That this House takes note of inequalities in income, wealth and living standards in the United Kingdom since the 2008 financial crisis; and further takes note of the work of the Institute for Fiscal Studies Deaton Review, Inequalities in the 21st Century, and the report of the United Nation’s Special Rapporteur on extreme poverty and human rights on his visit to the United Kingdom, published on 22 May.
My Lords, it is a privilege to open this debate, and I am grateful to the many Members of the House who are down to take part in it. As I prepared for the debate, I was almost overwhelmed by the mass of statistics on the subject of the level of inequality and poverty in the UK, but the one thing that all the figures show is that that level is far too high. There can be no dispute about that. There may be an argument as to whether things have got worse over the past two or three years. That is not necessarily my contention, but clearly the austerity policies introduced in 2010 have had a damaging effect on the people affected by poverty. I believe that the evidence shows that there is a great deal of inequality in the country, and this is having a damaging effect on many people here.
The question for Ministers and other politicians, therefore, is whether this is the price we have to pay for our present overall relatively high living standards. I am totally opposed to that: I do not believe it is a price we have to pay or a price we should pay, and we should reject any policies that continue to further those levels of inequality and poverty.
Many people are simply not comfortable living in a country where the differences between the rich and the majority are so wide. It gives me an uncomfortable feeling when I see poor people in the streets, when I am aware of the figures and the poverty. Frankly, I would not want to be the Minister answering this debate. It is a really tough call for her, but I suppose that goes with the job description. It is not as if the subject has not been debated frequently over many years. It is still vivid in my memory from when I was in the House of Commons seeing Margaret Thatcher as Prime Minister asserting, to quote her from memory, that a rising tide lifts all boats. She made a hand gesture to show that if the tide lifted the higher boats, the lower ones would also rise. I was amazed to hear that at the time: it was not true then and it has not been true since. The problem is that a rising tide has lifted some boats but not those at the bottom.
I think it is generally understood that, second only to the United States, the UK has the highest level of inequality of any advanced democracy. Without a redistributive tax and welfare system the situation would be much worse, so it is rather surprising that a contender for the Conservative leadership contest has committed to reducing tax on people earning more than £50,000 a year. I find that deeply shocking. They are hardly the most impoverished group in society, and I hope that the Minister will reject the proposal on the Government’s behalf before there are any changes in the leadership at the end of July.
A great deal of the evidence for this debate comes from the recently published introduction to the Deaton review, Inequalities in the Twenty-first Century. That includes some close statistics on the problem and will seek to tackle the issues over a further five-year study, so there will be more information to come. Launching the review, Sir Angus Deaton asked a key question:
My Lords, we are very tight for time in this important debate, so when the clock shows five minutes I expect the Member to sit down, otherwise I may have to stand up.
My Lords, I half agree with the Deaton review’s opening declaration that:
“Discussion of inequalities increasingly defines economic and political debate”.
That ought to be one of the central issues of British politics rather than the endless preoccupation with Brexit, sovereignty and making Britain great again, let alone cutting taxes for the rich and cutting services and benefits for the poor, as Boris Johnson is proposing to the apparent delight of Conservative Party members. I noted the article in the Telegraph last week by Daniel Hannan MEP, one of the Conservative Party’s leading ideologues. It dismissed the idea of poverty in Britain as being in reality about only inequality, and furthermore argued that inequality is not rising very much and, in any case, does not matter.
Successive analysts of open and democratic societies have argued for centuries that too great a gap between the rich and the poor is incompatible with a peaceful and mutually tolerant national community. The whole idea of a democratic national community requires a shared sense of commitment; a social contract shared by all citizens and between citizens and the state. Too wide a gap between the privileged and the underprivileged, between the very rich and the very poor, undermines this common citizenship. Liberals in the late 19th century and early 20th century invested public finances in state education, pensions and welfare in order to bring the poorest Britons into our national community.
The wildest Chicago School economists have denied the necessity of concessions to democracy in their pursuit of the free market, as we saw in their support for Pinochet’s economic experiments and political repression in Chile. Illiberal democracy offers citizens grievances against foreigners and myths about national history as a distraction, while oligarchs and billionaires use their money to buy influence and distort the political debate. We see illiberal democracy, or populism, played out by rich and privileged men pretending to be men of the people, spreading across the democratic world and now across the Conservative Party in Britain.
