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Baroness Byford: My Lords, I know that it is something that is done but, to be honest, when it is a debate on agriculture, it is not something that I do. Some people have a greater interest in one topic than they do in another. There are two of us on these Benches this afternoon, and there are three Liberal Democrats in the Chamber. I believe that there was a great empty Bench behind the Minister on the previous agricultural debate.

Lord Haskel: My Lords, I congratulate the noble Baroness on participating in this debate.

We on the left—the old left and the new left—do not seek uniform equality of outcome. Our aim is rather to create social conditions that give very different individuals an equal chance for a full and flourishing life. So the economic and moral case for tackling poverty stems from our belief in equality. A belief in equal worth—equal worth not only between the rich and the poor but also between men and women. This belief in equality between men and women is one reason why I welcome the Government's support for families. The new deal for young people, for the long-term unemployed, for lone parents, and for the over-50s is rooted in this belief. So is the national minimum wage.

Since 1997, the Government have increased child benefit, introduced the children's tax credit, and the working families' tax credit and raised children's allowances in income support. Those initiatives are all rooted in support for equality. That is only right. I agree with the noble Baroness, Lady Thomas. If there is no support for the family, it is women who become less equal than men. The benefits of all this are not difficult to find. They relate to breaking the cycle of disadvantage about which the noble Baroness, Lady Sharp, and the noble Lord, Lord Moser, spoke.

In traditional societies every person born has an allotted place in society. All this does is pass poverty and inequalities from one generation to the next. There is much research that charts this course. My noble friend Lord Layard told us that working-class children do worse at school than do middle-class children. The death rate from coronary heart disease is three times higher among unskilled men than among professional men. Other speakers have explained that the sons and daughters of high earners are far more likely to become high earners themselves than the children of parents on low incomes. This is what I mean by the "cycle of disadvantage".

All this was forcefully brought home to me by some research carried out by academics John Bynner and Heather Joshey. Their extensive work was based on

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two longitudinal surveys mentioned by the noble Lord, Lord Moser: 16,000 people born in single weeks in 1958 and in 1970 were tracked throughout their lives. The research analysed the obstacles and opportunities affecting those people. One of the most striking revelations to emerge from that work confirms the extent to which child poverty haunts people through their lives. The children of parents on low incomes performed worse at school. Children whose parents had the same occupational level and the same educational background still did significantly worse on average if they had financial problems than if they did not. That is why the government policy to raise the income of families with children is so important—not only does it tackle inequality and poverty, it also breaks the cycle of disadvantage.

The research also demonstrated very clearly that, as well as income, there is another very important element in tackling poverty; namely, education. That point has been made by nearly all noble Lords who have spoken today. The research showed that educational achievement is now the single most important factor in determining later success. Those who do well at school early tend to finish with good qualifications, and those who gain good qualifications do much better in the labour market later on. According to the research, men with no qualifications were 12 times more likely to be out of work by the age of 26 than those with qualifications. Indeed, the research showed that in some areas the detrimental effect of inequality of opportunity is growing stronger and more debilitating.

That point is illustrated, in particular, in the findings on teenage pregnancy. The noble Earl, Lord Listowel, spoke of that. The research showed that the relative risk of a girl from an unskilled family compared with a professional family becoming a teenage mother almost doubled between the 1958 and the 1970 cohorts. Daughters born in 1970 whose fathers were unskilled were an astonishing nine times more likely to become teenage mothers than girls whose fathers were more highly qualified.

Much of this is not new. Previous governments and social reformers have all been aware of it. Indeed, people can argue that, in fact, it does not matter because we are all better off today as income and living standards rise across the board. I do not agree. There is still a large gap. My noble friend Lord Lea and the noble Baroness, Lady Byford, spoke of that. I agree with the noble Baroness, Lady Sharp: that gap matters.

