Income Gap (Hansard, 27 February 1995)

§ The Minister of State, Department of Social Security (Lord Mackay of Ardbrecknish)
My Lords, the Government believe that giving people choice and opportunities, encouraging success and promoting wealth creation is the best way to safeguard the living standards of all groups. Our policies enable people to take advantage of opportunities through improved education and training, help the unemployed get back into work and protect the vulnerable by targeting help where it is most needed.

Noble Lords
Hear, hear.

§ Lord Molloy
My Lords, I thank the Minister for his reply. But I am not sure that he would get two or three 1305 cheers from the thousands of people who are unemployed. Unemployment is the greatest threat to any country. Therefore, will the Minister consider what growing unemployment has done to countries in Europe and the threat that it posed to this country in the 1930s? Ought it not perhaps to be taken most seriously? I know that the Minister cannot give me an answer immediately. But is he prepared to consider calling in the CBI, the TUC and the chambers of commerce—they would willingly help this or any Government—to help ensure that unemployment does not grow and that, therefore, especially in view of today's news, it does not threaten our country?

§ Lord Mackay of Ardbrecknish
My Lords, the noble Lord is quite right to put his finger on unemployment as one of the major problems when it comes to looking at the bottom decile. However, perhaps I may point out to him, and, indeed, to the House, that over the past year or so unemployment in the country has fallen by over half a million and is now well below the level found in the countries of some of our major European competitors. But we are still not completely satisfied, as shown quite clearly in the Budget Statement of my right honourable friend the Chancellor of the Exchequer last November, when he announced a package of benefit and employment measures worth almost £700 million in order to help get more of the unemployed back into work.

§ Earl Russell
My Lords, in his first Answer the Minister spoke of improvements in education under this Government. Can he mention just one of them, because I cannot think of any?

§ Lord Mackay of Ardbrecknish
My Lords, I am more than delighted to assist the noble Earl in that regard. However, as he comes from a university background I am surprised that he should ask such a question. In 1979 one in eight benefited from higher education; now it is one in three. More young people than ever are staying on in education and training: about 90 per cent. of 16 year-olds and 75 per cent. of 17 year-olds. I should have thought that the noble Earl would be aware of those figures. They certainly show the progress that has been made in further and higher education under this Government.

§ Baroness Farrington of Ribbleton
My Lords, can the Minister explain how the Government intend to tackle rising unemployment when they stand condemned by employers in the private sector construction industry for reducing investment in the fabric of our schools, our colleges and our homes in this country as part of their Budget strategy? That leads to job losses, lack of training opportunities and an increase in poverty.

§ Lord Mackay of Ardbrecknish
My Lords, I am sorry that the noble Baroness does not understand what a decrease in unemployment means. Despite there being half a million fewer people on the unemployment register now than over a year ago, we still talk about increasing unemployment. The noble Baroness is quite wrong in that respect. Further, if she studied page 71, 1306 Volume 2, of the Rowntree Report (which probably not many people managed to get into) she would see that improvements in education and training for unskilled workers are important, as is, in the European case, restructuring of taxation, especially payroll taxes like employers NIC, to reduce the relative costs of unskilled workers to employers. That is what we are attempting to do by refusing to sign the Social Chapter and to go along with some of the expensive desires of our European friends, and of the party opposite, which would actually make our competitive position in the world even worse.

§ Lord Avebury
My Lords, does the Minister accept that access to further and higher education varies enormously from one area of the country to another and that the average figures that he mentioned conceal those enormous variations? Can he say, for example, how many children in the London Borough of Lambeth gained access to further and higher education in 1979 and 1985 respectively and whether as a percentage of the total the number of children leaving school without any qualification at all has decreased or increased since 1979 in that borough?

§ Lord Mackay of Ardbrecknish
My Lords, I am not in a position to answer the question about the London Borough of Lambeth, but if the noble Lord puts down a Question to that effect I am sure it will be answered. I would give the noble Lord the figure I gave for the whole country. It is obviously an important one, as are the comparable figures, which I do not have to hand but which we all know about, which show the improvement that has come about in the qualifications of school-leavers, which is self-evident if the number going to university has increased from one in eight to one in three.

§ Lord Ennals
My Lords, does the Minister accept that some of us feel a certain sense of resentment that he should imply that we have not read the Rowntree Report which this House is debating on Wednesday? I can assure him that many people on this side of the House have already done so. But since he is in that sort of mood, so am I. I was surprised to see this Question on the Order Paper, as my understanding of the philosophy of the party opposite is that it is precisely to do this—to ensure that the rich get richer and the poor get poorer.

