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Lord Whitty: I think that the answer to that is, "No", my Lords. If I am misinformed on the matter I shall let the noble Lord know.

Lord Campbell of Croy: My Lords, do the Government include in their estimate those assets which are on and under the seabed—for example, oil, gas and substances used in medicine?

Lord Whitty: Yes, my Lords, the economic exploitation of some of the resources of the marine environment are particularly important. So it is not just a question of conservation; it is also a question of carrying out the economic activities ranging from oil and gas right through to very precious materials which can be used in smaller quantities with environmental protection in mind. Certainly that is the major dimension of our approach to the marine environment and a major source of employment.

Baroness Nicol: My Lords, is my noble friend aware of the report by 150 international leading marine scientists which has drawn attention to the fact that fisheries benefit greatly from the proximity of marine nature reserves? Can he explain why the seven marine nature reserves, which were identified over 20 years ago in 1981, have not yet been attended to? Only two have been designated from that list of seven. One more was added in Northern Ireland and that has since been designated. What is the hold up? Why have the Government not carried forward the programme which was under way when they took office?

Lord Whitty: My Lords, the Government are committed to improving nature conservation of marine nature reserves. We are considering ways in which conservation out to 200 nautical miles can be improved. Hitherto we have concentrated on the 12-mile limit. We are considering over 100 Natura 2000 sites. They are special areas of conservation under the habitats directive and the special protection areas for birds under the birds directive. To date, there

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are 62 candidates for special area conservation status. So this is an ongoing programme which will protect the most important sites already identified.

The Duke of Montrose: My Lords, is the Minister aware that the House of Commons Agriculture Committee in the Session 1998-99 produced a report on sea fishing which recommended that,

    "the Government establish for the first time a clear, agreed and coherent strategy for the management and development of the UK fishing industry"?

In January 2001 the Fish Industry Forum produced a draft strategy which included its requirements. Can the Minister tell the House whether this strategy has been developed by the Government; and, if so, when will it be published?

Lord Whitty: My Lords, the noble Lord will know that on the one hand the common fisheries policy is largely determined at the European level and that there is a review of the common fisheries policy which is starting this year. The Fisheries Council and my colleague, Elliot Morley, who is involved in that, are beginning to focus on that matter. So that is one dimension. Other aspects of how we develop and protect the British industry will be followed in that context. Fisheries is also a devolved matter. Therefore, both the Scottish and Northern Irish authorities have their own strategic approach to these matters.


3 p.m.

Baroness Miller of Chilthorne Domer asked Her Majesty's Government:

    Whether they believe that Postcomm's proposals for the Royal Mail will be in the interests of residents in rural areas.

The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Sainsbury of Turville): My Lords, Postcomm's primary statutory duty, laid down in the Postal Services Act 2000, is to ensure the provision of a universal postal service. Subject to that primary duty it also has a duty to further the interests of postal users where appropriate by promoting effective competition between postal operators. It is for Postcomm to decide how it carries out these two duties. Postcomm's document, Proposals For Effective Competition in UK Postal Services, published on Thursday 31st January, is for public consultation and we would expect any concerns about the universal service obligation to be thoroughly considered.

Baroness Miller of Chilthorne Domer: My Lords, while thanking the Minister for that reply, my Question asked whether the Government believe that the proposals will be in the best interests of residents in rural areas. Perhaps the Minister will comment on what feedback he has had from such residents, because the feedback that I have received is that they do not

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believe that the proposals will be in their interests. Nothing else that has happened to what was the Post Office has been in their interest, from the closure of hundreds of post offices to the mess that cabling for rural areas, which is being undertaken by the private sector, is now in. So the lesson of privatisation, without even considering the railways, suggests to them that Postcomm's proposals are hasty, ill thought-out as to their effect on rural areas and certainly not in their interests.

Lord Sainsbury of Turville: My Lords, the reason for setting up Postcomm was for it to advise or take action in such areas. It has put forward these proposals and they are being consulted on. It is clearly inappropriate for the Government, having appointed Postcomm to do that job and given it the necessary authority, immediately to state their own view on the matter. The reason for the consultation is clearly to decide whether the two duties given it by Parliament are being handled in the right way.

Although we may blame the Post Office for many things, to blame it for broadband, which is of course a telecommunications matter, is carrying its responsibility too far. As for issues concerning the rural network, which I think is what is of concern to the noble Baroness, they have nothing to do with this issue. They have to do with declining customer numbers for rural post offices. We tackled that difficult issue through the recommendations of the Performance and Innovation Unit report, which we accepted.

Baroness Miller of Hendon: My Lords, given that 547 sub-post offices have closed, that the Post Office or Consignia has shown a heavy loss for the first time in 25 years, that 63,000 days have been lost through industrial action—all of that since April 2000, when the Postal Services Act 2000 came into force—can the Minister say whether the Government think that the Act was a success? Apart from asking what the Government are doing to help those in the country, what are they doing to help anyone in any part of the country—in rural or urban areas?

Lord Sainsbury of Turville: My Lords, the figures that we now have for the closure of rural post offices are actually rather better than that. During the first half of this year, there has been a sharp reduction in the number of closures—

Baroness Miller of Hendon: My Lords, I was not asking about that.

