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Baroness Andrews: My Lords, the concept of a lifetime neighbourhood addresses exactly the sort of problems identified by the noble Lord. We should be moving towards age-friendly cities. Part of the challenge that we identify—I would like to take the noble Lord’s advice on this—is how to build in ways

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that do not trap older people in their homes without the confidence to go out, not just because the spaces or shops are inaccessible and dangerous to get at; the whole environment needs to be welcoming and safe. In the next 10 years, there will be another 2 million over-65s in this country. We need to think much more creatively about the sort of planning and space sharing that we are undertaking.

The Earl of Caithness: My Lords, will the Minister give an assurance that her proposals for making these better homes will not be used as another excuse to increase the community charge, such as the valuers are doing to pretty houses with nice views?

Baroness Andrews: My Lords, these 16 elements that make a home more accessible—ranging from wider doors to electric sockets that you do not have to double over to switch on—are simple. The total cost is estimated to be about £550. There is no reason why this should add to the cost of homes or anything else.

The Lord Bishop of Liverpool: My Lords, given what the Minister said about the number of people over the age of 65 increasing by 2 million and the need to be more creative in our thinking about how to adapt, will she say what creative work is being done to use the tax system to enable families to adapt their homes to care for elderly relatives?

Baroness Andrews: My Lords, I cannot answer that question directly. However, because this is in the front line of a range of preventive services in health and care, we are looking at ways in which families can be supported through the community, in their own homes, with their families and in their own neighbourhoods, so that they can support one another. That must be a cost benefit to everybody.


11.29 am

Lord Harrison asked Her Majesty’s Government:

The Minister of State, Foreign and Commonwealth Office (Lord Malloch-Brown): My Lords, we applaud the agreement reached between the leaders of the two communities to resume the search for a comprehensive settlement through negotiations facilitated by the UN and flanked by confidence-building measures such as opening Ledra Street. This agreement is a clear demonstration of their joint desire to reunify Cyprus. The UK’s role in this is not prescriptive but supportive. We will continue to support the UN by encouraging all parties to capitalise on this new opportunity.

Lord Harrison: My Lords, while recognising the necessity of the two parties themselves resolving the issues between them, will my noble friend nevertheless consult the Greek and Turkish Governments to

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reinforce any such agreement that occurs? Will he consult our European Union allies to ensure that Northern Cyprus benefits from being in the EU, something of which it has hitherto been deprived?

Lord Malloch-Brown: My Lords, I assure my noble friend that we intend to be actively involved in the diplomacy on this. The Prime Minister and Foreign Secretary have already directly met their Cypriot counterparts. We have intense engagements with the Government of Turkey as well as that of Greece. On the latter point, while it is true that Northern Cyprus has not enjoyed the benefits of EU membership, it enjoys a generous aid programme in per capita terms, intended to raise the living standards of Turkish Cypriots in a way that will reduce the friction on the happy day that the two halves of the island are reunited.

Lord Hannay of Chiswick: My Lords, while joining wholeheartedly in welcoming the steps that President Christofias, since his election, and his Turkish Cypriot opposite number, Mr Talat, have taken to revive the negotiating process aimed at reunifying the island, will the Minister confirm the importance in any resumed negotiations of the two Cypriot parties taking full ownership of the process from the outset, up to and beyond its conclusion? That way we would not again have any prospect of a party opposing the terms of a deal in the subsequent referendum. Will the Minister confirm that, in the context of an emerging settlement, Her Majesty’s Government will renew the offer made in 2003 to hand over a substantial part of the sovereign base areas to a reunited Cyprus?

Lord Malloch-Brown: My Lords, the noble Lord is of course a well recognised expert on this issue. He knows that the last time there was an agreement, there was coincidentally a change of Government through elections in the Republic of Cyprus, which complicated the issue of support for the agreement. We now have a new President in Cyprus with a new and fresh mandate, who is committed to negotiations. Equally, in the Turkish Cypriot leader, Mr Talat, we have someone committed since he came to office to finding an agreement. The omens for both sides taking ownership of this and negotiating in complete seriousness are very high. Of course, we will do everything we can—including on the issue of the sovereign bases—to provide incentives to make such negotiations a success.

Baroness Knight of Collingtree: My Lords, is it not the case that we have in this country a real responsibility as a long-term guarantor to do something to help Northern Cyprus? Is the Minister aware that real suffering has gone on for years in that little strip of land, not only with the people trying to make a living but in every aspect—property and so on? This is an urgent matter, and we would all welcome action being taken by the Government.

Lord Malloch-Brown: My Lords, the noble Baroness is correct that there have obviously been real economic disadvantages in the north which we have sought to address. With the prospect of two political

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leaders willing to lead their communities into a final solution to the root cause of this problem, this is not the moment for the UK to introduce new aid or economic incentives to the north alone. We must put all our efforts into finding a lasting solution: a political agreement between the two communities.

