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The Parliamentary Under-Secretary of State, Department of Social Security (Baroness Hollis of Heigham): My Lords, I have not had prior notice of these questions. However, it is not a debate on transport.

Lord Bradshaw: My Lords, because I intended to raise these issues, I wrote a letter about them which should have arrived here on Monday morning.

One of the greatest obstacles to maintaining services in rural areas is the need for small buses. The present regulations limit the size of what is called a taxi-bus--

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the Government are keen on such buses having given a lot of money to them through the challenge fund--to eight seats. The limit needs to be raised to 12 seats to accommodate the people in rural areas. In many places, large buses are inappropriate to the needs of people.

My final point relates to bus passes--I think that they will be made available to senior citizens--for which they will pay £5 and receive half fare travel. I understand that a provision will be included in the Transport Bill. There are two worries. First, we want to be sure that people in one local authority area pay one £5 and can travel over the boundaries into other areas. With the reorganisation of local government, people often want to shop in the next town which is outside the local authority area. The pass must be useful.

The second and more important point relates to the young person's rail card. It is a commercial approach and many young people use it. There is no equivalent on buses. Many young people find bus fares incredibly expensive; mention has been made of that. If the Government are concerned about social exclusion of young people in rural areas, they should consider seriously extending the possibility of half fare travel to young as well as old people. They are two distinct groups but they both suffer from a form of exclusion.

6.28 p.m.

Lord Lucas: I, too, congratulate the noble Earl, Lord Russell, on initiating the debate. One of the few pleasures of being in opposition is to find myself on the same side of the House as the noble Earl, and I intend to enjoy that for the next 10 minutes.

I shall concentrate on the social exclusion aspect and on those people who do not have access to mainstream society and economic life but nonetheless should have. There are many reasons why people cannot gain such access. They tend to be personal and diverse. The reasons are hard to categorise and, as the noble Lord, Lord Bradshaw, demonstrated, they are cross-departmental. I think that the only departments the issue does not touch are the Foreign Office and Defence.

The noble Baroness, Lady Miller of Chilthorne Domer, raised the point earlier of communications. The obvious solution to that is for the Department of Trade and Industry to have a clause in its contracts with mobile telecommunications companies that their masts and the accompanying trunk telecoms to connect them to their base stations might be used for the forthcoming ISDN system that is to be the way for businesses to connect to the Internet but that is otherwise restricted to places within three miles of the main exchange. If one is seeking to tackle a problem that wide and diverse, it is extremely difficult to do it out of one ministry set up in a conventional way.

I hope that we all agree that this is a problem we need to tackle. There is immense human cost and suffering as a result of people being excluded from the mainstream of society. To be excluded is a very

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uncomfortable and unpleasant thing on a personal basis. It costs the country a great deal to support people who are excluded in this way and who could, if they were able, earn their own place in society. In many cases people who are subject to this become disruptive influences in society and cost all of us a great deal of heartache and disruption in our own lives as a result. It is a hard and long road to do something about social exclusion. It is, as the right reverend Prelate said, a matter of community, not of partisan politics. It is something that we all ought to be joined together in doing. We ought to respect the structures set up by this Government. I am immensely impressed by the Social Exclusion Unit and by what lies behind that as a philosophy. We ought to give a commitment to respect that and to respect the structures and the initiatives so that our very long term policies can be carried forward from one government to the next without ever wondering whether they will be cut short as a result of a change in government, let alone a change in Prime Minister or Chancellor of the Exchequer.

As the noble Earl, Lord Russell, said, research is enormously important. It seems to me sometimes, certainly when I look back at my time in government, that there is a disregard for the value of information. Information is not collected. When it is collected it is not made widely available to researchers. In all these things we are dealing with a difficult and complex problem. We ought to approach every single initiative from a research perspective. From the very beginning they ought to be designed to produce information, enabling evaluation to take place of how they have gone. Otherwise, how can anyone else build on what has gone before? I am sure that this Government are improving upon something that was our practice. I deduce that from the gestures of the Minister. But there was certainly a lot of potential. When one looks at the area of social exclusion about which I speak, I do not think that public subsidy is the thing. This is not a question of bread and circuses. We are looking at people stuck down a well, floating on a table, and raising the water level a bit does not make much difference. We have to throw them a rope and help them to climb it.

The key issue we have to tackle is the tax rate on people whose benefits and entitlements, as the poorest members of society, are withdrawn as income comes in. This Government are starting on the issue; we never did. I shall be praising the Government far too much for the comfort of my own Front Bench. One of the notable things we did was to reduce the top tax rate to 40 per cent because we understood that that would increase the Treasury tax "take" and therefore the Treasury's ability to help the lower paid. This Government, to their credit, have taken that on board and have not sought to reverse it. We never had the courage--and certainly the Treasury never had the courage--to do that for the lower paid. There may be an argument that these people have been so long out of economic life, that, like the average Russian, they will not know what to do with the freedom. That should not stop us trying. We can do these things by way of test, trying this way and that way to find out

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what kind of support is needed. We ought to have in mind the aim that we should bring the tax rate down. Forty per cent may be a little ambitious. But certainly 50 per cent should be considered. One ought to be able to keep half the extra one earns. I am sure that if people could do that, then the incentive--when people have adjusted to put work above the benefits received--to go out there and earn a bit extra would be sufficient that the benefits to the Treasury at the end of the day would more than outweigh the cost. That is a very hard argument to win with the Treasury. Because it is being done by way of the benefit system, we can carry out trials in restricted areas. We do not have to change the whole tax system. There could be trials in the benefits system. I hope that that is something the Government will come to consider if they are not already doing so.