My Lords, I thank my friend, the noble Lord, Lord Dubs, for tabling this important debate. I have huge respect for his work, particularly in the area of refugees.
Whenever the subjects of poverty and inequality are debated in this House, emotions rightly run high. It is for this reason that I founded the Social Metrics Commission—to create robust measurements of poverty to help inform policymakers and provide clear and accurate metrics that all of us, regardless of our political persuasion, can use with confidence to drive improved outcomes for those in poverty. I wanted to bring to an end the battle that has characterised the measurement of poverty and move the debate on to what can be done. I was therefore delighted when the UN special rapporteur chose to use the Social Metrics Commission measure in his final report, and I thank Philip Alston for his recommendation that the metrics be adopted as the UK’s official measure of poverty. Further, I thank the Government for their commitment to taking these new measures forward as experimental stats and look forward to working with them towards them becoming official statistics.
My first point in response to the report is that we need to work together for the sake of building an effective strategy that will change lives. If the work of the Social Metrics Commission taught commissioners anything, it was to believe the best of one another. We had a guiding principle that, wherever we came from politically, we would believe that we all cared about the outcomes for those in poverty. So, while I am delighted that the UN special rapporteur chose to use the data of the Social Metrics Commission in his report, the tone and accuracy of the report does not match the consensus and accuracy that underpins all that the commission is trying to achieve. If we are to make real progress, we need to believe that we are all committed to the task ahead and that we all want to see that progress.
My Lords, my noble friend Lord Dubs said in his opening remarks that it was a privilege to open this debate; I am sure the House will agree that it is always a privilege to listen to him. I pay tribute to him for securing this important debate and for the way in which he introduced it.
I intend to address my remarks to the issue of inequality. The levels of inequality in this country are shameful. The detailed evidence of that is to be found not only in the Deaton review and the research that underpins the special rapporteur’s report but, interestingly, in the speech made by the Prime Minister when she took over at No. 10 on 13 July 2016. People can read the detail for themselves, but she made a speech of about 650 words, of which she devoted more than half to describing the challenges she was inheriting from her predecessor, David Cameron; she described him as a “great modern Prime Minister”, whose “true legacy” was “about social justice”. In contradiction to that description, the country she described in half of her speech was one of burning injustices and inequality, and she restricted herself then to only nine examples; there are many more. I am certain that other noble Lords will deal—and have dealt to a degree—with the evidence in detail. But, in my limited time, I intend to assume that their contributions will comprehensively prove the case for urgent action, as the previous speaker did.
To add to our shame, we know how to deal with these inequalities. I have picked a few solutions at random. On life expectancy, where the disparity between rich and poor is growing, access to healthcare services and education is crucial. Spending on public health has fallen since 2016 and education spending is flatlining. Deprivation is the driver of inequality more broadly, but benefit cuts have continued to be rolled out, and food bank use and homelessness have continued to rise since the summer of 2016. We now have an audit of race disparity in the criminal justice system but, as the deputy director of the race equality think tank the Runnymede Trust said:
My Lords, I too congratulate the noble Lord, Lord Dubs, on securing this important debate, which gives us the opportunity to welcome among other things the Deaton review of inequalities.
Sir Angus promises that he and his expert panel will think about inequalities broadly, determine the right mix of policies to tackle them and not be confined to traditional economic measures of income and wealth. Unusually for this country, the review will also explore how family structures drive inequalities. I suspect that this is due largely to the fact that Deaton’s academic career was forged in the United States, where academics and respected commentators are able to study and discuss family structure in a way that problematises family breakdown instead of simply accepting it.
Rightly, the IFS introduction to the review describes family as one of the most important aspects of life. Yet the UK Government and academic research community seem remarkably unconcerned that about one in six children—a significant proportion—is born into a household with no father present. This is a considerably higher proportion than in most of Europe and is heavily concentrated among those with less income and education. At least four in five of these children will live in a poor household while they are very young. Almost one-third of their mothers have no educational qualifications.
