The Rowntree Report

HL Deb 16 February 2000 vol 609 cc1233-305

3.29 p.m.

Earl Russell rose to call attention to the Rowntree report on poverty and social exclusion, and to measures needed to reduce them; and to move for Papers.

The noble Earl said: My Lords, perhaps I may reassure the noble Lord, Lord Peston, before he departs that I was not exhibiting the least impatience at his question. He has every right to request that business be in the proper place on the Order Paper and I am glad that he did so.

Noble Lords

He is not in his place.

Earl Russell

No doubt someone will convey my remarks to the noble Lord.

The previous Rowntree report on this topic was debated in this House on St David's Day 1995 on a Motion moved from the Opposition Benches, then occupied by the Labour Party, by the noble Lord, Lord Eatwell. It was a very good debate. I hope that it may do the same today. I am delighted by the range of speakers taking part in today's debate and I look forward to hearing their contributions.

On the previous occasion, I referred to the report as describing an economy that did not bat below number seven. I am slightly disappointed to say that I see no reason to revise that description when dealing with the new report, even though I speak in what is, internationally as well as nationally, a comparatively benign economic climate.

If we take the Government's preferred poverty measure—those who are on below half average income—the graph is "flat". All through the period, the number affected is between 13 and 14 million. That is a considerable number of people. However, if we look slightly lower down at the much more interesting figure for those on below 40 per cent of average income, we see that during the period since 1995, before housing costs are taken into account, it has risen from 4.3 to 5 million. And after housing costs are taken into account, the rise is from 7.3 to 8.4 million. That is the waterline of the iceberg. It is as low as the statistics before the House enable us to see.

I confess to a certain curiosity as to the dimensions of the lower portions of the iceberg. What proportions of people are on below 20 per cent of average income, below 10 per cent, or even, in some cases, below 5 per cent? Those kinds of figures are a great deal harder to discover than I should have wished.

The figures in the report are part of a worldwide trend towards rising inequality, which is part of the way in which the global free market appears to be developing. So some of the causes are clearly international and not merely the responsibility of a British government of whatever political colour. However, the trend towards an increase in relative inequality has been going faster in the United Kingdom than anywhere else in the developed world save New Zealand.

We on these Benches believe that the trend has gone too far and that it is time it was put into reverse. We believe that for reasons of common humanity, for reasons of social justice, and for reasons of consent and social cohesion. In its day, the classic free market theory of Samuel Smiles involved the view that those who did well were being rewarded for hard work, skill and persistence. However, there have been several times in my life when I have made more money simply by occupying a London house doing nothing than I could ever do in what is not a badly paid job. I find it difficult to see the social justice in that.

I am reminded of the pirate who was arrested by Alexander the Great and sentenced to death. He replied, "Because you do it with a great army and a great fleet, you are called a great emperor; because I do it with one ship, I am called a mean and contemptible pirate." When we consider the problem of fraud on social security, we may wonder whether some of the people with whom we are dealing may possibly reason in that way, and indeed whether they might occasionally have a little excuse if they do.

Most of all, I am concerned about the trend towards rising inequality for reasons of economic competitiveness. That may possibly surprise some noble Lords. We are used to thinking of economic competitiveness as consisting simply of cheapness— cheapness of price to the purchaser and cheapness of the overall social security bill to the taxpayer. It is true that those are indices of competitiveness, and strong ones when taken in isolation. But nothing does happen in isolation in this world. Competition happens in other ways as well, which may sometimes point in other directions.

We have an interest, for example, in having a supply of labour consisting of members of a fit and healthy potential workforce. My noble friend Lord Clement-Jones, whose province this is, will be discussing the problem of poverty and ill health. I look forward very much to hearing his remarks. We have an interest in having an orderly and safe environment. The consequences of real poverty for the budget of the police and prisons and people's overall sense of safety can be serious. Let us think only of the conditions in the more insalubrious parts of Rio de Janeiro. They are clearly a drag on Brazil's economic problems. Labour is one of the raw materials of business. Like other raw materials, if not safely warehoused when in use, it deteriorates. That is an extremely expensive process.

The problem of real, deep poverty is being missed by the concentration in the Government's audit of poverty on those below 50 per cent of average income. It encourages them to lift off the top, if I may so put it—the richest of the poor—and leave the rest alone. The reality is that the worst damage done by poverty is likely to be to those at the bottom of the poverty scale, not at the top of it.

There are two problems: one of relative inequality; the other of absolute poverty. For absolute poverty, we can well take as a working definition that used in the Acheson report; namely, having insufficient money to buy items and services necessary to good health. I shall not debate whether absolute poverty or relative inequality is the more important to put right. The question I want to address is: which is the more urgent? If you are involved in a train crash, it is not easy to decide whether it is more important to rescue the victims or to investigate the signals. It is apples and oranges. But it is perfectly clear which is the more urgent.

So I wish that the Government were doing more than they are to address the question of absolute poverty. I wish they were doing more to mend the holes that existed in the safety net at the time they came into office. There are whole categories of people—16 and 17 year-olds and asylum seekers, for example—who are disentitled to benefit. There is the problem of penal disentitlement to benefit as under the "actively seeking work" rules, the benefit penalties under the CSA, and, it is now proposed, for breach of community service orders.

There are two perfectly valid moral principles in this issue. Both are recognised as valid throughout these Benches. One is that people should not be paid benefits for doing nothing; the other is that we should not reduce people to total destitution such as we should not even inflict on prisoners. Which of those principles should take priority in any particular case can properly be referred to evidence. So we want to see, before we approve any more measures of disentitlement to benefit, real, genuine research on what actually happens to people who are totally disentitled to benefit and how they make their living.

There are also cases where the benefits system malfunctions. The Minister will recall giving a helpful Answer to me regarding DETR and DSS research on housing benefit. There are large numbers of people whose benefit fails to meet their rent, sometimes by as much as £50 a week. Many of those have taken to borrowing. It is a matter of regret to me, as it has been for a long time, that the DSS does no research on the level of debt among those on social security benefit. It is missing some cases of quite severe hardship. As the Minister well knows, the number of deaths from hypothermia is higher in this country than anywhere else in the EU, even including Sweden and Finland.

My noble friend Lord Ezra, whose province this is, will speak about fuel poverty in the United Kingdom. I look forward to what he says with great interest.

We have a very high level of teenage suicides. The reduction in the number is a health target. The absolute number has gone down but the percentage of the age group has not. I should like to know what percentage of those teenagers who committed suicide were without visible means of support at the time they did it. I tabled a Question for Written Answer a few weeks ago and the Minister told me that the information was not available. There is a lack of curiousness in this area and some defect in government records.

The Minister will recall that I asked another Question; namely, how many 16 and 17 year-olds without work, training or education and living independently were without any source of income. The Minister told me that there were none, whereas both the Rowntree report and the report of the Children's Society, which is still running, are aware of considerable numbers of such cases. I believe that what the Minister tells me is that such cases do not appear in government records, which are defective, rather than that it does not happen. If the noble Baroness refers back to her Written Answers to me since the beginning of January she will see that pattern repeated a good many times.

We must also think quite hard about the problem of benefit levels, especially in the light of the findings of the Acheson report that they are insufficient to maintain good health. We touched on this matter last night when debating the Social Security Benefits Up-rating Order. It was agreed, without advocating going back to linking benefits to earnings, that if one does not do so from time to time one has to uprate above prices as resources allow to avoid the development of rapidly increasing inequality. We believe that resources would allow for that this year. I do not know why the Government do not do it.

There is evidence, of which I hope we shall hear more in the debate, of significant food poverty. In parts of this country mortality is 10 per cent above the average. A great many cases occur in areas of London, including I am interested to note, the London Borough of Islington. These are pockets of poverty. There is severe poverty among pensioners, as the Minister will concede, for which the Government offer only 75p and the minimum income guarantee. I do not have quite as much faith in the minimum income guarantee, except as a device in debates, as Ministers do. If the Minister can give me any reason to change my mind about that, I shall listen with very great care and attention.

At the same time, the Government pay far less attention than they might to the real barriers to employment; for example, age discrimination. This applies to both youth and age. Eighteen per cent of males under 25 are unemployed. That is a statistic that should worry us when looking at the funding of pensions as well as the present state of youth. Anyone over the age of 45 who loses a job has a very poor chance of returning to employment. My noble friend Lady Barker, whose province this is, will speak to that, and I very much look forward to hearing her.

Perhaps one of the worst barriers to employment is race. I have just quoted the figure for young male unemployment, which is 18 per cent. The figure for black young males under 25 is 51 per cent nation-wide and 62 per cent in London. We should be ashamed of that figure. When I observe that young black males are seven times more likely to be in prison than young white males, I am tempted to entertain the hypothesis that those two figures are connected. The prison budget is about as expensive a substitute for social security as we could pick.

In rural areas in particular probably the biggest barrier to employment is transport. In Falmouth and Camborne, to take just one example among many, people on income support—which in normal times is hard enough to live on—attempt to continue to run cars because as soon as they sell them they become unemployable. This suggests that savings on rural transport may turn out to be exceedingly expensive in the long run. Two of my noble friends will speak to that point, my noble friend Lady Miller of Chilthorne Domer, from a general rural point of view, and my noble friend Lord Bradshaw from the point of view of a general transport specialist. These points need more attention than any government have yet given them.

Some actions that have been taken by the Government are good. We welcome the increases in child benefit and the minimum wage. We would welcome them even more if the Government committed themselves to regular uprating. But I am perturbed by the way that the Government tend, in their language, to denigrate social security benefits. In replying to the noble Lord, Lord Morris of Manchester, on the subject of benefit levels during Committee stage of the Welfare Reform and Pensions Bill, the Minister accused him of poverty of aspiration. I have checked the quotation and I can show it to the noble Baroness later. On 18th July the Secretary of State, speaking in Newham, said that, a giro can't get you a job, or improve your skills or prospects. That's why we're reforming the benefit system". I regard that as a non sequitur. It is not the purpose of the benefits system to create jobs but to keep people fit and well until there are jobs to which they can return. If the Minister disagrees I look forward with great interest to finding out why. I have never had a coherent explanation of it, and perhaps I am about to get one.

In a Written Answer about the cost of restoring benefit to 16 and 17 year-olds, the Minister treated me to the following homily, which incidentally was not part of the Question: We believe that every young person should have the opportunity to achieve their potential. That is why our aim is to engage 16 and 17 year-olds in education, training or work with training, rather than ;carting their adult lives dependent on the benefits system".—[official Report, 11/1/00; col. WA 113] I take exception to the words "rather than" in that response. Like the Children's Society, we believe that people without benefits tend to adopt what are called risky survival strategies which may severely hamper their prospects of returning to the labour force. We believe that benefits should be seen as a springboard to returning to the labour market rather than as an obstacle to it, and that the denigration of benefits is thoroughly unhelpful and, at its worst, potentially Clintonian. Above all, this is a problem in particular areas that are left behind like rock pools by the retreating tide. I refer to areas which are being stripped of services and facilities. As one of the members of our working group, a councillor from Meadow Well, Newcastle, said: Disadvantages tend to hunt in packs". We are entering into a competition between rural and urban poverty. What strikes me is how much the problem is the same: the closure of the corner shop, the post office, the bank, the benefits office, the hospital, the magistrates' court, the police station and perhaps the school. One after another the things that make an area live are closed down.

We cannot all live literally in Middle England on the M.4 corridor. The Deputy Prime Minister knows what the problems are. We need to do something to get the people, houses and jobs in the same places. In that context the failure to provide matching funds for objective work is a serious mistake; and that, rather than tinkering with the benefits system to make it more unattractive, is the area where we should be looking for a solution. My Lords, I beg to move for Papers.

3.50 p.m.

Baroness Pitkeathley

My Lords, the numbers and range of noble Lords who have put down their names to speak today are ample evidence of how grateful the House is to the noble Earl, Lord Russell, for giving us the opportunity to debate this important topic today. It is a privilege to be the first to thank him.

We are especially grateful to the noble Earl because many of us remember the not too distant past when we were not encouraged to discuss such a topic. We were especially not encouraged to make the connections— many of us know from our work outside the House that they are inescapable—between poverty and poor health, poverty and under-achievement in education, poverty and crime, and poverty and mental illness and family breakdown.

We now not only understand the significance of those connections; we are encouraged to address them. I cannot speak in a debate such as this without acknowledging the commitment of this Government to tackling poverty and working towards the ambitious target of cutting by half in 10 years the number of poor children in our society, currently estimated at 4 million; and ensuring that in 20 years no child lives in a poor household.

We can debate—no doubt we shall—whether that is a reasonable and achievable aim, or whether we should expect that the poor will always be with us. However, in my limited time today I want to focus on the second part of the Motion: on measures needed to reduce poverty and social exclusion. The noble Earl set out clearly some large-scale and extremely significant measures which he believes are necessary. I want to focus on much smaller-scale developments which are already under way, and to talk about some of the practical ways in which lottery money is being used through the New Opportunities Fund, which I chair, to address some aspects of social exclusion and to make a real difference to disadvantaged individuals and communities in the areas of health education and the environment.

I take first education. Sustainable policy for abolishing child poverty could not possibly be based only on paying more generous benefits, vitally important though those are. The strategy has also to increase the number of parents in work or at least to reduce the time they spend out of work. Clearly the New Deal, the minimum wage, and the working families' tax credit—I am sure many noble Lords will mention those—are vital parts of this strategy. But the New Opportunities Fund is also working to making an important contribution through our out of school hours childcare and our out of school hours learning initiatives.

Our childcare initiative, which aims to create more than 800,000 new childcare places, has thus far spent £17 million, almost all of it in disadvantaged areas, on schemes which create such activities as breakfast clubs, after-school places and holiday places which will enable parents to take advantage of the work opportunities on offer, secure in the knowledge that their children are well cared for.

Our out of school hours learning activities, on which we have thus far spent £27 million, include schemes like the one in the north-west where £0.75 million will benefit children in 38 schools in the Trafford area with holiday activity schemes, after-school sports, and cultural activities. In the north-east we spent £320,000 on setting up a study support system in 16 schools to enable children from socially deprived areas, who perhaps do not have the opportunity at home, to do their homework; and other forms of study to develop self confidence and improve their ability to learn.

Nor are all the education initiatives confined to the younger age groups. Our community access to lifelong learning initiative aims to encourage adults into learning with a particular emphasis on improving access to learning opportunities through information and communications technology. The evidence shows that the better off in society have greater access to the new technologies. There is a danger that we shall create a split between the information "haves" and "have-nots". The sum of £200 million of New Opportunities Fund money will help to minimise that split.

As regards health, the connection between poverty and poor health is well established. So our healthy living centre initiative aims to develop a network of healthy living centres across the United Kingdom which within five years will be accessible to 20 per cent of the most disadvantaged people in society. We have £300 million for that initiative; and healthy living centres will address important factors such as social exclusion, mental health, and poor access to services. They can include community cafes, exercise, counselling training classes, credit unions and health promotion activities.

Our cancer initiative has included purchasing diagnostic equipment for areas which are disadvantaged and a "living with cancer" initiative which is predominantly targeted at black and minority ethnic communities, and those which are socially and economically deprived. Many of us who live in areas where there is a well developed voluntary sector have benefited from local fundraising activities for such equipment and services. Again, the New Opportunities Fund aims to redress that balance for the poorest in society.

In the environment, too, we are working to make a difference. Why should poor communities have less access to green spaces and playing fields, or fewer safe areas for children to play in? The sum of £125 million will go to projects which help to develop such access.

I make no apology for the use of lottery money to target directly the needs of disadvantaged and socially excluded people for the purposes of this debate. Ask any average person buying his lottery ticket on a Saturday and that is what he says he wants the money spent on. Moreover, there is some evidence that previous types of lottery distribution have been unfairly skewed towards the "haves" in society because those areas are more likely to get their act together to make an adequate application. Again, the New Opportunities Fund is working in a different kind of arena.

All our initiatives are strictly evaluated to assess the impact they have on social exclusion agendas. We are willing to experiment, to break new ground. Therefore, I expect that not all the projects will fulfil expectations. Overall, I am confident that this initiative and the New Opportunities Fund idea will be clear evidence that a difference can be made and that socially excluded individuals and communities can be given new opportunities.