Raising the income of families through employment, education, childcare and the tax and benefit system helps to close the gap. I agree with my noble friend Lord Paul that education increases the opportunities for children growing up on a low income and, together with programmes such as Sure Start, gives them an important advantage. It also helps to close the gap. Closing the gap by tackling poverty and supporting the family has an enormous moral and economic pay-off. That pay-off is breaking the cycle of disadvantage. If we do nothing about it, it will span the generations.

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4.52 p.m.

Earl Russell: My Lords, I thank the noble Lord, Lord Layard, for introducing this extremely important debate. I say at the outset that I agree entirely with everything that he said about the proportion of support which must go to children. In the reference in his Motion to supporting families, I congratulate him on avoiding the definite article, to which I am allergic.

The definition of a family is, of course, a matter of discussion. I want to recommend to the noble Lord and to the Government a phrase from St Augustine:

    "An assemblage of reasonable beings united by a common agreement as to the object of their love".

That was, in fact, St Augustine's definition of the state, but it seems to me that it serves equally well as a definition of a family.

I want also to thank the noble Lord for his kindness in making available to me and for discussing with me off-prints of a number of his articles. I do not believe that it will surprise him greatly that I do not entirely agree with them. That happens among academics and I believe that we are quite used to it. But I am well aware—I have read enough criticism of my own work to know it very well—that, in criticising work a little outside one's field, one may misrepresent it. If I do so, even in a timed debate, I shall willingly give way to the noble Lord.

My noble friend Lady Sharp of Guildford pointed out that the Government have been applying these measures in an exceptionally benign economic climate. It is not easy to disentangle the effect of the Government's policies from the effect of the economic climate. The question must be asked: how high could unemployment go without exceeding the budget which the Government have set for the New Deal?

I must admit that in relation to the Government's measures I am very much of a sceptic. I believe that they rest largely on a mistaken diagnosis. I consider that they are misapplied in practice and that they consistently miss major problems to which they should be paying attention.

The theoretical part is, first and foremost, the work of the noble Lord, Lord Layard. He sees a clear link between the length of time for which unemployment benefit is payable and the length of time for which people remain unemployed. These are his exact words:

    "The longer unemployment benefits are available the longer unemployment lasts".

He believes that it must follow that the basic problem is making people want to work. That is not merely an economic problem.

Once, when I had a sabbatical term just after I had finished a book instead of just before, my wife and I switched jobs full-time and I became the sole full-time carer for our one year-old. I do not know what it did for his education; I know that it did wonders for mine. The desire for employment is as much social as economic, and economic factors alone are not enough to bring about that desire.

The noble Lord suggests that if we have a large pool of unemployed people who remain unemployed because they have generous benefit levels, that may

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explain why unemployment remains at a high level. But there are other explanations: there are other rigidities in the labour market; the jobs are in one place and the people are in another; and there is the question of transport.

Incidentally, the noble Baroness, Lady Byford, made an important series of points. On the previous occasion that we debated poverty, the right reverend Prelate the Bishop of St Albans drew attention to a single parent who was spending 10 per cent of her weekly benefit on fares in going to collect the benefit. That is a 10 per cent cut in benefit. Such matters are serious, as are age discrimination, dismissal because of pregnancy and the areas which are like the rock pools where the tide has not come back after the recession. The post office closes; the school closes; the bank closes; and the shop closes. In the Question relating to the Post Office, I would have asked, if I had had the opportunity, whether the Government have made an estimate of the effects of post office closures on the increase in poverty and unemployment. If they have, are they prepared to share that estimate with the House?

The noble Lord also suggests that if, through the welfare-to-work programme, we help the most unemployable people back into work, that will generate additional jobs. I was intending to read the passage in which he argued that point—it appears on page 26 of his OECD essay—but I do not believe that time will allow that. Therefore, I say only that, in my opinion, it rests on a considerable number of hypotheses. If the noble Lord has evidence to justify any of those, I look forward to hearing it when he replies.

The execution of the policy also leaves something to be desired. Of course, the measure of success rests unduly on the claimant count. If people are taken out of the claimant count during the time that they spend in the welfare-to-work programme, that automatically reduces the number of people who are long-term unemployed without there being any change. If one looks at the labour force survey, the reduction, although it genuinely exists, is a great deal smaller, and that should be borne in mind.