Lord Sainsbury of Turville: My Lords, I was going to give the noble Baroness the figures; I thought that there was some dispute about them. I have already dealt with the Act: first, it is a good Act; secondly, there has been rather a short time in which to judge it. As I was about to point out, on the subject before us the performance is better.

Lord Clarke of Hampstead: My Lords, first, may I ask my noble friend to convey to the Post Office my

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congratulations—and, I am sure, those of many noble Lords—on the excellent issue of stamps for Her Majesty the Queen's Jubilee today? Having said that, does my noble friend think that the seven weeks left for consultation on opening up the post are sufficient or constitute undue haste that is likely to cause more difficulty? The recent National Audit Office report expresses concern that introducing competition could affect rural services. Will the Minister give us an assurance that rural services will be protected if the fears of the National Audit Office are confirmed?

Lord Sainsbury of Turville: My Lords, I think that the report was published at the beginning of January and the consultation period lasts until the end of March, which seems to me reasonable. As I said, the issue of competition is not directly related to the closure of rural post offices. The issue there is the finances of not Consignia but rural post offices—the difficulty that they have in being profitable with falling customer numbers. It is worth remembering that 56 per cent of the rural post offices that closed last year were already open for only restricted hours and had no shop and fewer than 70 customers per week. That is the nature of the problem; it is not to do with the finances of Consignia.

Business of the House: Debates this Day

Lord Williams of Mostyn: My Lords, I beg to move the Motion standing in my name on the Order Paper.

Moved, That the debates on the Motions in the names of the Lord Layard and the Lord Hunt of Chesterton set down for today shall each be limited to two-and-a-half hours.—(Lord Williams of Mostyn.)

On Question, Motion agreed to.


3.6 p.m.

Lord Layard rose to call attention to developments since 1997 in tackling poverty and supporting families; and to move for Papers.

The noble Lord said: My Lords, there is nothing more shocking than poverty in the midst of plenty. It is shocking in any country, yet that is what existed when Labour came to power in 1997. During the 18 years of the previous government, relative poverty in this country had doubled, so that a quarter of our population was living at below one-half of the average income. Worst of all, child poverty had more than doubled, so that one in three of our children was in poverty on that definition—more than anywhere else in Europe except Italy.

Faced with that situation, the Government had to set priorities and, rightly, they put child poverty at the top of the list. Children are the most vulnerable people in our society and they are also our future. So the Prime Minister made a bold and courageous

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commitment to halving child poverty by 2010 and eliminating it by 2020. That is an extremely formidable challenge, but the Chancellor has devised a powerful strategy for heading us in the right direction. The strategy has three prongs: first, get more people into work; secondly, improve their pay through better education; thirdly, where people are still poor, transfer income. If we consider each of those elements, we can see how much has been achieved.

On the work front, our problem is with workless families—families in which neither parent is working. In 1997, nearly one child in five in Britain lived in such a family. That is one of the highest rates in Europe. What a terrible start to life, but, also, what a cause of poverty. How to get more people into work? Obviously through a stable macro-economic policy, which has been achieved, but also through supply-side measures to mobilise those who are not in work. It is on the supply side that our Government have done especially well compared with, for example, France and Germany. In recent years, there have been high levels of job vacancy in all three countries, but Britain has mobilised the unemployed to fill those vacancies by a mixture of active help and reasonable pressure.

The Employment Service now provides more help, advice and chivvying than ever before. Through the New Deal, it has largely prevented the tragic drift of people into long-term unemployment, guaranteeing activity to every young person within roughly nine months of their becoming unemployed and to every adult within roughly two years. That is now a right for the unemployed, but there is a corresponding responsibility to make use of that help if they want to receive any help from the state. There is no fifth option. That is the formula. It worked in Denmark and Holland, for example, and it is working here.

For other claimants who are not in work, particularly single parents and people with disabilities, the Government now rightly insist that they attend work-focused interviews at which they consider whether to seek some kind of work. They can take advantage, where relevant, of the more generous support that the Government now provide for child care.

What are the results? They are not bad. There are a million more people in work; the proportion of children living in workless households is down from 18 per cent to 15 per cent, a 3 per cent drop, corresponding to the fall in worklessness; and 52 per cent of lone parents are now in work, compared with 46 per cent in 1997. Of course, that is only a beginning. Five per cent unemployment is very high, compared with what we could have. We still have too many people outside the labour force. We know from other countries that we can go much further in mobilising the non-employed. The Government have committed themselves to an integrated approach to the problem, creating Jobcentre Plus, which brings together work and benefits, and the Department for Work and Pensions.

Work will not end poverty if income in work is too low. During the 1980s, there was an extraordinary increase in pay inequality in this country. It became

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more unequal than at any time since records began. That was mainly due to the scandalous neglect of the skills of at least a half of our young people. Although our higher education was the best in Europe, our vocational education below degree level was among the worst. Half our young people got no serious education beyond 16. However, since 1997, a major educational revolution has been afoot, with proper standards of literacy and numeracy achieved by 70 per cent of 11 year-olds in 2001 and a stronger expansion of sub-degree vocational education, modern apprenticeship and basic skills for adults as compared with more academic forms of education for the group that will end up at the higher income level.

