The Poverty Programme: ECC Report

HL Deb 09 June 1994 vol 555 cc1399-426

8.59 p.m.

Baroness Gould of Potternewton rose to move, That this House takes note of the report of the European Communities Committee on The Poverty Programme (9th Report, HL Paper 51).

The noble Baroness said: My Lords, I move the Motion on the Order Paper on behalf of the European Communities Committee. The committee welcomes this opportunity to present to your Lordships' House its findings on the implementation of the European Community Poverty Programmes for the social and economic integration of the least privileged groups, so enabling them to find new ways of participating in the normal social and economic life from which they are currently excluded.

It is, however, a matter of regret that this debate had to be held so late in the evening and on the day of the European elections, so precluding many noble Lords with specialist knowledge and expertise from participating. It is, however, important for the Minister to hear the views of your Lordships' House before the meeting of the Social Affairs Council on the 20th of this month when decisions will be taken on a new poverty programme.

First, I wish to give the apologies of the chair of the committee, the noble Lord, Lord Lewis of Newnham, for his unavoidable absence this evening and to take this opportunity to thank him for the patient and tolerant way in which he chaired the proceedings. I should also like to express the appreciation of the committee to our specialist adviser, Professor Graham Room, and the clerk to the committee, Mr. John Goddard, for their invaluable assistance in the preparation of the report.

Since the mid-1970s there have been three poverty programmes organised and financed mainly by the European Commission. A fourth programme is under consideration. All of the programmes have been small in scale in the context of Community spending. Consequently, few people have been closely involved. Nevertheless, after examination of the third programme, Poverty 3, the committee was unanimous in its view that it addressed urgent social problems of disturbing proportions and provided an opportunity for those fortunate to be beneficiaries to effect change not only in their own lives but also for the local community.

Poverty 3 commenced in 1989 and has given support to 41 projects across the 12 member states, with a total budget of 55 million ecus spread over the five years of the programme. Fifty per cent. of that sum has come from the European Commission and the other half has come from local partners and sponsors. It comprised 29 model action projects, each based on a locally defined geographical area where social exclusion and deprivation were the result of the multiple disadvantages of unemployment, particularly long-term unemployment, low income, dependency on low state benefits, ill health, inadequate housing and poor environment.

The aim of the 12 remaining innovative initiatives is to respond to specific problems for isolated groups. There are three model action projects in the United Kingdom based in Liverpool, Edinburgh and Brownlow in Northern Ireland. There is also a project in Bristol working to improve the lives of one-parent families.

The proposal by the Commission for a fourth programme with a larger budget raised for the member states the question of the purpose and effectiveness of past programmes, in particular Poverty 3.

The role of the committee was not, nor could it be, an assessment of a claimed cure for poverty or social exclusion but was to determine whether these specific programmes had in practice had any part to play in alleviating poverty, focusing demands for change and demonstrating what could be achieved at local level.

In order to make such an assessment, the inquiry sought answers to a number of fundamental questions: can small local projects make a worthwhile impact on the lives of poor people? What principles should underlie such projects? Can lessons be learnt from transnational communications between projects? What role should be played by the private sector, NGOs, local authorities and regional and national governments? Was there a justification for European intervention in the funding, co-ordination and choice of projects? Finally, what made a viable project in terms of size and duration?

To get answers to those questions members of the committee visited four different projects: Pilton in Edinburgh, Toxteth/Granby in Liverpool and, on the continent, projects in Lisbon and Antwerp. Written and oral evidence was sought and received from organisations and individuals involved in the examination and relief of poverty.

I will make reference only to the projects in Pilton and Toxteth/Granby which I was fortunate to visit. I use the word "fortunate" advisedly since to visit those projects was an experience. In both Edinburgh and Liverpool we were extremely impressed by the way in which the projects had achieved the aim of raising the capacity of the local community to re-orientate the policies and priorities of the local authorities and other agencies and establish a diverse range of projects designed to deliver social development and self-help rather than dependency. By example, the Pilton partnership put together a scheme in a local school whereby pupils who met individually-set attainment and behaviour targets were guaranteed training or jobs by local firms on leaving school, giving a significant boost to the morale of youngsters living in a high unemployment area. There was also provision in the school for adult training. Under the guidance of the partnership, a group of young women had raised funds and were in the process of building a child care centre on the estate.

In Liverpool, the Toxteth/Granby project has succeeded in influencing local decision-makers on the importance of employing local labour, including ethnic minority labour, to combat poverty and racism in an area characterised by racial divisions. The need to encourage people to assert their civil rights, for instance by assisting them to take up their welfare benefits, is an important part of the work of both projects.

But none of that could have been achieved without the initial input of enabling resources from Europe. This month sees the end of that funding. Fortunately, many of the projects will continue their work with funding from co-partners and other sources. However, the committee were firmly of the view that it was the responsibility of Member States to ensure that successful projects continued and were replicated.

The committee also had to consider that whilst Poverty 3 was designed specifically to counter the social and economic exclusion of the least privileged groups, Poverty 4 would also aim to reflect that income-related poverty and social exclusion were not co-terminous. Poor housing and health care, unemployment and lack of training, old age and single parenthood may all interact and react with low income in restricting economic and social opportunities. As the report shows, this can result in social exclusion. However, it is important that the principles underlying Poverty 3 of multi-dimensionality, partnership between public and private institutions and participation of the disadvan-taged groups concerned are maintained in Poverty 4. It is encouraging that in its response to the report the Government recognise the value of these principles.

The impact of that interaction on people's lives was illustrated in yesterday's debate on housing when my noble friend Lord Pitt of Hampstead referred to the inter-relationship between poor housing, ill health, under-achievement in education and poverty. The poverty report supporting that view states that the governments of all member states, including the United Kingdom Government, should review their domestic policies to ensure that they do not promote social exclusion or make its reduction more difficult. And further they should seek to remove from their economic and social policies any elements which, as side effects, create poverty.

In pursuing the limited aim of our inquiry, we became convinced that the underlying causes of poverty, social exclusion and loss of solidarity would have to be considered. Clearly the inquiry could not primarily address those wider issues, neither could it disregard them. An explanation was sought as to the reasons for the increase in the numbers of people living in poverty in recent years, estimated as 52 million in the 12 member states.

The 1993 edition of the DSS document, Households below average income, indicates that the number of individuals in UK private households with income below half the national mean rose between 1979 and 1990–91 from 4.4 million to 11.6 million before housing costs and from 5 million to 13.5 million after housing costs—an incredible increase of 230 per cent.

The Institute of Fiscal Studies, which analysed the DSS figures, pointed out to the committee that the statistics might understate the level of growth in poverty during the 1980s. The homeless were beyond the reach of the surveys on which the figures were based, and those most alienated from society might be less likely to respond to the survey. Its recently published study, in which 200,000 households took part, supports its previous view that in the 1980s in the UK the poorest became poorer, with the living standards of the poorest 10th of the population having barely risen over the past 20 years but the richest 10th being almost twice as well off.

Similarly, official government figures for the UK given in response to questions in another place show that over the same period the real incomes of the poorest 10 per cent. of households declined by 14 per cent., and the poorest 10 per cent. of families with children are £9 a week worse off. It might be assumed that that figure relates to the growth in the number of one-parent families, but they make up only 20 per cent. of the figure. The remaining 80 per cent. are two-parent households. This has to be contrasted with the 62 per cent. rise in the incomes of the highest 10 per cent.