If one looks at the reaction of those who participate in these schemes, it suggests that they are not entirely satisfied with the quality. Forty per cent of those who left the 18-to-24 scheme did so for what was not sustained employment. "Sustained employment" is defined as lasting for 13 weeks—that is not a particularly great achievement. In December 2000, 32 per cent of those who left the New Deal for under-25s left for no known destination. If a note is now on its way to the Minister to say that that is an old figure, I say, we know that; we have tried to update it. The figures are no longer collected, and that does not encourage me to believe that they have improved.

With regard to the full-time employment and training option, the completion rates leave a lot to be desired. They are 6.6 per cent of starters and 10.9 per cent of leavers. The figures in relation to Oldham illustrate the point about areas where the tide has not returned. In Oldham the completion figures are 1.4 per cent of starters and 2.5 per cent of leavers. I grant that

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that is better than nothing, but it is not particularly good. The execution leaves much to be desired. As my honourable friend Mr Webb pointed out on the day that the Government's poverty strategy was announced, it rests heavily on creaming off from the top of the poor and not nearly enough attention is paid to those in deep poverty.

The noble Lord, Lord Moser, dealt with the concept of absolute poverty. I grant that it is rare in this country, but the last crisis survey of the street homeless in London showed that there were 347 deaths on the streets in one year. I would not be surprised if none of those people was in absolute poverty. It is in fact very easy to disappear from statistics. Today Ofsted reports that 10,000 should-be schoolchildren have simply disappeared from the figures.

I agree with the noble Lord, Lord Layard, when he said that being disconnected for a long time from the world of work makes it much harder for one to return to work. But long-term sickness and crime also make it harder to return to work. In the context of crime, the Home Secretary would do well if he reversed the previous government's changes to housing benefits for prisoners.

It appears to me that a Government who impose sanctions without having the least idea of what their effect is are in no position to make a comparison between the extent to which long-term unemployment takes people out of the world of work and the extent to which benefit sanctions take people out of the world of work. I do not know what might be the answer to that comparison—nor do I have the figures—but not to have attempted it is in my opinion not only a political crime but also an academic one.

5.2 p.m.

Lord Higgins: My Lords, I join all noble Lords who have congratulated the noble Lord, Lord Layard, on introducing what has been a fine debate. It has differed from the debate held in December, which was primarily concerned with child poverty, in several respects. On that occasion a number of noble Lords referred to the situation in a global context. In today's debate that has been mentioned only briefly, although the noble Lords, Lord Moser, Lord Davies of Coity and Lord Paul, referred to the problem of international poverty. It is important that we put the situation in our own country into that context. By and large today we have been talking about relative poverty rather than absolute poverty—apart from the point made by the noble Earl, Lord Russell.

I listened with great interest to the noble Lord, Lord Layard, when he introduced the debate. He made some important points about the share of national income that goes to children. He and my noble friend Lady Byford referred to housing benefit. I was puzzled by what the noble Lord said in his introductory remarks. He appeared to argue for integrating housing benefit with other benefits. Those two kinds of benefits are distributed in different ways: housing benefit is distributed through local authorities and other benefits are distributed from the centre. Perhaps in his

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closing remarks he will seek to enlighten me as to how he believes that that can be brought about. It is an important point.

Clearly, we have established that we should distinguish between the absolute level of poverty and the relative level. In that context the noble Lord, Lord Moser, in particular, but also other noble Lords, referred to the Government's aim of abolishing child poverty in 20 years and halving it in 10. The noble Lord, Lord Moser, pointed out that in that regard time is running out. We are already into the 10-year period. The problem is that it is a moving target. As the standard of living in the country rises, the target in relation to relative poverty becomes more difficult to achieve. Perhaps the Minister will elaborate on that important issue.

