Poverty (Scotland)

– in the House of Commons at 12:29 pm on 5 February 1997.

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Photo of John McAllion John McAllion , Dundee East 12:29, 5 February 1997

I begin by saying something about the title of the debate. I have chosen to debate Scottish poverty simply because I am a Scot and I represent a Scottish constituency. I am only too well aware that poverty has no respect for national origins; nor does one nationality inflict it on another.

Last year I attended the national poverty hearings in London, where I heard poor people from Liverpool, Belfast, Preston, Glasgow, Coventry, Dundee and many other places testifying that poverty is endemic across national and ethnic lines. It was made painfully clear that, for far too many millions of people, whatever their origins, poverty is a shared experience that has been inflicted on them by a combination of market forces operating on a global scale and Government policies of deregulation and privatisation which have taken from the poor and given to the rich. Someone once famously said that there is no such thing as the poverty gene. The poor are not born to be poor; they are made poor by the unjust actions of others.

Let me now address the poverty in my own country. The statistics of Scottish poverty are stark enough. The latest unemployment figures show that Scotland's official rate of unemployment is 10 per cent. above the United Kingdom average and more than 50 per cent. above the rate in the south-east of England. In 1996, official unemployment fell far more slowly in Scotland than in any other part of the United Kingdom.

The official unemployment figures are only the tip of the iceberg. The Government claim that there are 1.8 million unemployed people. In reality, 4 million people are out of work. That point was raised by one of my hon. Friends at Question Time yesterday. The Prime Minister and the Conservative party showed by their dismissive attitude that they could not care less; they showed why the Tories are rightly seen by most people as the party of mass unemployment.

Other relevant statistics reveal that more than 217,000 Scots earn less than £3 an hour—a top line well below £120 for a 40-hour week, when the average income in the rest of the country is £282 a week. Let us be absolutely clear. Those poverty wages have been imposed by the Government's drive for deregulation and what they cynically describe as a flexible labour market. At one end of the scale are the fat cats raking in huge astronomical earnings. The chairman of privatised BT earns £644,000 a year. At the other end of the scale, casualised and de-unionised workers are forced to survive on less than £2 an hour.

A recent article in the Oxford Review of Economic Policy showed that wage inequality in the United Kingdom is now greater than it was 100 years ago. It really is forward to the past under the Tory Government.

The latest Convention of Scottish Local Authority figures highlight our poor health record in Scotland, where there are 30 per cent. more deaths among working people than in England and Wales. In Scotland, more children are in lone-parent families, rented accommodation, families on income support and homeless families. We may have fewer very elderly people, but in general they are in poor health. They are more likely to live alone, to be on income support and to live in rented accommodation.

COSLA estimates that those facts of deprivation in Scotland require Scottish education and social work departments to spend between £160 million and £270 million more each year compared with their counterparts in England and Wales. Those facts of deprivation are ignored by Scottish Office Ministers, who repeatedly threaten to reduce council spending in Scotland to England and Welsh levels.

If this morning's debate descends into a barren exchange of contradictory statistics across the Floor of the House, it will have failed miserably. I want to try to put a human face on the statistics of Scottish poverty. If nothing else, at least the record will show that Parliament knew the nature of the suffering and chose to do nothing.

Let us take the example of David from Glasgow, who told his story to the national poverty hearings last year. He is 45 years old, with a grown-up family, and he lives in temporary accommodation with the Simon Community. He is officially classified as homeless.

David never had many breaks. His wife had a severe schizophrenic illness, and he had been left to raise three children on his own. Because he was on his own, he became isolated and turned to drink. Because he was in arrears, he lost his council house and eventually ended up in prison where he reformed; but when he came out, he could not get a council house because of his previous arrears. The homeless single persons unit placed him in the Simon Community, at a cost of £300 a week. One week's money would have cleared his previous arrears and allowed him to have a council house, but the rules did not allow for that. Nor did they allow him to apply for a course at the local college. If he did that, his place in the Simon Community could no longer be funded by the single persons unit, and he would be out on the street again.

In other words, David is in a poverty trap created by a social security system that ensnares the poor in its mean-minded, penny-pinching bureaucracy—which excludes the poor instead of accepting them into society.