The unanimous conclusion of the committee could only be:

"It is clear that in the United Kingdom in the 1980s inequalities in income distribution widened dramatically".

The Government in their response to the report remain silent on the validity of that evidence. One must therefore assume that they accept it as correct, based as it is on their own figures. However, the Government express disagreement with evidence presented to the committee on comparisons with other member states. It must therefore be stressed that in its findings the committee carefully avoided international comparisons, appreciating that such detailed evidence was not simply and readily available.

It is not possible for me to go into the complexities of the structural relationships between the projects at local level, the research and development units established in each member state and the Commission. Suffice it to say that the committee very forcefully expressed the opinion that there needed to be clarification of the role of the RDU, which should be a key link in the communication network, with an improved and less complex communications strategy between projects and their national RDU, the Commission's Central Unit and the authorities of the member states.

Similarly, the report calls for more efficient arrangements for the co-funding of the projects.

The committee was also critical of the lack of interest and detached position of the Government to Poverty 3, but welcomed in principle the declared intention of the Government to be more closely involved in the new programme. The government plan to establish a steering committee was, however, a cause for concern. The committee felt that it was crucial to maintain local innovation, initiative and genuine participation, which would not necessarily be the case under central direction, whether intended or perceived.

It was clearly felt by participants in the projects that programmes which are parachuted in by professionals will lack local credibility and in general will not continue after the programme has finished. It is helpful that the Government have accepted that view and see their committee as having no stronger role than that of "liaison" and "oversight". But if the proposed liaison committee is to have any role in selecting projects and overseeing the setting up of those projects, it needs to be established well before the start of the programme, with its membership and terms of reference announced as soon as possible.

Mr. Hague, Minister for Social Security, on the one hand referred to Poverty 3 as an extremely worthwhile programme, while on the other hand identifying weaknesses in management arrangements and proper evaluation, raising doubts as to whether value for money was obtained from the programme.

There is no doubt that weaknesses should not be reproduced and that some changes in structure and management are required. But the committee is convinced that Poverty 3 has enabled valuable work to be done in relieving the effects of poverty locally, making it possible to mobilise a range of people, agencies and organisations to promote positive change in favour of the least advantaged by building their morale, providing a sense of solidarity, giving them a sense of purpose and a new lease of life.

Recent evidence on the scale of poverty in Britain underlines the importance of the poverty programme for the UK. The committee would urge the Government to give their backing to the proposed fourth programme and to support an increase in the programme's budget. We hope that the Minister will give a positive reply.

The committee report on the Poverty Programme opens with a quote from J.K. Galbraith:

"Poverty is an uncomfortable concept as well as an uncomfortable reality".

I wish to end my remarks with a quote from Dr. Johnson:

"this mournful truth is everywhere confessed. Slow rises worth, by poverty depressed".

I beg to move.

Moved, That this House takes note of the report of the European Communities Committee on the Poverty Programme (9th Report, HL Paper 51)—(Baroness Gould of Potternewton.)

9.14 p.m.

Viscount Bridgeman

My Lords, I wish to thank the noble Baroness, Lady Gould, for introducing the debate. I too was a member of Sub-Committee C and it fell to me to visit projects in Antwerp and Lisbon as part of our review.

On the question of poverty, there are various yardsticks which come out with different assessments of the relative poverty in this country and in other countries in the Community. But surely are we not in danger of not seeing the wood for the trees? Poverty is poverty. When we went to Antwerp the first thing people said to us was that poverty is relative, and that is so. The conception of poverty in a relatively prosperous part of Flanders was very different from that in Portugal. In Antwerp the project was mainly engaged in resettling, and rehabilitating the immigrants—mostly Moroccans and Turks. Understandably, it was an efficient and competent job.

However, it was in Lisbon that we were really impressed because there was a programme to resettle and rehabilitate the street children who come from rural depopulation and the old African colonies of Portugal. We were impressed by the care, the absence of coercion and, significantly, the almost complete lack of institutionalisation of the children. I mention that in detail because, if the concept were transferred to this country, some of us felt uncomfortably aware that it would at best have an institutional aspect to it.

The noble Baroness referred to the transnational implications and aims of Poverty 3. That is important, and the Lisbon project is just such an example which could well be copied and studied in this country. I share the disappointment that the Government do not feel able at this stage to commit themselves to doubling the Poverty 3 budget in Poverty 4. A lot of resources are needed in the transnational liaisons and meetings. I echo what the noble Baroness, Lady Gould, said: the committee felt that the Government had been withdrawn in their attitude to Poverty 3. I very much support our recommendation that a much fuller liaison committee be established, with central government, local government, voluntary agencies, employers' organisations and trade unions, as well as the crucial RDUs which are funded by the Commission. They should form the liaison between the liaison committee in this country and the Commission.

I come now to the drop in the ocean. There were only four projects in the United Kingdom, but under the proposal that will effectively be doubled. Whatever the relative merits, two drops in the ocean are worth twice as much as one. The efficacy of that kind of pilot project is multiplied by example. If there are two exemplary bodies, they will have more effect than just one.

All that adds up to a considerable commitment in expenditure. Poverty 3 had its drawbacks, but it achieved a significant amount, particularly in transna-tional co-operation. Predictably, some countries were keener than others: the Belgians, we found, were less keen than the Portuguese. But I very much hope that in due course the Government will be able to meet our recommendation that double the funding is made available in Poverty 4 than has been made available in Poverty 3.

9.20 p.m.

Lord Dahrendorf

My Lords, the noble Baroness, Lady Gould, deserves our gratitude for having introduced this debate. So does the sub-committee of the Select Committee which spent much time on producing a concise, interesting and in many ways informative report on an important subject.

Poverty and social exclusion are corrosive of human societies. They turn values which should be general and applied to every citizen into a privilege, even if it is a privilege of a majority. If we tolerate the existence and spread of poverty and social exclusion, in many ways we betray the basic values of membership in the civilised society to which we subscribe. In any case, any country which tolerates poverty and social exclusion cannot be surprised if there are some—perhaps a growing number—who no longer feel bound by the laws and rules which we all want to accept. There can thus be no doubt about the importance and the seriousness of the issue.

Indeed, I agree with the noble Baroness that there has been an unfortunate deterioration in the conditions in most European societies. Poverty and exclusion have increased rather than decreased in years in which we have seen massive overall economic growth. There may be a greater incidence of inequality today than there was 15 or 20 years ago.

But our subject tonight is not poverty and exclusion, as such. Our subject is the question of what the European Community, through the Commission, can or should do in order to alleviate an undoubtedly important problem. I hope that noble Lords will not find that I sound too discordant a note by throwing into the debate a little doubt.

I do not find it difficult to support the Motion before us: That this House takes note of the report of the European Communities Committee on The Poverty Programme". However, on reflection I believe that when it comes to poverty and social exclusion the European Community has no particular comparative advantage over its member states, its regions or indeed its localities. Nor is there an evident specific European interest in setting up a programme to fight poverty and social exclusion. Indeed, perhaps I may go a small step further. If ever there was a case for subsidiarity, it is here. By that I mean a number of quite specific things.

Perhaps I may be allowed to say that I do not speak as someone who is deeply sceptical about European co-operation —not at all. But I am one who believes that European co-operation and integration will capture the imagination of our peoples only if it concentrates on matters in which Europe has a specific contribution to make which no one else can make—a contribution which expresses an interest which is characteristically European.