§ Lord Mackay of Ardbrecknish
My Lords, perhaps I may draw the noble Lord's attention to another part of the report which refers to one of the options that the noble Lord has just mentioned; that is, the poor are getting poorer. The other option is that more people are getting poorer. However, the report states that, by and large, it is the second of these options which seems to have happened particularly as unemployment has risen. Of course the snapshot taken by the Rowntree Report was of the situation two or three years ago, before unemployment started to fall. I would suggest that a snapshot taken today, with half a million fewer people out of work, would look slightly different to that of three years ago.

§ Baroness Seear
My Lords, will the noble Lord reassure my noble friend Lord Avebury that things in 1307 Lambeth are improving greatly since there have been so many successes of Liberal Democrats being elected to the council?

§ Lord Mackay of Ardbrecknish
My Lords, I would hate to get into a discussion between the noble Baroness and her noble friend Lord Avebury. But clearly, if there have been such successes, he has not caught up with them.

§ Baroness Hollis of Heigham
My Lords, returning to the reply which the Minister gave to my noble friend Lord Ennals, is he aware of the remarks of John Maples just a couple of months ago when he said: The reality is now that the rich are getting richer on the backs of the rest who are getting poorer"? Does the Minister agree with the deputy chairman of his party?

§ Lord Mackay of Ardbrecknish
My Lords, if I remember the piece of paper which the Opposition have quoted from at length—they do not normally quote from government or Conservative Party documents at such length—Mr. Maples was talking about the perceptions that some people have. I know that the Opposition hate to think about it this way, but the simple fact is that the vast majority of people in this country are markedly better off than they were in 1979.

§ Baroness Hollis of Heigham
My Lords, I hope that the Minister will allow me to come back on this point. I think perhaps he misheard the quotation. John Maples did not refer to perceptions. He said: The reality is now that the rich are getting richer on the backs of the rest who are getting poorer". Does the Minister still quibble with his honourable friend?

§ Lord Mackay of Ardbrecknish
My Lords, I quibble with Mr. Maples in that regard because, while undoubtedly there are some people who are poorer, there will always be a bottom decile, although sometimes one would not think so when one reads the Rowntree Report. But the fact is that the great bulk of our people have seen their standard of living increase immeasurably.

§ Lord Archer of Weston-Super-Mare
My Lords, can my noble friend confirm that those in the lowest income group have a far higher standard of living than they did in 1979? Is it not also true, since 1979 and 1992, that the average growth for a household in this country is 36 per cent. above inflation? Is it not true also that pensioners now have an average growth of 56 per cent. above inflation? When will the other side work out that since 1997 we have had a Conservative Government who have made these things possible?

§ Lord Mackay of Ardbrecknish
My Lords, my noble friend is of course right in what he meant to say and equally right, I am quite sure, in what he says about the future! I can confirm, as I have already mentioned, that average incomes have risen by over a third —by 36 per cent.—between 1979 and 1991–92. It is also particularly encouraging that pensioners have done well during this period, with an average increase of 56 per 1308 cent., and far fewer are represented in this bottom decile than were represented when the party opposite left power. It is one of the little contradictions that one reaches only towards the tail end of Volume 2 of the Rowntree Report the fact that the least well-off, as represented by the bottom 20 per cent. by income, have seen a rise in the possession of consumer durables: telephones and central heating are up by over a half. Half have motor cars and video recorders and nearly a fifth have home computers.

§ Lord Ashley of Stoke
My Lords, instead of the selective use of figures, as shown by the noble Lord, Lord Archer of Weston-Super-Mare, and instead of the standard, smooth party political answers which he has read from a carefully prepared brief, will the Minister bear the following in mind? There is in Britain today a growing underclass of people who are deeply embittered and they are becoming alienated from our society. Given the Right-wing drift of this Government, unfortunately encouraged by the Prime Minister, I fear for the future. I hope—this is a general point—that the Minister and his colleagues in government will reflect on the alienation of this growing underclass, because it is dangerous for our democracy and our democratic health.

§ Lord Mackay of Ardbrecknish
My Lords, I would not disagree at all with the noble Lord about the problem of an underclass—perhaps we can debate whether it is growing or not—which is caused not just by economic but also by behavioural reasons. We shall probably debate how far those are connected on Wednesday. I hope that I made at least some positive contribution when I mentioned that we take seriously the need to look for ways to continue the fall in unemployment, which, as I said—I underline this again because people seem unable to accept it —has added up to more than half a million in the past year and a bit.