We need to increase people's access to training and education, jobs and advice. People who are stuck in social deprivation have a very hard time making it on to the jobs market. In all kinds of ways they become disabled from getting there. There needs to be great concentration on providing the services that these people require to get back into work. The Government are doing well. One only has to see what services are available to ex-prisoners to realise that an awful lot needs to be done.

There is much we can do to stop people ever getting into this difficulty or, if they get into it, to make sure that they have the ability to get out. It is an area where very notably the sins of the father are visited on the son. One has only to look at the backgrounds of many prisoners to realise that far too many come from homes where life was difficult and where they lacked the training and upbringing that would have equipped them to deal with problems and difficulties. Prison is one of the places where parenthood education is really starting to show. There are some very interesting initiatives taking place. Prisoners respond enormously well, not surprisingly, because it is something they realise they need but to which they never had access before. There is great scope for taking that kind of initiative out into schools generally. Very few of us who embarked on marriage really knew what parenthood was about other than what we had learned from our parents. If you have not learned much from your parents, there is very little you can do.

The Government also, in my view, need to support marriage. It is not a question of marriage being the best thing for the parents; it is clearly the best thing for the kids. It is the best environment in which to bring up children. One must recognise that marriages break up a great deal in modern society, that there are many different forms of family, and that family is something that survives the end of marriage. There is no reason why a kid should not associate with both parents. In my case I hope that they do. Family is something that does not end with marriage. There should be structures within government to support that continuation. It should not be left to parts of the noble Baroness's department which at times seems to be driving families apart when a marriage has ended. Perhaps that was more the practice under our government than hers. It does, however, seem to be the case in some respects.

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We need to do a great deal about education. Much has been said on that. We did a great deal and this Government are building on that, equipping children with the basic things they need in order to succeed in life. Literacy and numeracy come at the head of those requirements. I would put behind that what I think comes under the general heading of citizenship, which this Government, again, are pursuing. There should also be an emphasis on history and developing a real sense of who we are and why we are and where we are in this society so we can feel that it is something to which we belong. That is one of the great motivators. A feeling among people that they are able to do things within society creates the feeling that they belong to it and that they have a part in it.

We should, beyond anything else, value low achievers. It is one of the great features, for instance, of the education system in Singapore that they really value the bottom 20 per cent on the academic scale because that is where the really interesting people are. By making sure they come out of education well equipped for the world, they have built some world class companies consisting of people who were in that bottom 20 per cent.

We all have much to learn. There is much to do in this area. I congratulate the Government on what they are doing and I hope they continue their good work.

6.40 p.m.

Lord Patel : My Lords, I, too, thank the noble Earl, Lord Russell, for initiating the debate. I want briefly to speak about the health of women and children and socio-economic depravation.

The health of women is particularly important, not only because they constitute more than half the population but because of their role as carers for children and other dependants, and in pregnancy itself. The objective of pregnancy care has always been to facilitate the birth of a full-term, well grown normal baby with a minimal risk of mortality and developmental problems. Low birthweight babies are more likely to have health and educational problems and it has now been shown by Barker and many others that low birthweight is associated with hypertension and cardiovascular disease in the adult offspring and that the association may be causal. Low birthweight is twice as common in lower social class women, thus rendering even more important the provision of adequate resources and care for women before, during and after pregnancy and neonatal services for the baby.

The confidential inquiry into stillbirths and deaths in infancy, published this month, illustrates with tragic clarity the effects of poverty on health. It reports:

    "the research interviewers encountered examples of poverty and deprivation of a degree which they could hardly believe was possible in late 20th-century Britain. This striking association of absolute poverty with the risk of infant death remains as clear as when first described by Templeman in 1892".

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To that can be added information from the World Health Organisation that England and Wales share with some other countries in eastern Europe the highest rate--7 per cent--of low birth weight babies under 2,500 grams in Europe.

Evidence previously presented by the Royal College of Obstetricians and Gynaecologists to the independent inquiry into inequalities in health associated the poor nutrition of the mother with low birth weight. Nutrition is considerably worse in deprived women than in the better off.

The work of Professor Eva Alberman has clearly demonstrated the reduction in child mortality and morbidity that would result from the improvement in the birth weight of babies born at less than 2,500 grams through improved nutrition of the mother. Long-term health problems begin with underfed conception. Foetal growth restriction during pregnancy is a major cause of still birth, blindness, deafness, mental handicap and of the higher risks of developing chronic diseases in later life. The costs to the Treasury of ill health and educational under-achievement start in the womb. While it is obviously right for government health policies to tackle heart disease, cancer and mental health, nevertheless, prevention through adequate minimum incomes in pregnancy needs looking at.

Some of the other findings of the confidential inquiry are also pertinent. The risk of sudden infant deaths was higher the lower the family income. Twice as many families experiencing sudden infant deaths as control families received income support. A striking feature of the study was a strong association of both explained and unexplained deaths with extreme poverty and socio-economic deprivation. Parents were younger, less well educated, had lower incomes, were more likely to be unemployed and lived in less suitable housing, which was commonly overcrowded. Mothers were less likely to have a supportive partner than were the mothers of control infants. Families suffered the effects of multiple deprivation. A consistent thread through many of the cases was a background of social chaos, often coupled with abject poverty.