Let me give your Lordships three reasons why I believe that that is not the case when we come to poverty and social exclusion. First—the noble Viscount, Lord Bridgeman, mentioned this fact—the phenomena is not the same in different parts of Europe. It does not make much sense to make a general statement which is supposed to cover poverty in Portugal and poverty in the Netherlands. It is not something one would do if one were seriously describing worrying phenomena in various parts of Europe. Indeed, there are enormous differences within any country.

In this country there are differences between poverty in the south and poverty in the north; there are differences between urban and rural poverty; between the poverty of children and the poverty of old people; between geographically concentrated poverty and poverty that is widely dispersed; between poverty that is visible in the street and perhaps not so visible. General statements and European statements about poverty are likely to be more misleading than helpful and we must be careful before we accept that the same words can be used all over the Community.

Secondly, it seems to me that solutions which can be offered to a crucial social problem are not in any specific sense European. In some ways they are national. The key question of offering access to the labour market to young people may be the crucial question in this country. It is one that cannot be resolved by European action. It requires action at a national level. But beyond that I have come to be increasingly convinced that there are above all local needs which must be dealt with locally. I was pleased to see in the report that local needs and local measures were stressed quite strongly.

It is amazing how effective people who take up local issues can be in mitigating the effects of poverty and ultimately poverty itself, and in bringing in people who are outside full participation in society and in the economy. They may be priests; they may be women on housing estates who simply cannot bear the misery around them and so take the initiative and stimulate improvements; they may be local businessmen; they may be a whole lot of people locally. And while in all this we can learn from each other, the worst possible thing to do would be to tackle this kind of issue top down; that is, by starting in some remote organisation rather than starting with real people who really suffer and may know how they can get out of the mess.

That takes me to my third point. Financing a campaign against poverty and social exclusion must be appropriate to the needs. I suspect—I am sorry to have to say this—that if we calculated the cost of programmes proposed and implemented by the European Community, the overheads would be several times those of programmes which are not so proposed or implemented. Even national governments are often not particularly well placed to tackle those issues. If we had proper local government still—

Noble Lords

Hear, hear!

Lord Dahrendorf

—it would be a better set of institutions to deal with precisely those worrying issues. I had the privilege of being Trustee of the Ford Foundation in the United States for 12 years, which spent a great proportion of its funds on combating poverty. I have seen there how much leverage one has if one can deal with local problems locally and if one can support community initiatives. I have seen how far relatively small amounts of money go when one uses them to support local people in their worry. Indeed, I am a little sorry that the idea, which at an earlier time I tried to introduce into public debate, that the national lottery should be used to set up a foundation which might be able to support such local initiatives has not, it appears, met with sufficient support to become real.

In short, and in conclusion, I for one have no doubt whatever about the seriousness of the problem. I believe that there is a great need for a poverty programme and I do not believe that the European Community or the Commission are the right institutions or the right places to introduce such a programme. I shall not take this any further at this stage, but I do not think it is very difficult to extrapolate from these remarks what I hope will happen.

9.31 p.m.

Lord Desai

My Lords, I thank my noble friend Lady Gould for introducing the ECC report on the poverty programme. It is always a pleasure to follow my friend —I cannot call him my noble friend—and former boss, the noble Lord, Lord Dahrendorf. I shall disagree with him but I must say that I found his speech provocative and thought-provoking. Some of the issues he raised and some of the issues raised by the noble Viscount, Lord Bridgeman, have to be addressed. Not being a very practical person, and since I talk only about abstractions, I shall stick to that.

We are discussing a rather modest programme. Normally when we discuss anything belonging to the European Union, sums of 55 million ecus spent over four years hardly surface. But this is a modest programme. Having looked at the detail—not in as much detail as members of the committee have looked at it—I also found it commendable that a good deal of emphasis is put on small local projects. This is not a grand scheme to alleviate poverty; this is not the great society; this is not the war on poverty. This concerns very small and particular projects with a great emphasis not just on partnership or multi-dimensionality but on participation. I agree with the noble Lord, Lord Dahrendorf, that what one wants to see much more of are initiatives about poverty alleviation or strategies to get out of this situation proposed from the bottom by the poor themselves. Ways should be found to generate proposals from the bottom, from the people themselves, who know their situation and are much better informed than experts, civil servants or ministers. Participation is an extremely important dimension of the programme.

In saying that poverty is multi-dimensional, one could be obfuscating the issue rather than clarifying it. One of the dimensions of being poor is social exclusion or what I would call lack of dignity. Many years ago Adam Smith talked about the problem of poverty as being people unable to go about in public without a feeling of shame. He said that people wanted to have shoes and a linen shirt. He thought that that was the minimum necessary in order not to feel ashamed when going about in public. People lose a sense of dignity when they are poor.

Participation itself dignifies people if they are doing something about their own lives. That is a very welcome feature of this programme. To that extent I am not so much worried about this being a top-down programme, as the noble Lord, Lord Dahrendorf, said. I would have worried if it was a question of 55 billion ecus. But 55 million ecus spent over four years is slightly less than a regional health authority loses on a computer contract. I am not worried about the sum of money.

There is a problem as regards subsidiarity, Which has become a doctrine with which one cannot disagree. I found a subtext in this report and also in the Government's response to it. For one reason or another the Government do not like an anti-poverty policy. As the report shows, they are somewhat detached from the whole idea. I believe that the Government have strong views about anti-poverty programmes which they consider to be a mild waste of money.

If there is increasing impoverishment, involving people who were not previously poor, because of negative equity, unemployment or whatever, and if the national government are not interested in doing anything about it and it is not possible for anything to be done locally because the resources have been taken away, subsidiarity demands that the European Union does something about it. To that extent subsidiarity is not only the most appropriate way for the matter to be dealt with but the European Union is the most concerned. In a sense it would be quite proper for the people of Toxteth, or for a similar area in Wales which appears to be excluded from these projects, to go directly to the European Union and say, "We have a modest programme. Can you do something about it?" I hope that the Minister will tell me that I am completely wrong: that this Government are strongly in favour of anti-poverty programmes and they are doing a great deal about it. We wait to hear about that.

I now turn to the problem dealt with by the noble Lord, Lord Dahrendorf, and the noble Viscount, Lord Bridgeman; namely, that basically poverty is very local and there is no general way to look at the subject; in those circumstances it does not make very much sense to talk about poverty at a European level. This issue has been debated in literature for a very long time. Some people believe that in order to define poverty one has to have some kind of concept which is universal in time and place. For example, there may have been poverty in the 19th century, but there is no poverty now; or there may be poverty in Bangladesh or in Ethiopia, but there is no poverty in developed economies. Other people say that there is relative poverty and that every society has its own little pockets of the poor.

I do not like the definition which the European Community uses for poverty. It is deeply flawed. To say that someone is poor because their income is 50 per cent. below the average is total nonsense. There are poor in the world and in this country and poverty has increased. But that kind of definition is deeply flawed because in a sense it confuses poverty and inequality. Poverty is a different issue from inequality. To me there is no problem about having one single definition of poverty applicable across all countries because incomes are not the definition. It is not a question of how much money is needed to define someone living in poverty. In describing poverty one feels that people could be achieving much more with their lives and for one reason or another, which is not solely their fault, they are unable to achieve their full potential or to fulfil their capabilities.