The Deaton review has promised to determine how living in fractured family settings affects economic, social, emotional and health outcomes for the children and adults involved, and the long-term ramifications. The panel has much existing work to draw from: since 2006 the Centre for Social Justice has been calling out the relationship between family breakdown and poverty and has had the courage to say that we can and must do something to try to prevent family breakdown.
The centre’s most recent research, which controlled for factors such as socioeconomic grade and ethnicity, found that those who experience family breakdown in their childhood or youth are more than twice as likely to experience homelessness, to be in trouble with the police or to spend time in prison. They are almost twice as likely to experience educational underachievement and not raise their own children with the other parent—in other words, repeating the cycle that their own parents went through. They are close to twice as likely to experience alcoholism, teen pregnancy and mental health issues, and 1.6 times as likely to be in debt and on benefits.
My Lords, the noble Lord, Lord Dubs, has helpfully defined what particular inequalities he is focusing on: income, wealth and living standards. It is well known that families with a disabled person are among the poorest in the UK. I am glad that the Government have now accepted the Social Metrics Commission’s definition, with its figure of 6.9 million people who are in families where a person has a disability. That person is more likely to be unemployed or in insecure employment and to have been hardest hit by austerity measures. The Equality and Human Rights Commission published a report last year which criticised how the benefits system operates for disabled people, particularly vulnerable claimants who have experienced difficulties with UC, PIP assessments and the benefits sanctions regime, which, it says, have had no tangible positive effect on moving disabled people closer to paid work.
As we have heard, the Government have dismissed the highly critical report of the UN special rapporteur by saying, roughly, “How dare he?” Yet disabled people told him repeatedly about benefit assessments that were,
“superficial, dismissive, and contradicted the advice of their doctor”.
The report goes on to say, tellingly:
“Those with disabilities are also highly vulnerable to cuts in local government services, particularly within social care, which has left them shouldering more of the costs of their care. This has driven many families with a person with a disability to breaking point”.
The Deaton report must surely look at problems faced by disabled people and their families, because the figures are stark. The charity Scope says that disabled people face extra costs of between £583 and £1,000 a month. A particularly large amount goes on energy costs.
My Lords, it is a great honour to address your Lordships’ House for the first time, after some weeks of observing and learning. In one of my first, very hesitant forays into the Chamber, I was told by one of the doorkeepers, “You are a Peer of the realm, my Lord. You should bowl in there like you own the place”. I hope I am now entering somewhat more confidently—if not quite “bowling in” yet—but what hits me still as I enter this amazing place are the echoes of history and the many great things that have been achieved and accomplished within these walls.
I thank noble Lords from across the House and all the officials and staff for the very warm welcome that I have received. In particular, I thank the noble Earl, Lord Cork and Orrery, and the noble Lord, Lord Vaux of Harrowden, for all the help that they have given me in settling into the House. It has been a rather daunting but incredible experience.
I will tell noble Lords a bit about myself. I am a chartered engineer; I work for an engineering consultancy firm in Derby with a particular focus on nuclear energy. I am a project director and technical lead, leading teams to deliver aspects of the nuclear steam-raising plant for the Royal Navy fleet and deterrent submarines. I am very proud to work on these critical national programmes. I look forward to bringing my experience in engineering, defence and energy to the work of the House.
Turning to the subject before us, I thank the noble Lord, Lord Dubs, for initiating this vital debate on a matter that I am passionate about. Arguably, there is no more pressing issue in our society today than the inequalities that exist and the means of addressing them. When we look at all the upheavals in western society over the past decade—Brexit, the gilets jaunes, Trump—all of these can be traced back to the tear that is emerging in our societies between the haves and the have-nots. In the spirit of maiden speeches remaining relatively uncontroversial, I will keep my remarks much more general and measured than they might otherwise have been and avoid, I hope, provoking too much outrage.
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“There’s a real question about whether democratic capitalism is working, when it’s only working for part of the population”.
That is the quote which underlies this debate. If people say that poverty and inequality is a price worth paying, some of us will reject that totally.
There has been an even more critical United Nations report on the impact of austerity on human rights in the UK. It predicts that close to 40% of children will be living in poverty two years from now. I know that the Government have vehemently rejected that report, but it has quite a lot of evidence to sustain it. Another report from a very authoritative source confirms the high levels of child poverty. Professor Russell Viner, president of the Royal College of Paediatrics and Child Health, a very reputable body indeed, said:
“The impact of poverty on children can be devastating—not only to their physical health in terms of increased risk of malnutrition, respiratory problems from poor housing and infection—but also their mental health”.