A similar association exists between childhood mortality and morbidity. While childhood mortality rates have fallen, the social class differentials persist. Infant mortality rate for social class V births was 70 per cent higher than social class I births.

Childhood morbidity, too, for certain diseases such as respiratory problems is rising and health inequality between class groups is widening. From the time they are born, young children have a very different experience of factors hazardous to their health. The health risks experienced is influenced powerfully by social position.

I support many of the pleas made by several noble Lords to the Government. Although I recognise much that the Government are doing to help the socially disadvantaged, I hope that they will do more.

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6.45 p.m.

Baroness Wilkins: My Lords, I, too, am most grateful to the noble Earl, Lord Russell, for introducing this important topic for debate. It is of vital concern to disabled people and is so wide-ranging in its impact on us that today I shall concentrate on one area.

The Secretary of State for Education and Employment said in a speech last year,

    "In the end it will be work that protects people from poverty".

If that is the case, there is a significant group of disabled people--those who need personal assistance in order to work--who are being left out of current government policies.

Disabled people are twice as likely as non-disabled people to be unemployed and, once unemployed, find it harder to get back into work. As John Knight and Martine Brent quoted in their report on disabled people's experience of social exclusion, 41 per cent of those surveyed agreed that,

    "It's virtually impossible to get a job if you're disabled".

The Government's New Deal and other programmes aim to increase the number of disabled people in employment and to reduce the financial disincentives to work which have sometimes been created by the benefit system. However, recent policy initiatives have neglected to tackle a significant barrier to employment experienced by many disable people; a barrier which has been called "the personal assistance trap".

People who need help just to get up in the morning, be washed and dressed and go about their daily lives are increasingly being charged for these basic necessities once their income and savings rise above the most meagre levels. These are the people whom many would regard as the most severely disabled and therefore the most in need. In a recent interview the Minister, Hugh Bayley, said that the Government hold the view that disabled people ought to pay for "social care". It is the Government's policy on charging and means testing for this care which is creating severe financial disincentives to personal assistance users who want too work.

The irony is that over the past 30 years new technology with such possibilities as voice operated computers has opened up the world of employment to people with even the highest support needs. Successive governments' policies have also provided alternatives to residential care and dependence on families so that severely disabled people are now able to hold down a job and live independently with support in their own homes.

People who need a significant amount of personal assistance to go about their daily lives can look to two main sources of help: either cash payments in the form of direct payments from the local authority and the Independent Living Fund or direct services provided by local health and social services such as home care. All of them have financial disincentives to work and particularly to any form of advancement. ILF payments are means tested and so increasingly are

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direct payments. There are only five local authorities in the country which do not charge for home care services. Mine is one of them--Hammersmith and Fulham--and now it is proposing to charge £5 an hour to anyone with savings or income of £16,000.

Until January, ILF clients in employment were able to earn only £30 above the level of income support before deductions were made for their care. This also applied to their partner's income. Not surprisingly, with this major disincentive to work, only 100 out of the 5,000 severely disabled people helped by the ILF have managed to find jobs.

These means-tested rules have now been relaxed to allow clients to keep 45 per cent of their earnings between £30 and £200 a week. Above that figure, they still have to pay everything they earn towards the full cost of their care. While this relaxation is welcome, it still means that severely disabled people are being forced to pay 55 per cent tax on part of their income. That is on top of income tax, council tax, business rates and VAT.

The maximum payable has also been raised to around £30,000 a year. This can be made to sound a generous amount for disabled people; that is, until you recognise that it is purely wages for other people--other taxpayers. As Paul Matthews, a small businessman employing 24-hour assistance, put it:

    "I employ nearly 30 people and yet every single one of them earns more money than I am allowed to keep!"

I believe that there should be no means testing or charging for personal support services. If an individual patient costs the health service £30,000 a year, we do not demand, if they are working, that they contribute to the costs of their healthcare. Nor do we give refunds to those without children or charge extra for education services to those with several. Surely it is for the good of a healthy, just society that we should all contribute to the cost of providing personal support services to those whose lives would not be viable or would be intolerable without them.

To means test such support provides a powerful disincentive to work and save for people who already face enormous extra costs. The Government cannot tackle social exclusion for this group, nor can they be truly effective in getting disabled people and carers into, or back to, work without addressing the whole infrastructure of personal support.

The inquiry of the Select Committee on Education and Employment, Opportunities for Disabled People, published on 24th November last year, concluded that,

    "disabled people with high support needs who wish to work face considerable financial disincentives".

It recommended that the Government establish a cross-departmental working party to examine a range of options within the tax and benefits system that might ease "the personal assistance trap". The Government have not yet taken up this recommendation. I urge them to do so.

6.52 p.m.

Baroness Sharp of Guildford: My Lords, I should like to join with other noble Lords in thanking my

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noble friend Lord Russell for initiating this very important debate. As my title implies, I come from Guildford, which is hardly the most deprived area of this country. However, even in Guildford there are pockets of deprivation.

I am a governor of a small primary school located on one of Guildford's council estates. It is a one-form entry primary school. Thirty per cent of the children attending the school have special educational needs and many have behavioural problems. They come from a variety of homes, of which quite a number are broken homes. There is a high proportion of single parents, which brings the constant problem of new boyfriends moving in and of kids being resented by those new boyfriends. Many of the families are on benefit. An acute drugs problem exists on the estate. A large number of children qualify for free school meals. These are all indicators of deprivation.