One worries particularly about children, but also about adults who cannot participate in the political and social life of their communities. They cannot take advantage of the things that one should take for granted whatever the society in which one lives. To that extent, there is a universal definition of poverty because, whatever the society, one wants people to be capable of certain basic things. One wants them to be able to carry on their lives without having to worry about the minutiae so that they can get on with realising their potential.

As I have said, to that extent, therefore, there is a universal definition of poverty. Achieving an improvement may cost less in the streets of Portugal or in the rural areas of Calabria and it may cost more in London, but that is a separate issue. What we are talking about is relative only in terms of money. Every citizen anywhere has to be able to achieve certain minimum capabilities. That is especially true of children. That is why I am somewhat surprised that in the various documents—and perhaps I have looked at them only hastily—the definition of the perpetuation of poverty—of what used to be called the "life cycle of poverty"—has not been picked up. The definition relates much more to multi-dimensional participation.

One worries that by leaving children in poverty one is mortgaging the future. One is making it much more likely that when those children grow up their families will remain in poverty despite our best endeavours. That is why the problem of poverty is not easy to solve. Indeed, having a common definition of poverty causes a lot of problems, although different sums of money are involved in different areas.

The Poverty Programme is not the only initiative. Other policies are involved such as macro- and micro-economic policies and labour market policies. All either generate or alleviate poverty. We need to look at all of them. If one looks at the much debated and much flaunted recent OECD document, one can compare the level of unemployment across OECD countries since 1970. That gives the answer to why there is much more poverty now than ever before. I am not saying that there was no poverty in the 1960s and 1970s, but we have been following macro-economic policies—we were forced to follow macro-economic policies—which have led to persistent high unemployment. The Minister may say that unemployment is reducing, but that happens now and then in recoveries. However, since 1979 unemployment has not fallen to the level in that earlier era. That applies not only to the United Kingdom—the story is much the same in practically all countries.

We now face a different sort of macro-economic climate. In my view, what we have not done is to find a new set of policies for the welfare state which face up to the problem that we may have a society in which full employment, such as we enjoyed in the 1950s, will be very difficult, if not impossible, to recreate. We face a world in which people will move in and out of employment and in which men will have the episodic employment experience that women are used to having, but we have not thought through how to relieve poverty in that situation. To that extent, therefore, although the report is both good and helpful, much more needs to be done.

We should not assume that, because we live in a global economy and competition is very important, the state cannot do anything. It is important that the "state" is involved at the appropriate level—be it local, regional, national or Union.

Let me end by quoting, since I have already used Adam Smith's name in my support, something said by Winston Churchill when he belonged to a party other than the currently ruling party, I hasten to add. I was reading a new book by Martin Gilbert while I was standing at a polling station in the freezing cold. I picked up a nice reference. It is recorded that Churchill wrote to Asquith making a plea for state intervention, in the life of the less well-off; not for fragmentary improvement but for a comprehensive social policy to establish minimum standards both of labour and leisure, what Churchill called 'a sort of Germanized network of State intervention and regulation'". That was 1908. It is still a valid thing to do, but how it is done is another question. But we will have to do it, and we will have to do it with greater and greater intensity and care. Let me once again thank my noble friend Lady Gould for introducing to us this valuable report.

9.45 p.m.

Lord Bruce of Donington

My Lords, I am most grateful, as indeed the House will be, to my noble friend Lady Gould for having introduced the report so diligently prepared by her committee. The reports produced by the sub-committee and the committee as a whole for the European Communities are renowned for their thoroughness, the tremendous amount of detail into which they go, their method of presentation, their method of evaluating the evidence, and the ultimate production of the document itself. The sub-committee and its members deserve the thanks of the whole House for having tackled the task so thoroughly and, indeed, so quickly.

It will perhaps seem somewhat churlish if I venture to dissent from the emphasis that results from the exercise of that diligence. The document itself is published at a price of £23.80, which, of course, with strapped local authority library resources, will make it very unlikely that it will appear in any municipal library, and I do not believe that some of the ordinary workers in the country, let alone those who are unemployed, will be able to have easy access to it. One can only hope that the press may, among all the other documents that they have, have an opportunity to read it.

I am sure that all noble Lords will applaud the step of putting any money in anywhere, even for the temporary relief of unemployment and poverty. It is extremely welcome. There can be no question about that. But when I look at the document itself and its conclusions I am struck by two things. The first is the faith—one can almost say touching faith—which apparently the committee had in the European Commission to make any significant contribution to the problem.

Let us be clear about this: 55 million ecu, or £41 million, was spent in the five years from 1989 to 1994; a further £84 million will be spent in the next five years. That is spread over 12 member states, and does not work out at very much per annum, let alone very much per state. It is a comparatively small sum. How small is indicated by the fact that the annual sum that the United Kingdom receives is rather less than the Government hospitality fund and certainly lower than the total cost of Ofgas, the gas regulatory body. Therefore, we are not talking of vast sums as against the problem that exists.

I express a certain amount of apprehension about the attitude of my own Front Bench towards these matters. Agreement between myself and my noble friend on matters connected with the European Community have not always been entirely harmonious. I am most anxious that my party should not place a wholly disproportionate value on the EC contribution but that it should as a party, if it is confident of winning the battle here at home, produce its own bold plans to deal with the matter rather than rely on the European Community.

I say that because I venture to agree with the noble Lord, Lord Dahrendorf, on whether the EC is the correct body to be able to deal with the problem that is so varied country by country, region by region, district by district, town by town and as between the country and towns. Surely it is better to put to the electorate a bold programme rather than parking it off on the EC. Surely it is better to put forward such a programme and go to the country on it with authority rather than trying to do something second hand via the European Community. I have good reason for saying that. On reading through the document one finds the whole Community approach to the problem. If the House will permit, I wish to give your Lordships an indication of how it proposes to go about it. I refer to page 39, Article 3 of the new proposal for the next five-year period. It states: "The aims of the programme shall be to:

1. (a) contribute to the development of preventive and curative measures at local and national (or regional) levels through model actions.
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2. (b) support the creation and development of transnational networks of partnership projects;
3. (c) conduct information, co-ordination, assessment and exchange of experience operations at Community level;
4. (d) stimulate experiment and analysis, and identify the best innovatory models of action, in terms of both their content and organisation;
5. (e) study the mechanisms of social exclusion;
6. (f) provide information on the programme and disseminate results".

Yap, yap, yap, yap, yap! It is expressed in perfect "officialese". It expresses something in perfect Civil Service language that your people on the spot in the communities can put in their own language, draw upon their own personal experience, re-establish their own civic and community bonds and do so on the spot without having to take advantage of an entirely theoretical approach couched in impeccable academic language which is bound to appeal to my noble friend Lord Desai. It is done through an organisation which is set out in the organisational chart published as Annex 1 on page 37 of the document. I invite your Lordships to look at that. First, there is a Consultative Committee and then there is the European Commission (DGV/C/l) Management & Co-ordination Unit waiting with the European Export Support Group. Underneath there are National Correspondents, Model Actions, Transnational Networks, Transnational Studies/Visibility, which are all linked either by Management/Accountability Links or Advisory/Consultative Links. What on earth has that got to do with the relief of poverty in the various areas of the United Kingdom, let alone in the Community at large?

What is really happening for those who are willing to see and willing to contemplate that the emperor has no clothes —I use the old analogy—is that there is a bureaucracy which is extending its net a little further into areas into which it hopes to grow in the future. I have no doubt that its intentions are good and its aims are perfectly laudable. But it is ridiculous to start talking about organisational structures and theoretical concepts of that kind in view of the poverty which is staring people in the face if they care to go to see it rather than merely to read about it in theoretical terms.