I emphasise that the money spent by the fund is strictly additional to, and not a substitute for, statutory funding. We may have £2 billion to spend, but that is marginal money when addressing the needs of the nation. None the less, by addressing the needs of those who are most disadvantaged in society, by encouraging community participation, and by complementing local and national strategies and programmes, I believe that we can make a difference to the quality of life for some of those people. The key point is that we must all be working together—government at national and local level, charities, the private sector, and local communities—to address the major problems of poverty which we shall no doubt highlight in our debate today. No one would doubt that there is a long way to go, but neither should anyone doubt that we have made a start.

3.58 p.m.

Baroness Byford

My Lords, I, too, thank the noble Earl, Lord Russell, for introducing this debate in such a serious, sensitive and thoughtful way—the style to which this House has become accustomed. Unlike the noble Earl, I cannot speak on all aspects of the report. I hope that the House will forgive me if many of my comments concentrate on the rural perspective, although all the comments apply to rural and urban aspects of daily living.

I believe that in the early days social exclusion was assumed to be urban centred. An attempt to define it was based on mean streets, a lifetime of unemployment, violence, brutality, illiteracy and the many other Dickensian story-lines about which we know so much. It has now been recognised that social exclusion also affects people living in the countryside. The Cabinet Office report Economic, Social and Environmental Conditions in the Countryside, published earlier this month, testifies to that.

I have studied the Cabinet Office report and the Rowntree report and wish to draw your Lordships' attention to a number of implicit assumptions with which I am not comfortable. The Prime Minister, during his recent visit to South Wales, used some of these to publicise recent results from surveys that underpin the Cabinet report. Paramount among these was that 71 per cent of the respondents believe that the quality of life is better in the countryside than elsewhere. A breakdown of what this meant found that 68 per cent of the rural sample considered that their own area has a lot of community spirit compared with 43 per cent who felt that within the urban setting.

These figures hide trends that are somewhat alarming and do not bode well for the continued appreciation of rural lifestyles. The people who work and provide the community spirit anywhere are those who are willing to work and to care for others without thought of reward for themselves. In to this category come the neighbour who every day collects a newspaper for an elderly person, and then, most importantly, stays for a chat; those who serve on the parish council; these who visit the sick; those who shop for the housebound; and so on. We all know of them, whether in the city or in the countryside. All the evidence is that in rural areas the average age of those volunteers is rapidly increasing and that their numbers are fewer.

One reason for that is that younger people of both sexes now go out I o work to earn money and are often out of the community for eight to 10 hours during Monday to Friday. Another reason is that more four-bedroom and five-bedroom houses are built in the countryside, barns are converted, or two cottages are knocked together, and the buyers come from urban areas. They move house, but they do not leave their work or necessarily the school; nor do they change their interests. Such people may well spend 10 hours of each day away from the rural area. They simply do not have the time to do things for others in the vicinity of their own homes. These people can see the community spirit at work and they genuinely value it. What they do not see is that they need to contribute to it for it to be there in the future.

To make things worse, the foundations of the rural way of life are being eroded. I have read recently in the book Devil's Advocate by John Humphreys the passage where he states that Sir Donald Acheson said that it is now impossible for many of the poorest people in this country to get cheap varied food because the local shops are shutting while supermarkets move out of town. He also says that while the number of food superstores rose from 432 in 1986 to 1,034 in 1996, the number of small grocery shops fell by 50,000 in that same period. The closure of small shops applies as much to villages as to the inner cities.

Agriculture has been responsible for our basic food requirements and for much of the shaping and upkeep of our countryside. Agriculture has had to bear the costs of new hygiene practices in our abattoirs, of the animal welfare rules introduced by successive governments and of the consequences of problems such as BSE and bovine TB. I know that some will say that there is compensation. There is, but it covers only the bare minimum and not the knock-on effects of many of these problems.

The principal result is that farm incomes have fallen heavily since 1997. They have fallen from an average of £18,000-plus in 1996 to a mere £4,500 in 1999. During his farm visit to the south-west, the Prime Minister was shown accounts from one farm that revealed that the farmer's pay last year amounted to 33 pence per hour, somewhat below the average minimum wage.

Farmers are going out of business and, of those who remain, many have stopped investing further in their businesses. This, in turn, renders them less competitive, which means that their share of the market drops, which means that their income drops, and so on, as we know. Even more importantly, as their income falls so their share of the national cake falls. Various researchers, writers of reports, devisers of policy start saying that they are of diminishing importance because they already account for less than X per cent of national income. Even so, they receive a smaller share of government support, become less competitive and their incomes fall further. At page 32 of the Cabinet Office report this is illustrated well. Primary sector farming now contributes only one per cent of total UK GDP. Agriculture employs over half a million people and is the mainstay of the food chain, contributing approximately £55 billion—about nine per cent—of UK GDP.

At some point every year, including this last year, some 20,000 people decide to leave farming earlier than they had planned to. Many of them do so with little or no money, no pensions or nest eggs. Tenant farmers are the most vulnerable. These are the very people who have been at the centre of their village communities and supporters of those important aspects of community life which others seek.

Will the Minister tell us how many ex-farmers under 50 years of age, and how many over 50, have been successfully retrained for life and for a job in an urban environment?

In case anyone thinks that my vision might he blinkered, I turn to the Rowntree report and to the startling discovery on page 12 that the number of people with less than 40 per cent of average income, who are the very poorest, is rising and 10 per cent of all those households have an income of £ 132 per week or less. It is pointed out further on in the report at page 79 that one-fifth of the poorest households do not have any type of bank or building society account.

Will the Minister explain how these households are to receive benefits when the Government have arranged for electronic transfer of funds directly into said non-existent banks and building societies, and perhaps post offices?

I have also looked at the figures on incomes generally. I find that 29.1 per cent of the rural population is over pensionable age compared with only 18.2 per cent in the urban areas. Agricultural workers are not noted for amassing large pension funds. It is a fair bet that the pension income for those who have lived and worked in the countryside mirrors that from earnings. Most of the rural areas return lower average incomes than their regional urban counterparts.

Concern is being expressed not only by people who live in rural areas but also by those who represent them at local government level. Last September the Rural Services Partnership called for a rural task force and asked for a joined up approach to rural poverty, public services and employment. Local government spending in rural areas is £716 per head compared with £1,208 in urban areas.

I am surprised that the Rowntree report does not have any figures on empty houses, though it does note on page 85 that the number of households in temporary accommodation, which fell steadily from 1992 to 1997, rose sharply again in 1998 and 1999. This implies that, once again, there is a need for landlords of all types to renovate their stock. In that context, can the Minister confirm the newspaper reports of yesterday that the Government propose to reduce or eliminate VAT on repair work and levy it on new build? Can the Minister also tell us how many houses owned by local government are currently empty and what proportion could be brought back into the market-place were they renovated?

My allocated time is almost at an end. I should draw your Lordships' attention to a worrying report in today's newspaper that Blair's poverty policy is in chaos. I am sure that the Minister will know of it. A damning Cabinet Office report to be published today concludes that a multi-million pound drive to improve Britain's most deprived areas is descending into chaos because there is too little co-ordination between departments. At a time when every penny is needed to help those in greatest need, surely we can get our act together.

4.10 p.m.

The Countess of Mar

My Lords, we all know of and respect the expertise of the noble Earl, Lord Russell, in this field and I am grateful to him for drawing the Rowntree report to our attention today. I intend to concentrate upon a group of individuals who are spread across the whole age range of this report. They are men, women and children who are suffering from what are categorised as illnesses with "ill-defined symptoms". Among them are CFS/ME, multiple chemical sensitivity, Gulf War illnesses, fibromyalgia, sheep dip poisoning and irritable bowel syndrome. The severity of their symptoms fluctuates from day to day.

I have spoken about the predicament of these people on many occasions in your Lordships' House but never in this context. Prevailing medical opinion has it that their illnesses are the result of "functional somatisation". As I understand it, this definition may be loosely translated in this way: these patients have a personality defect that leads them to complain of physical symptoms in order to obtain sympathy and attention. Prevailing medical advice is that once known causal factors for the symptoms are eliminated, there is no point in doing further clinical investigation. Some leading psychiatrists are of the opinion that the best way to treat patients is with antidepressants, cognitive behaviour therapy and, in the case of CFS/ME patients, graded exercise.

There is very little sound evidence that this regime is effective. In fact, it has been criticised severely by researchers outside the UK. Patients who attempt and fail in this regime or who, having heard of its unfavourable results and refuse treatment, are effectively branded as frauds. As a result, they are all too frequently stigmatised and become socially excluded.

I am not aware of any UK studies that have looked at the quality of life of people with CFS/ME. I do have papers relating to one study from the USA and another from Australia. The American paper found that: Over-all scores on the quality of life index were significantly lower in CFS than for other chronic illness groups"; and that: The findings suggest that the quality of life is particularly and uniquely disrupted in CFS". In the Australian paper the researchers found: Results from both the SIP [Sickness Impact Profile] and the interview revealed that CFS subjects had significantly impaired quality of life, especially in areas of social functioning. These findings highlight the importance of addressing the social isolation and loss of role functioning experienced by CFS sufferers". My extensive contacts with sufferers from all the illnesses I have mentioned gives me the distinct impression that CFS sufferers are not alone in their plight. As successive Ministers for the Department of Health and the noble Baroness the Minister know only too well, for they have to respond to some of my letters, there are many in the community who are deprived of treatment, social services support and social security benefits. These people are not whingers and spongers. Many are seriously ill. The Australian study found that: Forty-six of 47 patients diagnosed with CFS were classified as having severe illness impairment. independent of their age. sex, education level or length of their illness. It is noteworthy that this degree of impairment, as reflected by overall SIP scores, is more extreme than the over-all impairment reported by patients with untreated hyperthyroidism, end-stage renal disease and heart disease … it is also more extreme than the over-all levels of impairment reported by a comparable group of MS sufferers". Let us not forget that between the two world wars MS sufferers were branded as suffering from a lazy man syndrome.

The American study of 110 subjects found that: All participants related profound and multiple losses, including loss of jobs, relationships, financial security, future plans, daily routines, hobbies, stamina and spontaneity, and even their sense of self because of CFS". I have a large folder of case histories. Patients, parents and doctors write to me in a desperate attempt to obtain recognition and help. They ask what they must do to obtain funding for treatment outside the NHS when they know from experience that the treatment works, but they have exhausted their private funds or their health authority or GP has withdrawn funding.

I had just such a letter today. This lady has been a patient at the Breakspear Hospital for 20 years. She suffers food and chemical sensitivities and is acutely sensitive to drugs The treatment has enabled her to function socially and in the home. For seven years West Sussex Health Authority paid £2,000 a year towards her treatment costs, which amount to about £5,000. The balance she has found herself. Despite the support she has from her GP, the health authority has now withdrawn its support, citing among other factors a shortfall in its finances.

Over the years she has been referred to innumerable consultants who, her GP states, "have failed to help her in any way". He has reminded the health authority that the effects of her illness mean that, without treatment, she is a suicide risk. I shall be writing to the Minister's noble friend about this.

The noble Earl spoke about suicides and we know that the suicide rate among farmers is extremely high. There is anecdotal evidence of many suicides among ME sufferers and Gulf War veterans. Are there statistics which link the illness of the patient prior to the suicide with the actual suicide? I know that suicides are listed by occupation, but I wonder whether there is any other information about them.

The noble Baroness may recall that I have written to her on many occasions about social security clients who are made to travel long distances to attend Benefit Agency offices, medical examinations and appeal tribunals. Even after going through all the hoops at great personal financial and physical cost, these people are deprived of their benefits and are told that they must seek employment. What employer would even consider taking on a person who does not know from one day to the next how much he will be able to do? I have also written to the noble Baroness about Gulf War veterans who are having difficulty with their war pensions and other social security benefits.

While I know that the noble Baroness is a kind and sympathetic person and that she tries to be as helpful as possible, I have now stopped being surprised by the chilly responses I receive. Her colleagues in the Department of Health are aware that there are parents who are being accused of exhibiting Munchausen's syndrome by proxy because they refuse to force their children to undergo the recommended regime; that these children are placed on the "at risk" register; made wards of court and forced to undergo what is, to my mind, a barbaric course of cognitive behaviour therapy and exercise. She must know of the children who are isolated at home, missing out on their schooling and contact with friends because their illness is not recognised.

Fortunately, there are some medical practitioners and researchers who are not, to use current language, "on message". They are conducting in-depth clinical examinations of patients who present with multiple symptoms. They are finding organic causes for those symptoms. Some are finding clear causal relationships between exposure to a variety of chemical and biological toxins and the development of illness. Others are successfully treating patients with a variety of complementary medical procedures. Unfortunately, too often they are either ignored or denigrated by those who prefer the "quick fix" of a psychiatric diagnosis. It seems that nobody will listen to them or to their patients.

Despite the assurances given by the director of the Benefits Agency Medical Services that all their doctors are trained to recognise these illnesses and that they are aware of the fluctuating nature of the symptoms, it is clear that some of these doctors are not following the guidelines. As a result, sick individuals find that they are not believed by relatives and friends or by their GPs. They struggle to exist in a social vacuum on minimal incomes and little, if any, medical support.

While I am aware that there is a task force in the Department of Health looking at ME/CFS, I ask the Minister to recognise the plight of all the men, women and children who fall victim to these illnesses and to work with her colleagues, to listen to, and actually hear, the sufferers and their professional carers and to examine all the means of lifting from them the stigma of social exclusion.

I speak from the heart. Noble Lords will know that I suffer from organophosphate poisoning. I spent two years being socially excluded. Fortunately, I have good friends and other helpful people. I have been treated and have recovered. I believe that I am now making a useful contribution to society. There are hundreds of people in the world who could make a similar contribution and I ask the noble Baroness to listen.

4.18 p.m.

The Lord Bishop of Durham

My Lords, I, too, wish to thank the noble Earl, Lord Russell, for giving us the opportunity of addressing the persistent evils of poverty and social exclusion in our society. Few of us can match his style, but we all share his passion. Indeed, the speech we have just heard from the noble Countess, Lady Mar, came from the heart and touched us all.

We want to eradicate from our society poverty, social exclusion and all that they mean. I hope very much that that will help us to rise above any party differences because we shall only tackle these problems as a nation, knowing what evils they represent in our midst.

The factors of social exclusion are those which I encounter many times a week during my work in the north-east. Only last Sunday night, I helped to inaugurate an imaginative regeneration scheme in Pallion, one of the worst hit areas which suffered as a result of the closure of the Wearside dockyards. For a decade, Pallion has exhibited all the facets of a forgotten area which are itemised in the Rowntree report. Now, however, thanks to a £10 million grant from the fifth phase of the Social Regeneration Project, hope is beginning to return. Through the partnership of Sunderland City Council, the police and the social agencies and, indeed, the voluntary agencies, the local people are becoming involved in a number of projects which will help to make Pallion once again a hospitable place in which to live.

In particular, I commend an initiative undertaken by the local police, who have taken a room in the local school as a kind of mini police station. It is not a part of the school, but because they are there it is breeding confidence and a sense of security for the mothers who come to the school gate and for many of the children who attend the school.

A moment ago I emphasised the voluntary sector because the Churches are at the forefront of developing buildings and energising people. A family centre and a resource for the mentally handicapped are being planned in and around the parish church. All this and more is made possible because of what the Government are currently offering. We must commend that and recognise it.

Perhaps I may now turn to another estate in my diocese, that of Norton Grange in Stockton-on-Tees. Here I find, helped by another piece of research from the Rowntree Foundation, that some years down the line from a major input provided by Stockton City Challenge, conditions are still woefully inadequate. There remains a feeling of insecurity, of social stigmatism, of deterioration of the built environment; there is also lack of local consultation and a divide between those long established on the estate and those who are newcomers. That social divide is something that I have found on many different kinds of estates. It is evident that people still feel unprotected by the police, are denied participation in the labour market and do not have equal educational opportunities. Furthermore, because they are stigmatised over where they live, they do not have access to credit and other services which the rest of us take for granted. Those factors help to define what social exclusion is all about.