Those impacts are stark. Children living in poverty are more likely to die before the age of one, become overweight, have tooth decay or die in an accident. They are more likely to have poor cognitive, social and behavioural outcomes, and are at greater risk of developing long-term conditions, particularly respiratory conditions, type 2 diabetes, cardiovascular disease and mental health problems. That is a pretty tough indictment of policies that result in child poverty.
In its recently published report, The State of Child Health: Two Years On, the Royal College of Paediatrics and Child Health highlighted its grave concern that no progress has been made towards reducing child poverty and inequality in the UK since the original report, The State of Child Health, was published in 2017. The president of the college commented:
“This latest research serves to highlight the importance of tackling poverty if the relatively poor outcomes for child health in the UK are to improve. That means measures such as binding national targets to reduce child poverty backed by a national child poverty strategy, the reversal of cuts to universal credit and the reversal of public health cuts”.
Those are policy points. That is a whole policy agenda coming from an extremely reputable source; I will come on to more ideas about that later.
Meanwhile, millions of people in jobs depend on various forms of charity. We know that there has been an enormous rise in the use of food banks all over the country. Of course, all of us, not only those who arrive here via Westminster Tube station, see rough sleepers in our streets. I always feel deeply shocked and uncomfortable when I see so many people sleeping on our streets and using food banks, and when I see buckets in supermarkets asking people to donate food for the poor.
We have seen a runaway rise in incomes, with those in the richest households almost tripling their salaries in the past four decades. In 2017, pay among FTSE 100 CEOs was, on average, 145 times that of the average worker, compared with just 47 times in 1998. Frankly, 47 times is already a bit excessive, but I do not know how businesses operate when the people at the bottom of the scale realise that the pay of the CEO coming in—although they probably never see him or her; it is usually a him, though—is vast compared with what they get. In addition, real wages are still below the pre-crisis level. In the financial year ending 2018, the wealthiest fifth of individuals in the UK saw a 4.7% increase in their disposable income, compared with a 1.6% decline for the poorest fifth. That is why I challenge what Margaret Thatcher said many years ago. It had no truth then and has no truth today.
Let me refer to a specific group of people, with whom I have been fairly closely associated, who are doing things for virtually no money: the people volunteering for NGOs working with refugees, especially child refugees, in northern France and Greece, particularly the Greek islands. I have had the privilege of meeting these people. While the newspapers talk about bankers fighting for an extra million or two in their bonus, these people are working for pretty much nothing. They give a year or two of their lives to help and support some of the most vulnerable child refugees. We as a country should be proud that we have such wonderful young people—they are not exclusively from this country, but many of them are British—willing to serve their fellow human beings. Of course, many other people volunteer in our society and do things for their fellow human beings despite the backdrop of the large amounts of money that some people are getting.
Of course, there are other income inequalities, impacting variously on women, the young—with a knock-on effect on their life chances within the housing market—older people, the black and ethnic-minority population, and those with disabilities, with the latter perhaps suffering more than most. We hear a great deal about the gender pay gap, for example.
I want to repeat a proposal that I have made before, which I believe would help significantly: that all tax returns should be in the public domain. Therefore, we would know about incomes and we would be able to see them. This works well in some Scandinavian countries. We would be able to see what people are earning and judge the extent of pay discrimination as it affects women, older people, the black and ethnic-minority population and disability. I should make it clear that when I previously made this proposal, the Government’s response was quite unenthusiastic. Nevertheless, I still believe that the day will come when these things will be in the public domain and we shall all know more. It will be better for the whole of society. After all, people know what others earn in the Civil Service and indeed there are various areas of our country where we know what the incomes are and that does not have a damaging effect. Why not put these things into the public domain?
I turn now to housing. It is quite shocking that there are virtually no opportunities for young people to enter the housing market, whether to buy or to rent. Older people managed to buy their homes many years ago and are sitting pretty in houses that have greatly increased in value, while on the other hand there are still too many pensioners who are in dire poverty. However, it seems that we are giving young people very little chance in life. Their incomes are too low to enter the housing market—not just in London and the south-east, although we are particularly aware of this issue locally.