I wonder whether the Minister really understands the deep hurt that is caused when Ministers and Tory Members denounce the poor as a disgrace and scum, accuse them of begging through choice and call for them to be hosed out of shop doorways and moved on. That is precisely what a Minister and a Tory Back Bencher said a few weeks ago.

David's story is not unique. Millions of people are trapped in poverty. One of my constituents had been on a training-for-work programme funded through benefit plus. He was getting £62 a week and was entitled to full housing benefit. He is single, lives alone and is 57 years old. He saw a course at the local college that would have given him a qualification that might have got him back to work. He applied and was accepted.

The course was for 22 weeks and was funded by a bursary of £64 a week. Because it was a bursary, he lost his entitlement to housing benefit. He could not afford his rent, and was forced to quit the course and sign on for income support. Like David, he was trapped by the Government's petty regulations.

The Government have plans for the likes of David, who is described as a single claimant under 60 years of age. They plan to deny him the right to a home of his own. He will be allowed only housing benefit for what is described as a single, non-self-contained room in what is euphemistically described as a house of multiple occupation. Like all under-25s, single claimants under 60 will now not be allowed the exclusive use of a bathroom, a toilet or kitchen. In the Government's view, those basic decencies are too good for the likes of David and too good for the poor.

Recently I spoke to a senior council officer with 30 years' experience working in different communities in Dundee. He said that he was receiving reports from his field officers of levels of poverty that he had never encountered before. They described children being sent to school with no breakfast, families being unable to carpet or furnish their homes, and genuine hardship on a scale that those of us who came of age in the 1960s never dreamed could happen again in our society.

What was the Government's response? They chose to attack the poor. The jobseeker's allowance takes away entitlement to benefit. It puts the onus of proof on claimants, who have to prove their entitlement to benefit. If they cannot do so within a three-month period, their benefit is withdrawn.

Moves are afoot to privatise the entire social security system. Lone parent benefit, housing benefit and council tax benefit are being cut. Council services are being cut to the bone. The poor look to councils for housing, but the housing budget in Scotland is being slashed again this year by a staggering 30 per cent. The poor look to councils to school their youngsters, but across Scotland council schools are closing, and council teachers are being made redundant. The poor turn to council social work departments for help, but they too have all been cut by a Government who have turned their back on the poor in Scotland and the rest of the United Kingdom.

We all have to live with the consequences of the Government's abject failure to create a just and fair society. Crime and drug abuse are rising everywhere, crimes of violence are on the up, our prisons are filling up, suicides in prisons are on the up. The Government plan to build more privatised prisons across Scotland; this House passes ever more repressive laws and ever harsher sentences; the Government seek a law-and-order solution to the problems of injustice and inequality. There is no such solution, and it is a fraud on the people to claim that there is.

From time to time in Scotland, there are major conferences on poverty. Sometimes there are even debates in this place.

Photo of Mr William McKelvey Mr William McKelvey , Kilmarnock and Loudoun

Has my hon. Friend had the opportunity to read the report by health visitors, which clearly shows that they have uncovered an increase in the incidence of rickets? As we know, rickets is a disease among children that is primarily caused by lack of vitamin B—through a lack of sunshine and especially a very poor diet that does not contain appropriate vitamins. When that was raised in the House, the former President of the Board of Trade admitted that he had read it but did not believe it. Such an attitude and response to a report by respectable and honest people is typical of Government Front Benchers.

Photo of John McAllion John McAllion , Dundee East

My hon. Friend makes a very effective point. The right hon. Gentleman who made that insulting remark about a very good report happens to be the Deputy Prime Minister, and speaks on behalf of all Conservative Members. All of them should be ashamed of what he said. The facts of poverty are well known to those in power, but just like the Deputy Prime Minister, they simply choose to ignore them. When they are confronted with the facts of poverty they refuse to take them on board or believe them, and look the other way.

For the most part, poverty is hidden from the majority, who continue to enjoy rising living standards. Poverty is mainly contained in particular areas in parts of vast housing schemes, well away from the more prosperous suburbs; but it is undeniably there. The poor may be cut off, not unlike the black townships in apartheid South Africa, but they still have a voice and it must be heard, even in this place.