Unfortunately, the school has not been able to attract enough pupils. Funding depends upon children being admitted and so the school is now under threat of closure. Since this possibility was announced and we entered into the rigmarole of procedure to react to the announcement, behavioural problems among the kids have shown an enormous upsurge. For many of those kids the school represents an oasis of stability in lives full of instability. The children get from their teachers a certain amount of tender loving care which they do not get in their homes. They are extremely vulnerable children. I believe it is vitally important that, if at all possible, such an oasis of stability should be provided for them.

Should we lose those children at this early stage, we know quite well what will happen to them. They will become truants in secondary school. They will truant only marginally in the first two or three years and then they will drop out of the system completely. We also know that the minimum cost of sending such children to special schools is £45,000 a year per child. Against that, the cost of £25,000 to fund one extra teacher in a small primary school could be well worth while.

Some noble Lords will know that I have been thrown into the proceedings on the Learning and Skills Bill which is currently going through the House. Further education is not an area about which I knew a great deal, but I have entered a steep learning curve over the past few weeks. Studying for the Second Reading and Committee stage of the Bill has led me to take on a large amount of reading around the subject. Among the material was a study by the Social Exclusion Unit entitled, Bridging the Gap. I should like to read out to the House one or two paragraphs from the report to illustrate the problem of young people who drop out of the system. Among the main conclusions of the report, it states:

    "There is a clear structure for those who do best at school: full-time study for a further two years, leading to entry into higher education or reasonably skilled and secure employment, with the prospect of good career development in the years ahead. The achievement of high status qualifications and entry into the places they lead to provide a clear goal, and what can be seen as a 'rite of passage' ...

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    The passage through the 16-18 years for those who have not achieved the success in school needed to enter these routes, or for whom personal or family problems, or poverty, get in the way of it--disproportionately people who come from backgrounds featuring a variety of kinds of social exclusion--is, by comparison, confused and lacking in clear goals and transition points. It offers less structure than the New Deal offers to older unemployed young people ...

    The young people involved are disproportionately from poor backgrounds in deprived areas. They may suffer multiple disadvantage and few recover from the poor start that they have had. The report shows that where life goes wrong, or continues to go wrong, for young people in this age group, social exclusion in later life is disproportionately the result".

So, what about the New Deal? Is the New Deal helping such young people? No, because it is not aimed at 16 to 18 year-olds. As we know, many young people, having drifted into petty crime, drugs and so forth, have come off the register. Once that has happened, they are no longer eligible for the New Deal. Unless at some point they are once again picked up by the education and training system--I shall return to that point shortly--almost by definition, they will not be helped by the New Deal.

Many such young people, and in particular those from areas like Guildford, drift towards London. For that reason, London has a disproportionate number of young people who have come off the register. In addition, London has been experiencing real problems with the New Deal. Some 22 of the 26 New Deal areas with the highest percentage of young people leaving the New Deal system for unknown destinations are based in London. A government-sponsored study of what happens to New Deal participants shows that only 25 per cent of those who left the New Deal system found continuous employment; 40 per cent who found work were unemployed six months later; 31 per cent had left the scheme without attending a single interview; 55 per cent of those who had left the scheme were unemployed six months later and 19 per cent of those were not claiming benefit.

The Demos study of the socially excluded suggested that the New Deal was not helping very much. It was exacerbating the point because, if one comes off the New Deal in this way, one may incur sanctions and not be able to claim benefit. The Demos study warned that young people simply will not be fed through a programme.

A BBC "File on Four" programme last summer featured a fellow called Paul. He was a New Deal client who considered leaving the scheme early or not co-operating with it. When asked about the consequences, he said, "I'll end up getting my benefit stopped". When asked what he would do then, he replied, "I'll do what everyone else does--most probably go out and rob or something. Know what I mean? To get money. Or I'll just go sick".

The Government are addressing that issue. Last week they published a rather splendid document called Connexions. It has a lovely, jazzy cover and concerns a new service which is trying to pick up 16 to 18 year-olds. I believe that that is a vitally important job because we must not let them drift in this way. The

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service proposes that the Careers Service, as it now is, is reoriented towards social exclusion and that we develop a new generation or class of people who will be mentors on a highly labour-intensive, one-to-10 basis. As I say, I believe that that is admirable in intent.

I shall read a little about what the service says will happen. It gives an example of a boy called Ahmed whose parents have split up in his final year at school. As a consequence, he does not do as well in his GCSEs as expected. He fails to take up his modern apprenticeship and does not have a job. He drifts in the streets with the 16 to 17 year-olds, and, of course, the great danger is that he will take part in petty crime. The Connexions document states:

    "In the future: The Connexions Service would identify that Ahmed had not taken up his Modern Apprenticeship placement and would make contact with him. He would be encouraged to work with a Personal Adviser who would support his needs. The Personal Adviser would be able to develop a package of support for Ahmed to enable him to take up a Modern Apprenticeship placement; this could include confidence building, exploring his feelings in relation to his family, retaking a couple of GCSEs and providing a mentor. They would also be able to organise accommodation for Ahmed should the situation with his mother not improve".

Admirable. Splendid. However, I believe that it is most important to bear in mind that Demos said that young people will not simply be fed through a programme.

That brings me back to my little primary school. It is essential that as far as possible we act when those children are young. It is essential to bring together these facilities. Quite frankly, it is worth spending £25,000 now to save many, many thousands of pounds of expenditure later.

7.3 p.m.