As has been rightly pointed out, in talking of reducing relative poverty to some extent we are talking about equality rather than poverty. In that respect there was some division on the Benches opposite—and perhaps around the House in general—between new Labour and old Labour. Some noble Baronesses and others placed more emphasis on equality rather than on the removal of poverty. There is much confusion about the Government's, indeed the Prime Minister's position. The Prime Minister appears to be more concerned with raising the absolute level of income at the bottom end of the scale regardless of whether it is raised at the top whereas the Secretary of State for Work and Pensions appears to be concentrating more on the issue of equality. Perhaps the Minister will elaborate.

I want to pay particular attention to the issue of whether 1.2 million children were taken out of poverty during the previous Parliament. As I pointed out in the debate in December, that figure has a strange provenance. Two quite separate analyses produced that figure: one was a PolyMod study and the other was the Government's figure. Both produced a figure of 1.2 million, albeit on totally different bases which is perhaps a little curious.

The Government's last manifesto stated that over one million children have been taken out of poverty. A number of noble Lords referred to that as an achievement, in particular the noble Lord, Lord Paul. I have always thought that myth has a great role to play in politics. If one can establish a good political myth, it will indeed be a powerful weapon. That figure is something of a myth. Not even the Chancellor of the Exchequer believes that that is the figure because in December what appeared to be a clear-cut undertaking of taking one million children out of poverty turned out not to be quite what everyone had supposed. One would have thought that if one took the figure of the number of children in poverty at the beginning of the Government's time in office and reduced it by one million you would end up with a fairly clear-cut figure. In fact, you do not end up with that figure. It turns out that the latest Treasury report states that there are,

    "1.2 million children fewer in poverty than there would otherwise have been".

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So one cannot simply subtract the figure of one million and end up with the figure that one would suppose. That is an important point. I ask the Minister what the Government's target is now in relation to that.

A number of noble Lords referred to the various points raised by the Government in introducing one benefit or another, but as those who debated the State Pension Credit Bill last week, and no doubt those who will debate it again next week, have stressed, that has meant an enormous increase in means testing. With the Chancellor of the Exchequer's passion for credits of every conceivable kind, enormously increased complexity is being introduced in the various measures. In other debates on work and pensions I have taken the view that possibly only the noble Baroness, Lady Hollis, who regrettably is not in her place today, understands such matters. It may be that the Minister who is to wind up does too. If so, I suspect that they are the only people in the country who do.

That is not a trivial point. There are real problems regarding the complexity of the introduced measures and of take-up. The Government keep announcing more and more increases in the amount they are going to spend on a particular benefit. It is then found that actually far less is spent because of the lack of take-up. That is a very real problem. We need to take it into account in appraising the extent to which the Government's policies are actually working.

There are a number of other aspects which have not been mentioned in this debate. There is the problem of the Social Fund. The Select Committee on Social Security in another place suggested that, because of the way benefits are claimed that would actually work very much against the Government's aim of reducing poverty and social exclusion.

As to the number of workless households, the trend is not in the favourable direction that one would have hoped. I am relying there on the Office for National Statistics. After the "fiasco"—I think I might reasonably so describe it—regarding its views on how much money there is in pension funds at the present time, perhaps one must increasingly take its figures with a degree of scepticism.

Overall, this has been an extremely helpful debate. One must take into account the Government's proposals when they first came into office in 1997. That is the date selected by the noble Lord for the purposes of this debate. The Prime Minister clearly stated that, by the end of a five-year term of a Labour government,

    "I vow that we will have reduced the proportion of national income we spend on the welfare bill of social failure",

and so on. In reality the way that the Government have proceeded has led to a significant increase. The extent of social security, as it used to be called—work and pensions, I regret to say, it is now called—has actually increased. It has gone up from something like £100 billion to something like £110 billion. That is not exactly the kind of reduction promised in 1997. Of course one welcomes, as I have, the State Pension

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Credit Bill. That will help various pensioners and others. The noble Baroness, Lady Castle, and others have taken the view that one would do better to go for an increase in the basic state pension. I do not take that view myself, although many noble Lords on the Benches opposite may. It might have been a different way of tackling the problem.