As the Rowntree report highlights, social exclusion is made up of a combination of factors which include jobs, safety, housing, health, education and, most importantly, the participation of local people in decisions about their own futures. The Rowntree report comes at a time when 1999 data are not yet available and the impact of recently introduced government programmes such as the minimum wage and families' tax credit are not yet known. We must give the Government credit for introducing a range of measures which target poverty and social exclusion. We hope to see the results of those measures in future surveys. However, for now, we must remain vigilant about the suffering which is caused when 20 per cent of the population of a western nation that is currently prospering still live on incomes below half the national average and the number of people below 40 per cent of national average income has risen by over 1 million.

The Government will know that in the public, private and voluntary sectors, there are high expectations. Change must come and evidence of delivery will be demanded. For now, I look to the Government for reassurances on three fronts. First, I hope that, if noble Lords will forgive the language, the Government might get their act together in presenting their initiatives in a coherent way. There is some evidence that time and money are being wasted by fragmentation and duplication of effort between departments. I know that some local authorities are confused and frustrated by having to apply to different departments for help on different aspects of the same project. If that is true of local authority departments, how much more difficult must it be for small voluntary groups?

Secondly, will the Government encourage the regions to look at all their deprived areas in a coordinated fashion? Housing estates are not islands. They relate strongly to the economic and social factors within the whole region. If one looks at the map published by the DETR showing the 44 most deprived local authorities, it is clear that they cluster primarily into four regions: London, the West Midlands, the north-west and the north-east. I know that regional development agencies are designed to bring about a regional response, but they are driven by economics and perceived by ordinary people who are suffering the most to be remote bodies. The RDAs need to be part of a democratically elected regional assembly which can bring together all the different factors of a region. It is no accident that the four most deprived regions are now the ones which are most strongly campaigning for devolution in the English regions, which will provide cohesion and make the work of local authorities more decisive and more straightforward. Will this element of devolution continue to find a place in the Labour Party manifesto as it is prepared for the next general election?

Thirdly, will the Government underline their faith in the voluntary sector as playing a significant part in tackling social exclusion? According to the Rowntree report, the cost of bringing everyone up to the current level of half the national average income is only around 1 per cent of GDP. So, presumably, it could be tackled. However, in this House we know that the problem is not only one of money; it also concerns how to target taxes and benefits with the minimum of stigma and disincentives at the same time. In other words, it concerns human dignity as much as it concerns money. It is about enabling people to believe in themselves and know that they have a part to play in the processes of change.

The voluntary agencies, and not least the Churches, are close to the people. They know what engages them, what will lift their heads and what will put a smile back on their faces. Most often, the voluntary agencies are the local people, catching visions, sharing in the projects that are in place locally and putting a little more joy back into such communities. It is as they lift themselves up that much of the degradation that we see in certain parts of the housing estates of the kind I have described will be lifted. The voluntary sector welcomes the incentives recently introduced by the Government. It gladly plays its part in social regeneration programmes and it would be glad to have a reassurance that this partnership and encouragement will continue, along with perhaps a second look at the way in which Church buildings can be relieved of VAT.

Those are my three questions concerning poverty and social exclusion: government coherence; regional response and voluntary participation. I believe that they are integral to meeting the problems addressed by the Rowntree report. I only hope that the Government will take encouragement from the whole of this debate and I look forward very much to their response.

4.29 p.m.

Baroness Turner of Camden

My Lords, I welcome the opportunity to participate in this debate which was introduced by the noble Earl with his usual flair and erudition. Already, we have had some very interesting contributions covering a wide range of topics.

It is clear from the report being debated that problems of poverty persist and, in some cases, have worsened. Among improvements have been the falling levels of unemployment, with fewer adults on means-tested benefits and higher attainments among 11 year-olds at school. Nevertheless, more than 2 million children live in a household where no adult has a paid job and 3 million live in households with below average income. Therefore, relative child poverty continues to exist. Among 16 to 17 year-olds there are still 160,000 in neither education, nor training, nor work. As for old people, some 1.3 million are dependent entirely on state provision, which is acknowledged to be inadequate.

The Government have put in place policies designed to deal with some of those problems. We have the minimum wage, which has benefited some 2 million workers—mostly women. However, in my opinion it is set too low, even with the projected increase. There is the working families' tax credit but that, unfortunately, will not lift all working families out of poverty. There are the increases in child benefit. There is the Government's New Deal for the young unemployed, now extended to those aged 25 and over from April this year, and to be extended nationally to those aged 50 and over.

The voluntary programme for lone parents is said by the Government to be working. Some 90,000 people have taken up the offer of an interview, and some 23,000 are said to have found jobs. As the Minister will know, I am critical of the Government's policies in relation to pensions. I support an immediate increase in the basic state pension above that promised this year. Pensioner poverty is still with us and, in my view, cannot be dealt with adequately by the private insurance industry. In the main, however, there have been some welcome developments.

In advance of this debate, I received some most interesting briefing from an organisation known as the Zacchaeus 2000 Trust. As many of your Lordships will know, that organisation has devoted much time and energy to campaigning for the Department of Social Security to research and set the minimum income necessary to sustain good health and cover essential needs. Until I received that briefing, I was not aware that many governments, in fact, set minimum income standards. The countries that do so include Australia, Belgium, Finland, France, Germany, the Netherlands, New Zealand, Norway, Sweden and even the US.

The briefing I received points out that the absence of such a standard in this country impacts on a number of different government departments. The Home Office and the Lord Chancellor's Department should be concerned because magistrates have no minimum income standards against which to judge the level at which they should set fines. Sometimes that leads to imprisonment. Extensive poverty and survival-related crime fills the prisons with young men. An 18 to 25 year-old living at home with parents who are also on benefit does not have enough money to live on. If he has no job and becomes desperate for money, he sometimes turns to petty crime. If, for whatever reason, such young men refuse jobs or training, in a short time they will lose benefit. The result is that magistrates often face young men involved in petty crime with no money and no benefit from which to deduct a fine. The only punishment will be prison.

At the end of the New Deal, what happens to those young people who apparently have not participated? I gather that at the end of November 1999 the destination of some 73,950 young people who had ceased to participate was unknown. What happens to the young people who fall out of the statistics in that way? Are we experiencing what the United States has experienced in relation to some of its workfare programmes, whereby people disappear from the statistics and reappear among the crime statistics?

Many young women in poverty with inadequate benefits turn to prostitution. Asylum seekers receive only 90 per cent of income support. Therefore, the pressure on them to enter crime or prostitution increases. The Department of the Environment, Transport and the Regions is involved because there is a clash between local authority regulations which cover rent arrears, housing benefit and council tax enforcement on the one hand, and income poverty of benefits and low pay on the other.

Problems exist in relation to council tax defaulters. Council officials habitually threaten defaulters with imprisonment. Most cases of defaulters never reach magistrates, who could reduce or remit debt on a hardship basis. At a magistrates' court the defaulter would have the right of representation if there was a risk of imprisonment. Rather than risk going to prison, the already impoverished defaulter borrows from licensed and unlicensed loan sharks at punitive interest rates. Repaying those rates out of inadequate benefits causes stress, ill health and sometimes suicide.

As has already been said, there are approximately 1.5 million people on low pay or inadequate incomes who are outside financial services altogether. They rely entirely on door-to-door money lenders who charge punitive rates. Their legal rights are thus reduced and their health is adversely affected in the pressure between law on the one hand and poverty enforced by inadequate benefits on the other. Magistrates have no guidance about the level of income at which they should remit council tax arrears on grounds of income poverty. That has resulted in expensive and sometimes unlawful imprisonment initiated by local authorities. Over 400 appeals to the High Court have shown that magistrates have acted unlawfully by imprisoning defaulters.

The shortage of affordable rented accommodation regularly causes stress in the life of the poor. That is particularly true of more affluent areas where, in conditions of economic boom, the price of living accommodation of almost any kind has rocketed beyond the reach even of many in stable employment. For the really poor, things can become quite desperate.

The Department of Health is involved because cases of poverty and debt-related stress, disease and malnutrition flood hospitals and doctors' surgeries with poverty-related expenditure. Particularly serious is the evidence of the relationship between inadequate income and low birth weight, which can be followed by a lifetime of illness. The Department for Education and Employment feels the effects of poverty because there is a connection between poverty-related malnutrition and educational under-achievement.

The Treasury is involved because eliminating income poverty would save the taxpayer money by eliminating some of the cost to which reference has already been made. There is no estimate available to government of the incomes from pregnancy to pension which are necessary to sustain good health and cover essential needs nor of the savings that could follow were such a minimum income standard established and put into practice.

It is in the interests of all that poverty and the social exclusion that it causes should be eliminated from our society. That has been the standpoint of everyone who has spoken so far in the debate, and I believe that it is a view widely held throughout this House. The notion that minimum incomes, in and out of work, should be set at levels which will sustain good health and cover essential needs may assist in dealing with what appears to be a quite intractable problem, despite the policies now in place and the good intentions which I sincerely believe are held by the present Government. I acknowledge and support what has already been done. I understand that the problems inherited by the Government were substantial. I look forward to hearing from the Minister at the conclusion of the debate what other schemes the Government have in hand to deal with these very grave problems.

4.38 p.m.

Baroness Miller of Chilthorne Domer

My Lords, I thank my noble friend Lord Russell for giving us the opportunity to debate these issues this afternoon. In particular, I thank him for his opening remarks in which he reminded us that poverty is not a competition between rural and urban areas.

Particularly in that context, I regretted somewhat the Prime Minister's remarks during his visit to the south-west when he suggested that, generally, life in rural areas was of a better quality than that in urban areas. I believe that imputed in his remarks was the sentiment that we should not worry too much about rural areas. I believe that his remarks, for example, suggesting that people live longer in rural areas, ignored the fact that they might live alone for decades with access to any services being very difficult. His remarks ignored young people and the fact that, although they are not represented in the homeless statistics, that may be because often they are sleeping on friends' floors.

As a result of that kind of comment, I believe that it behoves the Government to consider developing minimum standards of access to services so that people in rural and, indeed, urban areas know what they can expect in relation to access to services and what, reasonably, they should be provided with, rather than being told that their quality of life is fairly good and that it is unreasonable to expect any better.

One of the indicators in the Joseph Rowntree report that made me think particularly is that which shows how much less the poorest sections of society participate in social, political and community organisations, a point already highlighted by the right reverend Prelate the Bishop of Durham. If the voice of those people were heard to a greater degree, it would be much harder to ignore their experience of life when making assessments of the quality of life. When we do not hear their voice, we fail to understand what has happened to the communities in which they live, which have become organised around those with plenty of money. The communities have become divided and the voice of those on low incomes is heard even less.

I have a rural brief, so it will not surprise the House that this afternoon I shall talk about rural areas. I shall also do so because in rural areas the divide between rich and poor can be more stark than in suburban or urban areas. This was clearly illustrated in the Wiltshire study quoted in the Performance and Innovation Unit report on rural economies. It found that 40 per cent of the population in Wiltshire had incomes of under £8,000 and another 40 per cent had incomes of over £40,000.

The situation is exacerbated by the fact that new housing in rural areas is extremely limited, and people with substantial incomes and the newly retired are choosing to move to rural areas, so that house prices increase in a way that bears little or no relationship to the availability of work or local wages; nor do they reflect the relationship with the availability of services, because people with larger incomes generally have access to cars or have cars of their own, at least until they become too old to drive.

Rural transport is certainly a key issue. It will be well addressed this afternoon by my noble friend Lord Bradshaw, so I shall confine myself simply to saying that rural transport has been under-funded for years and its improvement is vital. There are still hundreds of parishes with no bus service and thousands with only one daily bus.

But providing more rural transport will not be a total panacea. Even with a massive expansion, getting people to the services will prove difficult, if not impossible. With local services being closed down and people having to '.ravel further and further to reach them, we need more imaginative solutions from the Government. I do not believe that transporting people to the services—sometimes it takes half a day by bus to go to the magistrates' court and back, or to the housing office and back—is a good solution. There may be far more imaginative ways of bringing such services to the smaller communities in rural England.

The first way is through information and communication technology. But rural areas have a particular problem here: the fact that computer ownership is not wide and that the infrastructure is not in place. One has to live fairly near a telephone exchange to install an ISDN line, and there is a danger that rural areas will suffer again by being left out of the e-commerce revolution because they simply do not have the infrastructure to keep up.

Service provision is also lacking in imagination because rural communities are not seen as needing a multi-functional place where services could be provided. I take the village hall as an example. When I use the words "village hall", I expect your Lordships imagine something with a corrugated roof, old loos and a basin with only a cold tap, and a kitchen with somebody's donated cooker and a tiny fridge, with nowhere to lay out cups for coffee. It is a really depressing picture. When I told a colleague this afternoon that I was going to talk about village halls, he said, "Oh, I wish you wouldn't" It is depressing, but is not that sad?

In fact, what we find in communities where motivated people have got together to raise funds to modernise a hall, or to build a new one, is that it is rented out to many groups, it starts to gain an income of its own, it does not need constant repair and it is cheaper to heat. It also becomes regarded by external agencies—for ex ample, the health authority—as a place where they can start to offer their own services. People meet there, learn there, receive services there and have fun there. There is then an increase in the voluntary spirit, which the Government recognise provides so much., because people come out from behind their front doors, gates and fences. They share their problems and begin to help each other with those problems in a way that cannot happen if there is no meeting place.

So the question is: why have village halls been regarded as so unimportant by successive governments over the years? They are seen as charming, old-fashioned centres for tea and flower arranging clubs. I do not believe that even the present Government regard village halls as potential centres for a range of services and activities that could transform the life of the entire community. The recent Cabinet Office report, Sharing the Nation's Prosperity, mentions village and community halls only at the end, in a subparagraph when talking about the National Lottery, where it says that village halls and community centres help provide the cultural heart of the community.

When I talk about imagination, it is because I think that in provision for rural areas we need some vision of what a multi-functional centre could provide. Halls could be used for senior citizens' clubs, mother and toddler groups, youth clubs, meals-on-wheels centres, a shop, an IT centre—all sorts of things. But halls cannot be used in that way if they are old, crumbling, roofed with asbestos and barely heated.

The burdens now placed on volunteers running the halls are enormous. The right reverend Prelate mentioned VAT with regard to Church buildings. Until recently VAT on village halls could be reclaimed by parish councils. But then Customs & Excise called that a loophole and decided that village hall committees must pay. I understand that the average cost of village hall repairs is around £63.000, so having raised that money a committee will have to find another £11,000 for VAT. Imagine, my Lords, how many more jumble sales that represents. I believe that the Chancellor is reviewing charity taxation. It is an area that urgently needs to be addressed so that communities that raise their own funds are not taxed upon doing so.

The National Lottery provides funding for village halls, but obtaining the funds is an exhausting process for volunteers, who often have to write different business plans for different parts of the Lottery. The Lottery needs to understand the value of the multi-functional hall and create a one form, one business plan approach that means that volunteers do not spend half their lives having to apply to different parts of the Lottery for different parts of their hall.

I hope that the Government can address the potential for community buildings and for services to be delivered in communities with much more imagination, so that they can remove some of the difficulties that communities encounter in raising funds, and also encourage their agencies to think of taking the services out to such communities, instead of always transporting the people to the services in ever-distant sub-regional centres.

4.49 p.m.

Baroness Crawley

My Lords, the noble Earl, Lord Russell, has done us all a service in drawing our attention to the Rowntree report in this formal way today. We thank him very much for that.

Poverty and social exclusion continue to disfigure our country, even as we can prove that we live in an unprecedented era of peace and plenty. As our debate is about the have-nots, perhaps the House will bear with me if, to put that in context, I speak about the haves for about a quarter of a minute.

There is no doubt that most people—I emphasise "most"—have seen their standard of living improve over the past three decades. In the period beginning with the start of Edward Heath's premiership and coming up to the present Government's period in office, we have seen household incomes double in Britain. Since 1955, household spending has increased by an average of 2.5 per cent per annum, a very powerful expression of the principle of corn pound interest.