The problem is not that the country cannot afford to end poverty. In the final four decades of this century, world economic activity has quintupled. There has never been more material wealth than there is now. In relative terms, Scotland and Britain may have less of a share of that wealth, but they are both undeniably more wealthy than they have ever been.

In 1948, the country was immeasurably poorer than it is today, yet in 1948 the country found the political will to build a national health service and a welfare state that guaranteed the eradication of poverty, ignorance and illness among all peoples. Yet now, when we are far wealthier than ever before, we hear in the House the repeated cry that we cannot afford the social security system, the NHS or to treat the poor as equal citizens in an equal society. I for one simply do not believe that.

Photo of Mrs Maria Fyfe Mrs Maria Fyfe , Glasgow Maryhill

Does my hon. Friend recall that in 1948 hot school dinners of good nutritional value were available everywhere? Today, local authorities are having to consider removing proper school meals from their spending plans.

Photo of John McAllion John McAllion , Dundee East

My hon. Friend directs my attention and that of other hon. Members present to today's reality. I understand that, when the Secretary of State for Scotland was confronted by demonstrators outside the Scottish Grand Committee meeting in Selkirk on Monday, he said that there were no cuts in local government services. He was treated with the contempt that that sentence deserves by the demonstrators in Selkirk, and, indeed, by the vast majority of Scottish people. Those who depend on hot school dinners are the poor. Those with means have an alternative. The poor will suffer if hot school dinners are cut by councils across Scotland, which is what is happening.

The problem is not that there is not enough wealth—we have more than enough for everyone—but how we distribute it. For almost 20 years, the Government have been taking from the poor to give to the rich. It is time to reverse that process. [Laughter.] The hon. Member for North Tayside (Mr. Walker) laughs, but he should look at the latest analysis of households below average income, which says that, in 1979, the top 10 per cent. of earners took 20 per cent. of this country's wealth, but they now take 26 per cent. What has happened to the bottom 10 per cent. is the exact opposite. They have less of a share of the wealth than they did in 1979.

It is time that we reversed the Government's process of taking from the poor to give to the rich, through progressive and fair taxes linked to expanded programmes of public expenditure and investment. No one can achieve such a breakthrough until we get rid of the Tory Government. The first step will be taken in the general election when they are removed. With a new Government, further steps will follow to help the poor. Only then will their day come.

Photo of Mr George Kynoch Mr George Kynoch , Kincardine and Deeside 12:46, 5 February 1997

I congratulate the hon. Member for Dundee, East (Mr. McAllion) on securing this debate. I have listened very carefully to all that he has said, and will attempt to deal with some of the points in the time remaining.

The Government's policies have always been directed towards promoting overall prosperity and economic growth, which have produced benefits for all of the people In a rapidly changing and increasingly competitive world economy, living standards in Scotland in terms of real gross domestic product a head rose by 28 per cent. between 1985 and 1995, and are higher than in all parts of northern England and Wales. The benefits of that have been spread across all sections of our population.

Our policies of promoting sustained growth have meant that the United Kingdom recovery since 1992 has been the strongest of any of our major European competitors. Our underlying inflation performance is the best for almost half a century. Unemployment in Scotland has fallen by more than 70,000 since its previous peak in 1992, and is below the European average.

We have secured record levels of inward investment. The companies that we have been able to attract are creating jobs, resulting in increased prosperity for Scotland and its people. Research has shown that the vast majority of people are better off as a result of the Government's policies. Average income has risen by more than a third—37 per cent.—between 1979 and 1993–94, and all family types have benefited, not just top earners.

Listening to the hon. Member for Dundee, East recite his catalogue of doom and gloom, one realises the Labour party's difficulties in Scotland. He and his colleagues cannot recognise the Government's remarkable success in bringing wealth to the nation.

We are nevertheless determined to ensure that specific groups who need it are supported through the social security benefits system, for which my right hon. Friend the Secretary of State for Social Security has responsibility. The main aim of the social security system is to focus resources on specific vulnerable groups such as low-income families, poorer pensioners and sick and disabled people on low incomes.