That policy, if continued resolutely, will, at long last, reduce the disgracefully unequal nature of our education system, one of the most unequal in Europe, which has done so much to produce unequal incomes in later life. Of course, it will take years to affect the overall pattern of wages. If pay is too low to sustain a family, there is no alternative to income transfer. The national minimum wage can play some role, but the main burden must fall on the Exchequer. That is why the Government have hugely increased the scales of assistance to poor families, in work and out of work. I am thinking of the working families' tax credit, child benefit and benefits for the workless. Those increases have gone far beyond the adjustments for price inflation that were provided by the previous government. As a result of the changes in benefits and in personal tax, there are now 1.2 million fewer children in poverty than if benefits and taxes had been indexed to prices. That is a big number.

One thing is clear: such generosity must be repeated again and again, even if we want just to keep poverty constant. We will have to run just in order to stand still because of the logic of the situation. Unless benefits rise at roughly the same rate as average incomes, relative poverty must, by definition, increase unless it is cut by having more people in work or reductions in low pay. Although higher employment rates can make a contribution in the short term, it is unlikely that pay will become more equal at all soon. The main point I make is that if we want to reduce poverty—not just hold the line—we must see a steady rise in the share of national income going to child support. That is not always realised, but it is a logical implication of the Prime Minister's pledge.

In the context of benefits, the argument that we should reduce the poverty trap by further reducing the steepness of the benefit tapers must be strongly rejected. I am sure that someone here will advocate that, but it must be resisted. It is expensive and ill targeted, and it raises the implicit rate of tax for some at the margin, even as it reduces it for others. One problem that must be faced is housing benefit. It traps people into non-employment more than any other benefit, and it distorts the housing market. It must be gradually absorbed into the existing cash benefits.

What can be said about the overall results of the Government's anti-poverty policies? Unfortunately, there is a long lag before the data come. We have had no really good data since 1999-2000. That is over two

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years ago and before many of the policies that I mentioned began to bite. However, we do have some crude data from the family expenditure survey for 2000-01 that are encouraging when compared with those for the previous year. For all households, the disposable income of the lower income groups appears, at last, to have risen significantly faster than for the middle and higher groups.

The figures cover pensioners, as well as people of working age and their children. As there is no time to look further at every group of poor people, I want finally to consider the record on pensioners. A number of us in the House are pensioners. It is important to realise that the world has changed and that the pattern of poverty has changed; it is remarkable. Today, most poverty is due to low pay or worklessness. Only 20 per cent of the poor are pensioners, which compares with a half in the 1970s. That is because of the increase in other forms of low pay. The risk of poverty for a pensioner is barely higher than it is for the average person. In fact, nearly 40 per cent of all pensioners are in the top half of the overall income distribution. So the Government's policy towards pensioners must be targeted as it is on other groups in the population.

We have debated the subject several times, and the strategy is well known. Pensioner poverty is being attacked by the minimum income guarantee, which is to be indexed to earnings for the duration of this Parliament. About 2 million people now benefit from that guarantee. By next April, those people will be over 20 per cent better off, in real terms, than they would have been under the price index policies that the Government inherited. Of course, the guarantee does nothing for those who fall just above it but are still on the margin of poverty. For those whom it affects, it renders useless any savings that they may have made, which is why, from 2003, the Government will introduce the pensioner credit. It will provide the minimum income for people who have only the state pension, but, for others, it will provide an income that rises by 60p in the pound for additional income that a person may have, up to a maximum. A half of all pensioners will benefit from the pensioner credit.

In the war against poverty, much has been achieved. Looking back, one dreads to contemplate the situation that would have existed had previous policies been continued. Our task is like turning round a liner that was heading in the wrong direction. It will take serious money to deliver the Prime Minister's guarantee. Benefits for children must rise faster than earnings; that is the logical necessity that I mentioned. Real money must go into vocational education for the 50 per cent who are not going to university. A government committed to eliminating poverty should have not only a target for the percentage going to university, but a target for the other group not going to university that demonstrates that we will give them all a skill.

The Government deserve real praise for the radical measures that they have already adopted. However, if they are really to abolish child poverty, they must go much further. I trust that they will not flinch or fail. I beg to move for Papers.

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3.20 p.m.

Baroness Byford: My Lords, I thank the noble Lord, Lord Layard, for bringing this debate before us today. Tackling poverty and supporting families is a prime concern for any government. As John Prescott wrote:

    "Improving the quality of life for the people of this country is perhaps the most important duty of Government".

However, the figures from the Department for Work and Pensions show that there has been "no consistent change" since 1996-97 in the number of children living in poverty, while the number of working-age people in poverty has "remained broadly constant". Millions of people have been trapped on means-tested benefits without any significant impact on poverty trends.

Among individuals living in households with below 50 per cent of mean income, four out of 10 were not in work; between 20 and 25 per cent lived in households without access to a bank account; and between 50 and 60 per cent lived in families in receipt of one or more income-related benefits.

The failure of this Government to improve the situation was expressed recently by the noble Lord, Lord Hattersley, who is not in his place today, when writing in the Guardian. He commented:

    "New Labour has fulfilled the party's historic destiny to redistribute income. Unfortunately, it has not happened in quite the way that the founding fathers intended . . . If the prime minister knew how wide the gap had become, self-preservation may have persuaded him to dismiss inequality as unimportant rather than acknowledge that he has presided over a tragedy".