It may well be that the Government, who already pay £2.5 billion net of taxpayers' money into the European Community, will decide to eliminate that irrelevancy from the Commission. After all, we must match pound for pound the money which the Community gives back to us—and that is from the money which we gave to it in the first place. That may well be so. Real problems of poverty are experienced by people whose incomes are below 50 per cent. of the average earnings of the country. There are between 8 million and 9 million people on the poverty level in the UK; and that figure may be higher. That is the scale of the problem by which the Government will be judged. It will be no good for them to show how independent they are from so-called Community diktats in deciding not to endorse that programme because nobody will be deceived.

What is required is a considerable expenditure; but above all it requires the Government to reintegrate people into civic communities and to give them a sense of responsibility as between one another, both with regard to duties and responsibilities to their fellow human beings. That is far more important than messing about with a lot of theoretical concepts which are coming out of the Brussels bureaucracy, however welcome the £2 million per annum may be.

Perhaps I can prompt my noble friends on the Front Bench, without insulting members of my party, by drawing the attention of the House to what one of the greatest socialists said about this matter. I refer of course to Aneurin Bevan whose name is frequently evoked these days by members of my party although they do not always show a vast understanding of what he really meant. He said: poverty, great wealth and democracy are ultimately incompatible elements in any society". He said: The issue therefore in a capitalist democracy resolves itself into this: either poverty will use democracy to win the struggle against property, or property, in fear of poverty, will destroy democracy". This country and indeed parts of Europe are rapidly approaching the grave situation to which he then referred. The challenge to this country and the challenge to my party is not to tinker about with the problem by calling in outside agencies; but it must deal with it itself from its own resources, by using its own rich history, traditions and experience in practically all fields which have any bearing on the subject.

10 p.m.

Lord Butterfield

My Lords, I have asked for permission to speak in the gap. When I came down from the flatlands of East Anglia and Cambridge today I little knew that I was going to hear such sterling speeches as those I have heard from the moment that the noble Baroness, Lady Gould, who took the heavy responsibility of introducing the debate, began, right through to the speech of the noble Lord, Lord Bruce, who gave us a reminder of what the people who are suffering expect us to be thinking about.

I shall make just a few remarks this evening. First, I should like to pay tribute to those members of Sub-Committee C upon whom the noble Lord, Lord Bruce, reflected briefly. Our chairman, the noble Lord, Lord Lewis, has such extraordinarily nimble feet which step from the highlights of chemistry and evolutional problems to sociology, economics and concern with poverty. We were very lucky to serve under him. I am also most grateful to my colleagues who entertained, but also educated, me regarding many of the problems which arise in the whole field.

The committee was especially fortunate in our Clerk, Mr. Goddard, who listened to our discussions and the remarks of our visitors when they came to talk to us. In some miraculous way he was able to bring it all down to lucid and manageable proportions. I am also very conscious of the wonderful work his office accomplished in getting us off on our visits to Europe. I visited Antwerp where I saw young unemployed people working, and I met older children in Lisbon. However, the noble Viscount, Lord Bridgeman, dealt with that aspect of the matter, so I shall not dwell upon it. Of course, we were most fortunate in the experts who advised us. I should like the record to bear witness to the fact that we pay them respect, gratitude and tributes.

As has been made clear on all sides, the scheme did not have enough money to do very much about the problem. However, I was most impressed with the way that it tried to look at broad principles when dealing with the problems of poverty. I was very moved by the way in which the organisers in Brussels and national organisations had seen the importance of bringing together the multi-dimensionality of the various schemes which people had started, the partnerships that were set up under the various schemes, and especially the participation by the local people, living wherever they might be living, who were involved in such schemes.

I was also impressed, as were other members of the committee, by some of the problems which we encountered. We realised that there were problems of communication between one project and another. They were also problems of organisation in the way outlined on page 39 of the report, as mentioned by the noble Lord, Lord Bruce. I was most conscious of the problems that people experience in that kind of work in rapidly recruiting really first-class workers who can get into top gear almost immediately.

I was also very moved, as were other members of the committee, by the realisation of the vastly underrated but incredibly important aspects of rebuilding morale and self-confidence in the communities with which we were especially concerned and the need to prevent the feelings of self-exclusion; that is, of being excluded. The money levels in different countries—for example, as between Greece and Portugal on the one hand and Germany on the other —are so variable that it seems to me that the social yardstick of social exclusion must be recorded as a major problem.

Examining the poverty programmes has greatly reinforced my appreciation of what I have come to realise is a very serious social haemorrhage. Social exclusion weakens neighbourhoods, it weakens classes and it weakens regions. It also causes loss of solidarity everywhere. Therefore, I believe that people who engender social exclusion commit a new found and very serious social crime. I had not realised before I considered this problem with the committee to what extent social exclusion is recognised as almost the worst of sins in society. Long ago, as a schoolboy, I felt that I was subjected to bad treatment from other snobby schoolboys. That is exactly the matter we are discussing. But I had no idea of the ramifications of this matter in the minds of other people.

I end by saying that perhaps this social exclusion idea, theme, philosophy or lesson could be the general lesson we can extract from the work of this committee and its report on which its members, clerk and staff worked so hard and so long into the night.

10.5 p.m.

Baroness Hollis of Heigham

My Lords, like other speakers tonight I also particularly wish to thank my noble friend Lady Gould for introducing a very important report on tonight of all nights. I also thank everyone—if it is not deemed impertinent—for what has turned out to be an extraordinarily interesting debate so well introduced by my noble friend Lady Gould and well amplified by the noble Viscount, Lord Bridgeman. Some of the report's assumptions were worried at thoughtfully and correctly by the noble Lord, Lord Dahrendorf. Its metaphysical structure was queried by my noble friend Lord Desai. Its timidity for failing to tackle poverty was appropriately denounced by my noble friend Lord Bruce, and its theme of social exclusion was so well conveyed to us by the noble Lord, Lord Butterfield.

I think the projects have both been blamed for seeking to do too much and too little at the same time. It is clear (is it not?) in this report that these measures were not designed to end poverty—the schemes were too localised and too modest for that—but to recognise, through the projects, that the defining feature of poverty, as the noble Lord, Lord Butterfield, has said, is exclusion from social and economic life, and to assess whether small, bottom-up projects (as they are) can make a difference and can help to regenerate and re-energise a community.

Some schemes have already been mentioned, such as the Lisbon school fees without which children are deprived of educational opportunity, or the scheme in the Netherlands which provides help with aids and information for the disabled who are often marginalised in all societies. There has been mention of the scheme in East London which works with young people with learning difficulties and the project for the homeless in Westminster. That is certainly needed. Reference has been made to the project involving street children in Lisbon and to the training and advice scheme in Edinburgh for the young unemployed. All of the groups we are discussing are citizens who have been marginalised by their poverty. In the process, as my noble friend Lord Desai said, we have been forced to examine what we mean by poverty.

Clearly, even in Europe, poverty can be about actual want; for example, someone on income support not being able to afford more than one meal a day, an elderly person having to switch off his heating in winter because he fears the fuel bills, or children who run around in my ward whose only pair of shoes is one tattered pair of trainers. But with respect to my noble friend, we are not talking about Bombay. We are talking about poverty in relation to the standards of our society in which the poor find themselves. That is why, unlike my noble friend, I find the EC definition of poverty as 50 per cent. of national average income informative. But I recognise, as he does, that that is not about absolute poverty but about relative poverty. But it makes the point for us that as inequality widens, so relative poverty grows, and poverty is at the extreme end of inequality according to the EC. I am sure that that is right.