Photo of Mr George Kynoch Mr George Kynoch , Kincardine and Deeside

No, I shall not give way, because I want to try to get through as much as I can in this very short debate.

Following the implementation of key Department of Social Security reforms to the benefits system in 1988, extra help has been made available to low-income families, which is now worth approximately £1.5 billion a year The value of improvements to income-related benefits for pensioners since 1989 is now £1.2 billion a year.

The Government are committed to creating a better social security system that protects the most vulnerable, is adapted to modern needs and does not outstrip the nation's ability to pay. It is clear that changes to benefits can play a crucial role in helping people into work, which is the most effective way of raising their living standards.

Concentrating on attacking the causes of dependency and creating ladders of opportunity and incentives helps to increase individuals' chances to prosper. People are being helped to take up employment by ensuring that they are better off in work, and are not discouraged from increasing their earnings.

Those initiatives and incentives include the introduction and extension of family credit, which now averages £56 a week on top of family incomes in addition to child benefit, the introduction of disability working allowance, the fact that up to £60 a week in child care charges is ignored when calculating in-work benefits, and the implementation of the jobseeker's allowance.

However, it is important to bear in mind the fact that the benefit system should not be regarded as the mechanism for eliminating poverty. The Government have a range of policies and programmes with the aim of ensuring that everyone has the opportunity to benefit from economic prosperity. In addition to the help given to unemployed people, significant assistance is also given to those who have a job but require additional help.

I referred to the extensions to family credit and the other schemes aimed at ensuring that people find that they are better off with a job. Through its pilot earnings top-up scheme, which started last October, the Department of Social Security is now testing whether in-work benefit assistance is effective in getting the single and those without dependent children back to work. One of the eight pilot schemes is in Scotland, covering Perth, Dumbarton and Stirling, and it has the potential to increase the income of low-paid workers there by more than £50 a week. That is a practical measure, which will be especially beneficial for young people under 25.

As our economic measures continue to bear fruit, and unemployment in Scotland continues to fall, we remain alert to the needs of those who are still unemployed. In addition to our economic measures, we have put in place a wide range of programmes and services to combat unemployment and assist people back to work. They include programmes such as training for work, the main training programme for unemployed adults who have been out of work for longer than six months, Employment Service measures such as 1-2-1, worklink, and jobplan for the minority who remain unemployed for 12 months or longer, and restart courses and jobfinder grants for those still unemployed after two years.

The Government have also launched Project Work, an innovative programme offering job search help and practical work experience to people unemployed for two years or more. In response to encouraging results from two current pilots in Hull and in Medway and Maidstone, my right hon. Friend the Secretary of State for Education and Employment announced an extension. The four Scottish pilots, to be located in Lanarkshire, Edinburgh, Dunfermline and Dundee—the hon. Gentleman's own area—will help 9,000 long-term unemployed people to find jobs.

Photo of Mr George Kynoch Mr George Kynoch , Kincardine and Deeside

The hon. Gentleman provides a classic illustration of the Labour party in Scotland, especially his wing of it, which is intent on selling Scotland down the river, and on refusing to recognise the significant improvements that the Government's policies have achieved in Scotland and the help given to those unfortunate enough not to be in employment. All he can do is carp. I suggest—I may have time to enlarge on this later—that his policies would do nothing to help the situation. In fact, they would have the reverse effect.

As I have said, we have a range of policies that have the effect of reducing poverty. Our housing policies have done much to improve living standards for all of Scotland's people. Since 1979, we have issued more than £8 billion in gross capital allocations to local housing authorities. Since it was established, Scottish Homes has invested more than £2.5 billion in housing. Those resources have led to real progress in addressing issues such as homelessness and housing that is below tolerable standard.

Another of the important successes of the Government's housing policies has been the dramatic shift in tenure. The proportion of housing accounted for by the public sector has fallen from more than 50 per cent. in 1979 to less than one third now. Levels of owner-occupation have risen from 35 per cent. in 1979 to almost 60 per cent. now. In the city of Dundee, between 1979 and 1995 the proportion of local authority stock was reduced from 53 to 32 per cent.