Lord Wallace of Saltaire: My Lords, on occasions over the past six or seven years, it has seemed as if the United Kingdom has been the only EU member apart from Greece that is actively interested in resolving the Cyprus conflict. Given that the Cyprus conflict and its related links with Greece and Turkey are at the heart of the problems of closer links between NATO and the EU, can Her Majesty’s Government make the strongest possible efforts to ensure that other EU Governments also take an active and positive role in assisting both parties in negotiating?

Lord Malloch-Brown: My Lords, the noble Lord makes an important point. We will certainly work to involve individual EU countries in this way. He was not suggesting otherwise, but both parties agree that the right frame for negotiations remains the United Nations. EU member states have a particular role in supporting that.

Lord Maginnis of Drumglass: My Lords, why do the Government appear so dismissive of human rights for Turkish Cypriots, as evidenced in recent Written Answers? Have they forgotten the ruthlessness of EOKA-B against Turkish Cypriots? Why do they still disregard their obligations as a guarantor of the 1960 Treaty of Guarantee, despite promises renewed in April 2004 after the Annan plan referendum?

Lord Malloch-Brown: My Lords, I certainly hope that the noble Lord is not correct and that we do not overlook either our obligations as a guarantor or concerns for the human rights of those in the north. Rather than direct monitoring by the UK, as occurred in the past, we now rely on the well established UN mechanisms and UN reports on the human rights situations of the different communities as our main basis for action. I reassure him that we have not forgotten about these issues.

Bedfordshire (Structural Changes) Order 2008

11.36 am

The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Andrews): My Lords, I beg to move the Motion standing in my name on the Order Paper.

Moved, That the draft order laid before the House on 10 March be approved. 14th report from the Joint Committee on Statutory Instruments, 15th report from the Merits Committee, considered in Grand Committee on 25 March.—(Baroness Andrews.)

On Question, Motion agreed to.

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Financial Inequality

11.37 am

Lord Harries of Pentregarth rose to call attention to financial inequality in the United Kingdom; and to move for Papers.

The noble and right reverend Lord said: My Lords, GK Chesterton once remarked that the English working man was less interested in the equality of human beings than he was in the inequality of racehorses. There is still some truth in that. However, what is very deeply rooted in most English people is a strong sense of fairness. The English may not reveal much outward observance of religion, but there is a deeply felt inner conviction that some things are fair and others are grossly unfair. In proposing this debate, I do not primarily have in mind a discussion of equality as such, fascinating though that would be, but the stark inequalities in our society, which the majority of our fellow citizens now regard as unacceptably unfair.

I say “inequalities” but we are all aware that the situation is one of growing inequalities—widening financial and economic inequalities, which are reflected in every area of life. Recently there have been a number of reports which bear on this subject, which have been helpfully summarised in the briefing note provided by the House of Lords Librarians. Although the situation is complex, what emerges from the reports of the Institute for Fiscal Studies in both 2000 and 2008 is that for the poorest 15 per cent of the population, income growth has been very much lower, with real income falls in the very lowest part, while for the wealthiest 10 per cent of the population, there has been rapid economic growth, with what they term a “spike” at the 99th percentile point.

In recent years, as we know, we have become used to stories of vast City bonuses, which have, in my opinion, totally distorted the housing market, and stories of great pay-offs to directors and executives, some of whom, by any ordinary standards, have failed. There is widespread disquiet in our society about this. Three recent polls reveal that 75 or 76 per cent of the population find this totally unacceptable. We are not talking about the politics of envy, with what WB Yeats called,

We are talking about a feature of our financial system, which, if it continues unabated, could undermine both the basis of our economic prosperity itself and the fabric of our society.

In the great debates about the market economy in recent years, its most thoughtful defenders have always stressed that the success of the market depends on factors other than the market itself—in short, on certain moral assumptions that go wider than the legal framework on the basis of which the market in fact operates. One of those is the acceptance of what we might term proportionate reward. Appropriate reward for hard work, skill and enterprise is basic to how the market operates, but implicit in that is some kind of judgment about what is appropriate and fair and what is inappropriate and unfair. If people as a

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whole feel, as they do now, that the gap has become outlandish, that cannot but undermine the kind of social contract on which the whole operation of the market depends.

What does a person on the minimum wage feel when they work long hours just to survive for year after year when groups of people get a regular windfall that is more than they can earn in several lifetimes? I believe that that undermines any sense that what they are doing is worthwhile.

I am sure that your Lordships will fill out the facts and figures of what is happening in various areas of life, but I just mention a few. There are still 3.8 million children living in poverty—one in three—with even higher rates in urban areas such as Manchester and London. More than half of those children have at least one parent working. If both parents are working with at least one of them full-time, families can survive, but with only one working, the situation has not improved. The situation of children with no parents working has improved somewhat in recent years, but there were 1.4 million children of poor parents living in working households in 1997, and that number is the same today. That has not improved. The Zacchaeus 2000 Trust has drawn our attention to the stressful and inevitable rent and council tax arrears, debts, loan sharks and clashes with bailiffs created by poverty for people both in and out of work.