Inequality is not only about income. As the Deaton report makes clear, there is a divergence in life expectancy between deprived and affluent areas in our country and a growing burden of poor mental health among disadvantaged groups. There is also a geographical divergence between our successful cities and our former industrial towns and coastal areas, a problem which successive Governments have not done enough to tackle.
Danny Dorling, a professor of geography at the University of Oxford, has linked the fall in life expectancy to government policy:
“‘Something began having an influence shortly after 2010’, he said. ‘Older age mortality rose as services for the elderly were massively cut, social services in particular that were aimed to help those living on their own’”.
Let us take one topical example. A male child born in Kensington in Liverpool can now expect to live 18 years less than a child born in Kensington and Chelsea in London. That is a shocking difference and it is not acceptable. How can we live in a country where this goes on?
I know that some people on the other side of the Chamber do not like trade unions, but when we are talking about achieving more equality, trade unions have a significant part to play. The Deaton report said that stronger trade unions can tip power towards employees. In the Nordic countries, between 52% and 86% of all employees belong to a trade union compared to the UK figure of a little over 25%. Having workers on company boards, which is mandatory in Germany, can have a similar effect, curbing inequalities within firms, if not between firms. If workers are given a say in how companies are run, they might help resist downward pressure on wages, press for better working conditions and rein in executive pay at the top.
Inequality cannot be reduced to one dimension, stemming as it does from many forms of privilege and disadvantage. The real question is whether the immorality of increased inequalities in our country is sustainable or whether they should be condemned. I am very much of the latter view, and it is good to see my party bringing forward imaginative and costed solutions which I shall mention very briefly. They include a national transformation fund aimed at rebalancing the economy and a national investment bank with regional arms. I also welcome plans for tackling tax avoidance and evasion, increased corporation tax and a hike in the living wage, with the latter including a more equitable system that benefits younger workers.
As it stands, we on this side of the House are not yet the party of government and a general election may happen later this year, but it could be as far off as the early summer of 2022. I hope, therefore, that the Minister responding to this debate will give some indication of what her party plans to do to reverse the current depressing trends. They are a challenge to us all and to the Government. We have to tackle these problems and I hope that we will do it quickly.
I regret that the sometimes intemperate language of Philip Alston’s UN human rights report has allowed the UK Government to dismiss the argument that he makes. It would have been more powerful as a restrained analysis than as the case for the prosecution he has made it. The detailed studies on which it is based, from universities, reputable think tanks and government agencies, are powerful enough on their own. Like the Deaton review, it emphasises the multiple dimensions of poverty and inequality, and the interaction of disadvantages in child care and early years support, education, housing, access to jobs and public transport with low wages and benefits. I welcome the accumulation of data-based studies, including those from the Resolution Foundation and the Social Metrics Commission.
I see inequality and deprivation on the ground in Bradford and West Yorkshire. The most deprived wards in Bradford, whether predominantly ethnic white or Asian, also have the highest rates of crime and violence, the largest number of children growing up in single-parent households, the least access to playing fields and open spaces, and the lowest ranking schools. Last summer, I was driven round a former council estate by one of our local councillors. We saw no representatives of authority—police numbers had been cut and community police teams disbanded—and we saw social housing that had been sold off now rented out for multiple occupancy by private landlords. We saw children who should have been at school playing in the street, and teenagers who looked as if they were dealing drugs. The prospects for social cohesion, let alone social mobility, in such circumstances are dire.
We should also note the regional dimension of inequality in England and welcome the first report of the UK2070 Commission, chaired by the noble Lord, Lord Kerslake. It notes,
“the historic concentration of public investment in London and the wider south-east”,
under successive Governments—Labour, coalition and Conservative—and its link to the concentration of political power in London.
Let us admit that all parties have contributed, over two decades and more, to the problems we now face. However, the Conservatives’ determination to shrink public spending to 35% of national income, against the 40% which was the agreed coalition target, is making economic inequality and social alienation much worse. We could do a great deal to solve such problems with 3% to 5% of our national income, instead of demanding more and more tax cuts for those already well off.