As I said, most but by no means all families in Britain have shared in that income growth. In 1970, only 35 per cent of households had a telephone. By 1998, 94 per cent of households had at least one telephone. In the past few years the number of households with a home computer has risen to one-third; and the average weekly household income in Britain today is about £400.

However, our debate centres around the assertion that those averages of which I have just spoken of income growth disguise the very substantial inequalities in income distribution. I apologise to the right reverend Prelate for bringing a little party politics into this. My accusation against the Conservative years of the 1980s and 1990s was not that the majority of the people in this country did not see an improvement in their lives and living standards but that the impoverished minority were neglected to a large extent and allowed to languish in benefit systems which did not give them routes out of poverty.

The last government had enormous political energy which they chose to direct towards such areas as great privatisation and deregulation projects. Politics is all about choice and priorities. That was their choice. They did not choose to tackle an unreconstructed benefit system which did not assist in empowering the victims of two horrendous recessions out of poverty and into work and dignity.

I believe that this Government have committed themselves to fighting poverty and social exclusion on a very wide range of fronts. As noble Lords said earlier in this debate, poverty is extremely wide ranging. We have had a fascinating debate so far about urban and rural poverty. Because of the wide-ranging nature of that poverty, that is the only way that the Government can tackle it.

The Government's report Opportunity for All and the Rowntree report argue that poverty has multiple causes—poor housing, poor health, poor education, poor employment prospects, lack of opportunities. The causes as well as the effects must be tackled and it is right that Opportunity for All sets out specific standards against which the Government's performance in fighting poverty can be judged for all the stages of our lives—in childhood, in work and in old age.

The Rowntree Report and Opportunity for All shock us with the scale and depth of poverty experienced at the beginning of the 21st century by millions of British people. My noble friends have alluded to some of those dreadful shock statistics. More than 2 million children are still living in households where there is no adult in paid work. That is a doubling of the figure since 1979. The numbers of people living in relative poverty more than doubled between the end of the 1970s and now, from 5 million to 14 million. One in four working-age adults has poor literacy and numeracy skills.

I was certainly shocked recently by some of the RDA reports from the regions. As we know, the RDAs have all put forward their economic strategies. The figures on poor literacy and numeracy of young people in the regions is quite shocking if we are trying to regenerate our regional economies.

We have the highest rate of teenage pregnancies in Europe—seven times higher than that of Holland. More than one-third of single pensioners experience fuel poverty.

So what is being done to challenge those sickening statistics both from Rowntree and the Government's Opportunity for All report? As the Minister will no doubt draw to our attention a little later, an enormous amount of government energy has gone into tackling the causes of poverty. Employment has risen by over 0.5 million since the general election. Employment is no longer one of the great political debates of our time. We almost think now that it is becoming normal to have high levels of unemployment. Youth unemployment is down by 60 per cent, although obviously the figures which the noble Earl, Lord Russell, gave at the beginning of this debate are extremely sobering, particularly in relation to young black unemployed people. Unemployment is down by 50 per cent for long-term unemployed people since the general election.

The working families' tax credit was introduced, as we know, in October 1999. There have been substantial increases in child benefit and income support for children. As a result of the 1998 and 1999 Budgets, the poorest one-fifth of families with children will gain more than £1,000 per year. The first national childcare strategy has been initiated, with a substantial budget attached to it. And, of course, the national minimum wage, as my noble friends have said, has helped nearly 2 million people, over two-thirds of whom are women.

I wish to focus on the subject of poor women for the remainder of my contribution. While there is no doubt that women are a driving force in the new economy and the numbers of women in work have never been higher, the fact remains that women are also the largest group to experience poverty in Britain today.

As chair of the Women's National Commission, I am aware that women constitute 70 per cent of the lowest earners and 56 per cent of adults living in poverty. The groups especially at risk are lone parents and single pensioners, the majority of whom are women.

There is particular concern among women's NGOs that not enough recognition is given to the feminisation of poverty in Britain. While initiatives such as setting up the Social Exclusion Unit are to be welcomed, there should also be a far more embedded commitment to routinely disaggregated statistics on social exclusion by gender.

There is also a need expressed by women's NGOs for information on the distribution of income within households so that a much clearer picture can be built up of the gender effects of poverty. Not all income in all households is of equal benefit to all the members of that household. In 1997, the Scottish Poverty Information Unit found through research that income received by men is less likely to be spent on children than income received by women. One does not need a lot of research to come to that conclusion but that research exists.

That is particularly significant given the Government's emphasis on the redistribution of wealth through earning and tax credits rather than through welfare payments.

Women's NGOs also want to see the New Deal for lone parents succeeding, for ultimately women, as the vast majority of lone parents, will benefit only from achieving economic independence and a sense of control over their lives for themselves and their families through access to good quality training and work. So many women's NGOs welcome the New Deal for lone parents and wish it well. The Government are aware that encouraging more people to come to that first interview, when the possibilities which are there for them can be explained, is one of the great challenges which I know the Minister is taking up with her usual determination and energy.

5 p.m.

The Lord Bishop of Hereford

My Lords, it is no accident that three bishops are speaking in this debate, which I warmly welcome. I join with other speakers in expressing my gratitude to the noble Earl, Lord Russell, for introducing the debate and, in particular, for his opening speech.

A bishop is charged at his consecration to, have a special care for the outcast and the needy". Poverty is a moral issue. It is a Kingdom of God issue. Most of us who are bishops know a good deal about poverty and social exclusion through our regular contacts with clergy in our inner cities, outer estates and deeply rural parishes and from our own visits to those places.

Acute poverty and social exclusion have always existed in hidden pockets in the deep country. However, in the past two or three years, those problems have begun to bite much more deeply, especially in the marginal hill country of the north and west. They are becoming very serious indeed in parts of my diocese.

I was glad to support the amendment tabled by the noble Lord, Lord Morris of Manchester, in October last year to the Welfare Reform and Pensions Bill. I am glad, too, that that debate led to a meeting between the Government, in the person of the junior Minister in the other place, and representatives of the Zacchaeus 2000 Trust and the Family Budget Unit. However, I am not certain that the outcome of that meeting was that the Government read, learned, marked and inwardly digested everything that was shared with them. We welcome the Government's commitment in principle to eliminating child poverty and social exclusion and in getting unemployed people into real and sustainable jobs.

We fully support the work of the Social Exclusion Unit in raising skills levels. That is absolutely critical. I echo the comments made in that regard. The West Midland RDA Survey revealed an alarmingly low skills level throughout the West Midlands. Raising self-esteem and involving communities in finding ways to help themselves are also important factors.

I was glad to see mentioned in the report of Policy Action Team 9, part of a national strategy for neighbourhood renewal—perhaps that is a sign of the slightly more co-ordinated government for which the noble Baroness, Lady Byford, was looking—the vital part played by faith communities in regeneration at all levels. Such communities range from the National Inner Cities Religious Council to small groups in every single deprived locality where they and more often the Churches are working together.

In my diocese the Churches have a notable record of achievement in the tougher parts of Telford. Next week I shall be meeting Church and community leaders to help plan a major regeneration project in the most deprived estate area of Hereford. That is a place in which I am glad to say there has been good initiative in convening consultation days. Local people have been invited to come together and say what they mind most about; what it is that hurts them most and what they most long to see changed in their communities.

All that is good and encouraging. However, grave problems remain which cause immense misery, needless illness and premature death. The cause is, quite simply, income poverty, particularly for those who live on benefits for any length of time. They just do not have enough money to maintain proper health, let alone afford those modest items of expenditure which are essential for any degree of social inclusion: pursuing hobbies and interests; occasionally offering hospitality; occasionally going to the pub; or enabling children to take a proper part in school activities. For the very poor, survival is a desperate juggling act. Good health, especially that of children and pregnant mothers, is a frequent and costly casualty.

Most of those unhappy facts are spelt out in the Rowntree report. The big statistic, to which at least three of your Lordships have referred, is the fact that the number of those living on less than 40 per cent of average income is rising dramatically. That is a striking and worrying statistic. We hope fervently that last year's changes; that is, the national minimum wage and the working families' tax credit, are beginning to turn the tide. However, some of the trends revealed in the Rowntree report are alarming.

There is other evidence of the grim consequences of acute poverty. The NSPCC has evidence of a direct correlation between child abuse and the incidence of unemployment and debt. Infant mortality and morbidity are directly related to poverty. The Confidential Enquiry into Stillbirths and Deaths in Infancy, to be published this month, contains this paragraph: The research interviewers encountered examples of poverty and deprivation which they could hardly believe possible in late 20th century Britain. The striking association of absolute poverty with the risk of infant death remains as clear as when first described by Templeman in 1892". If an underweight and malnourished child survives, it will look forward to a lifetime disproportionately dogged by illness and cut short by premature death. The poor were dying younger in 1991 than in 1981. Unfortunately, in direct contrast to the general trend, Rowntree confirms that that difference still exists.

It is shameful that 32 per cent of children in the United Kingdom live in families on less than half of average income. It is also shameful that we do not attempt to set a properly-calculated minimum income standard. In Denmark the comparative figure is 5 per cent; in France, 12 per cent; and in Germany, 16 per cent. All those countries calculate and pay a minimum income to families. The Government have so far consistently refused to examine the true needs of poor families and establish a rational and realistic level of benefits. I urge the Minister to look again at the work of the Family Budget Unit, which is academically rigorous and based on real prices of real commodities.

Perhaps I may mention briefly two further facts about poor children which run counter to the general improving trend. First, they are twice as likely as children from families in social income groups 1, 2 or 3 to die in accidents. Secondly, their attainment levels in school declined while overall attainment levels were rising.

Old people are suffering too from acute poverty. Rowntree points to the problem of excess winter deaths among old people getting worse. The help available to old people from social services to enable them to continue to live in their own houses is becoming less because of cuts in funding to social services.

For families, there is the grim problem of debt. Rent or council tax arrears, or the absolute necessity to buy an urgently needed household object may mean borrowing from the hard-pressed social fund. That can lead to further deductions from an already inadequate benefit. Worse still is to borrow from the loan sharks whose dreadful rates of interest tighten the noose of poverty still further round the necks of those who fall victim to them.

Perhaps I may make some practical suggestions. The poor cannot wait 20 years or even five years for the Government's grand design to be in place and working. We hope that it will be in place and working but the poor need help now. As mentioned by my friend, the right reverend Prelate the Bishop of Durham, Rowntree wisely pointed to the need to target taxes and benefits with minimum stigma or disincentives. That is what matters. Such targeted help need not be unduly costly nor encourage further benefit dependency.

I have already expressed the hope that the Minister will look again at the recommendations of the Family Budget Unit. Will she also undertake to consider four further areas of short-term action? I refer first to the return to a system whereby the cost of some urgently needed household items can be met by unrepayable grants, not by the loans at present available, if one is lucky, from the social fund. The availability of such loans is patchy from one part of the country to another.

Secondly, will she consider the possibility of pregnancy allowances payable in a way analogous to child allowances? Thirdly, will she empower local authorities, in certain cases, to remit arrears of council tax rather than restrict the power to the magistrates' courts, as has been done since the advent of the poll tax? Finally, can she give an assurance that the Government will bring about some improvement in the speed and flexibility with which benefits are paid to those who are in and out of what are, sadly, still often short-term jobs, to overcome those periods of desperate poverty and real destitution which result from the slowness of the present system?

I consider it to be a privilege to support the noble Earl, Lord Russell, in this extremely important debate.

5.9 p.m.

Lord Northbourne

My Lords, I, too, am most grateful to the noble Earl for introducing this subject. Several noble Lords have spoken eloquently about money and have implied that social exclusion is a consequence of inadequate income. In the few minutes available to me, I intend to address the subject from the other point of view, while acknowledging that these two factors are entirely interactive. I am anxious to explore for a few moments what one might call the root causes of social exclusion and alienation; and, indeed, of poverty.

Too many young people today are still growing up inadequately prepared for life and for life in a society that is becoming more and more difficult to live in—a complex, competitive and technological society with fewer set rules and social structures than there used to be. I do not just mean young people lacking in literacy and numeracy or in technical education; I also mean young people lacking emotional literacy, as mentioned by the right reverend Prelate the Bishop of Hereford, and inter-personal skills. This means that they are condemned to poverty and exclusion. They have no hope of getting a job because they cannot cope with society as we know it. I have in mind young people who ask themselves, "Who am I?"—as we all do and did—"Where do I fit in?" The answer comes back, "In the street, sleeping rough; in the black economy. Those are the places for me".

A recent survey entitled, Leading Lads, showed that, at the age of 14, 13 per cent of young men today are depressed, have no confidence in their future and no belief in their ability to have a place in our society. By the time they reach the age of 19, that proportion rises to 17 per cent. The problem of inadequate preparation for life often starts very early. Sadly, the cause is often the lack of a secure, happy and loving environment in the early years, which often leads to rejection when the child enters school. That is the beginning of a downward, slippery slope.

In saying this, I want to insist that I am not blaming anyone; I am not allocating blame. If we start to think in terms of blame—like blaming single parents, or whatever it may be—we shall lose the thread of the argument and fail to understand the real nature of the problem. With very few exceptions, the reality is that all parents start out wanting the best for their child. But circumstances intervene—for example, unemployment, poverty and debt, which have all been mentioned today, especially by the noble Earl and the noble Baroness, Lady Turner.

Debt is a terrible problem. Then there is poor housing and loneliness, alcohol, drugs and stress. However, there are also two rather more subjective factors. First, there is a lack of understanding of the needs of the child; in other words, that understanding of the parenting role that used to be passed down from generation to generation. Sadly, the golden chain is broken in some families.

Secondly, there is the problem of trying to rear a child single-handed. In that context, I should like to stress that I am not stigmatising, criticising or apportioning blame. Far from it. I believe that many single parents are doing an heroic job. But just as sailing around the world single-handed is more difficult than doing so with a crew, so it is more difficult to raise a child single-handed. There are, of course, two kinds of single-handed parenting. There are those in lone-parent households and there are those in households where the second parent is not contributing, or is perhaps making a negative contribution.

I intend to spend the next few minutes on the issues that surround this problem of single-handed child rearing. It is not, of course, the only problem. However, having worked for 12 years with seriously disadvantaged young people, I am convinced that it is an important one. Moreover, there is not enough time this afternoon to deal with more than one issue.

As noble Lords will know, there has been a lot of good, recent research in this field. All the evidence shows that some single-handed parents succeed and their children succeed, but that it is a tough and stressful job. Statistics show, as we all know, that a higher proportion of children from households where both parents are involved and share the job of childcare achieve their full potential. Therefore, it seem to me logical to ask whether there is anything that we can do; for example, would it be possible to increase the proportion of the nation's children who have these better chances? If the answer were yes, we would probably be setting the scene for many less stressed and happier parents.

I believe that there are things that can be done. Obviously I can only suggest one or two this afternoon. But, for example, should we not be ensuring both in school and in post-16 education that all young people have the opportunity to learn about the needs of children and to know the objective facts about a young child's need for security, love, stimulation, guidance and, above all, stability in the key adults in their life? Should not young people in school be learning about how to sustain committed relationships more successfully in the interests of their children?

I suggest that the Government need to look carefully at the legal, tax and benefits structures to ensure that they reflect the importance to society as a whole of families that are able to give their children the best start in life. Finally, perhaps more contentiously, I suggest that, as a society, we could also try to evolve a set of shared values about the mutual responsibilities of parents, children and the state. There is a great deal of uncertainty within the law today about the responsibilities of a father and those of a mother; and, indeed, about the responsibilities of children, as they grow up, to their parents. That also applies to the relationship of those inter-locking responsibilities with the responsibility of the state.

With the greatest respect to the right reverend Prelate, I suggest that these are not moral issues. They are, perhaps, moral issues for those who accept moral standards, but we live in a society where many people reject moral standards. In my view, they are social issues; issues of citizenship. If family structures are wrong, the effect on our society is dramatic.

In the past decade there has been an enormous sea change in the public perception of our responsibility as citizens to the environment. Is it too much to hope that, in the next decade, we might see a similar sea change in our society's perceptions of the mutual responsibilities of the different parties in the family? Enhanced expectations are so important. People often tend to perform in the way that we expect them to perform.