Lord Beaumont of Whitley: My Lords, the person who is 23rd on the Speakers' List on a day such as this must spend three-and-a-half hours worrying about whether the point that he is going to make will have been made far better by others before him. When he reaches the stage of rising to his feet and realises that it has not been made, he has another worry: that possibly the point has not been raised because it is not worth making! I hope that what I shall say in this debate is something new and is a point worth making. I believe that I can produce some evidence to that effect.

Those of us who were in serious politics in the 1960s were under the illusion that the lessons of the 1930s had been learnt and that never again would we see serious poverty taking over a whole section of society, continuing generation after generation and, if anything, increasing. Yet, such is the case today. The corollary, as everyone knows and as the Rowntree report makes clear and as speaker after speaker has said, is ill health, child suffering and crime.

The answer of the mainstream parties is to juggle a marginal tax rate here and attract inward investment there. Of course, I exaggerate, but it is along those lines. In doing that, they neglect the fact that the whole economic system which now governs most of the world is geared to reducing as much as possible the costs of production. The inevitable result is that the rich get richer and the poor get poorer; there is a dramatic split

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between the comfortably off who receive better education and more and more interesting work, and the poor who receive worse education and less and less interesting work.

Incidentally, that almost universal tendency has a devastating effect on politics today. I believe that it is as a result of that that the Conservative Party, whatever its achievements, has ceased to conserve; the Labour Party as a whole, in spite of the number of speakers on the Benches opposite who have shown real compassion today, seems to have ceased to be the champion of the poor.

However, surely what is needed is not the marginal charges to which I have referred but a complete acceptance of the need for drastic and revolutionary action. At the very least, we need serious, redistributed taxation. But probably we need much more than that. We must accept the fact that modern technology means that we can divorce economic security from wealth creation. For a long time, many of us believed that the answer lies in the concept of "citizen's income".

The noble Lord, Lord Desai, who has just entered the Chamber and who, I very much regret, was unable to take part in this debate, was one of those who believed in citizen's income. For a long time, the Liberal Democrat Party was in favour. I well recall the unparalleled tears of rage with which Lady Seear--for so long a very respected leader of our party in this House--greeted the successful and, as she thought, intellectually dishonest efforts to abandon it. I, and the Green Party which I represent, have that as a serious plank of our policy.

This is not the time or the place to argue the undoubtedly complex issues involved. I shall quote briefly from a pamphlet by that very distinguished writer, James Robertson:

    "Support for [Citizen's Income] continues to grow, especially in Britain and Western Europe. A recent study ... showed that a full Citizen's Income could be introduced in Ireland over a period of three budgets. It would result in nobody receiving less than the poverty line of income; all unemployment and poverty traps being eliminated; and it always being worthwhile for an unemployed person to take up a job".

There is an intellectual case for citizen's income. However, for the most part, I am content merely to point out that your Lordships have already solved the problem. This Chamber provides satisfying jobs for its Members which are worth while and which stretch us. It pays us for them through an attendance allowance--not, possibly, a citizen's income and certainly not what would have been considered to be a nobleman's income in another age, when a Peer, having to sack his pastry cook, asked, "Can't a fella have his biscuit?" However, it provides a source of income which allows many of us to do this job and make ourselves available for it. Ceteris paribus, this is not at all a bad pattern for what employment should and could eventually be in the whole of society. What is good enough for us is possibly good enough for the socially excluded of this nation.

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7.9 p.m.

Lord Clement-Jones: My Lords, first, it is a privilege to wind up from these Benches after a debate such as this. We must all thank my noble friend Lord Russell, not only for initiating the debate but for so tellingly introducing the subject. Few of us can match the depth or deftness of his analysis. He has given us the opportunity to cover a broad range of issues today. I believe that your Lordships will agree that the debate has succeeded admirably in its purpose in bringing forward many of the issues raised by the Rowntree report.

I should like to take a few examples of the issues mentioned during the debate. We have the broad issue of income inequalities and poverty. There are the bare statistics that those below 40 per cent of average income have increased by more than 1 million since 1995. Our income inequalities have risen faster than anywhere, except New Zealand, in recent years.

The noble Baroness, Lady Turner of Camden, and the noble Baroness, Lady Crawley, raised the issue of child poverty and how that has increased over the years. My noble friend Lord Russell raised benefit penalties and disentitlement issues. My noble friend Lord Ezra raised the key issue of fuel poverty and housing problems, including the problem of housing quality. The noble Lords, Lord Rea and Lord Patel, raised issues of public health, poor health and health inequalities.

The noble Baroness, Lady Turner, also raised the impact of poverty on crime and levels of imprisonment. A number of your Lordships raised particular issues relating to groups within the community. The noble Lord, Lord Northbourne, and my noble friend Lady Sharp of Guildford raised the issue of inequalities among the young. Older people were the subject of the speech of my noble friend Lady Barker. My noble friend Lord Russell originally raised the issues of inequalities among the ethnic minority communities, as did the noble Baroness, Lady Howells of St Davids. The noble Baroness, Lady Crawley, raised issues of inequality among women.

Then we had a whole series of speeches relating to particular communities, such as the mining communities raised by the noble Baroness, Lady Gale, as well as rural communities, raised by the noble Baroness, Lady Byford, and my noble friend Lady Miller of Chilthorne Domer. My noble friend Lord Bradshaw raised a number of transport issues relating to those rural communities, as well as other issues, such as public services and amenities.