Equal concern was expressed by Child Poverty Action Group. Its report of 26th February last year showed that in 1998-99 4.5 million children in the UK were living in poverty. That figure was an increase of 100,000 during Labour's first two years in office. Those are bleak figures. But what do they mean in practical terms? I suggest that suitable housing and poor health are the major issues, followed closely by under-achievement at school, the difficulty in obtaining jobs and the fear of crime.

I start with housing. We recognise that a warm home in reasonable condition is something we all value, whether through private ownership or through the rental market. But have the Government had any success in achieving an increase in the availability of single-occupancy units and of new affordable houses?

In rural areas the lack of provision of affordable homes is acute. Developers have tended to build three, four or five-bedroom houses. But the new PPG3 regulations require them to build more houses per acre and may increase the number of affordable houses for those who are in work and can afford them. Have the Government any plans to change the rules for the very rural villages by reducing or removing the ratio requirement of large to small homes so that local councils will be able to stipulate small units where they are needed?

The rural housing trust has pointed out that local authorities are often unaware of shortages of suitable accommodation in villages until the people

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affectedshow up when they move to the town. That was confirmed by the Joseph Rowntree Foundation, which concluded that,

    "the most important role for registered social landlords in addressing concerns about social exclusion and the sustainability of socially balanced communities in rural areas, is still undoubtedly the provision of more affordable housing of good quality for low income households".

In another place, on 20th July 1999, Miss Armstrong stated the Government's determination to reduce the number of empty government homes and supplied targets. Can the Minister tell us whether those targets have been met? Lastly on this topic I ask what progress has been made in the rented sector, either private or social housing. In passing, will the Minister comment on the Government's plans for dealing with the problems of the housing benefit system, to which the noble Lord, Lord Layard, referred? Over 4 million tenants rely on housing benefit to pay their rents. For many of them, eviction has been the result of failures in the benefit payments system.

One of the ills of poverty is poor health. We are becoming a sedentary population, overweight and exposing our children to an increased likelihood of ill health in later years. Current research indicates that that will be worsened by the reduction of sport in schools. Will the Minister tell us how many school sports fields have been sold since 1997? Will he also tell us how the new SEN—special educational needs—code squares with the need for poor children to take more exercise?

Given the housing conditions and the health problems experienced by many of our poorer children, a good education is vital for them. The Education Bill, shortly to arrive in this place, is a mighty tome. But I wonder whether the measures contained therein will actually reduce teachers' burdens. Unruly and violent behaviour, bullying and teachers struggling to control their class are still with us despite the Green Papers, the White Papers and performance-related pay. Education is key to helping children, especially those from poorer homes, to learn and gain skills that will enable them to get a job and succeed in ways that were perhaps not open to their parents.

There are other important issues with which families on low incomes have to deal. Debt, or "living on tick", for some is the only way they can get by. I have been greatly concerned, as, I suspect, have many other noble Lords, by reports of the levels of interest charged by private individuals and should be grateful for the Minister's comments on whether or not the Government have any proposals to deal with that situation.

As noble Lords will be aware, I have a hobby horse and cannot resist the temptation, following on from the fourth Question taken in the House this afternoon, to refer to how we make welfare benefit payments. Poorer families rely on the post office to keep them solvent. There is nowhere else for them to go. The closure of sub-post offices and the proposed reorganisation of Consignia fills me with horror; nay, rage. I shall not be affected and suspect most other noble Lords will not be affected either. But millions

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will. In the four-and-a-half years since 1997 to October 2001, 1,564 post offices have closed. That is over 7 per cent of the total open at the beginning of that period.

I have already referred to benefit payments and remind your Lordships that one of the most important forms of benefit is the distress payment, the emergency handout, sub, or whatever we call it. A cheque or giro cashed in the post office has provided food for infants, a bed at night, a pair of shoes and many other things besides. Time and again I read of delays caused by the new computerised systems. They may be harder to cheat, but that is not much use if one is starving and needs help.

Post offices also pay pensions to many older people who have never had and do not want a bank account. In view of the many choices which this Government insist we are open to as parents, children or refugees, I am appalled that they are preparing to close the choice of post offices in that way.

I once again thank the noble Lord, Lord Layard, for giving us the opportunity today to raise some of the important issues that are daily trials for those on low incomes.

3.29 p.m.

Baroness Sharp of Guildford: My Lords, I join the noble Baroness, Lady Byford, in thanking the noble Lord, Lord Layard, for introducing the debate on this extremely important subject. It is an issue on which more and more data are being published which enable us to track precisely what is happening.

It is right that we should pay tribute to what the Labour Government have achieved. As the noble Lord, Lord Layard, said, in 1997, 4.7 million children in this country—one in three—lived in poverty. By 2001, this had been reduced to 3.2 million children—one in four. It is still an awful statistic of which we should be genuinely ashamed.

According to the Institute for Fiscal Studies, the net effect of the five Labour Budgets has been to increase the income of those in the poorest 10 per cent by some 13 per cent, with the increase going disproportionately to single parents and to full families with large numbers of children, which are the two largest poverty groups.