The complexity issue is very real. If we are going—as we must all wish—to try and reduce the level of poverty and to help the position of families, it is right that we should look at the detail of the various measures concerned and to put the matter in a broader context, as we have today. That was most helpful. We must congratulate the noble Lord for initiating the debate.

5.13 p.m.

Lord McIntosh of Haringey: My Lords, I am proud of many things that this Government have done. I pause to anticipate the interjection—"He would say that, wouldn't he?" I am proud of the fact that we have a strong, stable and growing economy, of our active participation in Europe and of the increased money that we have made available to tackle world poverty. I am proud of the reduction in unemployment, of improvements in educational standards, particularly in primary schools, of the increased investment and staffing in the National Health Service, of action against oppression and terrorism in Kosovo and Afghanistan. But what I am most proud of, and what makes me most happy to be a member of this Government, is our policies, our strategies and the way in which they are working against poverty and in support of families.

We had a debate, as the noble Lord, Lord Higgins, and other noble Lords have reminded us, about child poverty. I shall address this matter from a slightly different starting point. The themes of what I shall say are basically that there is a pre-condition—of course there is—for effective action against poverty; that is a strong and stable and growing economy—the macro-economic policy which has been referred to. Its most important effect has been on the incomes of the less well off. The most important way in which that has been achieved has been the increase in employment of 1.3 million since 1997. Incidentally, for anyone who queries that, that is the lowest figure since the 1970s, both on claimant and ILO criteria. I say that to the noble Earl, Lord Russell. That is not just because of economic success but because of deliberate policies—the policies of the New Deal and of encountering the unemployment and the poverty trap—in other words, the policies of making work pay.

It is also true that we would not be tackling poverty effectively if we only did so by increasing incomes, because we must tackle poverty in its non-household finance sense; in other words, in the quality and the targeting of public services. It is an unfortunate fact, and has been for many years, that the middle and upper classes have greater access to public services, to the services in particular of education and health, but also to some extent of housing. Unless we put more

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investment into our public services and their efficient reform, and in addition ensure that those in most need are capable of taking them up, then we will not be tackling poverty effectively.

Clearly, I do not have time in the course of this debate to tackle the broader issues of the quality of our public services. However, I have time, and I want to spend a certain amount of time doing so, to talk about the way in which public services are being targeted to those most in need.

So what am I going to say? I have already spent three minutes doing so already. The statistics are on the record and have been well aired in the course of this debate. I propose to follow the reference of the noble Lord, Lord Moser, to a combination of policies—the structure of the policies which constitute our approach to these issues. If in doing so I fail to answer questions as varied as the Prime Minister's visit to Africa or vacant government housing, I hope that noble Lords will forgive me.

I start with the economy. I shall not go over the ground of macro-economic policies, except to say that if we are able—as we have—to spend £4 billion less on the cost of unemployment over the past two years than we did before, and if we are able to spend £8 billion less on debt repayment in a year than we did before, then the opportunities for positive action are that much greater.

In terms of our expenditure on public services, by 2003-04 the Government will be spending £10.5 billion more on education and training than in 2000-01. Annual capital investment in housing will be £4 billion by 2003-04, compared with just £1.5 billion planned spending in 1997-98. That is underpinned by the target to ensure that more is spent in improving services in the more deprived areas that have in the past missed out on economic prosperity. That is the subject of the public service agreements which we have with the public service spending departments.

I return to the issue of employment opportunity. The increase in the employment figure is 1.3 million, I think we can now safely say. One important factor of that is that it is equal in every single region. There are no regional inequalities. The New Deal for young people has helped more than 345,000 18 to 24 year-olds find work. In total, New Deal has helped more than 600,000 into jobs. I am aware of the concerns of the noble Earl, Lord Russell, and I acknowledge that the drop-out rate must be taken into account and is serious. He must not assume that "no known destination" means that people have not got other jobs. On the contrary, from my experience of researching youth opportunities programmes during the 1980s, the most common actual researched outcome of "no known destination" was that people had come off the lists because they had other jobs and were no longer interested.

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