Poverty

Baroness Jones of Whitchurch Excerpts

Thursday 22nd July 2010 Lords Chamber

[Baroness Jones of Whitchurch]

My Lords, I congratulate my noble friend Lady Donaghy on her passionate and informed maiden speech. I would have expected no less of her, having known and admired her abilities for nearly 30 years. I first met her when we were both trade union officials in the university sector in London in the 1980s. Since that time she has had an impressive trade union career becoming the president of both her own union, NALGO, and then president of the TUC.

Following that time, as we have heard, she served as chair of the Advisory, Conciliation and Arbitration Service for seven years, helping to make it into the modern and effective organisation that it is today. It was also one of the periods of the lowest industrial unrest in its history and, as she has indicated, I am sure these skills of bringing peace and harmony to potentially warring factions can be put to good use in your Lordships’ House, not least among noble Lords on the coalition Government Benches. Finally, lest anyone might think that her skills are on the soft side, she also served on the Committee on Standards in Public Life for seven years before becoming its interim chair. I am sure that she will play her part in keeping us all in line in the years to come, with her trademark reputation for intelligence, independence and straight talking.

I add my congratulations to my noble friend Lord Boateng on his passionate and inspired maiden speech and very much look forward to the maiden speeches of other noble Lords in this debate.

Before I start, I declare an interest as the chair of Circle 33 housing association and record that I am a volunteer in The Passage homeless centre in Victoria. I, therefore, have some direct experience of the fine line walked by some of the most disadvantaged and vulnerable in our society, for whom managing a weekly budget and staying out of debt is a constant trial and burden. It takes only one trigger—perhaps a partner leaves, someone falls ill or an employer closes down—for an individual or family to fall behind with their rent and face homelessness. When you are already living in poverty the financial margins are tight and the consequences of default can be devastating. I say that in the confident knowledge that the previous Government—my Government—both understood this fear and acted on it. They understood that you could be working but still poor and they introduced the working families tax credit to make work pay. They understood that a child brought up in poverty would bear the scars for life and so they increased child benefit and set a goal of ending child poverty completely by 2020. They invested in jobs and training to give people the skills to get secure and rewarding work.

Of course, not everything they did was perfect and not all their ambitions were achieved but I am proud of a Government who invested in public services, reduced unemployment and raised people out of poverty. We went a long way to creating a fair and benevolent society in which the poorest and most vulnerable were protected.

That brings me to this Government’s Budget and what it tells us about their values and beliefs. First, they seem to have abandoned the post-war Keynesian analysis that government fiscal and monetary measures can mitigate against economic recession. Instead, we appear to be returning to a rather alarming 1930s free market programme, which became discredited first time round and now risks driving the recession into a deeper and longer trough. Of course, there is a need for a clear deficit reduction plan and part of that will inevitably include tough choices on spending. But in the current fragile world economy, there is a particular imperative to prioritise growth as a precondition for economic recovery. That remains Labour’s strategy. It is based on sound economic modelling and was already proving to be successful in stopping our economy sliding into a recession. Therefore, the question remains: do the current Government have an alternative growth strategy or are they happy to let high unemployment and increased poverty act as the drivers for future economic policy?

Secondly, despite their election promises, they are intent on squeezing public services and cutting front-line staff. It is obvious to everyone that departmental cuts of 25 per cent or even more can be achieved only by wholesale services being abandoned. Those public servants who are lucky enough to remain will have their income and, therefore, their spending power reduced as a result of the freeze in public sector pay, while those who are made redundant will cost the country billions in lost tax revenues and increased benefit bills. The consequence of this policy is bound to have a further depressing effect and will, of course, particularly impact on the poorest regions where public services play a particularly valuable role.

Thirdly, they appear to be abandoning the goal of ending child poverty by 2020. At present nearly 4 million children are living in poverty in the UK. We know from previous research that child benefit has proved to be one of the most effective and popular ways of cutting child poverty so freezing it for three years will hit the very families who need it the most. Again, this will prove to be a false economy because respected research from the Joseph Rowntree Foundation has estimated that £17 billion every year could be saved from public spending if child poverty was eradicated.

Finally, to return to a subject particularly close to my heart, the cuts in housing benefit will cause hardship to many and may well push families in high-priced areas on to the streets. There has of course been a need to reform housing benefit for some time, but the cuts proposed in the Budget are not the solution. There is a myth developing that housing benefit claimants are wayward families bent on living the highlife. In truth, as Shelter research has confirmed, the vast majority are pensioners, those with disability, people caring for a relative, or hardworking families on low incomes, while only one in eight is unemployed. At the same time, nearly half of local housing allowance claimants are already making up a shortfall of almost £100 a month to meet their rent, so further cuts to this benefit could trigger a spiral of debt, eviction and homelessness.

Of course, at the heart of this problem is a critical shortage of affordable housing, which means that more and more families are forced into the private rented sector, often into inferior, poorly maintained properties with rents that are almost double those in the social housing sector. It is this lack of affordable housing that the Budget could have, and failed, to address.

This coalition Government have made the misuse of the English language into an art form. The use of words such as “fair” and “progressive” to describe a Budget that is blatantly neither of these things has rendered those words obsolete in their true sense. As the weeks go by and the consequences of the Budget are spelt out, it is becoming clear that the government agenda has at its heart an ideological drive to promote the free market, close down public services and hand over the remaining services to private multi-nationals. It is a policy that is increasingly saying to the poorest and most vulnerable, “You’re on your own. If you’re lucky, a charity or a private philanthropist will come to your rescue, but don’t expect anything from us”.

Interestingly, this attitude was notably absent in the election campaign. Prior to that, there was lots of talk of compassionate conservatism, but now there appears to be a view that compassion is for wimps. Budgets are inevitably about global statistics and calculations running into billions of pounds and affecting millions of people. But behind those statistics are real people, like the ones I work with at The Passage whose lives are on the margins of success and failure, for whom small shifts in their fortunes make the difference between a job start or staring at a wall all day, between paying their rent or being on the streets. These are the people I fear for with this Government’s policies, so I hope that the Minister is able to reassure me that my fears are groundless and that those at the bottom of the economy really will be protected in the years to come.