Three factors have contributed substantially to these improvements. These were acknowledged by the noble Lord, Lord Layard. The first is the increase in employment—perhaps above all the increase in employment. The drop in unemployment has made a great deal of difference. This has been substantially due to the economic cycle and much less to any of the new deals which have been put into effect. Secondly, the working families' tax credit and the minimum wage between them have helped very considerably to increase the gains of those in work at the lower end of the income scale. This again is a major improvement. Thirdly, the minimum income guarantee has been an important gain for those not in work and, particularly, for poor pensioners.

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However, there is no room for complacency. As I said, one in four children living in poverty in this country is a shocking statistic. At 25 per cent—at one in four—we have the highest rate of child poverty in Europe. In Sweden it is only 5 per cent—one in 20. Overall rates of deprivation and poverty, as measured by Eurostat, put Britain, at 14.6 per cent, above only Ireland and Portugal; Spain, Italy and Belgium are above us at the 11 to 12 per cent mark; and the Netherlands and the Scandinavians are at the top at 7 to 8 per cent.

It is also notable that while new Labour's measures have helped to lift some of those at the very bottom of income distribution out of poverty, the gap between rich and poor has not decreased but increased. Whereas the net incomes of the poorest 20 per cent increased by 1.4 per cent during the first four years of the Labour Government, those in the top quartile grew by double that amount, 2.8 per cent. So inequality has increased, not decreased.

The big question is whether inequality matters. Can we achieve what we want to achieve by just raising the floor? My noble friend Lord Russell will address this matter later, but we should bear that question in mind during our discussions.

One of the features of the poverty population is that it is surprisingly mobile. Half of the people in the lowest 10 per cent of income in any one year are not among the same 10 per cent the following year. Inevitably, unemployment, illness and family problems mean that there is a degree of mobility among those at the bottom. However, the mobility tends to be among those at the bottom; you do not find people moving from the lowest 10 per cent to the highest 10 per cent. On the whole, they move from the lowest 10 per cent to either the next lowest or the next lowest after that. They move in and out of those brackets.

There is considerable evidence of persistence in economic fortunes from one generation to another. If your father or your family is poor, your chances of being poor are greater than of being better off. Similarly, if your parents are well to do, your chances of being well to do are very much greater.

In the 1960s, I worked at the LSE with people such as the noble Lord, Lord Moser. When we talked about poverty then, the euphemism was "deprivation" or "multiple deprivation", and we talked about the "cycle of deprivation". It was clear from all the studies made in the 1960s and 1970s—it is still true today—that those who were poor were more likely to suffer not only from low income but from poor housing, poor health, poor healthcare, poor diet, poor schools, low educational achievement and lower paid jobs. One was interactive with the other; they were mutually reinforcing of poverty.

This has not changed today. As the noble Lord, Lord Layard, made clear, the attack on child poverty is not only about income and inequalities but about improving life chances. The Government are paying a lot of attention to other areas, such as education, and I shall concentrate the remainder of my remarks on that

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vitally important subject. If we are to increase life chances, education can provide that very important route out of poverty.

Many of the initiatives undertaken—Sure Start, the numeracy and literacy hours and the new Connexions Service—are doing precisely what the noble Lord, Lord Layard, said; that is, they are trying to help those at the bottom end of the scale to get a better start, to get training behind them and to get into new jobs. The danger, however, is that, for all the rhetoric, some of the measures that have been taken will reinforce inequality rather than promote greater equality.

I am particularly worried by the preference for performance indicators and the fact that schools are listed constantly in league tables. Those schools which have the greatest difficulties are inevitably at the bottom of the league tables, and that tends to reinforce their position.

I should like to draw your Lordships' attention to the problem of specialist schools. One thousand out of the total of 3,500 secondary schools designated as specialist schools are to receive an extra half a million pounds over four years when they are specialist schools. Half a million pounds for a secondary school is a lot of money. Those schools are, disproportionately, the higher achieving schools; they tend to be middle-class schools.

Let us contrast the numbers of free school meals in the least achieving schools with those in specialist schools, or even in average schools. Of those in the least achieving schools, 44.8 per cent have free school meals—nearly half of them are classified as in poverty under free school meals—compared to 15.3 per cent in the average state school. Some 33.18 per cent of children in the least achieving schools have special educational needs, compared to 14.1 per cent in ordinary state schools.

The problem with the specialist schools programme is that it involves a disproportionate number of middle-class schools. The schools that are not achieving are the ones that need the extra half a million pounds. We need positive discrimination in favour of the lower achieving schools rather than the other way round. I know that the Excellence in Cities programme is doing this, but it is only doing it in a small minority of schools in city areas. There are schools in rural areas that need this help.

From these Benches we applaud the aims of the Labour Government in tackling poverty and supporting families. We congratulate them on what they have achieved to date, even if we feel that they have been lucky with their share of the upward trend in the economic cycle and that they have been too cautious in some of the measures they have pursued. We warn them, however, that they will need to be bolder in the pursuit of their targets. In particular, they cannot tackle poverty without also tackling inequality. Unless they are prepared to tackle inequalities in the factors contributing to long-term poverty—I have highlighted the inequalities in the education system

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but it applies equally to health and to housing—they will never achieve their ambition of abolishing child poverty within this country within this generation.

3.39 p.m.