It is a poverty found among the very low paid, those on benefits and those in sink estates. It is a poverty also of communities—those semi-wastelands where boarded up shops, vandalised cars, graffiti, empty factories, dumped stained mattresses and neglected flats can produce a physical landscape which I think deadens the soul—which are seen as being only tenuously connected to the mainland of moral majority Britain. That is why poverty, as the report emphasises, is not just about low income but accepts, as I think we know, that if we lay over the map of income the same maps of poor housing, low education and skills, high unemployment and poor health, those maps are largely coterminous.

What the report allows us to do—indeed, reproaches us into doing, as my noble friend Lord Bruce rightly required us to do—is to judge Britain by the standards it sets both for individuals and their poverty and the isolated deprived communities in which many of them live. The EC said in 1991 that 50 million Europeans were living in poverty in the mid-1980s. The proportion was especially high in the poorer countries of the Community: Portugal, Greece, Spain, Ireland and the United Kingdom. One-quarter of Europe's poor live in Britain. Virtually all the growth in poverty in Europe during the 1980s was accounted for by that in the United Kingdom.

For much of the 1960s something like 5 million of the poor in Britain had half the national income. As my noble friend Baroness Gould said, that had risen to over 11 million by the 1980s. Why? The evidence submitted to the committee by, for example, the Low Pay Unit was in no doubt. In the past such poverty followed recession. That is no longer so. As we leave recession, if the Prime Minister is to be believed we leave the poor behind, not take them with us. That is the meaning of poverty as exclusion. Why? I believe that the Low Pay Unit has indicated—it is supported by a wide range of research —that the poverty of Thatcher's Britain reflects the intersection of three trends, the first of which is taxation policy. There has been a reduction in the higher rate of tax and a switch to indirect taxation. That has meant a direct switch of resources from the poor and a redistribution of it to the rich. Together with increases in income from investment, pensions and dividends, most of the gain from cutting taxes has been corralled by the top 20 per cent. in our society. Most of the increases in cost have been funded by the bottom 50 per cent.

In addition to taxation policy, which by switching from direct to indirect taxation has increased regressive taxation, we have to consider the thrust of social security policy. In particular, following the 1988 Savage review some benefits were cut, as we saw in the case of incapacity benefit which replaced invalidity benefit, or unemployment benefit in the past, and in future (I do not doubt) job seekers' allowance. Other benefits have been frozen or discarded, as in the case of income support benefits for those under 18, and other benefits such as pensions related to prices rather than earnings, thus reducing in relative value.

On the basis of the Government's own statistics, looking at spending on social protection as a percentage of GDP—by which they mean not just the percentage of GDP spent on social security, but also the amount spent on health, occupational pensions and social services— whereas the Benelux countries spent 30 per cent., Germany 30 per cent., France 28 per cent. and Italy 26 per cent., the United Kingdom spent just 23.5 per cent. The United Kingdom is amongst the lowest in Europe. Only Greece, Spain and probably Ireland and Portugal spent less. The United Kingdom is amongst the poorest countries in Europe. And in the thrust of our social security policy we have amplified that poverty.

Poverty no longer follows economic recession but remains with us because there has been deregulation of the labour market, huge pay rises at the top where people need the incentive of reward, and wage cutting at the bottom where people apparently need the incentive of penury. Therefore in Britain we now have the longest hours, the least wage protection, the most part-time workers and, apart from Portugal, among the most children in Europe in the labour market, as well as the lowest pay. We see those factors for example, with regard to compulsory competitive tendering, zero-hour contracts, and the like.

Wages are so low now in this country that it is often not worth working. That is not because benefits are generous—they are not; they are among the lowest in Europe—but because they take families into destitution unless those wages are topped up by a benefits system. That has meant that over the past decade part of the wages bill has been transferred from the employer to the taxpayer. The benefits system pays the family credit, the housing benefit and the council tax benefit in lieu of wages. In the 18th century that would have been known as the Speenhamland system.

The result is that deregulation has meant in Britain a growth in employment of 3 per cent. in 20 years whereas Germany has seen a growth of 11 per cent., France 6 per cent., and Italy 18 per cent. according to EC figures. When will we learn that we cannot compete with South Korea and Taiwan on grounds of cheapness, but only in terms of quality, skill, design and training?

The figures I now wish to quote are not just from the EC—the Government dispute those—but from their own department. The consequences of those trends are clear. As my noble friend Lady Gould said, the top 10 per cent. have seen their share of the income rise to 25 per cent.; the bottom 10 per cent. have seen their share of the income of this country fall to 3 per cent. The top fifth earn two-fifths of the national income; the bottom fifth receive one twentieth of the national income. The gap between that bottom 10 per cent. and the top 10 per cent. has virtually doubled since 1979, on the Government's own figures.

I ask the question raised by the director of the CBI in March. The poorest 10 per cent. have become 14 per cent. poorer in real cash terms. The director asks: are we happy about that? It is clear that over the past 15 years the trickle-down theory has not worked. Instead, as we have seen the cake grow, absolute poverty has grown with it. That is morally indefensible. Who are we referring to? We are talking about the very old, the very young, women, the elderly, children, those on benefits, and the unemployed and their families. The numbers have doubled since 1979. The lower paid are often self-employed because it is cheaper for the employer not to pay the national insurance contribution, and not to be responsible for sick pay, holiday pay or any other entitlements. Within each of those social categories inequalities have widened. Within work wage inequality has widened. Among pensioners income has widened according to whether or not they have private provision. Among families and among the self-employed the position is similar.

However, while the top 10 per cent. have become 62 per cent. richer and the bottom 10 per cent. 14 per cent. poorer over the past 15 years, we recognise that those same poor cluster in poor communities. They are marginalised. Within Europe 10 of the 11 of the UK's regions are poorer than the EU average. Even our most prosperous region, the South East, has a level of income half that of Hamburg and only two-thirds that of Paris. The same regional and community inequity existing within the EC is also true within this country. As urban trends show, within the UK the gap of deprivation between inner city communities and mainland England has also widened since 1979. Housing: in deprived areas there are twice as many homeless; eight times as many in bed-and-breakfast accommodation. New housing is down by half in England as a whole, but by three-quarters in the inner cities. In 1989 London completed 12 million square feet of offices and 300 new local authority homes.

On the jobless, on average about 8 per cent. or 9 per cent. nationally are unemployed; in the inner cities, 20 per cent.; among young ethnic blacks, 30 per cent. or more. Half the TECs still cannot guarantee training places. We find that a quarter of all unemployed 16 and 17 year-olds—80,000 of them—are not in school, not in work, not in training and are without income. Then we wonder why they beg. The same pattern of deprivation is reflected in all aspects of their well-being: infant mortality, health, education, truancy, crime, children in care. They follow the pattern of deprived communities.

Yet the UK has not been short of programmes targeted on the poor. We have had a whole series of them. We have had urban programmes in the late 1960s; UDCs from 1980; enterprise zones from 1981; estate action from 1982; city action teams from 1985; task forces from 1986; Heseltine city challenge from 1991; and the Urban Regeneration Agency only last year. As the Audit Commission said in 1989, we have had a patchwork quilt of complexity and idiosyncrasy, of programme overkill within a strategic vacuum. My noble friend Lord Bruce is absolutely right.

