for up to six months without a chance to do something to improve their employability. We would offer all those young people the £55 a week jobseeker's allowance rate as a training allowance while they complete a three-month internship with an employer.
We believe that the next Government must continue to invest to stimulate the economy and create jobs. We want to rebalance the British economy and build it again on solid, sustainable and green foundations. We have identified £3.5 billion of current Government expenditure that could fund an economic stimulus and job creation plan. Together with our banking reforms, which will end the dependence of the British economy on the City of London, that plan will kick-start economic growth on stronger foundations than before, and ensure that growth and jobs last as they should.
As we face the election, which is being called today, there are several steps that can be taken in an attempt to stop a further rise in poverty and inequality. The question at this election is whether the next Government will aspire to such aims. A Liberal Democrat Administration certainly would.
Andrew Selous (South-West Bedfordshire) (Con): I pay tribute to the hon. Member for Birmingham, Selly Oak (Lynne Jones) for her speech. This is an important subject, and I am glad that she secured this debate. It is a pity that there are not more Members here to participate in it, but we understand why, in the circumstances of the general election being called today.
I welcome the hon. Member for Hereford (Mr. Keetch), who I believe is also standing down at this election. He does not usually speak for his party on these matters, but he is welcome here today. I am not sure where the members of his shadow Work and Pensions team are, but we wish them well in their absence.
I was particularly struck by the quote from Robert Kennedy that the hon. Member for Birmingham, Selly Oak ended with. I have not heard it before, but I shall acquaint myself better with it when Hansard comes out tomorrow. It struck me that there was a certain similarity in what he said and some of the issues around gross
well-being, to which my party leader, my right hon. Friend the Member for Witney (Mr. Cameron), has drawn attention.
We need to look at the facts in this important area of poverty and inequality and try to understand why things have become worse under this Government since 2004. According to the Joseph Rowntree Foundation and, indeed, the Government's own figures on child poverty and other statistics, it was at that point that poverty, unemployment and repossessions started rising in the UK. That was well before the recession began.
Poverty is now back at the same level it was in 2000, having risen every year since 2004-05, and an additional 400,000 children now live in poverty. There has been an increase, not a decrease, during that time. We are indebted to the work of Save the Children and others who pointed out a particularly worrying trend as far as severe poverty among children is concerned. They said that it, too, has risen since 2004-05.
This debate has rightly dealt with the position of pensioners living in poverty. There are 2.5 million pensioners living in poverty in the UK, which is some 100,000 more than in 1996-97. My party is also committed to restoring the earnings link.
Helen Goodman: I would like to give him the actual figures. In 2000, there were 3.1 million before housing costs; now there are 2.9 million. After housing costs, the measure was 4.1 million, and it is now 4 million. The hon. Gentleman simply must be accurate in what he is saying.
Andrew Selous: When the Minister reads the record tomorrow, she will see that I said that poverty, not child poverty, is back at the same level as in 2000. Those are the Joseph Rowntree figures. If she wants to dispute them, she is welcome to. She knows very well that my figures on child poverty referred to the increase since 2004-05, which is extremely well documented, and on which, sadly, we have not had much fresh thinking from this Government.
Another group that I am glad was mentioned today is the disabled. Several Members mentioned them in their speech, which was right and proper, because we know that there is a much higher rate of poverty among disabled people. Some 16 per cent. of non-disabled
people live in poverty, but the figure is around 30 per cent. for disabled people. I shall shortly discuss what my party would like to do about that. We must never lose sight of that group when we discuss these important issues.
We now have the highest levels of inequality since the comparable time series was started in 1961. That should concern us all, as it has a number of serious negative effects. The Gini coefficient, which is a commonly used measure of inequality, is now above the level that this Government inherited and, as I said, at the highest level since the start of a consistent time series in 1961. The National Equality Panel, which the hon. Member for Birmingham, Selly Oak rightly quoted, said that we have the highest level of inequality since the second world war, and the UK is placed seventh worst for income inequality in the list of OECD nations-so considerably worse than many of our European neighbours.
My party is committed to building a society that is not only richer but also fairer and safer, where opportunity is more equal and poverty is abolished. We will focus our efforts on looking at strengthening families and communities and at incentives into work, which, although it has not been raised so far in this debate, is important.
With our major focus on welfare to work, we will replace this Government's complicated, bureaucratic employment programmes with our work programme, which will be a single programme of back-to-work support for everyone on out-of-work benefits, including the 2.6 million on incapacity benefits who have not had the attention that they should have had under this Government to try to help them back into work. We will also create 400,000 new apprenticeships and training opportunities over two years to tackle youth unemployment and prevent a generation from being written off by the recession.
Lynne Jones: The hon. Gentleman mentioned the slight increase in inequality, but that is largely due to the huge increases in the highest rates of pay. What would the next Conservative Government do, were they to be elected? Hopefully, they will not be elected. Would they support a high pay commission, for example?
Schools are the motor of social mobility. They provide children from low-income backgrounds the chance not to replicate low income among their own children and to increase their life chances. We will weight school funding towards children from the poorest backgrounds through a pupil premium, ensuring that extra funds follow those pupils into the schools that educate them. The hon. Lady was right to draw attention to that. She mentioned the woeful underperformance of children on free school meals compared with other school children. That is a passion of the shadow Secretary of State for Children, Schools and Families, who has raised this matter on a number of occasions.
We want to see a universal health-visiting service for all parents and we want Sure Start to go back to its original purpose. We share the Government's aspiration to halve child poverty by 2010-although sadly, from what we have seen in the documents in the Budget, that seems not to have been achieved-and eliminate it by 2020. We supported the Child Poverty Bill during its progress through the House.
We want to make greater efforts to try to break the link between disability and poverty. We will focus on trying to find jobs for people who are disabled and trying to enable them to progress in their careers. One area that will be particularly important in that regard is flexible work. Again, there has not been leadership from the Government on promoting and creating flexible work. Five Departments have numbers of part-time employees only in single figures. The Government could and should lead by example.
The hon. Member for Birmingham, Selly Oak is right to say that levels of inequality matter in society. They matter for a number of reasons that are important to Conservatives. We know, from Professor Richard Wilkinson's book, which the hon. Lady mentioned-I have a copy in my office, which I have been reading-that in more unequal societies there is less volunteering and more crime. I was looking at some evidence over the weekend showing that the level of crime in London's most unequal boroughs, compared with five more equal boroughs, is significantly higher. We also know that levels of mental illness are higher in areas where there is greatest inequality. We can say that more unequal societies lead to additional costs to the public purse and prevent us from being a more cohesive society.
I am pleased that the hon. Lady has the book on early intervention by the hon. Member for Nottingham, North (Mr. Allen) and my right hon. Friend the Member for Chingford and Woodford Green (Mr. Duncan Smith). That is a good example of important cross-party collaboration on early intervention. She mentioned the importance of brain development. If I remember rightly, she said that if time in the 0 to threes, particularly, is lost it is much more difficult to make progress with a child. Politicians need to take notice of this important epidemiological insight. I believe that this cross-party work has been significant in doing that. Early intervention is important, but I agree with Professor John Hills that children need a series of what he describes as in-flight boosts to correct inequality later on.
I say to the Minister and to the hon. Member for Birmingham, Selly Oak that it took a Conservative Mayor of London to bring in a living wage for local authority staff. The cleaners who cleaned the Minister's office early this morning are not paid the London living wage by her Department: I found that out from answers to parliamentary questions. I wonder whether that is as it should be.