I heard a member of the Cabinet yesterday refer to our “broken social contract”. He is right to use such stark language. If not fixed, a broken social contract will threaten to break our liberal and democratic national community.
The second lesson of the commission was to be really careful about what the data is actually saying. The argument that poverty has dramatically increased since the financial crisis cannot be argued from the statistics the UN special rapporteur has chosen to use. It is incorrect to argue from the SMC data that the number of people in poverty has risen since 2008. Despite headlines, in reality the poverty level today is broadly similar to what it was prior to the financial crisis and before austerity policies. What is more, where the HBAI measure showed poverty falling throughout the financial crisis, which always felt counterintuitive, and rising since, the SMC shows that the rate of poverty rose, as one would expect, over the financial crisis, and has remained stable at its pre-financial crisis level. If we want to focus on the real tragedy of the past 20 years, it is that poverty levels have largely been stubbornly consistent, standing between 21% and 24% throughout this period. In fact, the SMC report shows that since 2001, under successive Governments —Labour, the Conservative/Lib Dem coalition and Conservative—while the composition of who is poor may have changed, the number of people in poverty has remained tragically consistent. It is too easy for us in this Chamber and in the other place in debate to say that 200,000 people have moved from one side of the poverty line to the other. However, there are 7.7 million people in persistent poverty who have been so generationally. If we are honest, none of us has really seen the sort of breakthrough here that we long for, and we cannot allow this to be the reality of this generation.
The good news that could have been highlighted is that there are fewer pensioners living in poverty than previously thought. This is a tribute to the hard work done to improve the lives of pensioners over the past two decades by Governments of all colours and shows that concerted policy action can really make a difference. The real value for the UN rapporteur in using the SMC measure would have been to better identify who is in poverty, with a full measurement framework that captures depth, persistence and the lived experience. Much of the inequality that the IFS will focus on in its five-year review is in this space, such as the inequality of mental health outcomes, education outcomes and employment opportunities for those in poverty compared with those who are not, among others. These are among the lived-experience indicators of the SMC measure, and the Deaton review is right to focus here. The UN rapporteur had an opportunity to highlight what has been left out of historical approaches to poverty measurement, particularly disability and full- time work.
“Highlighting the gaps doesn’t address the gaps”.
We need action, and we have known that we need action for a long time. Social mobility has been virtually stagnant for four years and requires the implementation of at least some of the recommendations of the Social Mobility Commission. On the gender pay gap, women on average still earn 18% less than men; progress is far too slow.
In 2010, we had in place much of the necessary infrastructure to support the programmes needed to address many of these challenges. These public programmes are being pared down, bit by bit. Institutions that protected vulnerable people are being closed, social care services are at breaking point and local government and devolved institutions are stretched far too thinly as more and more responsibility for this is given to them by central government. The social safety net that once provided a guarantee of security against the most extreme level of poverty and deprivation has systematically been eroded to focus austerity on the poorest while giving tax cuts to the privileged few.
In responding to this debate, I hope, as my noble friend Lord Dubs does, that the Minister will engage with these and other solutions, and confirm that a Government still led by a Prime Minister who promised to make a country that works,
“not for a privileged few, but for every one of us”,
will increase investment in them. Why is it that the Chancellor’s £26 billion reserve, taken from the poor by austerity, is being referred to as a “Brexit war chest”? I have to say to the Minister that I fear disappointment, but I caution her to avoid the responses her colleagues have deployed against the increasing evidence of inequality. She should avoid the Chancellor’s inclination to deny the existence of the scale of poverty and inequality; apparently, he does not see it, yet, as my noble friend and the noble Lord, Lord Wallace of Saltaire, pointed out, the evidence on the streets of the communities that we live in is there for us all to see.
Secondly, I welcome the increase in employment, but it is not a panacea for poverty. A shocking 2.8 million people are in poverty who are in families where all the adults are working, and one in six food bank users is working. In particular, will the Minister avoid the response deployed by the Prime Minister at PMQs on 22 May? When faced with the evidence of inequality set against the obscenity that the wealth of the 1,000 richest people had increased by £50 billion in the preceding 12 months, she stated that in every year under the Conservatives the richest had paid more tax. Does she not realise that this response provides evidence of growing inequality, not the opposite? Is she proud of the fact that the richest have increasingly monopolised both the wealth and the income of this country?