We have had a hotch-potch of programmes, each financed by top-slicing or cutting the previous programme, so that the urban programme was halved to fund the UDCs and housing programmes were top-sliced to fund city challenge. The Urban Regeneration Agency, now called English Partnership, was funded from existing initiatives. So we can meet two objectives at the same time: saving the Treasury money while allowing Ministers to keep on declaring new initiatives.

The programmes have not only taken money; they have taken people and energy away from each other, as when the DTI found that for every three jobs they created in an inner city deprived area, they took two away from a neighbouring community. We have seen UDCs collapse into debt.

What does the report tell us? Certainly we welcome the Government's single regeneration budget which replaces the hotch-potch of funding and which will incorporate 20 existing programmes. We very much endorse the call of the noble Viscount, Lord Bridgeman, for British Government support for Poverty 4. But what the report tells us is why so many of our British initiatives—and I have tried to cite a trail of them—went wrong. It tells us that such initiatives must be multidimensional because poverty is many-faceted. My noble friend Lord Desai rightly praised the report for telling us that such programmes must be based on partnerships of all agencies and on participation so that local people own them. If local people do not own such initiatives, as we should know by now from our own experience, if they are done to local people, we not only perpetuate a so-called dependency culture but we fail to root initiatives so that they flourish when the pilot schemes come to an end.

To be fair, neither the noble Lord, Lord Dahrendorf, nor my noble friend Lord Bruce gave adequate weight to what the report suggested. The report did not say that the EC initiatives—small-scale, localised, temporary —were a substitute for proper programmes to tackle poverty, exclusion and deprivation in each member state. The report makes clear in paragraph 49 that the committee wishes the governments of all member states, including the UK Government, similarly to review their domestic policies in order to ensure that they do not promote social exclusion or make its reduction more difficult. To do that, the report calls on national governments to review their own programmes. That must mean a fairer tax system and a more equitable social security system. It must, above all, mean a commitment to full employment which will alone furbish the wealth and reduce the cost of benefit and the social penalties that go with it. As a step to that, we should be refurbishing the physical infrastructure which so deprives our communities and our environment of housing, hospitals and the like. Above all, we must recognise that to be successful projects must be bottom up, rooted in partnership, based on local plans and initiatives, accountable to local people and owned by them. It must not, as with so many UK initiatives in the past, be property-based regeneration. Projects must not be parachuted in from outside and not steered by quangos which take pride in their invisibility and anonymity, by-passing elected local government.

For poverty, as the Low Pay Unit reminds us, is not just a barrier to consumption. It is a barrier to citizenship. People become less poor by participating in society, not by just participating in poverty projects. Poverty is not just about the top and bottom in income distribution. It is about the marginalisation of communities, about insiders and outsiders, the included and the excluded.

There has been much talk of an underclass—which the Home Secretary in November 1992 identified as one of the. most formidable challenges facing western democracy—of the feckless, the semi-criminal and the voluntary unemployed. With time and the help of this report we can nail that stereotype. People in our society are homeless because there are no houses; they are jobless because there are no jobs; they are poor because benefits and pay are low. In all ways we exclude the poor by our labour policies, tax policies and social security policies. We marginalise them. In the name of citizenship and common sense, perhaps this report can show us how, by building communities, we can rebuild our common wealth.

10.27 p.m.

The Parliamentary Under-Secretary of State, Department of Social Security (Viscount Astor)

My Lords, I welcome the opportunity to debate this very important subject, particularly today when attention is focused on the European Parliament. We have had an interesting debate with a number of differing views. There were two rather differing views from the two very distinguished economists on the two opposite Benches. There was a different view from the noble Lord, Lord Bruce of Donington, who always has a unique way of looking at some of this country's problems with the EC, and another view from my noble friend Lord Bridgeman. But all noble Lords were concerned about poverty. We all agree that these are serious issues that must be addressed.

The committee's report is not only thorough but highlights the important issues that concern the Poverty 4 programme. I am extremely grateful to the members of the committee for all their hard work and in particular to the chairman, Lord Lewis of Newnham, and the noble Baroness, Lady Gould of Potternewton, who initiated today's debate. I am also grateful to my noble friend Lord Bridgeman and the noble Lord, Lord Butterfield, who were members of the committee and have spoken in this debate. The Government have studied the report carefully. It provides a useful basis for us to lake forward our negotiation at the next Council of Ministers meeting later this month.

In considering how the Government can contribute to the fight against social exclusion, I want to set the scene by starting with a reference to the White Paper on competitiveness, Helping Britain to Win, launched by the President of the Board of Trade on 24th May. This is fundamental to the issue we are discussing today because our prosperity as a nation depends on the wealth that we can generate.

In the White Paper we have addressed the issue of competitiveness and demonstrate that we are today in a powerful position: gross domestic product is rising; unemployment continues to fall; underlying inflation is at the lowest level for a generation; interest rates are among the lowest in the EC; and exports are at record levels. We are in an excellent position to take advantage of the recovery as it takes hold in the rest of Europe.

The White Paper considers in detail the vital contribution of educational standards and training opportunities. It sets out a range of new initiatives to improve standards in education and to establish new training and apprenticeship schemes.

It is, of course, essential to maintain a comprehensive benefit safety net for all our citizens, and we have done so. But the best way to help people to prosper is to help them into work, and that is why in social security terms we emphasise the importance of work incentives. One of the important changes my department is introducing from this autumn—the child-care disregard—removes a major stumbling block for families who need help with child-care costs to get back to work.

Regenerating the inner cities creates job opportunities and increases the quality of life for all. We have created a single regeneration budget to bring a coherent approach to the problems within inner city areas. This year alone the single regeneration budget stands at £1.3 billion.

All those initiatives and schemes are producing positive results. There are three principles underpinning the third European Community programme. They are participation, partnership and multi-dimensionality. In simple terms, participation is taken to mean involvement in the project of the individuals experiencing social exclusion; partnership is working together with public and private bodies to address the problem; multi-dimensionality—a Euro-speak word, as I am sure the noble Lord, Lord Bruce of Donington, would agree —is not even found in the Oxford Dictionary, but it expresses as best it can an important sentiment that we should tackle simultaneously more than one of the factors contributing to poverty. These are not new principles. We have applied them independently in various domestic aid programmes. In particular we can point with some pride to the City Challenge schemes currently under way in over 30 cities around the UK.

We have supported three anti-poverty programmes, each different in its own way but having a common thread. We are looking closely at the Commission's proposals for a fourth anti-poverty programme. We must first ask the question whether after 15 years of Community action in this field there is a need for more Community action. The principle we must address is whether the fourth programme will add value to the work already being undertaken in this country. The noble Lord, Lord Dahrendorf, said that in his view, if ever there was a case for subsidiarity, this is it. That is an important view we must consider.

The current Community programme, Poverty 3, has produced some interesting results at a local level. But we also recognise that weaknesses in the Poverty 3 structure have led to doubts as to the value for money obtained from this central programme. Those weaknesses were identified by your Lordships' committee. We must also consider whether the Community has the right to take this sort of action. That is answered by the Commission itself in the executive summary to the proposals. The Commission is quite clear that it is primarily the responsibility of member states to fight social exclusion. That follows the general principle of subsidiarity: that action will be taken at the lowest level of authority possible. The Commission goes on to say that a Community-wide programme adds value to member state actions by disseminating information and experience; it can stir people into action and stimulate debate.