In conclusion, I ask the Minister to raise with her noble and right honourable colleagues the possibility that the Government's new citizenship curriculum could be used as a vehicle through which our society might work out for itself a family policy for the 21st century—a policy based on the parenting needs of children and one which accepts that, in return for the enormous benefits we receive, we, as citizens, also have duties and responsibilities within the family, which has been described as the basic building block of our society.

5.19 p.m.

Lord Rea

My Lords, as noble Lords might expect, I shall concentrate my remarks on the effect of poverty on health in the United Kingdom, but of course the problem is worldwide, as the noble Earl pointed out.

I particularly thank the noble Earl for initiating this debate because it allows me to update my maiden speech of November 1982 which centred on the Black report, then only two years old. That report was commissioned in 1977 by my noble friend the late David Ennals—who died much too young—because of emerging evidence that health inequalities were creeping up again after a period when they had narrowed during and just after the 1939–45 war. Of course the findings were inconvenient for the Thatcher administration which was in power by the time the report came out. It had quite other plans for the economy than the redistributive measures recommended by Professor Black and his colleagues.

In fact, as we all know, the 18 years of monetarist economic policies, high unemployment, anti-trade union legislation and trimming of social security benefits after 1979 resulted in an unprecedented rise in income inequality, so that the UK has become the most unequal society in Europe. This was accompanied by a parallel rise in health inequalities which so far show no sign of disappearing. Luckily there is no need to spell these out in detail today, as my noble friend and most other members of the Government are fully aware of and acknowledge the problem. Frank Dobson, when Minister of Health said in 1997, Inequality in health is the worst inequality of all. There is no more serious inequality than knowing that you'll die sooner because you're badly off". I heard a story about a tough old inhabitant of the Glasgow district of Drumchapel who, when told that the average life expectancy in his district was 10 years less than in rural Scotland, said, "Well if you lived in Drumchapel, Jimmy, you'd no want another 10 years". Of course, it is not only physical health that is worse in deprived communities but also mental health, including suicide, drug and alcohol abuse and crime, which may have been the main reason why that Drumchapel resident did not recommend living there.

In June last year the Government produced a document Reducing Health Inequalities: An Action Report which sets out the Government's responses to the Acheson report, Inequalities in Health, the successor, after 18 years, to the Black report. It lists a large raft of policies, many of which encourage action at a local level. Many of these are also described in Opportunity for All, published in September. Many of these suggestions have already been described by noble Lords in the debate. Poverty is, as we all know, to be tackled mainly by getting people into work or preparing them for work.

This will not only reduce the social security burden on the Treasury but is a laudable aim in itself if the work is sustainable and reasonably well paid and the conditions of work are acceptable. However, as the right reverend Prelate the Bishop of Hereford said, too much of the work that is available for the previously unemployed is poorly paid and temporary. Much of it is part-time, useful for women with dependants but seldom well enough paid to attract lone parents off benefits.

Poverty, therefore, is not automatically abolished by work, and though the working families' tax credit, day care centres and the minimum wage will certainly help those on the bottom rung of the working ladder, low pay will still leave many families in poverty. As other noble Lords have said, the Rowntree report found that the number of adults over 25 on low pay was "worsening"; that is, increasing. It will be interesting to see whether this figure comes down when the new measures are working fully.

However, as other noble Lords have mentioned, the largest number of those in poverty are those in families where no member is able to work and who are dependent on state benefits. I include in that number pensioners, the disabled, families—often lone parents with young children (that encompasses 2 million children)—and, increasingly, men in the age group 45 to 65 who have been made redundant or who have a health problem which would not normally have prevented them from working if work had been available but who are receiving incapacity benefit. It would be interesting to know if my noble friend can say whether this group has decreased in size as numbers in work have increased over the past two years, and, if so, whether they are actually back in work or on jobseeker's allowance or another benefit.

There is another group of mainly young adults described graphically by Nick Davies in Dark Heart, but also by my noble friend Lord Hattersley in articles in the Guardian, whose lives have been so damaged by the effects of poverty and emotional deprivation that it is extremely unlikely that they can ever be rehabilitated sufficiently to hold a regular job. I met quite a number of them in my practice in Kentish Town.

It is these recipients of state benefits who for one reason or another cannot work whose economic status has gone down most. Their relative poverty will continue to increase until benefits are uprated annually in line with average wage increases rather than prices. It is not fully appreciated, as I reported in the debate on the National Health Service two weeks ago, quoting Professor Peter Townsend in The widening gap, that, If the Conservative Government had not reduced social security benefits, it can be estimated that the poorest 20% of the population would today have about £5bn … more … disposable income … and that poverty by European standards would have been reduced by more than a third".—[Official Report, 2/2/2000; cols. 268–69.] According to a report prepared by the House of Lords Library for my noble friend Lord Morris of Manchester and quoted by him in a speech on 11th October—this has been referred to by the noble Baroness, Lady Turner—by breaking the link between earnings and social security benefits the Exchequer saved £119 billion between 1980 and 1996. That is about £7 billion a year. This was distributed in tax cuts to the better off, and, to quote my noble friend Lord Morris, this was, Not a trickle but a flood, and the direction was up". It is no wonder that health inequalities have greatly increased in the past 20 years. To restore the relative position of those on benefit to what it was in 1979 would therefore cost some £7 billion annually. I suggest that this is perfectly possible if the will is there, and could be taken over a five-year period for example. It would mean increasing the social security budget by some 1.5 per cent per annum in real terms for five years, a much lower percentage than is proposed for the National Health Service.

In the long term this measure would almost certainly improve the nation's health and save more lives than an improved and modernised NHS. However, I realise that the need to sustain the NHS is more politically urgent and clamorous. Middle England demands it. Middle England, however, suffers now from having to pay more to maintain the health of the poorest 20 per cent of the population because of its worse health, as well as suffering the crime and drug related problems which are associated with low income. I suggest that Middle England would not be averse to increasing government expenditure, and therefore taxes in some form, to redistribute income—in easy stages, of course—if the Government were to make a convincing case for it, particularly pointing out that this expenditure would in the end be in their own interest. The widening gap quotes surveys which show that an increasing proportion of the population would now support an increase in income tax to help alleviate poverty. However, I am well aware that what people say in surveys does not always carry over to the ballot box!

But getting back to the pre-Thatcher situation of 1979 would only restore the relative health levels of that time, which were shown by Black to be unacceptably unequal between rich and poor. There is further to go. The Black report costed the changes which it recommended in 1980. Professor Townsend reports, using figures from Hansard, that in today's prices that would require £12.5 billion, the great majority of it being used to eliminate child poverty, which is one of the Prime Minister's stated priority aims; namely, to halve it in 10 years and to eliminate it in 20 years. The Government accept that there is unacceptable wealth and health inequality in Britain and that this does great damage to society.

Through reports and the speeches of Ministers, the Government talk in a persuasive way about the measures they are taking to combat this. Many are truly excellent. But I do not think that the Government have begun fully to accept the size of the investment that will be required to correct the damage done by the previous government's policies and to end the imbalances that existed before that. Only when the full extent of that backlog is faced squarely and corrected will we be able to claim that we have achieved the fairer society that the Government were elected to deliver.

5.30 p.m.

Lord Ezra

My Lords, I am pleased to follow the speech of the noble Lord, Lord Rea. He spoke about the impact of poverty on health; I shall be dealing with another aspect of the problem. As my noble friend Lord Russell pointed out in his impressive and wide-ranging speech when he introduced the debate, I shall be concentrating on fuel poverty. I shall be taking as my point of departure Indicator 35 in the Rowntree report, which illustrates the number of excess winter deaths which occur in this country.

As noble Lords who have studied the report will have seen, up to 45,000 excess winter deaths occur in this country. This mainly affects people in the age group of 65 and over. The Rowntree figures record up to the winter of 1996–97; in the winter of 1998–99 the figure was 49,000. As my noble friend pointed out, this proportion is far in excess of that of any other west European country—something like two to three times in excess.

It arises because of the poor state of housing, particularly among the elderly on low incomes, with inadequate insulation and inadequate heating. The Government have described the state of fuel poverty as being that of persons who have to spend more than 10 per cent of their income to achieve reasonable heating standards. If those people have to spend that proportion of their income on heating, they tend to skimp. In any event, spending it in a house which is poorly insulated and poorly constructed will have very little impact.

I have been much involved in this work for many years through the charity NEA, which concentrates on trying to improve the insulation in houses of people on low incomes. I have been in houses which are much more uncomfortable in winter within than without. At least outside the cold was reasonably dispersed. Inside it hit you as though there were a number of rapiers striking at you from under the door, through the window-sills and through various other crevices.

To be fair, the Government have recognised the problem, and in May last year they introduced a report on new ways of improving heating in homes, particularly the homes affected in the way I have described. This is described as the new Home Energy Efficiency Scheme (HEES). Under this scheme the Government will be devoting considerably more resources than at present to improving heating standards in this category of home. In their estimate, there will be an improvement to the extent of some 460,000 homes being brought out of the fuel poverty area over the next two years.

This is a welcome development. Unfortunately, the number of households in fuel poverty is between 4 million and 5 million. Therefore, at the rate of 230,000 per annum—if that rate continued—it would take something like 20 years to resolve this problem.

The problem is fundamentally linked to the poor standard of housing in Britain. We have the oldest housing of any west European country. Some 45 per cent of our houses are more than 50 years old, compared to something like 20 to 30 per cent in other countries. The English housing survey, the last of which related to 1996, showed that there are 1.5 million households living in houses which are officially regarded as unfit for human habitation. This is in Britain, one of the most affluent countries in the world. A further 2.5 million will require very substantial expenditure on improvements to make them suitable for habitation, and many more will require a good deal of expenditure to bring them up to a reasonable standard.

So this is a fundamental issue in this country, which the Government are tackling in many ways. However—relating back to fuel poverty—we cannot afford to wait for 20 years to resolve it.

In this connection, the Warm Homes and Energy Conservation Bill is being promoted by Mr David Amess in another place. It proposes that a target should be set for the elimination of fuel poverty. I hope that the Bill will get a fair hearing in the other place and that it will be accepted when it comes to your Lordships' House. We need to know the timespan within which this problem will be dealt with. We cannot go on, year after year, with this large number of excess winter deaths which are due to poor housing conditions.

As the Government have admitted in debates on the subject, there is little doubt that poor housing exacerbates ailments such as respiratory and cardiovascular diseases. The relationship is very clear.

I should like to end my brief remarks by quoting Helen Liddell, the Minister for Energy. Last November she stated: It is shameful and unacceptable that 5 million families are struggling to afford to heat their homes". I am sure that your Lordships fully concur with that sentiment—and I am sure that the Government will do even more than they are doing already to try to deal with this issue.

5.38 p.m.

Baroness Howells of St Davids

My Lords, I, too, am grateful to the noble Earl, Lord Russell, for bringing this report to the attention of the House. Much of all that has been said relates also to the minority communities, so I shall use my few minutes to bring to the attention of the House two areas of concern which are specific to the community from which I come and which have a real bearing on the poverty described in Rowntree.

Some visible minority groups have flourished in Britain. From within all communities there are always success stories. Despite this, ethnic minorities are still represented disproportionately in all the key poverty indices. As a result, many from those communities feel ignored, under-valued and powerless. Black communities feel the lack of a strong collective voice to articulate their needs to service providers. Their voluntary sector is under-developed and badly resourced, with small groups often competing with each other for scarce resources. There is a need to encourage more working partnerships and dialogue between different ethnic groups. The need is even more acute in rural communities, where language barriers and different skin colour cause minorities to be extremely isolated.

One of the most damaging aspects is lack of education. Education decides one's employment. Employment decides where one lives. Empirical data show that young black males are excluded from school at the most critical time during their school years. Unless the Government are prepared to invest in voluntary organisations at the grass-roots level which are able to articulate the ways in which the system fails such children and to suggest remedies, it will be impossible to break the cycle of deprivation.

A growing number of those excluded early from schools come from the Afro-Caribbean population. Racism and negative stereotyping within the institutions have almost always led to disaffection and disengagement from active citizenship. There is strong evidence that that process starts from a very young age and leads to a poor socio-economic position in society. In whatever plans the Government propose to tackle poverty and social exclusion, there must be a concerted effort to address the disaffection and disengagement experienced by many young men from my community.

Another area of concern relates to those men and women who enter our institutions for second-chance education. Without proper family support, such people become so poor that survival, rather than any long-term benefits, becomes their real motivator. There are many from their own communities who could give them support and encouragement if some funding were available to set up projects aimed particularly at their special needs.

Major researches show that racial discrimination and racism are realities in our society. The noble Earl, Lord Russell, has already given the figures for unemployment among black males. Cultural diversity is not a popular concept in all walks of British life. Special financial help is a necessity if such men are to move forward into social inclusion.

A simple fact is that young men tend to marry when they feel that they are economically able to support a wife. Most families feel content when an economically able young man proposes to their daughter. In the black community, the lack of full-term education will by default create more young single parents. I know that that situation was initiated by the slave traders in the early days, but we have come a long way since then. We are now at the point where if children are thrown out of schools, they will seek other means of comfort. I suggest that we look carefully at those who exclude children from schools without another place for their learning.

5.43 p.m.

The Lord Bishop of St Albans

My Lords, I welcome the opportunity that the noble Earl, Lord Russell, has given us to explore some of the over-simple mythologies surrounding social exclusion; for instance, the myth that social exclusion is only regionally based, whereas the evidence points to severe deprivation also within regions. My own region, the east of England, would score quite well on a regional league table, but it contains also areas of serious deprivation. I also welcome the debate because it courageously makes public the benchmarks against which social exclusion issues may now be judged, although I acknowledge and welcome the considerable force of the noble Earl's request for more precise statistics, especially relating to the very poor.

I want to draw attention to three areas of concern. First, government macro-economic and macro-social policies, while no doubt put in place for a good reason, can have unforeseen micro-consequences. The decision, for example, whenever possible, to make the payment of benefits and pensions electronically will clearly save money at the macro-level. But translated to the micro-level, the irony is that, far from alleviating social exclusion, that policy may actually exacerbate it.

Let us take the example of a single woman pensioner living in my diocese in a Bedfordshire village, where there is no post office or bank. If her pension of £66.75 is paid electronically to her bank, in order actually to withdraw that money she has to spend at least £2 in bus fares—she is lucky that there is a bus at all—then spend money on a lunch because the buses do not run to suit her convenience. To collect her £66.75 will actually cost her approximately £6. That is 10 per cent of her pension spent in order to collect it. That seems totally unjustifiable and inequitable. Will the Minister assure the House that the electronic payment systems for benefits and pensions will be flexible enough to ensure that no pensioner, either rural or urban, is directly penalised for being old, immobile and a non-driver?

Secondly, the East of England Development Agency, in common with other RDAs, is, for understandable reasons, making much play of developing the local knowledge-based economy. I applaud that and I welcome it. But where knowledge is increasingly the capital of our new society, access to that knowledge is critical. That, again, has an impact upon young, old, and those who, through poverty or disability, lack mobility. I think, for instance, of a student trying to reach Cambridge Regional College where he is studying who, I am told, gets a lift with his father for the first 10 miles to a bus stop. If the bus does not arrive, he then has to phone his mother, who has to leave work, pick him up and drive a further five miles in order to get him to college. He has tried the alternative, which is public transport. It involves leaving home at half-past six in the morning, which I am assured, surprisingly, he would not mind, but it would cost him £20 per week. He cannot earn £20 per week to get access to his education.

If the knowledge-based economy is our future—and I have no doubt that it is—then social exclusion will encompass those debarred from that economy by distance and disability. I am sure that that is not the intention, but I should be glad to know what thinking is going on to ensure that the rhetoric about access bears some relationship to reality.

The third area concerns the role of the Church in combating social exclusion. I could give dozens of examples of what the churches are already doing, but I shall allow one or two to suffice. There is in my diocese an Anglican/Methodist Church in Bedford which provides community facilities for over 3,000 users per week. It is used by groups with learning disabilities, women's groups and groups from faiths other than the Christian faith. That community centre cost the people or that church more than £300,000 to create, including VAT. Not a single penny came from government sources or from local authority sources.

