Inequalities

Baroness Barran Excerpts

Thursday 13th June 2019 Lords Chamber

[Baroness Barran (Con)]

My Lords, I thank the noble Lord, Lord Dubs, and echo noble Lords’ gratitude to him for introducing this debate, which has undoubtedly stimulated an interesting and important discussion in your Lordships’ House. I shall do my best in the time available to me, which I appreciate is a great deal longer than that available to your Lordships, to respond to as many of the points raised as possible. I hope noble Lords will forgive me if I have to write on some of them. I also thank the team from the UN for taking the time to visit our country last November and for speaking to individuals who face very difficult situations. I thank, too, the Nuffield Foundation and the researchers at the Institute for Fiscal Studies for the ambitious and important research agenda they are undertaking. We look forward to receiving the Deaton review and hope it yields findings that will enable us to continue our progress in this area.

I also join other noble Lords in welcoming to his place the noble Lord, Lord Ravensdale, and congratulating him on his maiden speech, which brought an elegant combination of expertise and humility. It was doubly impressive as there were apparently no notes—a great skill.

As we have heard from several noble Lords, the UN special rapporteur’s report was highly critical of both levels of poverty and the policy intentions of this Government. I must refute the impression given in the report that there has ever been an intention to impose policies that damage the prospects of the poorest of our citizens. This Government introduced the national living wage, supporting the wages of the lowest-paid to grow by 8% above inflation between April 2015 and April 2018. The percentage of jobs that are currently low paid, just below 18%, represents the lowest level for 20 years.

We take poverty and inequality very seriously and are committed to improving the living standards of all in our society. However, as my noble friends Lady Stroud and Lady Finn and other noble Lords explained, when we look at the data it is striking how little overall inequality, be it absolute, relative or among children, has changed during the past 20 years. I thank in particular my noble friend Lady Stroud and her colleagues on the Social Metrics Commission for introducing metrics that reflect the way we live: we have income; we have assets; and we have expenditure. For disabled people in particular, as the noble Baroness, Lady Thomas, pointed out, we need to recognise that there are fixed costs that go with disability. That is an important and helpful way forward, as is the commission’s focus on persistent poverty—the noble Lord, Lord Davies of Stamford, would probably agree with that.

That poverty and inequality are stuck is in spite of the efforts of Governments of every hue to change it. I share the view expressed by the noble Lord, Lord Dubs, and the noble Baroness, Lady Prashar, about the unacceptability of the levels of inequality; I just wanted to note that it is very hard to shift.

In common with other EU countries, we recognise that we face major challenges. The noble Lord, Lord Davies of Oldham, referred to real wages. While they have grown every month for the past 13 months, we all know that they remain at a similar level to 10 years ago. Whatever the overall statistics on inequality may or may not tell us, there are clearly groups in our society struggling to make ends meet, including some single parents and many with a disability.

Equally, we should not ignore the findings of the world happiness survey, which puts the UK at 15th in the world. As noble Lords pointed out, that is somewhat behind Finland but it is very helpful to refer to the concept of well-being.

A number of noble Lords, including the noble Lords, Lord Ravensdale and Lord Wallace of Saltaire, and my noble friend Lord Freeman, talked about the importance of strengthening the social contract, having a sense of aspiration and believing that we and our children have opportunities. The noble Lord, Lord Dubs, referred to his experience and that of refugees. As the daughter of a refugee, I can certainly vouch for the importance of being brought up to believe that anything is possible.

As noble Lords know, this Government believe that the best way out of poverty is through work and we are rightly proud of our record since 2010, with 3.6 million more people in work and a seven percentage point increase in the employment rate for the poorest 20% of the workforce. We have supported this increase in employment by increasing minimum wages and the personal allowance. That means that a person working 35 hours a week on the minimum wage takes home £13,700, an increase of £4,500 on 2010.

I shall now try to answer some of the questions raised by noble Lords and finally set out some of the important actions initiated by government that we hope will help to address some of the structural issues that contribute to both inequality and poverty. I want first to defend the Government’s stance in seeing employment as a critical component in resolving these issues, because it goes not just to the financial rewards that employment can bring but to a sense of social glue, connection, well-being and aspiration, which I think all your Lordships agree are critical.

The employment rate today is at a record high. The female employment rate is also at a record high of 72%. Since 2010, the employment rate of lone parents has increased by more than 10 percentage points and is now at 69.5%. Over the same period, youth unemployment has almost halved and a number of your Lordships, including the noble Baronesses, Lady Young of Old Scone and Lady Bryan of Partick—she and I were introduced on the same day, so it is a delight to be in a debate with her—talked about zero-hours contracts. Some 2.6% of all people in employment were employed on zero-hours contracts as their main job between October and December 2018.

As I touched on already, real wage growth has been flat over the past 10 years. The noble Lord, Lord Ravensdale, referred to the impact of globalisation. My noble friend Lady Verma is, I point out—if I have done the maths right—almost a perfect age; it sounds very similar to my own. She talked about barriers to accessing employment for people from black and minority-ethnic communities and those without English as a first language. We fully fund all adults to take English and maths to level 2 and from 2020 we will fund them for basic physical skills which, I know she will agree, are a critical factor. There has also been a disproportionate increase, compared to history, in employment of people from black and minority-ethnic communities, particularly in the high-skilled roles. I am sure your Lordships will share my pleasure in that.