Lord Moser: My Lords, I, too, thank the noble Lord, Lord Layard, for introducing this important debate. The noble Lord and I have worked together on various statistical projects over many years. Therefore, I start by believing the kind of statistics that he uses, and I have confidence in them up to a point. The noble Lord has taken us to the heart of the problem.

The very word "poverty" has many different uses. It is difficult at the present time to talk about poverty without at least a sidelong glance at poverty in its serious form in the developing countries. We cannot forget that half the world's population now lives on less than two dollars a day. Over a million live on less than one dollar a day. As President Clinton reminded us in his remarkable Dimbleby lecture, every day 1½ billion people do not have sight of a glass of clean water. That is poverty in its most abject form. Let none of us forget it. In this debate, however, we are talking about this important topic in a national context—in the context of a rich society.

The noble Lord, Lord Layard, has brought us up to date. He rightly bases his analysis and conclusions on the official definition of poverty—usually referred to as "relative" poverty. It is quite different from what is normally referred to as "absolute" poverty, under which definition basic needs are valued and then translated against incomes. In a study of relative poverty, low incomes are compared with the general standard of living. On that basis, some 18 per cent of households and 23 per cent of children are below the poverty line. That is the background to the Government's aims to abolish child poverty within 20 years and to halve it within 10 years—seven or eight years from now.

The noble Lord reminded us of the range of policies that are necessary to achieve those targets. Some, as he told us, bear on employment—getting poor people into work—and others on various tax and welfare schemes. Although the figures are not totally up to date, the indications are that the combination of the policies is beginning to bear fruit, with a significant effect on distribution and on inequalities. As a result, some 1.2 million children have been lifted out of poverty, thus defined. That is a fine achievement on the part of the Government. However, the challenge of a further two million to be lifted out of poverty remains.

I want to put these material measures of poverty in the wider context and to comment on what they mean in terms of health, housing, education and life opportunities. It is notable, and cheering, that every speaker has emphasised the importance of education in the context of poverty. I wish to do the same. I declare my interest as chairman of the Basic Skills Agency—a remarkable organisation which has done key work over many years on literacy and numeracy.

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All children deserve a good education. Above all, they deserve the ability to read and write and to cope with numbers. Yet we have lived through decades when a substantial minority of children—some 15 per cent—have left school without these abilities. It is not surprising that they have been led down the road to low incomes, unemployment and social exclusion.

The situation is becoming slightly better, especially in schools. A great deal has been done by the Government, largely through the Literacy Hour, so that now fewer and fewer children are leaving school unable to read and write. The noble Lord, Lord Layard, said that 70 per cent of 11 year-olds now have these basic abilities. That is a good figure, but I am more concerned about the remaining 30 per cent of children who still leave school with basic skills impaired as the figure should be nil.

As regards adults, a recent report by a committee which I had the honour of chairing indicated that, in this rich country, between six million and seven million adults have poor functional literacy, resulting in major disadvantages to their lives. The links with poverty are all too obvious. Compared with a person with good normal literacy, someone with poor literacy is five times more likely to be unemployed; and, if employed, he or she is twice as likely to be in the lowest income bracket. I mention this simply to remind your Lordships of the importance in relation to poverty of the whole set of government policies on education—notably literacy and numeracy—as well as other social factors bearing on life opportunities.

I want to make two further points. The first is statistical. It is most important that we all understand how poverty comes about—indeed how all inequalities come about—and the complex underlying causes, as well as the complex consequences of being in poverty. Much of this has been set out in the excellent work of the Social Exclusion Unit and by the Office for National Statistics.

Secondly, I want to mention a statistical source of enormous importance; namely, longitudinal surveys. These are surveys in which the same people are asked questions over a number of years. This country has the best such surveys in the world. We have four sequences of surveys, the most recent beginning with the birth cohort last year. This is the ideal method of assessing life opportunities and the consequences, as well as the causes, of poverty.

Finally, returning to policy, like other speakers I pay tribute to the Government for seeing poverty reduction as a central aim, and for their evident achievements so far. To focus on relative poverty, however, means that progress has to be judged in relation to overall rises in living standards. Therefore, it is important to know from Ministers, first, whether the plan is to continue to assess progress in tackling child poverty in the way in which it has been judged so far, applying the same measures; and secondly, whether, with only eight years to go, the Government's judgment is that this enormously ambitious target is still realistic and whether we are on track towards it.

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3.48 p.m.

Baroness Andrews: My Lords, I am grateful to the noble Lord, Lord Layard, for creating an opportunity for us to reflect on what has been achieved. I also pay tribute to him as one of the architects of some of the most imaginative strategies that have been put in place for employment, and which are making such a difference.

My argument is that the Government have been radical. However, I agree with the noble Lord, Lord Hattersley, although possibly for different reasons, that they have not been redistributive. The Government have not made poor people richer by making rich people poorer. What they have done is to release resources and to direct resources to the poorest. And we are beginning to see the difference in what is happening to some of the poorest children in society.

The debate provides an opportunity to ask ourselves what makes a radical and sound social policy as a whole. I suggest that there are a few defining criteria. One is to tackle the causes of poverty and to break the inter-generational cycle of worklessness, hopelessness and powerlessness in young people. The second is to create a coherent framework, so that policies that tackle poverty directly and indirectly can work together to have the most beneficial effect.