What the Government have done in introducing the minimum wage has been an essential, very welcome first step towards helping with that problem. That wage is now £5.52 an hour, although often paid without holiday or sick pay. A single earner in a couple with two children would now have to work 80 hours a week at the minimum wage to avoid poverty through their wages alone, without any other benefits or tax credits.

Whatever Government we have in power should commit themselves at least to maintaining the value of the minimum wage in line with average earnings growth over the economic cycle and should extend the adult rate to 21 year-olds. But that is not enough, so I very much welcome the Living Wage for London movement. The living wage for London has been set at £7.20 an hour—a big difference from the national minimum wage—and the unions and London citizens have been remarkably successful in persuading a significant number of employers in London to sign up to it. By December 2007, 5,800 were covered, with a total gain of nearly £20 million in wages. I believe that the figure of £7.20 is in fact the minimum that all London employers should be paying.

Cleaners and hotel workers are especially liable at the moment to be treated unfairly. One hotel worker was paid the equivalent of 26p an hour for the first six days’ work, the first three days being regarded as training. That is only one of a number of such stories.

As we know, the Government have committed themselves to halving child poverty by 2010. The recent Budget ensured that another significant step would be taken towards that. We need to ensure that there is no let-up on what will be needed every year until child poverty is eliminated. Again, I believe that

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whatever Government are in power, they should share that commitment to the total elimination of child poverty.

That is action that needs to be taken at the bottom end of the financial pile: action to raise the poorest people out of poverty and enable them to participate meaningfully in the market economy. What about at the other end? Inequality has two poles to it and is indicated by the distance between them. Some suggest that we can eliminate child poverty while not bothering too much about gross inequality. However, it is no accident that the only countries to abolish child poverty—the Nordic countries—are much more equal than ours. There is a clear link between gross inequalities and the presence of poverty.

The figures on inequality speak for themselves. Some 3 per cent of the country’s income is taken by the poorest 10 per cent of the population; 28 per cent of the country’s income is taken by the richest 10 per cent—and that is only what is declared. According to the recent Budget, the official Revenue and Customs’ estimate is that tax avoidance has now reached £41 billion a year.

As far as wealth is concerned, it is estimated that the share of wealth owned by the top 1 per cent rose from 17 per cent in 1991 to 24 per cent in 2002, while the wealth of the bottom 50 per cent fell from 8 per cent to 6 per cent over the same period. No less startling is the fact that, over two decades, the average earning of the chief executives of the top 100 companies has gone up from 17 times the average employee’s wage to 75.5 times the average employee’s wage. That is an extraordinary jump in just 20 years. Is that jump really deserved? It may be argued that in a market economy—particularly one that is operating internationally—there must be huge salaries and bonuses available to attract the few who allegedly make all the difference in a highly competitive world. However, as Will Hutton put it:

It is interesting that the Institute of International Finance—the association of global banks—met recently, in Rio de Janeiro, to discuss for the first time a voluntary code of conduct on pay. According to Polly Toynbee, it was,

Suggestions include a deferral of bonuses until the impact of the strategy is clear, or even clawing back bonuses in light of later, worse performances.

The Motion before us is about financial inequality. It is not surprising that this inequality is reflected in every aspect of life—housing, education, health, opportunities for advancement and so on—and I take just a very few examples. One strong theme from the recent reports is how segregated the United Kingdom now is, between rich communities getting richer and pockets of deprivation. This is, of course, because economic inequalities are reflected in what economies call “positional goods”—housing, whose costs have risen so disproportionately, access to good schooling

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and so on. Then there are the prisons. Martin Nary, who visited one prison a week for years, says quite simply:

Less familiar are the figures about low birth weight, a core signal of poverty. From 1953 to 1973 the percentage of babies born in the UK with a low birth weight was in the area of 6.6 per cent. The data for 2007 show that the figure has now risen to 10 per cent. This is compared to 4 per cent for countries as varied as Sweden, South Korea and Samoa, and 9 per cent for countries such as Romania and Namibia. Causes have been identified by experts as being due to poor maternal nutrition owing to poverty and a lack of education about a healthy diet. There is something very shocking about those figures.

Then there are the figures on life expectancy. About two decades ago, there was a difference in life expectancy of about five years for males, depending on whether they lived in Glasgow or the south-east of England. More recently, that difference has widened out to more than nine years. Poverty brings ill health and earlier death; increasing inequality brings about even starker contrasts.

John Rawls, one of the most influential philosophers of the late 20th century, argued that a degree of financial inequality was acceptable provided that the poor benefited from it. A society is just only if its worst are better off than they would be under any alternative arrangement. He justified this view on the basis that if we all had to choose a society from scratch, with no idea whether we would be badly off or well off in it—in other words, leaving aside our present interests—we would all be bound to choose his idea of a just society, for this would be the only one in which everyone could benefit wherever they were born in it. The acid test, however, is whether the worst off are benefiting or benefiting enough. According to Rawls’ view, which seems to be pretty compelling, our present arrangements, which rightly allow for some inequality, are justified only if they are benefiting.

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