Then, of course, the noble Countess, Lady Mar, raised particular conditions and the inequalities suffered by those with CFS/ME, organophosphate poisoning and Gulf War illnesses. I have considerable sympathy with her over the issues that she raised.

In some ways the most worrying aspects were those raised by the right reverend Prelate the Bishop of Durham. There was, for example, the question of the geographical concentration of social exclusion and poverty in particular areas.

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Before I try to pull together the strands of some of the conclusions that your Lordships came to, I should like to concentrate for a few moments on health inequalities and other health issues, since they relate to my own interests.

Differences in mortality rates between those at the top and those at the bottom of the economic social scale have widened in the past 20 years. They are very heavily influenced by geographical differences. The figures for low birth weights have worsened in exactly the same way. Similarly, obesity is very strongly affected by social and economic class.

The Acheson report of 1998 remains at the core of the public health debate. It suffered from the disadvantage of not being costed or prioritised, but it performed a valuable role in reminding us of the reasons for health inequalities and of what action should be taken. In my view, the key recommendation was the third: that there should be action to reduce income inequalities and improve living standards of households in receipt of social security benefits. Basically, the conclusion was that benefit levels were inadequate to maintain good health. The public health White Paper published the following spring said that the story of health inequality was clear: the poorer a person is, the more likely he or she is to be ill and die younger.

But there was considerable disappointment with the Government's response to the Acheson Committee. There were key targets relating to cancer, mental illness, cardiac disease and accidents, but it was not clear, despite the fact that the link to social conditions was accepted, that there was any kind of poverty target. Without such targets, Acheson now risks the same fate as the Black report.

I acknowledge that the context has changed. The last government would not even allow the use of the word "inequalities" in their documents about health; they would respond only to "health variations". So we have made some progress.

A recent report on cot deaths highlighted the link to poverty again. One in 200 of low income families--a parent under 25 and unsupported by a partner--suffers a cot death, compared with one in 8,500 in families where the parent is over 25 and supported by a partner.

The UN Development Programme now considers the UK to be one of the most unequal industrialised countries in the world. The UK has seen the greatest growth of social inequality of any European country in recent years.

Low income is the greatest risk factor when it comes to ill health. This has been clear since 1837, when the first Superintendent of Statistics, William Farr, published his report. But it has always been an unpopular message. Edwin Chadwick had to publish his 1842 report, Condition of the Labouring Population, himself when the Poor Law Commission refused to do so. The Black report in 1980 was similarly buried.

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The Widening Gap report, published just last month, said that poverty levels in Britain were far too high for us to expect to see inequalities in health fall. The authors' conclusion was that changes in social security under previous governments had directly led to greater inequalities and specifically greater health inequalities. The report's conclusion was that the poorest 20 per cent would be 20 per cent better off if the previous government had not reduced social security benefits, and that the ratio of the richest to poorest 20 per cent would have been reduced from 9:1 to 5:1. That is an extraordinary figure.

To their credit, the present Government have recognised that action needs to be taken across the board. The former Secretary of State for Health, Frank Dobson, said on 17th March 1999:

    "Promoting better health is not just a matter for the NHS or for social services. This is a job for the whole government, joined up government. All the Cabinet are working together to tackle the things that make people ill".

He also recognised that:

    "Poverty is a principal source of ill health. Poor people are ill more often and die sooner".

As Acheson suggested, there should above all be concentration on the first five years of life. As the noble Lord, Lord Patel, graphically illustrated, correlations between low birth weight babies and future poverty and under-achievement are absolutely clear. We on these Benches welcome the Prime Minister's promise to eliminate child poverty by 2020. That is reflected in the first annual report on tackling poverty and social exclusion, but we are not convinced that the targets are very challenging.

I want to come on to some of the points made by your Lordships, particularly the welcome given to some of the Government's actions, apart from the targets concerning child poverty.

We have the question of the increase in child benefit and the recent notification of the increase in minimum wage. Indeed, we have the principle--the noble Lord, Lord Davies of Coity, was extremely eloquent on this subject--of the establishment of the minimum wage. We have some of the transport initiatives that my noble friend Lord Bradshaw reported. There is the New Deal, but I suggest that the Minister take note of the devastating criticism of aspects of the New Deal by my noble friend Baroness Sharp.

There are some of the very impressive initiatives from the New Opportunities Fund mentioned by the noble Baroness, Lady Pitkeathley. There are the social regeneration projects to which the right reverend Prelate referred. There is also the work of the Social Exclusion Unit. I see today that the noble and learned Lord, Lord Falconer, has been given the task of co-ordinating poverty policies for the Government, which of course must be welcomed. But the jury is out. We do not yet know the impact of many of these policies. Your Lordships have made it very clear today that what has been done so far is, quite frankly, not enough.

During the course of the debate, a number of important aspects have been raised. My noble friend Lord Russell raised the issue of research, as did the

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noble Baroness, Lady Crawley. Much better research is needed. We need to mend the holes in the safety net. We need minimum standards for access to services, as my noble friend Lady Miller advocated. My noble friend Lady Barker referred to the whole issue of age discrimination.

A number of issues were raised in relation to the voluntary sector, the regional focus and the presentation of policies to which the right reverend Prelate the Bishop of Durham referred. Those are all extremely important matters. The need for improved insulation was raised, as were all sorts of issues surrounding transport and housing.