This is not rocket science. Indeed, it is blatantly obvious to more than 80% of British adults, who say that stronger families are important in addressing Britain’s social problems—as do an almost identical percentage of divorced people. Does the Minister agree that politicians do not need an unblemished track record in their own family matters to recognise this urgent issue and to do something about it? I am not, of course, thinking about anyone in particular who has—shall we say?—a particularly colourful family life.
Deaton and his team have promised to look at whether growing rates of parental separation and single parenthood are due to changes in either cultural or social norms or to a cluster of disadvantages such as a decline in good working-class jobs and secure incomes—or to some combination of the two. His open-mindedness in the area of underlying causes is to be applauded, as is his willingness to open up the subject of family structure to much-needed scrutiny in the UK policy and research context. I trust that Professor Deaton will follow through and give this neglected driver of inequality the urgent attention it deserves.
In the limited time available, I want to turn to what the Government could do to help disabled people in the benefits system, which is an absolute lifeline for them. First, the implementation of universal credit is sadly and unnecessarily turning into a nightmare for many people. There are reports from all over the country of how it is not helping vulnerable claimants. Even in relatively prosperous places such as Winchester, I hear from Citizens Advice about a lack of care and flexibility in how such claimants are dealt with. This apparent heartlessness would not be imposed by the staff unless it was built into the whole system.
MPs’ postbags and CAB caseloads are full most of all with problems with PIP. Here is a typical example. A constituent of my MP colleague has heavy callipers on her legs due to a congenital hip condition and has had a Motability car for some years. However, on reassessment, she was told that, as she is able to drive, she must be able to walk, so she was refused enough points for the car. When the MP intervened, the car was restored, but just for two years,
“in case your legs get better”.
This level of ignorance is unforgivable, but it is not unique.
Citizens Advice in Mole Valley, Surrey, is particularly concerned about mandatory reconsideration, meaning that decision-makers have to examine a claim before a possible appeal. This is still far too much of a rubber-stamping exercise. At the end of January 2019, 81 % of new claims and 76% of reassessment decisions reviewed at MR were overturned on appeal. Clearly, therefore, it is not working. It causes delays, stress to claimants and is confusing and poorly understood. Some 73% of cases are overturned by tribunals. We clearly need an assessment of the cumulative impact of welfare policies on disabled people and a levelling of the playing field.
Today, I will focus specifically on the effects that globalisation has had on inequality in the UK and the regions. In this, we must not lose sight of one central fact: when viewed at a global level, income inequality has continually reduced over the past three decades, principally brought about by the lifting of millions—if not billions—out of poverty in India and China. More than anything else, this shows the immense power of capitalism and globalisation to transform lives for the better and transform the world for the better.
There are, however, dark sides to this. One is the effect that globalisation has had on many workers in the West, including in many sectors of the UK. Too often, globalisation is presented by politicians and economists as an unalloyed good, when in fact it has caused huge disruption, many job losses and wage reductions in many sectors of western economies, including that of the UK. It is those at the lower end of the income scale who have suffered most from this. What, therefore, should be done? We should not abandon free trade, raise tariff barriers or protect failing national industries. What we really need is a globalisation that works for all in the economy. I will raise several points here.
First, public discussion must be much more open, as there are costs as well as benefits to globalisation. Secondly, training and reskilling the workforce is going to become ever more important as changing global markets continue to affect old industries. Thirdly, there needs to be much more of a focus on areas outside the metropolis. The Deaton report makes it clear that London has experienced much higher growth than other regions—as mentioned by the noble Lord, Lord Wallace—such as the Midlands, where I am from, and the north. This is partly due to the hollowing out of old industries. Much more must be done to encourage clusters of new industries to be set up outside the capital and to renew the infrastructure in those places. That is why initiatives such as the northern powerhouse and the Midlands engine are so important. They must get the focus they deserve.
I finish with a question for the Minister: can she assure us that renewed focus will be given to revitalising areas outside the capital and, importantly, that the Midlands will not be excluded from these initiatives? With interest rates at record lows, the Government should seize the opportunity.