I give another example. In a survey conducted of Bedfordshire churches, I discovered that more than 500 adults voluntarily give their time to work with young people; again, at no cost either to national or local government. I have yet another example. In the east of England over 4,000 church wardens give their time to care for the 2,500 Anglican churches. Someone is bound to come up to me and say, "But what about the English Heritage grants?" I shall remind him that the Church pays more in VAT than it receives in grants—far, far more—and, irony of ironies, it pays it on building alterations specifically designed to try to create greater community use and greater social inclusion.

My point is a simple one. In every community there is a church—and frequently a number of churches— which remains available while all other organisations, such as banks and post offices, move out. The vast majority of those churches provide not only the physical resources to combat social exclusion but also attempt to provide the more significant spiritual resources. Without being too pious, it is the injunction to love God and love our neighbours which is the fount of energy that enables churchgoers and others to do so much for their communities.

In these circumstances, can the Minister assure the House that the role of the Churches in combating social exclusion will be taken seriously by the Government, that steps will be taken to ensure ex officio status for Churches and other faith communities on the developing regional bodies and, perhaps most importantly of all, that a forum will be set up to enable heritage interests, which I regard with genuine respect, having once been an archdeacon—not least because some Members opposite knew me as an archdeacon—to meet with social exclusion interests, to see how our Churches can be released to play an even greater part in creating a more just and fair society. I recognise and welcome the energy being deployed to tackle social exclusion, but what I long for is the development of more imaginative partnerships in which Churches, other faith groups and especially those who are socially excluded themselves can play a role which reflects the work they are already doing.

5.53 p.m.

Baroness Gale

My Lords, I, too, should like to thank the noble Earl, Lord Russell, for the opportunity to debate and highlight the matter of poverty and social exclusion, and the measures needed to reduce them.

As someone who lives in the Rhondda Valley, I see the effects of poverty and social exclusion every day. The Rhondda and the other valley communities in South Wales suffered greatly during the 1980s and 1990s, when we saw the decimation of the coal and steel industries. The loss of a job in these circumstances is a loss to the community. When a colliery closes down, the community closes down. It brings about a feeling of despair and of no hope for the future. It brings poverty to that community and also a rise in petty crime and drug abuse among young people. But most of all, it brings poverty and social exclusion to young children. This picture I paint of a valley community sounds rather depressing. But I believe that under this Government things will improve. Already measures are being put in place which are bringing back hope and an anticipation that the future will be brighter.

The problem facing the Government in eliminating child poverty is an enormous one. The statistics are well known, but are worth repeating. Child poverty has trebled over the past 30 years: 4.3 million children now live in poverty. Disproportionate numbers of them either live in households where there is no adult earner, or in one parent families. Combating poverty and social exclusion that threatens to separate these children from the mainstream is a complex task, but a hugely important one.

The Government are tackling the problems on many fronts. In their document Opportunity for All—their first annual report tackling poverty and social exclusion—they set out the aim of eradicating child poverty within 20 years. That is a very ambitious aim but one which the Government are determined to meet. How can the Government achieve their aim? From where we are now, if we do nothing—or very little—if we fail to break the cycle of deprivation that is handed down from generation to generation, we will build a society where there is no hope for these children.

We have seen the bad effect of child poverty which shows itself in poor health, low attainment at school and poor prospects in the job market, to mention just a few. In their report the Government say: We are determined to create a United Kingdom where everyone has opportunities to work, to learn, to make a contribution and to achieve their full potential … Our goal is for a fairer society; where no child lives in poverty". One of the measures introduced in October 1999 was the working families' tax credit. That will give a minimum income of £200 a week to working families with children. That means an average of £24 extra per week for these families. In Wales alone the Inland Revenue has said that 75,000 families should benefit from the working families' tax credit in the financial year 2000–01.

On child benefit, approximately 360,000 families in Wales will benefit from the uprating in April. That will be the highest ever rise in child benefit. The latest information available on the New Deal, as it affects Wales, shows that more than 8,500 New Deal participants have obtained a job through one or other of the New Deal initiatives. Within that total, the New Deal for 18 to 24 year-olds has seen more than 6,500 jobs secured by young people, including 4,800 sustained jobs. The New Deal brought the hope of a job to young people in Wales, many of whom live in some of the most deprived areas in the country.

I use these examples to show that the Government's policies on assisting families with children are working with such good results. This is just the start of the 20-year plan to eradicate child poverty. The national minimum wage has helped many low paid workers to rise above poverty wages, and the promised increase will assist these people even further. Together with the 10p income tax and the working families tax credit, it is helping to make work pay and giving back pride and dignity to people as they are able to provide better for their children than they would have been able to do had they continued to live on benefits.

In conclusion, I believe that the Government have made a good start in their aim to eliminate child poverty in 20 years. Continuing to monitor the initiatives they have begun should enable their aims to be met. It will not be an easy task but it is one which must never be abandoned. For future generations, the benefit of seeing children grow up in homes that are adequately financed will have a positive spin-off in many directions: for example, good health, better housing, better schooling, an improved family environment and an improved, stable family life. Those aims are worthy of a Labour government. I look forward to future initiatives in this field in the lifetime of this Government.

6 p.m.

Baroness Barker

My Lords, I join many others in thanking my noble friend Lord Russell for affording us the opportunity to focus our attention on those members of society who are in the most urgent need. At the outset I declare an interest. I have worked for many years for Age Concern England, and for a proportion of that time I have worked in some of the poorest and some of the most affluent areas in this city. I want to concentrate on some of the poorest people of all—older people of working age but not in employment, pensioners and other older people.

During the past two years it has been interesting to watch the Inter-Ministerial Group on Older People as it has developed a plethora of initiatives with wonderful titles; for example, Listening to Older People and Better Government for Older People. Welcome as many of the programmes are because they highlight the extent to which older people are marginalised in society, there are a number of somewhat more basic ways in which the Government are failing to tackle poverty. There are some simple things that can be done, and it is on those that I want to dwell in the short time available.

The Government's overall priority, repeated like a mantra by the Chancellor, is to "get people off benefits and into work". For many people aged over 50, the odds against their finding a job are so high that that is not so much an aspiration as a pipe-dream. The Government's own statistics, drawn from the Labour Force Survey, supplied in a Written Answer to my noble friend Lord Russell on 18th January, indicate that the number of people aged between 50 and 60 who are not in employment rose from 1.91 million in 1989 to 2.12 million in 1999; and there was a slight decrease in the figure for those aged between 60 and 65, from 1.88 million to 1.81 million.

Unemployment among older people is becoming an increasing problem. A recent study from the LSE indicates that 600,000 more men and 200,000 more women aged over 50 would be working now if older men were working at the level of 1979 and if older women had shared in the increase in work for younger women over the same period. Many studies—perhaps the most notable of which is that produced by Professor Alan Walker entitled Too Old at 50—provide ample evidence of ageism among employers. People are laid off or encouraged to take early retirement simply on the grounds of age. To give an idea of the scale of unemployment among older people, it may be helpful to draw your Lordships' attention to a study published by the Employers Federation on Age, which has calculated that institutionalised ageism costs the British economy £26 billion every year.

During the Christmas holiday I was in conversation with three very good friends of mine. The oldest celebrated his 40th birthday last year. One is a civil engineer, one is an accountant and one is a computer systems designer. One will be made redundant in a couple of months' time and the other two have looked round their offices and come to the realisation that there is no one in the office aged over 40. Each has up-to-date computer skills but all are worried that when we meet again next Christmas they will be unemployed. Ageism has ceased to be a problem solely for old people.

Despite the extent of unemployment among people aged over 50 and the extension of the New Deal to include that age group, unemployment shows no sign of decreasing. Nevertheless, the Government have so far refused to introduce anti-age discrimination legislation, preferring to rely instead on a voluntary code of practice for age diversity in employment. A few enlightened employers such as B&Q have set out specifically to recruit and retain older workers and have valued their skills. I applaud them for being pioneers of what I hope will one day become standard best practice in employment. However, if the pattern of combating other forms of discrimination, such as racism and sex discrimination, are repeated, it will be 30 years before older workers fight their way on to shortlists solely on their ability. That is simply far too long. In the mean time, more and more people will be compelled to exist below the poverty line.

So if employment is not achievable, what are the Government going to do to alleviate pensioner poverty via the benefits system? The answer is, not quite as much as the spin doctors would have us believe. At a time when the economy is growing, pensioners are being left further and further behind.

The increase in the basic state pension of 75p from April is an insult. That increase, from £66.75 per week to £67.50 per week from next April, will give those with a basic state pension not quite enough to meet the £40 increase in council tax which, net of all rebates and benefits, a typical pensioner will, have to pay next year. And there will be no additional income to meet any other increases—for example, in community care charges. The 75p increase was calculated last autumn, when inflation was low. It was low 'because mortgage and interest rates were low. So those pensioners who also rely on savings income have been hit by a double whammy.

Whenever I talk to groups of pensioners, one topic is always mentioned; namely, the plight of pensioners who have just enough savings to take them over the capital limits. There are 600,000 pensioners who live below the income support line but who have capital above £8,000. For most, that is their life savings. We are not talking about people with the riches of Croesus. They are having to get by on an income well below the level of the minimum income guarantee, and this year their income will rise by a grand total of 1.1 per cent. The capital limits were set by the previous government, and they have been frozen for three years. This Government have promised to review those limits. But pensioners have been waiting for two years. I put a simple question to the Minster. How much longer are they going to have to wait?

I now turn to the minimum income guarantee—a misnomer if ever there was one! It is certainly minimal and it is income, but it is not a guarantee. One-third of those who are entitled to the income guarantee do not receive it. At present, the only way to ensure that pensioners receive their entitlement is to increase the basic state pension. Why will the Government not do so?

If the Government continue to resist increases to the basic state pension, we really must question their commitment to getting money to pensioners who are most in need. At present, 750,000 pensioners entitled to income support do not claim it. The Department of Social Security has conducted research on the number of pensioners who should be claiming but who are not. It has come up with the usual reasons: ignorance, stigma, the complexity of forms proving too much for people. I echo the words of the noble Baroness, Lady Howells. Those pensioners who come from minority communities are even more unlikely to be able to claim.

On 17th January in another place, Mr John Grogan drew attention to the problem of the under-claiming of income support. He cited the DSS research and also the solution suggested by the department: namely, making income support an automatic payment without the need to claim. At the time of an application for the basic state pension, pensioners would be asked what income they received from other pensions. If that did not add up to the minimum income guarantee, they would automatically receive a payment. On that occasion the Minister, Mr Rooker, expressed interest in that as a way of ensuring that those who are in greatest need receive the support to which they are entitled. I ask the Minister whether that is still under consideration. If it is, when is an answer likely to be forthcoming?

Perhaps I may refer briefly to the issue of fuel poverty. The Minister will no doubt talk about the winter fuel payment. But that payment will not form part of the basic state pension and will therefore not be uprated. Like the £10 Christmas bonus, it could remain at the same level for the next 25 years. Ministers have said repeatedly that it is equivalent to £2 a week on the basic state pension. Why can that not be done and then uprated automatically?

I conclude with one comment on energy efficiency. For many years the organisation Care and Repair had a major government contract to carry out work on pensioners' homes. It has now lost that contract which has been awarded to somebody else. That is a major service which is known to older people who suffer some of the worst housing problems. I believe that that will be a severe blow to the attempts of the Government to tackle both the causes and effects of fuel poverty. I do not believe that on its own the winter fuel payment will do so.

6.10 p.m.

Lord Davies of Coity

My Lords, I too express gratitude to the noble Earl, Lord Russell, for introducing this debate. I start with a confession. Until yesterday morning I thought that last week had not been a good one for me. The week started with my speaking and voting against the Government, having been driven by conscience. As the week progressed I was given to understand that the Government had resisted the recommendation of the Low Pay Commission to improve the level of the national minimum wage. As my noble friends can testify, I thought that again I would be in conflict with the Government that I support.

But that was last week. When I awoke yesterday and turned on the radio things were totally different. I was pleased to hear the announcement that the Government would increase the level of the national minimum wage in line with the recommendation of the Low Pay Commission. It was that announcement which prompted me to speak in this debate on poverty, social exclusion and the way in which low wages contribute to the state of deprivation in which so many people find themselves.

For 28 years I represented workers in the private service sector, the overwhelming majority of whom are women working in shops, restaurants, cafes, pubs, clubs and hotels. Over the years I was able to observe the impact of low wages on people's living standards. Low pay—often called "poverty wages"—is not new but very old. What is so damning is that it is still with us at the start of the new millennium. What is the history of low pay? We know that the situation was considered to be so bad at the beginning of the 20th century that Winston Churchill introduced the wages councils which covered the areas of industry renowned for low wages and sweated labour. In order to address that dismal situation the wages councils survived for most of that century until the 1980s when they were swept away, leaving millions of vulnerable workers to the mercy of the market or, more accurately, bad employers.

Is it not a funny old world when sometimes attitudes and party policies change dramatically? When in government the Conservatives abolished the only mechanism to provide legal minimum rates of pay as a means to reduce poverty among working people. However, when in opposition the Conservatives fought tooth and nail to prevent the Labour Government introducing a national minimum wage of just £3.60 per hour. With the return of Michael Portillo, the Opposition now say that the national minimum wage will not suffer the same fate as wages councils if the Conservatives are returned to government.

In the five years from 1978 to 1983 I had responsibility for negotiating with employers through the wages councils on behalf of workers employed in the hotel and catering industry. I remember when the weekly pay of many workers in London hotels was less than the charge for one night's accommodation, and they were not the most exclusive hotels either. That situation probably exists in some hotels today. The national minimum wage will not of itself solve the problem of poverty and social exclusion, but it is a starting point for impoverished and vulnerable workers on which we can build. That is the main way in which we can eventually remove the scourge of low pay that is suffered by the working poor.

Until the wages councils were abolished the demand for a national minimum wage received only limited support because the legal mechanism provided by those bodies covered the overwhelming majority of low paid workers in the private sector. But as soon as the wages councils were abolished the demand for a national minimum wage grew rapidly. Now that we have the national minimum wage we must ensure that its value is at least maintained. I believe that it should be increased in real terms at every opportunity because that is the only way to eliminate the scandal of the working poor of which we should all be ashamed.

I draw attention to just three references in the Rowntree report which I believe are worthy of comment. First, in the section headed "Poverty and low income" reference is made to, the introduction of the National Minimum Wage and the working families tax credit, both of which will now be influencing the incomes of many of the working poor". It must be acknowledged that these measures, introduced by a Labour government, will undoubtedly make a difference. The second reference reads: The number of people with less than 40 per cent of average income, who are the very poorest, is rising. Between 1994/95 and 1997/98 there was a rise of 1.1 million". That is a clear indication of how the problem was becoming worse. To an extent that has been stayed because of the measures introduced by a Labour government. I believe that the third reference is the most important: The duration of time spent on a very low income can have a considerable effect on the deprivation of a person or family". I conclude by referring to the word "deprivation". Deprivation faced by the working poor is not just a denial of the material things of life or the inability to build a satisfactory home, to own a car, to take a holiday, to save for an emergency or special occasion, to save for a pension or to provide for one's children the things that their school friends have. Deprivation can be all those things in a society as affluent as ours. But deprivation is more than that. There can be deprivation where, through poverty pay, there is an attack on dignity and self-respect which are damaged, sometimes beyond repair. Deprivation also means that hope and confidence ebb away to be replaced by a feeling of guilt. That leads to despair and depression which often arise from the severe burden of debt where the poor become the victims of loan sharks. Those consequences are faced by far too many in this land of plenty and should not be tolerated any longer. The sooner they are eradicated the sooner our society will be a better place for all of us.

6.9 p.m.

Lord Bradshaw

My Lords, in introducing this debate, my noble friend Lord Russell said that I would talk about rural transport. I do so from the background of an Oxfordshire county councillor who has had responsibility for this aspect of policy and also experience of the bus industry.