But the right reverend Prelate the Bishop of Hereford stressed the problem of poverty. That is the principal reason for the inequalities that we have been debating today. We need major improvements to the benefits system. There needs to be a change in our attitudes and we must not, as my noble friend Lord Russell said, denigrate benefits. There must be a sense of urgency, as many noble Lords have said. We cannot wait for the grand design to take effect, as the right reverend Prelate said. We must target tax and benefits with the minimum stigma. We need minimum income standards. We also need to be intensely practical.

The Prime Minister said that if the next Labour Government have not raised the living standards of the poorest by the end of their time in office, they will have failed. But there are conflicting messages coming from the Government. Listen to the Secretary of State for Trade and Industry, Stephen Byers: the reality is that wealth creation is now more important than wealth distribution. Yet we read this Monday that redistribution, the "R" word, is coming back into vogue. What is the reality? Perhaps the Minister can tell us. Do the Government believe that increasing the tax burden for the well-off and raising benefits for the poorest is a policy option?

Previous Labour governments did not recognise adequately the need for wealth creation. This Government have rightly reacted against that. However, in doing so, they have lost sight of the need for redistribution. Until the Government recognise that wealth creation and redistribution go hand in hand, then the problems of poverty and inequality will not be solved.

7.21 p.m.

Lord Astor of Hever: My Lords, the House will be grateful to the noble Earl, Lord Russell, for introducing this timely debate. Like the noble Lord, Lord Clement-Jones, it is a great privilege for me to wind up the debate for my party.

The debate has been informative and constructive and there is agreement in all corners of the House that we must work together to eradicate poverty and social exclusion. As my noble friend Lord Lucas said, they cause immense human suffering. Although I shall be critical tonight of the Government's policies and lack of direction, I have no doubt that the Minister is as personally committed as the rest of us to do everything

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she can to alleviate those concerns. But I agree with the noble Lord, Lord Beaumont, that the Labour Party appears to have ceased to be the champion of the poor.

On these Benches, we have some concern about the term "social exclusion". It suggests that there is a deliberate attempt to exclude certain parts of society. We believe it is more helpful to look at those areas which suffer high unemployment and crime, poor housing, weak family links and high rates of welfare dependency and to understand their real causes and effects.

There is also a clear philosophical difference in approach between the Government and these Benches. The Government favour state intervention and state prescription to solve those problems. However, we believe that the key point is to have an economy which is vibrant and robust and which generates opportunities for employment and wealth creation. It is only by creating wealth in the first place that it is ever possible for it to be shared.

The timing of this debate must be hugely embarrassing for the Government. My noble friend Lady Byford pointed out the article in the Telegraph. The Minister will probably tell me it is all rubbish. She just has. But the Government's poverty policy has apparently been condemned as a shambles by a Cabinet Office report which says that there are too many initiatives and no strategy or co-ordination.

What is more worrying about today's article is the report that the noble and learned Lord, Lord Falconer, is to be given a prominent role in integrating the many regional initiatives, as the so-called "zone tsar". After the fiasco of the Millennium Dome, that hardly bodes well. Will the Minister indicate what his role and responsibilities are to be? I have not given the Minister notice of that question but I should be grateful if she will write to me. We have given her a copy of the newspaper article.

The timing of the Rowntree report was inconvenient for the Government as it came days after they launched a Cabinet Office report entitled Sharing the Nation's Prosperity, dismissing the existence of the north-south divide.

The Rowntree report shows that twice as many people are receiving benefits in the north-east as in the south-east. Indeed, one of the authors contradicted the Cabinet Office report, telling the Daily Mirror that,

    "there is no doubt there is a strong North-South divide".

The Minister will probably say that the Rowntree report fails to take account of new government policies. But the report says clearly and starkly that the problems continue unabated.

The Minister will also probably say, "It is all the fault of the Tories as this report covers the period before our reforms were introduced". But one of the authors told the Northern Echo:

    "The Government didn't start introducing its main measures until at least 2 years after it come to power and, if it had got going earlier, we might be beginning to see the benefits now".

One of New Labour's main pledges was to tackle social exclusion. The figures in that report are a damning indictment of two-and-a-half years of

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government by sound-bite, with few effective measures being taken. It reveals an enormous credibility gap between the Government's rhetoric on social policy and the reality of life in some areas of Britain. One only has to mention the former junior Defence Minister, the Member for Liverpool Walton, for the Government's spin doctors to go into overdrive.

It would be impossible to cover all the issues relevant to this subject. However, I wish to concentrate on two specific areas which are relevant to the report--social problems in rural Britain and the plight of lone parents.

Several noble Lords have mentioned the problems in the countryside. My noble friend Lady Byford drew the House's attention to the Cabinet Office report Economic, Social and Environmental Conditions in the Countryside. In its election manifesto, new Labour said that it recognised the special needs of people who live and work in rural areas and that the Conservatives did not. That seems rather at odds with the humiliating local authority by-election and European election results which New Labour has endured in rural areas since May 1997.

Ministers and their spin doctors seem to forget that behind the statistics are tragic stories of human misery, bankruptcy and suicide not seen in our countryside for generations. Bureaucracy, uncertainty, increased fuel prices, growing crime levels, declining services and declining access to services all blight the lives of families in country areas. It is no wonder that the Prime Minister was booed as he left the NFU's annual meeting. At least this time no one had a chocolate eclair to hand.

The Government have set up a task force to deal with the problems of urban areas. In view of the devastating crisis in the countryside, will the Government consider setting up a rural task force? After all, 60 local authorities have urged the Government to do just that.