Private sector investment in housing has been crucial, especially when there are ever-increasing pressures on the finite public resources available. Scottish Homes has already attracted private investment of more than £900 million, and there is scope for the private sector to play an even greater role. Scottish Homes continues to have substantial resources at its disposal, and will invest more than £500 million in Scottish housing this year and next, which in turn will generate over £300 million of private sector funding. As a result, 10,000 people in Scotland will be better housed.

In the local authority housing sector, we have maintained the net provision for local authority capital expenditure at planned levels of £180 million each year for the next three years. That means more than £0.5 billion-worth of investment in council housing in the next three years, on top of the £2 billion that councils have been able to invest since 1992.

The total net allocations for 1997–98 amount to £171.9 million, slightly higher than those issued to authorities in 1996–97. In addition, next year councils will be expected to generate usable receipts of between £50 million and £60 million to augment their investment.

We firmly believe that considerable scope exists for authorities to increase investment levels by involving the private sector to a greater degree than at present. Authorities should be considering the potential for transferring stock to other landlords. Such transfers benefit tenants, by enabling investment to be made in their homes earlier than would have been possible through conventional means, and gives them an assurance about future rent levels, along with improved services.

In some parts of Scotland, people face a combination of low incomes, poor housing and a degrading environment. Tackling either the economic or the social causes of deprivation in isolation cannot bring a sustainable renewal of such areas. We need to focus instead on developing a comprehensive approach, encompassing social, economic and physical regeneration, if we are to achieve a lasting solution for the most needy areas in our country.

In 1988, we published our ground-breaking urban regeneration policy statement, "New Life for Urban Scotland", which acknowledged the importance of taking a comprehensive, strategic approach, involving all partners with an interest in regenerating our deprived urban communities.

At the same time, we established four pilot Scottish Office-led urban partnerships at Castlemilk in Glasgow, Ferguslie Park in Paisley, Wester Hailes in Edinburgh and Whitfield in Dundee. Each of those partnerships has shown the way forward in urban regeneration, winning awards and admiration not only in Scotland but beyond. The hon. Gentleman and his hon. Friend the Member for Dundee, West (Mr. Ross) joined me when I recently visited the Whitfield partnership in Dundee, and the project under way there was most impressive.

On 11 November last year, my right hon. Friend the Minister for Local Government, Housing and Urban Regeneration announced the designation of 12 priority partnership areas and support for 11 regeneration programmes, with resources amounting to £60 million over the first three years. Included in the list of successful PPAs and regeneration programmes was Dundee, which will receive urban programme funding of £3.3 million for its PPA and £727,000 for the regeneration programme over the same period. Much has been done, and is still being done, by the Government to help develop a prosperous and successful economy that is benefiting Scotland and all of our people.

The hon. Member for Dundee. East and his party believe firmly in introducing a national minimum wage and in signing up to the social chapter. Labour believes in the application of a tartan tax in Scotland, and a teenage tax. It believes in policies that will hit all Scotland, but particularly the poor. Rather than benefiting those on low incomes, the introduction of a national minimum wage and the social chapter would have quite the opposite effect.

In a market economy, wages reflect the productive contribution of employees, and a minimum wage would prevent some people from gaining productive employment. The Government believe in allowing the market to generate jobs, and a national minimum wage would not help families on low incomes—rather, it would cause many people to lose their jobs. The figures for the UK show that, if a national minimum wage was set at around £4 and if only 50 per cent. of the differentials were restored thereafter, 1 million jobs would go.

The attitude of the Labour party has been typical, as has that of the hon. Member for Dundee, East. He, at least, is an honest member of the Labour party, who believes in saying what he thinks. He called for increased funding for local government, and I felt from his speech that perhaps he was seeking to justify that to his own party as much as to anyone else.

In conclusion, I believe that the Government's policies have been good for the people of Scotland, whatever their economic circumstances. We have created sustained economic growth, increased average incomes—

Photo of Mr Geoffrey Lofthouse Mr Geoffrey Lofthouse , Pontefract and Castleford

Order. We now move to the debate on the second Severn crossing.