The Government have done some good things: they have introduced a rural bus service grant and the rural bus service challenge fund. They have restored—I believe that the correct term is "unfrozen"—the fuel duty rebate and promised half-fare passes for the elderly. Although that promise was made some time ago, it has yet to be delivered. Many people in rural areas do not expect a great deal. A study conducted by my colleagues at the University of Oxford states that those who travel most are more unhappy than those who travel less. Travelling a great deal and racing around makes life more stressful and more unhappy. However, people in rural communities want a sufficiency of travel opportunities and will not complain about having more of them.

In seeking to evaluate the usefulness of the rural bus service grant and other government measures, I have considered carefully a hierarchy of users of buses. The top priority is getting people to employment. In the survey of people in rural Oxfordshire, concern for their children's employment prospects is placed first in the list of worries of people in rural areas. Having a job is placed by rural people well above having a car. The job is at the centre of people's desires.

Second in order of preference was the ability to undertake training and education. That was referred to by the right reverend Prelate the Bishop of St Albans. Children who live in Oxfordshire can in general travel only to the school where the school bus goes. But those with two cars have a choice of schools; they are able to take their children to the better schools. However, in instituting these new rural bus services, we find that others are allowed a choice. Sixth form education in parts of my county has to be sought at colleges of further education and not in the sixth form. Many children travel 20 miles or more to receive sixth form education; and we do not pay their travel costs. We do not have the money, so the families have to pay them.

Health is the third item in my hierarchy. Getting to the doctor and the hospital are important. In 10 days' time we shall see the closure of two community hospitals in Oxfordshire, in Watlington and Burford. It is a long way from Watlington to the next hospital. People were promised that there would be more domiciliary care, and transport to the next hospital. At yesterday's public meeting, people were told that the domiciliary care arrangements have not been made; transport has not been arranged; but a planning application has been made to turn the hospital into luxury flats which are not for the people who live in that area. There is also the need to get to an optician or a dentist. NHS care is thin on the ground. Although I may not need it myself, the occasional visit to a hairdresser does a great deal to lift some people's spirits, but it may be a long way to travel.

The noble Baroness, Lady Byford, mentioned shopping. Although local shops are, valued, they are more expensive. If people have to travel a long way to get to them, the cost is even greater. The lowest income families in rural areas on average travel 25 miles a week to do their shopping against 12 miles in the more urban and suburban areas.

The last item on my list is entertainment. Young people are often cut off from any form of entertainment. I have outlined the features which I believe a regular bus service should provide. I believe that I am right to put getting people into employment at the top of the list.

I regularly use the services funded under the rural bus service grant. I see the people who use them. After a year, quite a lot of people are now travelling to new jobs which they have obtained because the bus services are in place. Work is changing in the rural area. We have two golf courses where there used to be farms. We have hotels or nursing homes in large houses. People use the buses when leaving their children in childcare nurseries—they seem to be a growth industry—on their dash into cities to work. And, of course, people use buses to catch the train. If the bus services are to be any good, they have to cover broad working hours from seven in the morning until seven at night. They must run on Saturdays because people have to be able to get to work; and in some cases on Sundays, otherwise they do not get a job. Unfortunately that is the way in which work is now organised.

There are social aspects. When I was travelling on one of these buses recently, an elderly couple said to me, "This bus is a godsend to us because since our son left home"—he had the car—"we can't get out". Noble Lords may consider that a weekly trip into Watlington is hardly a visit to Sin City, but it makes a huge difference to those people's lives. We should not undervalue getting out from the four walls of one's home and seeing a few different people.

How are the Government evaluating these bus services? There are (what I call) discontinuities. We may have got a dozen people into work and out of benefit; and that has saved a lot of money. The county council pays for the bus subsidy but somewhere else in government that money is saved. However, the two are not matched in any form of accounting.

I gave the Minister previous notice of matters to which I hope that I shall receive some answers. All shire counties want to know whether the rural bus service grant will be continued. At present it will run out in less than a year's time, and we are busy letting out tenders. We do not know the answer. It would be a tragedy if the good we have done will be lost.

The Parliamentary Under-Secretary of State, Department of Social Security (Baroness Hollis of Heigham)

My Lords, I have not had prior notice of these questions. However, it is not a debate on transport.

Lord Bradshaw

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

One of the greatest obstacles to maintaining services in rural areas is the need for small buses. The present regulations limit the size of what is called a taxi-bus— the Government are keen on such buses having given a lot of money to them through the challenge fund—to eight seats. The limit needs to be raised to 12 seats to accommodate the people in rural areas. In many places, large buses are inappropriate to the needs of people.

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

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

6.28 p.m.

Lord Lucas

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

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

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

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

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

The key issue we have to tackle is the tax rate on people whose benefits and entitlements, as the poorest members of society, are withdrawn as income comes in. This Government are starting on the issue; we never did. I shall be praising the Government far too much for the comfort of my own Front Bench. One of the notable things we did was to reduce the top tax rate to 40 per cent because we understood that that would increase the Treasury tax "take" and therefore the Treasury's ability to help the lower paid. This Government, to their credit, have taken that on board and have not sought to reverse it. We never had the courage—and certainly the Treasury never had the courage—to do that for the lower paid. There may be an argument that these people have been so long out of economic life, that, like the average Russian, they will not know what to do with the freedom. That should not stop us trying. We can do these things by way of test, trying this way and that way to find out what kind of support is needed. We ought to have in mind the aim that we should bring the tax rate down. Forty per cent may be a little ambitious. But certainly 50 per cent should be considered. One ought to be able to keep half the extra one earns. I am sure that if people could do that, then the incentive—when people have adjusted to put work above the benefits received—to go out there and earn a bit extra would be sufficient that the benefits to the Treasury at the end of the day would more than outweigh the cost. That is a very hard argument to win with the Treasury. Because it is being done by way of the benefit system, we can carry out trials in restricted areas. We do not have to change the whole tax system There could be trials in the benefits system. I hope that that is something the Government will come to consider if they are not already doing so.

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

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

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

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

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

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

6.40 p.m.

Lord Patel

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

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

The confidential inquiry into stillbirths and deaths in infancy, published this month, illustrates with tragic clarity the effects of poverty on health. It reports: the research interviewers encountered examples of poverty and deprivation of a degree which they could hardly believe was possible in late 20th-century Britain. This striking association of absolute poverty with the risk of infant death remains as clear as when first described by Templeman in 1892". To that can be added information from the World Health Organisation that England and Wales share with some other countries in eastern Europe the highest rate—7 per cent—of low birth weight babies under 2,500 grams in Europe.

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

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

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

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

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

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

6.45 p.m.

Baroness Wilkins

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

The Secretary of State for Education and Employment said in a speech last year, In the end it will be work that protects people from poverty". If that is the case, there is a significant group of disabled people—those who need personal assistance in order to work—who are being left out of current government policies.

Disabled people are twice as likely as non-disabled people to be unemployed and, once unemployed, find it harder to get back into work. As John Knight and Martine Brent quoted in their report on disabled people's experience of social exclusion, 41 per cent of those surveyed agreed that, It's virtually impossible to get a job if you're disabled". The Government's New Deal and other programmes aim to increase the number of disabled people in employment and to reduce the financial disincentives to work which have sometimes been created by the benefit system. However, recent policy initiatives have neglected to tackle a significant barrier to employment experienced by many disable people; a barrier which has been called "the personal assistance trap".

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

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

People who need a significant amount of personal assistance to go about their daily lives can look to two main sources of help: either cash payments in the form of direct payments from the local authority and the Independent Living Fund or direct services provided by local health and social services such as home care. All of them have financial disincentives to work and particularly to any form of advancement. ILF payments are means tested and so increasingly are direct payments. There are only five local authorities in the country which do not charge for home care services. Mine is one of them—Hammersmith and Fulham—and now it is proposing to charge £5 an hour to anyone with savings or income of £16,000.

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

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

The maximum payable has also been raised to around £30,000 a year. This can be made to sound a generous amount for disabled people; that is, until you recognise that it is purely wages for other people—other taxpayers. As Paul Matthews, a small businessman employing 24-hour assistance, put it: I employ nearly 30 people and yet every single one of them earns more money than I am allowed to keep! I believe that there should be no means testing or charging for personal support services. If an individual patient costs the health service £30,000 a year, we do not demand, if they are working, that they contribute to the costs of their healthcare. Nor do we give refunds to those without children or charge extra for education services to those with several. Surely it is for the good of a healthy, just society that we should all contribute to the cost of providing personal support services to those whose lives would not be viable or would be intolerable without them.

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

The inquiry of the Select Committee on Education and Employment, Opportunities for Disabled People, published on 24th November last year, concluded that, disabled people with high support needs who wish to work face considerable financial disincentives". It recommended that the Government establish a cross-departmental working party to examine a range of options within the tax and benefits system that might ease "the personal assistance trap". The Government have not yet taken up this recommendation. I urge them to do so.

6.52 p.m.

Baroness Sharp of Guildford

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

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

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

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

Some noble Lords will know that I have been thrown into the proceedings on the Learning and Skills Bill which is currently going through the House. Further education is not an area about which I knew a great deal, but I have entered a steep learning curve over the past few weeks. Studying for the Second Reading and Committee stage of the Bill has led me to take on a large amount of reading around the subject. Among the material was a study by the Social Exclusion Unit entitled, Bridging the Gap. I should like to read out to the House one or two paragraphs from the report to illustrate the problem of young people who drop out of the system. Among the main conclusions of the report, it states: There is a clear structure for those who do best at school: full-time study for a further two years, leading to entry into higher education or reasonably skilled and secure employment, with the prospect of good career development in the years ahead. The achievement of high status qualifications and entry into the places they lead to provide a clear goal, and what can be seen as a 'rite of passage' … The passage through the 16–18 years for those who have not achieved the success in school needed to enter these routes, or for whom personal or family problems, or poverty, get in the way of it—disproportionately people who come from backgrounds featuring a variety of kinds of social exclusion—is, by comparison, confused and lacking in clear goals and transition points. It offers less structure than the New Deal offers to older unemployed young people … The young people involved are disproportionately from poor backgrounds in deprived areas. They may suffer multiple disadvantage and few recover from the poor start that they have had. The report shows that where life goes wrong, or continues to go wrong, for young people in this age group, social exclusion in later life is disproportionately the result". So, what about the New Deal? Is the New Deal helping such young people? No, because it is not aimed at 16 to 18 year-olds. As we know, many young people, having drifted into petty crime, drugs and so forth, have come off the register. Once that has happened, they are no longer eligible for the New Deal. Unless at some point they are once again picked up by the education and training system—I shall return to that point shortly—almost by definition, they will not be helped by the New Deal.

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

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

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

The Government are addressing that issue. Last week they published a rather splendid document called Connexions. It has a lovely, jazzy cover and concerns a new service which is trying to pick up 16 to 18 year-olds. I believe that that is a vitally important job because we must not let them drift in this way. The service proposes that the Careers Service, as it now is, is reoriented towards social exclusion and that we develop a new generation or class of people who will be mentors on a highly labour-intensive, one-to-10 basis. As I say, I believe that that is admirable in intent.

I shall read a little about what the service says will happen. It gives an example of a boy called Ahmed whose parents have split up in his final year at school. As a consequence, he does not do as well in his GCSEs as expected. He fails to take up his modern apprenticeship and does not have a job. He drifts in the streets with the 16 to 17 year-olds, and, of course, the great danger is that he will take part in petty crime. The Connexions document states: In the future: The Connexions Service would identify that Ahmed had not taken up his Modern Apprenticeship placement and would make contact with him. He would be encouraged to work with a Personal Adviser who would support his needs. The Personal Adviser would be able to develop a package of support for Ahmed to enable him to take up a Modern Apprenticeship placement; this could include confidence building, exploring his feelings in relation to his family, retaking a couple of GCSEs and providing a mentor. They would also be able to organise accommodation for Ahmed should the situation with his mother not improve". Admirable. Splendid. However, I believe that it is most important to bear in mind that Demos said that young people will not simply be fed through a programme.

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

7.3 p.m.

Lord Beaumont of Whitley

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

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

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

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

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

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

This is not the time or the place to argue the undoubtedly complex issues involved. I shall quote briefly from a pamphlet by that very distinguished writer, James Robertson: Support for [Citizen's Income] continues to grow, especially in Britain and Western Europe. A recent study … showed that a full Citizen's Income could be introduced in Ireland over a period of three budgets. It would result in nobody receiving less than the poverty line of income; all unemployment and poverty traps being eliminated; and it always being worthwhile for an unemployed person to take up a job". There is an intellectual case for citizen's income. However, for the most part, I am content merely to point out that your Lordships have already solved the problem. This Chamber provides satisfying jobs for its Members which are worth while and which stretch us. It pays us for them through an attendance allowance—not, possibly, a citizen's income and certainly not what would have been considered to be a nobleman's income in another age, when a Peer, having to sack his pastry cook, asked, "Can't a fella have his biscuit?" However, it provides a source of income which allows many of us to do this job and make ourselves available for it. Ceteris paribus, this is not at all a bad pattern for what employment should and could eventually be in the whole of society. What is good enough for us is possibly good enough for the socially excluded of this nation.

7.9 p.m.

Lord Clement-Jones

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

To their credit, the present Government have recognised that action needs to be taken across the board. The former Secretary of State for Health, Frank Dobson, said on 17th March 1999: Promoting better health is not just a matter for the NHS or for social services. This is a job for the whole government, joined up government. All the Cabinet are working together to tackle the things that make people ill". He also recognised that: Poverty is a principal source of ill health. Poor people are ill more often and die sooner". As Acheson suggested, there should above all be concentration on the first five years of life. As the noble Lord, Lord Patel, graphically illustrated, correlations between low birth weight babies and future poverty and under-achievement are absolutely clear. We on these Benches welcome the Prime Minister's promise to eliminate child poverty by 2020. That is reflected in the first annual report on tackling poverty and social exclusion, but we are not convinced that the targets are very challenging.

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

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

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

During the course of the debate, a number of important aspects have been raised. My noble friend Lord Russell raised the issue of research, as did the noble Baroness, Lady Crawley. Much better research is needed. We need to mend the holes in the safety net. We need minimum standards for access to services, as my noble friend Lady Miller advocated. My noble friend Lady Barker referred to the whole issue of age discrimination.

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

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

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

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

7.21 p.m.

Lord Astor of Hever

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

The debate has been informative and constructive and there is agreement in all corner; of the House that we must work together to eradicate poverty and social exclusion. As my noble friend Lord Lucas said, they cause immense human suffering. Although I shall be critical tonight of the Government's policies and lack of direction, I have no doubt that the Minister is as personally committed as the rest of us to do everything she can to alleviate those concerns. But I agree with the noble Lord, Lord Beaumont, that the Labour Party appears to have ceased to be the champion of the poor.

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

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

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

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

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

The Rowntree report shows that twice as many people are receiving benefits in the north-east as in the south-east. Indeed, one of the authors contradicted the Cabinet Office report, telling the Daily Mirror that, there is no doubt there is a strong North-South divide". The Minister will probably say that the Rowntree report fails to take account of new government policies. But the report says clearly and starkly that the problems continue unabated.

The Minister will also probably say, "It is all the fault of the Tories as this report covers the period before our reforms were introduced". But one of the authors told the Northern Echo: The Government didn't start introducing its main measures until at least 2 years after it come to power and, if it had got going earlier, we might be beginning to see the benefits now". One of New Labour's main pledges was to tackle social exclusion. The figures in that report are a damning indictment of two-and-a-half years of government by sound-bite, with few effective measures being taken. It reveals an enormous credibility gap between the Government's rhetoric on social policy and the reality of life in some areas of Britain. One only has to mention the former junior Defence Minister, the Member for Liverpool Walton, for the Government's spin doctors to go into overdrive.

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

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

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

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

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

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

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

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

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

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

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

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

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

7.34 p.m.

Baroness Hollis of Heigham

My Lords, I join other noble Lords in thanking the noble Earl, Lord Russell, for initiating the debate. I should also like to thank—at least I think so—the young researchers of the Rowntree report for doing their best to hold us up to the mark, however uncomfortable that may be on occasion.