I turn to the group with the highest prevalence of poverty: one-parent families. It is a depressing statistic that three in five lone parents in the United Kingdom live in poverty. Lone parents have overtaken pensioners as the group with the lowest average income. On current benefits, lone parents who have lived in poverty for some time cannot afford to eat healthily. Lone mothers are 14 times more likely than other mothers to go without food themselves in order to meet the needs of their children. Many experience severe hardship, poor housing, health problems, lack of access to financial services and debt. The removal of the lone parent rate of family premium in April 1999 reduced housing benefit and council tax benefit for lone parents in paid work and for lone parents moving from income support into paid work.

Despite the Labour election manifesto pledging effective help for lone parents, the Government's own estimates for last year showed that up to 395,000 will have lost out. Working lone parents faced maximum average national losses of £10.20 per week. The losses in housing benefit and council tax benefit alone amounted to as much as £9.35 for some lone parents.

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According to the Child Poverty Action Group and the Microsimulation Unit of the Department of Applied Economics at Cambridge, after three budgets a considerable proportion of lone-parent families in the poorest income groups are worse off than they would be under policy existing prior to the 1997 election.

For most lone parents and their children, the most effective route out of poverty is getting a job. The Minister made that point last night. Indeed, most lone parents want to work at some time. That means real jobs in the real world rather than subsidised placements that are no more than an artificial attempt to help the Government to meet their next publicised target.

Given the rate at which housing benefit and council tax benefit are withdrawn as income rises, lone parents going out to work can lose up to 85 per cent of the extra income from the working families' tax credit. On top of that, when they move into work, lone parents' expenditure on travel and clothing increases and they lose the right to claim "passported benefits" such as free prescriptions, sight tests and free schools meals.

Our current system means that many lone parents simply cannot afford to enter education because student loans are treated by the DSS as income rather than debt. Furthermore, those lone parents who manage to graduate from university and enter employment will find themselves using their WFTC to repay their student loans. What plans do the Government have to address that issue and ensure that lone parents have equality of access to further education?

We on these Benches recognise that to tackle the symptoms of social exclusion takes a realistic and intelligent appraisal of the changes in society and the economy. We need cogent and sensible policy-making that promotes opportunities for people to move out of poverty through private sector job creation, wider home ownership and community-led solutions on health, education and law and order. We need to extend opportunities for all and not reinforce the culture of dependency that has done so much to reinforce the present problems.

What is clear is the failure of this Government meaningfully to tackle poverty and social exclusion. This is not political point scoring, when so many of the Government's own supporters are voicing their concerns at the lack of co-ordination and insight into how to tackle these problems.

Unlike my noble friend Lord Lucas, I cannot congratulate the Government. They need to do much more to tackle these issues and do so in a more coherent, integrated and intelligent manner.

7.34 p.m.

Baroness Hollis of Heigham: My Lords, I join other noble Lords in thanking the noble Earl, Lord Russell, for initiating the debate. I should also like to thank--at least I think so--the young researchers of the

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Rowntree report for doing their best to hold us up to the mark, however uncomfortable that may be on occasion.

The noble Lord, Lord Clement-Jones, vigorously described the major contributions tonight, which to some extent spares me the time in doing that. However, I thank your Lordships for a fascinating, wide-ranging debate. It ranged from small, rural buses to VAT on village halls; from Welsh devolution (your Lordships will not be surprised if I duck that) to the Independent Living Fund and CFS sufferers, all more or less--sometimes less--related to the Rowntree report. Noble Lords will understand if I seek to answer those points primarily related to the report. I, or my colleagues, will seek to respond by correspondence to some of the other points raised.

Noble Lords all agree that far too many people are living on low incomes. The numbers of people on low income, defined as a proportion of the population living in households with below half mean average incomes, or about 60 per cent median incomes, increased dramatically between 1979 and 1996-97 from one household in 10 to one in four: from 5 million to 14 million people. That is also as much about widening inequality as about poverty, which may mark us off from some of the Scandinavian countries rightly quoted by the right reverend Prelate the Bishop of Hereford.

Worse than that, however, is the fact that many people spend long periods living on a low income. Around one in 10 of the population spent all seven years between 1991 and 1997 living on a low income; that is in the three bottom deciles of the income distribution. They were in persistent poverty, which scars health, aspiration, prospects and self-esteem. Therefore, low income, and in particular the problem of persistent low income, is fundamental to poverty and social exclusion.

However, we also know that the problems of poverty and social exclusion are related to a wider range of factors than simply low incomes. Just as welfare is more than simply social security, so people's access to good quality housing and public services has a major impact on their standard of living. To quote the noble Lord, Lord Beaumont, that is what in the sixties we used to call "the social wage".

There is no easy way to tackle problems of poverty and social exclusion. Despite the comments made by the noble Lord, Lord Astor, we are acting to raise the incomes of the poorest and seeking to row back on the deprivation we have inherited over the past 15 years. We have improved the income of those most in need for pensioners, children and families most at risk of being trapped on low incomes for long periods of time.

However, as we can see by looking at the experience of the past 20 years, poverty cannot be eradicated by just raising benefits. That may be one of the profound points of difference between myself and the noble Earl, Lord Russell. I believe he stated that it is not the business of the benefit system to get people into jobs but to keep them fit and well until they get jobs. I hope I have quoted him correctly; I certainly do not mean to

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misquote him. That passive approach, which I deplore, is precisely why over the past 20 years we have seen expenditure on benefits double and so at the same time have poverty and social exclusion. That response has not worked and is not one we shall seek to perpetuate.

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