The Government have begun to do both. That is the major difference that they have made. It is a cultural and political difference as much as a technical difference. That is what makes it radical. It has been cast in the European context and the language of social inclusion, which is relatively new in this country. That enables us to place the concept of raising incomes within a framework that demands that we deal with the relationship between poverty, health and education, as many noble Lords have already said.

I agree that by setting a target of abolishing child poverty within 20 years, the Government have taken a mighty risk. They have raised the profile of tackling poverty beyond the obsession of a few highly dedicated and highly skilled campaigners to make it the natural target of everybody who cares about social justice and about how government works. It will be a task against which the Government are measured.

It is fair to reflect on how far we have come on creating incentives for work as well as opportunities for work and on raising living standards in work. I shall take three examples of that process. We are moving towards an integrated tax and benefit system. A Bill will shortly come before your Lordships' House to introduce an integrated child tax credit system. That is a hugely challenging undertaking. It was discussed for decades, with endless academic papers and government initiatives on how it might be done, but it was never seriously countenanced because it was too difficult. We have begun that process.

The minimum wage was the target of a lot of negative propaganda for years, but it is in place and is raising living standards. It is not raising them high enough or fast enough in my opinion, but it has introduced a new ethic to the workplace on what is payable and how well it is paid.

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We have also seen moves to tackle the poverty of that group of pensioners who for years were the largest and poorest group in poverty. Through the minimum income guarantee and now through the state pension credit scheme we have a genuine possibility of raising all poor pensioners out of poverty.

It has been difficult to make a judgment about the cumulative effect of all the measures that have been put in place since 1997, because the statistics flow at a glacial rate. They are very suspect, not to say slippery, and one has to look at a number of different triangulated points to get a fix on them. There is a major time lag between policy and effect. I never thought that the Government would be accused of doing good by stealth, when they are so much more frequently accused of over-egging their achievements to the point of beginning not to be believed, but they have done a great deal of good by stealth.

When making those judgments, it is not necessary to rely only on people who would say that, wouldn't they. Just before the election, the Child Poverty Action Group, which has been a critical friend to many governments—often more critic than friend—wrote:

    "There is no doubt that when the election takes place there will have been a substantial reduction in poverty, particularly child poverty, by any measure you care to use. This is a great achievement—partly the result of a buoyant economy with falling unemployment, but mainly the result of pursuing redistributive social and fiscal policies".

We do not have the statistics that we would love to have to take us up to 2002, but we have a model drawn up by reputable academics, who have extrapolated data to estimate with confidence that 1.2 million children will have been lifted out of poverty. We have to say "Thank God", because, as the noble Lord, Lord Layard, pointed out, by the middle of the 1990s, after 20 years of redistributive policies flowing in the other direction, Britain had the highest child poverty rate of any country in the European Union and one of the highest in the industrial world. Even after two years of a Labour Government, that situation appeared not to have shifted much.

Significantly, in contrast with other governments, which had managed to use social policies to protect and improve the living standards of children, our governments had not done so. Children were poor not because of global economic trends, but because of the failure of policy makers. We have made a start on reversing that, tackling the causes of family poverty and making the right framework.

As many noble Lords have pointed out, we have also tackled the inexorable link between the failure to thrive and the failure to learn. In that respect, I warmly welcome yesterday's Ofsted report and the statement that there has never been better teaching in this country, as well as the expansion of those initiatives that are directly targeted on the poorest children in the most disadvantaged areas. I hope that those initiatives will not be national projects, but will become national programmes. For too long, we have been a nation of projects and not a nation of sensible and sound

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policies. Those policies will address the real but diffident talents of children who do not think that they have a right to a place at university.

At the same time, the Ofsted report rang loud warning bells about persistent and growing truancy, much of which is condoned by parents. That illustrates perfectly the difficulty of framing education policy outside family and social policy as a whole.

Tempting though it is, there is no time for a debate on the links between educational failure and poverty. It is diagnosed beyond dispute, but some interesting recent research suggests that the impact of child poverty depends in some ways on the age of the child in poverty, but more certainly on the length of time that the child spends in poverty. As Robert Walker put it:

    "While poverty in childhood may not always be a significant problem, poverty throughout childhood most certainly is".

If that is so, we need to look carefully at where and how we intervene to break the cycle of poverty and what instruments we choose to support families. Extending Sure Start and making extra and differential help available for families with primary and adolescent children are part of the answer.

We may agree that economic and social policies are having the intended effect of lifting families out of poverty, but we must ask how far and how fast that is happening and at what point it will make a significant and permanent difference to families.

The New Deal is achieving a lot on behalf of lone parents, who now make up such a significant proportion of society. We know that 122,000 lone parents had found work through the New Deal by last October. They need more accessible education and training and they need to know that, in due course, the childcare strategy will help to provide them with support not just for formal care but—as I hope—for the informal care that many of them have to draw on. Lone parents have to be very careful about where they put their children and whom they trust.

To adapt a phrase, much has been done and much remains to be done. The noble Lord, Lord Layard, called for serious money and other noble Lords have called for serious thought. I call for serious action to sustain and maintain the momentum that I think we have established towards closing the gap. If we have coherent policies, we can have equality as well.