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

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

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

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

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

However, as we can see by looking at the experience of the past 20 years, poverty cannot be eradicated by just raising benefits. That may be one of the profound points of difference between myself and the noble Earl, Lord Russell. I believe he stated that it is not the business of the benefit system to get people into jobs but to keep them fit and well until they get jobs. I hope I have quoted him correctly; I certainly do not mean to misquote him. That passive approach, which I deplore, is precisely why over the past 20 years we have seen expenditure on benefits double and so at the same time have poverty and social exclusion. That response has not worked and is not one we shall seek to perpetuate.

Earl Russell

My Lords, I am grateful to the Minister for giving way. She has quoted me accurately. If she is able to explain why this increase in poverty and social exclusion was caused, in her opinion, by the passivity of the benefits system, I would understand something which at present I do not.

Baroness Hollis of Heigham

My Lords, I am not sure that I shall be able to satisfy the noble Earl by responding tonight. However, perhaps I may put it another way. I did some "ready reckoner" SUMS. We could increase all benefits by £10 per week. That would be useful and might pay for an extra couple of pints of milk and a yoghurt each day, or two cinema tickets at the end of the week. However, people would still be poor. Only a small proportion would go over and above half-average incomes. Passively to increase benefits and do little else would cost perhaps an estimated £20 billion— indeed, as much as we spend on schools and as much as we spend on hospitals—and people would still be poor. That is my response to the noble Earl. That pattern has not, and will not, work.

We must address not just what I would call the "presenting" problems of poverty—for example, low income, about which we do not disagree—but also the reasons for it. We must do so by improving employment prospects, by reforming public services and by helping people to save for their retirement. That cannot be done quickly. In order to improve employment opportunities for those of working age we must not only help this generation of working age people but also ensure that all children leave school with the skills that they need to survive in the modern labour market. To improve pensioners' incomes in the future we need to ensure that all working age people save for their retirement now.

Our key public services are suffering from decades of neglect and cannot be turned around overnight. It is a long-term strategy. Low incomes, poor education, poor health and criminality, all of which have been mentioned tonight, affect the same people and the same places. I have in mind the poorest communities that have been drifting further and further away from the rest of Britain.

The right reverend Prelate was absolutely right to say that geography matters. For example, the poorest 284 wards in England and Wales, with a population of 2.5 million, have nearly half—45 per cent—of the working population inactive and unemployed, compared to half that figure for England and Wales as a whole. They also experience double the rate of deprivation, and yet—this is where the problem begins to present itself to government—half of our fellow citizens who are poor do not live in poor areas. Therefore, we need targeted help and we need to work in partnership with local authorities; indeed, the sort of work and help that my noble friend Lady Pitkeathley is doing in chairing the New Opportunities Board. We need targeted help but we also need national help.

In quoting the article from the Daily Telegraph on regional strategy, the noble Lord, Lord Astor, said that that targeted help was in chaos. That is absurd. With a dozen or so pilot zones, budgets, agencies and initiatives, the Government have recognised that the time now is right to strengthen the co-ordinating structures between those initiatives. I hope that I am not misquoting him, but I believe the chief executive of Sandwell council said that he had "one of everything". However, most of the time we receive complaints from city councils that they do not have one of everything and, indeed, that they have "not enough" of most things.

The need to balance the targeting on some of our rural and poorest communities, especially those belonging to the old mining, shipyard and steel communities, with national strategies informs government action. Key groups—such as lone teenage mothers—suffer from multiple problems of low incomes, lack of work, few skills, poor health and poor prospects—so the Social Exclusion Unit is both looking at "communities of exclusion", if I may use that phrase, as well as at the geographies of exclusion in trying to bring them back into the mainstream of our society.

Poverty and social exclusion are also about the lack of prospects, opportunities, self-worth and self-esteem. I remember a social worker friend of mine telling me some 30 years ago that the biggest problem for poor people is the low self-esteem that they have. Life happens to them; they do not control it. We need only compare a student studying for a university degree with an unskilled lone parent who has been out of work for many years: they have identical incomes but totally unidentical prospects. As I said, being poor is when your life is something that happens to you. You do not own your opportunities. You do not own your future.

Who are the poor? They are not primarily pensioners—I will return to the remarks of the noble Baroness, Lady Barker, later—because well over 70 per cent of pensioners now have over half the average income. The number of pensioners in the bottom fifth between 1979 and 1996–97 has halved from 47 per cent to 24 per cent, which is actually lower than the proportion applying to the population as a whole. So the poor are not pensioners, although there are some poor pensioners.

The poor are not primarily adults of working age because 80 per cent of those are on incomes of above half average earnings. However, some adults of working age, especially women and lone parents, are very poor. They are not primarily disabled people. Again, nearly 80 per cent of disabled people have earnings or incomes of above half the average income. If they are not pensioners, adults of working age or disabled people, who are the poor? As my noble friend Lady Gale said, the poor in this country are children. Indeed, one-third of all children are poor. The face of poverty in this country is the face of a child.

By 1996–97, one in three children lived in households with below average incomes—three times the rate of 1979. By the mid-1990s the UK had one of the highest proportions of children in relative poverty. I know that we are also talking about inequality, but, nonetheless, that represents one of the highest proportions in the European Union. By the end of that period, families with children were more likely to be living in low-income households than any other group. What an inheritance for those children, as well as for an incoming government!

As the Prime Minister said: Our historic aim will be for ours to be the first generation to end child poverty … it is a 20-year mission". The Chancellor of the Exchequer went even further, when he said: It is not enough to tackle absolute poverty and simply prevent destitution. We should do more. It is not fair that children should be disadvantaged from the start of their lives because of who their parents are, what school they go to [and] where they live". Therefore, we have introduced a wide range of measures to improve the incomes of low-income families. I hope that that will engage with that "travesty"—if I may call it that—of our record so far, as presented by the noble Lord from the Opposition Benches. I think that he was teasing us. But just in case he was not, I shall try to address his points more seriously.

The combined impact of the financial measures introduced in the Budgets of 1998 and 1999 will raise the incomes of the poorest fifth of families with children by £1,000 a year. On average, households gained from the three Labour Budgets by about 5 per cent, but those in the bottom fifth gained by nearly double that figure. Those families with children in the bottom fifth gained by three times or 15 per cent. That is a significant achievement in just a couple of years by any judgment: £4 billion extra pounds has gone to families with children and about two-fifths of that sum has gone to those in the greatest poverty.

I could give noble Lords a dozen examples, but I shall give just one. For children under the age of 11 in workless families the value of the income support allowance has risen in two years from £16.90 to £24.90; in other words, it has risen by 50 per cent in that time. I hope that no one will accuse us of neglecting properly to address the issue of child poverty within our resources.

Our strategy is not just to improve the incomes of low-income families with children but also to tackle the causes of that low income. We know that those children who are poor suffer from a double disadvantage. First, they live in fractured families; and, secondly, they live in workless families. The noble Lords, Lord Lucas and Lord Northbourne, rightly drew our attention to the problems of children in fractured families. They reminded us that children need the support of both parents, even if they do not remain married. We know from all the research that we have on the outcomes for children of lone parents that the daughter of a lone parent is likely to flourish if her mother is in work and, similarly, that the son of a lone parent is likely to flourish if he is in contact with his natural father. Those are our best predictors of breaking the cycle of deprivation which those children would otherwise inherit.

We also seek to overcome the problems of poverty among children and to overcome the problems of persistent poverty. For example, in 1998 over 800,000 children lived in families that had spent at least five years on means-tested benefits. Moreover, 2.2 million children—almost a fifth—live in families without work. Again, we have the worst record in this respect of any country in the EU. Children are spending large parts of their childhood living in households where no adult goes to work and where, all too often, there is only one adult in the family. As I said, they suffer a double deprivation which if we do not intervene will scar them for life.

All the research shows—and there has been no dissent on this tonight—that work is the best and most secure route out of poverty for families. Finding work helps to lift people out of poverty, while long periods out of work decrease the chances that parents will return to work. Therefore, when we seek to help lone parents and disabled people back into work, we know that we need to tackle the issues of childcare, the fear of the risk of losing benefit, poor health, low human capital, low motivation, poor skins, poor financial incentives and lack of knowledge about available jobs. We are trying to work across the whole of that waterfront.

Our New Deal for lone parents seeks to help lone mothers, particularly lone mothers who wish to return to work. As the noble Lord, Lord Lucas, has suggested—and as the right reverend Prelate the Bishop of Hereford has asked—we seek to adapt the benefit system in order to sustain that movement into work. Lone parents are understandably reluctant to take jobs that do not pay. The new working families' tax credit, with its generous childcare tax allowance, will improve the incentives to work. As a result, the financial benefit for a family entering work, taking a typical entry wage job, has increased from a net gain of £30 a week to nearer £42 a week. Together with reforms to income tax and to NICs, the WFTC could increase employment by 47,000 over one year and by as much as nearly 300,000 over the long term.

Apart from the problem of low income, we need also to tackle the wider problems of housing and health because they exacerbate each other, as many of your Lordships have said tonight. Just to take one example, we know that nearly half of all lone parents smoke. That is twice the national average for young people. They are poor because they smoke; they smoke because they are poor. A quarter of lone parents have limiting illnesses mainly associated with smoking, and so do their children. Some 75 per cent of the illnesses of the children of lone parents are respiratory related and correlated with their parents' smoking. As Alan Marsh has said, and as the noble Lords, Lord Patel and Lord Rea, have said tonight, we need not just a welfare-to-work programme but a welfare-to-health programme, and, as the noble Lord, Lord Ezra, said—I agree with him—a welfare-to-heat programme. We are engaged in providing that.

We have made the tackling of child poverty a priority, because unless we tackle that we shall build up problems for the future because we know that poverty, like wealth, is largely inherited, largely unmerited and unearned. We know that poverty is a cause of poverty. For example, people raised in a family experiencing unemployment are, when they grow up, about twice as likely to have prolonged periods of unemployment themselves. Although children of poor families may move up one or two deciles of income as compared with their parents, for most people the movement is short range, short term, and down the snake they come.

Poverty should not be a birthright. Our strategy is to break that cycle and to halt the transmission of low expectations, low aspirations and low outcomes from parent to child. That means we need to invest our children with the best possible start in life as the dowry our society owes them. As the noble Lord, Lord Patel, absolutely rightly said, the periods before and immediately after birth are crucial to a child's development. At 22 months children whose parents are in social classes 1 and 2 are already 14 percentage points further up the educational development scale than children whose parents are in social classes 4 or 5. When they start school, they begin to fall even further behind. As the noble Baroness, Lady Sharp. said, by the time they are in their teens they are already beginning, almost literally, to vote with their feet. That is why we have introduced a new short start programme, modelled to some extent on the American headstart programme, to promote the well-being of children. We are spending £500 million on building 250 local programmes, as well as investing a further £19 billion in education across the board.

As the noble Baroness, Lady Sharp, movingly said, there are other groups of vulnerable young people who find it difficult to make the transition to adult life. I refer to teenage mothers, children living in the care of local authorities and 16 to 18 year-olds dropping out of education and training. The long-term life chances of these children are often significantly worse than those of other children. We have cross-government programmes which help to discourage teenage conceptions on the ground that children should not have children, as the Prime Minister said. As your Lordships will know, a Bill currently going through this House steered by my noble friend Lord Hunt seeks to encourage local authorities to continue the care of children who are leaving care. I believe that that Bill has been warmly welcomed by your Lordships. Therefore we have a comprehensive programme of action to tackle child poverty, to tackle the causes of child poverty and to help the most vulnerable children as they make the transition to adult life.

We have also to address the problems of people of working age, because they enter poverty for two reasons: half of them enter poverty because they have no job or they lose it and the rest through family breakdown or the birth of an extra child. People of working age are poor if they are not in work. The proportion of working age households with no one in work has doubled since 1979. There is only one escape route for people of working age and that is into earnings. Two-thirds of those who move out of low incomes do so when someone in their family gets a job or increases their earnings. If he gets a job and she gets a part-time job, they then become work rich rather than work poor. To achieve that aim we have to establish the right macro-economic framework, which we are doing. Unemployment is now at its lowest level for 20 years. Over 700,000 more people are now in work. The number of unemployed young people has fallen by more than half. The number of long-term unemployed has also halved. Our record so far is good, though we still have more to do.

Yet there are still substantial numbers of people who are out of work, inactive and depend on social security to survive. The number of economically inactive men outnumbers the number of registered unemployed by more than two to one. Around one in seven of the working age population are out of work claiming income replacement benefits and nearly 3 million of those have been out of work for more than five years. Many of these people want to work. They are the hidden jobless. Around 1 million disabled people without a job want to work, especially if we can help them tackle the barriers that block their way. That applies also to lone parents.

Work is available. There are more than a million vacancies across Britain, spread pretty evenly across the regions. Our New Deals are springing people back into work. But we also need to make work pay. My noble friend Lord Davies of Coity talked powerfully about the effects of both the working families' tax credit and, above all, the national minimum wage, which has helped more than 1.5 million people—two-thirds of them women—to spring the poverty trap.

My noble friend Lady Howells thoughtfully described the situation of people in ethnic minorities. She is right to say that seven in 10 households with a Pakistani or Bangladeshi head of family were in the poorest fifth of incomes either because they had high unemployment among the men or low employment among the women or large families or low pay. But the good news is that with the New Deal some 57 per cent of ethnic minority young people and 59 per cent of whites—that is a virtually identical figure—have left the New Deal to enter work. The future is more promising. We know, however, that work is not appropriate for all. That is why from 2001 we shall provide the 175,000 poorest disabled people who cannot work with a new income guarantee—for single adults, children and couples—thus establishing their incomes.

I wish to say a few words about pensioners. We want to ensure that all pensioners have a life to look forward to. The noble Baroness, Lady Barker, said that pensioners were being left behind. That is simply not true. Over the past 20 years or so pensioners' incomes have on average increased much faster than the incomes of the rest of us—by 60 per cent in real terms. However, there are still some who struggle to make do, even though income support has kept pace with the rise in real earnings rather than just prices. That is why our strategy is twofold. We seek to help those who are poorest now, mainly elderly widows who need help with taking up the guaranteed minimum income, and we seek to reform our pensions strategy by adding to the basic state pension access either to a state second pension or a stakeholder pension where a good occupational pension is not in place. I have explained what we are doing for pensioners, for people of working age and for children.

We welcome the Rowntree report Monitoring poverty and social exclusion. However, I add a note of caution. The report showed the position mainly in 1997–98 when the key statistics for WFTC and the national minimum wage had not yet come through. Many noble Lords have spoken about research tonight, and we shall be monitoring this in our annual reports, Opportunity for all, in which we shall be measuring our progress in eradicating poverty against our agreed poverty indicators.

We accept the reality of poverty; we accept its many facets; we accept the damage it causes. Beveridge understood those connections more than 50 years ago—so do we. That is why, together with our New Deals, the minimum wage, WFTC, our work for children and our work for pensioners, I believe that we have made more progress, although we need to make even more, in the past two to three years than we have seen over the past 15 years. We have a lot to do, but we are getting there.

8 p.m.

Earl Russell

My Lords, this has been a debate in which it has been a privilege to take part. The House collectively has been absolutely at its best. It is not often that one is allowed to take part in a debate where there are 26 speakers—all of them relevant, all of them good, all of them drawing on different and diverse bodies of experience—and where every speaker on the list beyond number 20 has a major new point to contribute. That really is a pleasure.

I thank the Minister very warmly for replying to the debate in the spirit in which it was conducted. It was a debate in which there were some fairly deep divisions of principle and some fairly deep divisions about likely solutions. But there was also a large amount of common ground.

I agree with Mrs Malaprop that comparisons are odorous. I am not making a comparison but emphasising the need for diversity in paying special tribute to the contributions of the right reverend Prelates. The Church has been for centuries practically the only institution represented in every parish of the country. Its knowledge and its concern for community life owe a great deal to that fact. Were the Church's parochial structure to fall victim to mammon, I believe that not only Christians would be the losers.

It is not a figure of speech to say that I should like to thank all noble Lords who have spoken—I should like to thank them very warmly indeed. Having done so, I beg leave to withdraw my Motion.

Motion for Papers, by leave, withdrawn.