The noble Lord, Lord Desai, said that he believed the EC definition of poverty as below half average income was deeply flawed. I agree with him. Actually the position is worse than he thought. The EC definition of poverty uses half average expenditure as a proxy for income. By that definition someone on a good income who saves becomes poor.

The noble Baroness, Lady Hollis, said that a quarter of Europe's poor are in the UK. The noble Baroness made the mistake of relying on EC figures. The figures published in 1993 with the Commission's draft proposal for the fourth poverty programme suggested that, on the EC's own measure, the UK had the seventh lowest incidence of poverty in the Community, even lower than France. The wild variation comes from the figures that the Commission published two years earlier. That is one reason why we are doubtful of the reliability of the Commission's methodology. The Government do not accept that poverty is increasing in the UK. Since 1979 average take-home pay has risen by 40 per cent.; average household income is up by 35 per cent.; and even among the least well-off there has been a dramatic rise in the possession of consumer durables. The incomes of the vulnerable have also risen. Pensioners' income is up by more than 40 per cent. The income of the unemployed has risen. The income of those in work on relatively low pay has also risen.

Baroness Hollis of Heigham

My Lords, will the noble Viscount therefore comment on the figures produced by his own department? The figures are set out on page 60: bottom decile 10 per cent. 1979 to 1990–91; income after housing costs in real terms down 14 per cent. How does that correlate with what he has just told us?

Viscount Astor

My Lords, it correlates very simply because the figures do not show that the poor have become poorer. They reflect complex changes in composition; for example, more lone parents who are generally dependent on state benefits and more self-employed reporting low or negative incomes but whose expenditure was higher than the national average.

The weaknesses of Poverty 3 have been identified by the Government and by your Lordships' committee as poor communication horizontally between projects, vertically between projects, the Commission and national government and horizontally between member states.

We believe that the fourth programme must clearly demonstrate good value for money. We must be satisfied that it will add value to the UK work in the field before we can agree to its implementation. We have suffered in past programmes from a lack of reported results and relevant research.

We are not alone in this view. Other member states are also concerned and the proposals were briefly discussed at the Social Affairs Council on 19th April. No decision was reached and the proposals were remitted to the next Council on 22nd June. We and other member states will continue to press these points at the June Council meeting. Under the Treaty of Rome, the implementation of a programme of this nature has to be agreed unanimously. At the April Council doubts were raised about the Community's competence to act in this field. The need for a programme has also been questioned at a time of constrained resources across all of the European Community. I have to say that the Government had some sympathy with some of the views expressed at the Council. Those views are still being voiced and, as a decision cannot be taken without the agreement of all member states, we think it likely that a decision will not be reached on 22nd June.

But if these difficulties are resolved and a fourth programme is agreed, then the Government must ensure that the problems seen in Poverty 3 are not repeated. As I said earlier, we have carefully considered the committee's report. We take its recommendations very seriously and will want to build on them for the future. The committee's recommendations in the areas of communication, evaluation, project selection and oversight at national level are to be welcomed. They are in line with government thinking on these issues. In any future programme we will want to see that the selection process allows enough time for a thorough scrutiny of applications. We will want to see that successful applicants have enough time to plan properly and set realistic but demanding objectives. There must be sensible evaluation procedures put in place and carried through.

The Government have been accused this evening of being detached from the programme. That is not true. After all, it is a Commission programme. We have participated as fully as the programme itself allowed. The UK project received about £1.3 million of central government funding—not an insignificant sum. The formal structure of the programme does not encourage easy dissemination of ideas and lessons. The only formal input by the governments of member states is through the Poverty 3 Advisory Committee. That is not a decision-making body and has no right to call for information. There is no formal role for member states in relation to the Poverty 3 programme within their own countries.

We should like to learn from the programme and that is why we are pressing for improved management arrangements to enable us to do so. To help to disseminate the lessons from any future programme we would set up an inter-departmental liaison committee to maximise the benefits to be gained from the programme.

Let me conclude by saying this: we agree with the Commission that the issues of social exclusion and poverty are best tackled by national governments. We believe that it is important that the problem is identified and quantified in a realistic way. We agree with your Lordships' committee that control and evaluation of projects need to be improved. We believe that the measures taken must be designed to support individual endeavour wherever possible.

10.41 p.m.

Baroness Gould of Potternewton

My Lords, I thank all speakers in the debate today which, as my noble friend, Baroness Hollis, said, has been extremely interesting because of the differing views which have been expressed. I would like to make one or two comments in response. I say to my noble friend Lord Desai that the achievement of potential is crucial, but that is devastated when one is poor. One is not even aware that one has potential. Being poor removes initiative; it is demoralising and puts people into despair so that they have no hope. Therefore, it is absolutely essential that something and somebody enables them to find out that they have potential.

The noble Lord, Lord Dahrendorf, said that such support is not now available either from the Government or from local government. That is possibly true. A large amount of money is required to solve the real problems of poverty. I would not assume—nor I hope would anybody in your Lordships' House—that any action, no matter how small, which is taken to relieve the plight of one individual or one community should be rejected. That is what Poverty 3 did and that is what we hope Poverty 4 will be enabled to do. As has been said, it is a very modest programme but to me it is absolutely crucial that we look at every possible way of alleviating poverty and avoiding the exclusion of individuals.

I note that my noble friend Lord Bruce of Donington said that you have to go to see and hear poverty. It is more than that. You have to experience it to be able to appreciate the sense of despair which people feel. We have to go, see, hear and learn from that and people's experiences.

I would like to give an example of how one can learn. When we went to Pilton we talked to a number of women who had no future. In the main they were one-parent families and there was little future for them. They were living on a very deprived estate. Because this was a European project they were able to go to another country and witness the experiences of people running another project. On their return they were able to find ways of developing a childcare centre in their own community. The project in Pilton enabled them to do that by telling them where to go, and how,, to raise the funds. They returned from Brussels with plans for the new development and were constantly in touch with their opposite numbers to learn and benefit from their experience. What they gained was not only the ability to build a child care centre in their own community, but they undertook training on how to be child-carers—and that changed their lives. They had suddenly become very important people, not only to themselves but to the community. That is really what all this is about.

No matter how much one might dislike the idea that this money comes from Europe -I appreciate the feeling of my noble friend Lord Bruce about that -I repeat that we should not have the audacity to remove the right of any individual to improve his or her life.

I should like to make one or two comments in reply to the Minister. Although I thank him for his response, I feel that he failed to appreciate the scale of the problems of relative poverty and growing inequality. The Minister referred to the importance of getting value for money, with which everyone would agree - not least those people who would benefit from the implementation of a further poverty programme, having had to live on a very minimal income and to learn how to get value for money. The Minister also referred to the need to study evaluation reports in more detail. As I said earlier, we must ensure that we do not project any of the mismanagement (or the bureaucracy which would be removed) into another project.

These issues seem to have been raised at a rather late stage. One is a little worried that they might, at the best, be interpreted as procrastination but, at the worst, pave the way for ultimate opposition to Poverty 4. However, I suppose that I should take some cheer from the fact that the Government acknowledged the intention of the report and made a commitment to endeavour to meet the concerns wherever possible. If the Government really mean that, surely one way of realising it is to make sure that they support Poverty 4.

On Question, Motion agreed to.