3.58 p.m.

Lord Davies of Coity: My Lords, I have two comments at the outset. First, I thank my noble friend for introducing the debate. Secondly, in anticipation that there will be a lot of detail in many speeches and a lot of bandying of statistical information for and against what the Government have done, I have decided that in my short contribution I shall largely express what I consider to be conviction and motivation.

When I decided to take part in this debate on tackling poverty and supporting families, I was reminded of a speech that I made on poverty a number of years ago, when I first came to the House. It was a

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speech that received, as expected, a mixed response. My noble friend Lord Puttnam—whom I did not know at the time, but who had entered the House at the same time as I did—passed me a note congratulating me on my speech and stating that he was glad to be reminded why he was sitting on these Benches.

The noble Lord, Lord Renton, attacked my speech, describing it as "old Labour". That may very well happen again today. On that occasion, however, the late Lord Beloff disagreed with his noble friend and, commenting on my speech, said that someone had to speak up for the poor. I remember thinking that that statement was a little odd as I felt that speaking up for the poor was something that we should all be doing. However, on contemplating the matter further, I reflected on the fact that we are all to some extent products of our environment and that there may well be some who have never experienced poverty or under-privilege or even come close to such circumstances. Those people may feel that poverty arises from individual irresponsibility. They may think that laziness, drunkenness, neglect are but a few of the characteristics that lead to the poverty suffered by the wives and children of such men.

I have no doubt that such cases exist. However, the truth is that poverty arising from such circumstances represents a small minority of those who have suffered the deprivation of poverty over the centuries. The indignity of poverty suffered by whole communities down the ages has clearly resulted from the operation of market forces and unfettered capitalism without the application of the measures needed to establish the necessary social justice. Although that description may seem harsh to some, it was not all that long ago that a leader of a party opposite coined the phrase "the unacceptable face of capitalism". Industrial change from the 19th century onwards has from time to time created widespread poverty, damaging both individual families and whole communities.

With the historical development of this country, none of us can be surprised today at the way in which the trade unions mushroomed in the 19th century. It was not only the individually irresponsible or the unemployed who suffered poverty; millions of workers who worked long hours in hard and often dangerous jobs also suffered poverty. Yet at the same time a few were amassing vast fortunes.

Is it any wonder that the Labour Party was born of the trade union movement, in the knowledge that if social justice and the eradication of poverty were to be achieved, political decisions would have to be taken? These values have been with the Labour Party since its inception and they are still part of Labour's mission today, 100 years later. Although the circumstances have changed, the values have not. They are as important to Labour today as they were a century ago.

As we all know, just about halfway through the 20th century, a Labour government with a landslide victory were elected to form the government who laid the foundation stones of Labour's historical mission: to remove poverty and establish universal social justice. Regrettably, it took another 50 years for another

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Labour landslide. Last year, for the first time in Labour's history, a landslide was repeated in a subsequent election. This Government are determined to complete the job that the Attlee government started. The measures may be different, because circumstances are different, but the values are the same. For 18 long years, the Conservative Party had every opportunity to tackle poverty and support families. In my view, they failed. I shall not speculate now on whether they did not want to succeed, or whether they did not know how to succeed. However, in 1997, the electorate demonstrated their view. The British public made their decision. It was not the poor, the most disadvantaged or the most under-privileged who voted the Conservative government out of office; it was those who were well off or reasonably well off and those who were relatively comfortable. It was those who were ashamed at what was happening to this country and to large numbers of people living in it, reflected in slogans such as, "Get on your bike" and, "There's no such thing as society".

It is clear to me that, since 1997, this Labour Government have been introducing measures that are consistent with their core values: to remove poverty and to establish social justice by focusing on support for people—individual men, women and children—and collectively focusing on families.

I know that, in his reply, my noble friend Lord McIntosh will where necessary emphasise once again the Government's record—particularly on bringing more people into work, providing minimum levels of income and improving benefits for pensioners and benefits for families. I shall therefore not go into those details, which have already been clearly expressed by my noble friend Lord Layard in introducing this debate.

I should, however, like to say how much I welcome the action of both the Prime Minister and the Chancellor of the Exchequer on world poverty. In the developing world, poverty is very often caused by famine, drought, disease and other natural disasters, as well as by exploitation and abuse. Such poverty is far worse than anything that we experience. Whatever its cause, however, that poverty very soon becomes the breeding ground for fanatical terrorists. I therefore warmly welcome the Prime Minister's proposed tour of Africa, and I warmly welcome the Chancellor's attempts to establish a world-wide, funded coalition to attack world-wide poverty.

Last Sunday, at the church I attend, during his sermon, the minister quoted Martin Luther King, saying:

    "Injustice anywhere is a threat to justice everywhere".

In the context of this debate, I say that poverty anywhere is a threat to prosperity everywhere. If 11th September 2001 has not taught us that lesson, it has taught us nothing.

4.6 p.m.

Baroness Thomas of Walliswood: My Lords, poverty and its attendant ills ought always to be a matter of concern to us all. I agree with very much of what the

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noble Lord, Lord Davies of Coity, has just said—perhaps pausing only very briefly to remind him, in the most gentle possible way, that Lord Beaverbrook was a Liberal—

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