The noble Lords, Lord Hain, Lord Browne and Lord Adonis, talked about cuts in public spending. I will cover this in more detail, but I just remind your Lordships that this Government inherited a uniquely difficult fiscal situation in 2010. However, the Chancellor has reaffirmed the five-year public spending plan, which has resource budgets growing at an average of 1.2% above inflation from 2019-20 compared with real cuts of 3% a year in the 2010 spending review.

Several noble Lords—the noble Baronesses, Lady Thomas, Lady Prashar and Lady Janke, the noble Lords, Lord Liddle and Lord Judd, and the noble Viscount, Lord Hanworth—talked about universal credit. We continue to spend more than £220 billion on the benefit system, and we are spending an additional £1.7 billion a year on universal credit, increasing by £1,000 the amount that 2.4 million households can earn each year before their UC begins to be withdrawn. The noble Baroness, Lady Prashar, asked for examples in which we are changing, reviewing or improving on the system. I will highlight two things: we are starting to test the system of more frequent payments following feedback from claimants and then will roll out more widely what works. I stress the really critical role of the work coaches, who are now receiving training on how to spot people who might be particularly vulnerable and do everything they can to make sure that they get the support that they need.

The noble Lords, Lord Hain and Lord Morris, and several others talked about the usage of food banks. Noble Lords will be aware that my right honourable friend the Secretary of State for Work and Pensions has acknowledged that there were problems early on with the rollout of UC but now more than 85% of payments are made on time, which compares very favourably with the legacy system. We believe that there is need for more robust data on trends in food insecurity and we are working with experts at the Office for National Statistics and the Scottish Government to introduce a new set of food security questions in the family resources survey from April this year. Obviously, we in this House look forward to the report next year from the ad hoc committee that has just been established on food poverty.

I turn to child poverty, a subject raised by several of your Lordships, including the noble Lord, Lord Dubs, the noble Earl, Lord Listowel, and the noble Baroness, Lady Janke. A child is five times less likely to be in poverty in a household where all adults are working. Today there are 665,000 fewer children living in workless households. In 2018, the Government announced an extra £1.7 billion for work allowances, which directly helps children living in the poorest households. We are also making investments, as your Lordships know, in the NHS, childcare and other areas which—if time permits—I will touch on.

My noble friend Lady Verma and the noble Baronesses, Lady Bryan and Lady Janke, talked about women and the gender pay gap as well as the role of women in the workforce. We should recognise that the gender pay gap brings visibility to the problem that we are facing: it shows unacceptable growth in the pay gap over time, but currently, at 8.6%, the gender pay gap is the lowest that it has ever been and we are determined to see it come down further.

My noble friends Lord Farmer and Lady Finn stressed the importance of family life and focused particularly on the importance of both parents playing a positive role in a child’s life. As he knows better than I do, there is so much research now on the impact of sustained stress on the development of a child’s brain and what that does to their life chances, particularly in the first 1,000 days. This is absolutely critical. We know that children living in single-parent households are almost twice as likely to be in poverty as those in couple households. There is not a sudden increase in this rate, but we are doing a number of things both directly and financially, as I have already touched on. More broadly, we published the domestic abuse Bill, which we hope will help address the experience of not only victims of domestic abuse but of their children. Our commitment to increasing mental health expenditure, our work on drug and alcohol and our support for free childcare are also crucial.

I am running rapidly out of time, but I want to touch on the concerns raised by the noble Baroness, Lady Thomas, about the PIP awards for disabled people. I hear the concerns that she raises, but I note that a greater proportion of people are receiving the highest level of PIP awards today compared to its predecessor, the disability living allowance. I am not able to do justice to all the other areas that have been mentioned, so I will make my closing remarks and then write to your Lordships with the rest of the answers to the important points that have been raised.

As many noble Lords pointed out, reducing inequality and poverty is about not just supporting living standards today but building and investing for the future. I wondered whether the noble Lord, Lord Adonis, had caught sight of my speech when he made a similar point. We want to build an economy that enables individuals to reach their potential tomorrow.

I will touch briefly on three areas where our investment today will help to build a more equal society. As I just mentioned, the data show that where a child is growing up with one parent or just one parent working they are more likely to be in poverty. That is why we have introduced 15 hours of free childcare for disadvantaged two year-olds and doubled the hours of free childcare for working parents of three and four year-olds. In 2019-20 we spent almost £6 billion on childcare support, which is a record amount, and more than 700,000 disadvantaged two year-olds have benefited from the free education places we introduced in 2013.

The noble Lord, Lord Adonis, and others criticised our record on education. We have committed to spending an additional £900 million in our schools in 2019-20 and have protected the pupil premium. The crucial thing is that the investment is starting to pay off. The gap between disadvantaged pupils and others has closed by about 13% at key stage 2 and nearly 10% at GCSE since 2011. We know that higher qualifications translate into higher-paid work—not a quick win, but an important one.

A number of noble Lords raised secure and affordable housing, which is at the root of a sustainable standard of living. The Government have committed more than £9 billion in this spending review period to the affordable homes programme to deliver 250,000 new affordable homes of a wide range of tenure, including social rent. The Prime Minister has also announced a further £2 billion of new funding in the affordable homes programme.

Finally, the NHS has always been the country’s most beloved public service, there to provide outstanding care whenever it is needed. The Government have introduced a long-term plan backed by the biggest cash boost in the history of the NHS, providing it with the certainty to plan for the next decade. These reforms might not show up in the inequality and poverty statistics today, but they are laying the foundation for an economy and society that delivers a higher standard of living for everyone—an aspiration that I know every single noble Lord who has spoken in the debate shares with me.