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Social Inclusion

My Lords, I too thank the noble Baroness, Lady Morgan, for having given us an opportunity to debate these issues. So many noble Lords have painted on such a wide canvas. Many of your Lordships will remember that on the Liberal Benches these subjects were the preserve of Conrad, Lord Russell, whose belief in justice and in the ties of community and society were articulated with such passion and erudition that anything I might say on this subject will reflect the base of the learning curve rather than its height, which would have been his terrain. The causes are well worth championing. As many noble Lords have mentioned, inequality, both economic and social, has an impact on society far beyond the traditional measures of economic growth. There are volumes of economic research. I will mention only Putnam, Sennett, Layard and Wilkinson, as well as the noble Lord, Lord Giddens, who is missed today, for his expertise would have well informed this debate. The research shows significant consensus now that well-being, health and happiness have far more complex underlying factors than the simple levers of prosperity and material consumption would indicate. This is not to underestimate the impact of market economics as having been the driver of levels of wealth and prosperity that Adam Smith in his time might have found unimaginable; it is simply to acknowledge that the market has served us well over the past 200 years in an era of unparalleled opportunity, when many have choices to the point of confusion, technology makes our planet infinitely smaller in terms of our knowledge of it, and the inter-generational span is expanding so that our children will soon know their great-grandparents. Alongside the progress, however, we have also witnessed the effects of consumption and exploitation: the loss of habitat and environmental damage that will preoccupy subsequent generations as well as our own; the prevalence of disease whereby in some parts of the world children will not have known their parents, despite the availability of drugs; and, within the developed world, the situation in rich countries where so many still live in relative poverty and isolation, as we have seen in the aftermath of Hurricane Katrina, or in the public disorder in France and Britain in the past few months. Many noble Lords have spoken of the causes of social exclusion. I will confine my observations to three broad areas where I think the Government’s policy has run counter to the spirit of their commitment to reduce exclusion. These are to do with the young, those in what I call the age of social investment; adulthood and working life, where there is a role for the enabling state; and old age, where there is a duty for the state to provide dignity with support for its citizens. The first period, from early years to late adolescence, where children’s and young people’s life chances are determined, is critical. There have been some very positive measures to improve life chances in the early years and to equip parents to provide good care. One example of this is Sure Start, where programmes seem to be providing real opportunities for early years development and learning. While this is helping the very young, however, the evidence does not seem to demonstrate much effect on school performance. We find that the relationship between poverty and poor school performance remains, with disproportionate exclusions as acute as ever. Within the early-years and school-years groups, when the evidence shows that more investment will reap rewards, we see precious financial resources diverted to the Child Trust Fund, which will have a limited return on today’s investment at the age of 18. In fact, recent research on the take-up of the Government’s contribution proves that it is not even going to achieve its objective of providing a vehicle for parents to save for their children. I turn to older children and education. Despite a host of reforms over the past eight years, none has so far succeeded in shaking that dreadful statistic that approximately 10 per cent of primary school children leave primary school at the age of 11 without being able to read, write or add up properly. We know full well that it is this 10 per cent who then proceed to fail through secondary school, drop out at age 14 and end up as the 10 per cent who are classified as not in education, employment or training. It is unsurprising that this group then goes on to form the bulk of the 20 per cent of our adult population who are functionally illiterate. They pay the price of a system that is failing some. Alongside are those young people who suffer from complex needs. Along with the increasing numbers of young people who are locked up in prison, they can suffer forms of mental illness, or require special educational needs that are unrecognised. A significant number of anti-social behaviour orders are handed down to such vulnerable young people, who can then end up in prison. As the Social Exclusion Unit’s recent report points out, they need individual support orders, not anti-social behaviour orders. The failure of the system to catch mental health problems in the young has lifelong consequences, as many noble Lords have mentioned. Such provision as there is concentrates on meeting special educational needs and therapy. Anything outside the special educational needs framework is scant. There is a crying need for trained counsellors to be attached to primary schools to identify vulnerable children early and to provide support for better parenting. My second theme is the period of life when the state should act as an enabler; the period of adulthood when we are at our most productive. In this period we see the role of the state as critical in ensuring that the tax and benefit system is both equitable and fair. While progressive taxes help with countering the rampant inequalities of the marketplace, it is the timidity of the Government towards them and towards fairness that is so grossly unjust. I refer to that single most inegalitarian tax—the council tax. It remains disproportionately helpful to the very rich at the cost of the less well-off. Its capping renders local authorities unable to deliver essential services, pace the black hole of £2 billion projected by the LGA for the next financial year, and which continues to weaken accountability between the taxpayer and the deliverer of services. It is time that we changed the system in favour of a fairer one where people’s taxes are based on their incomes—that simple concept of ability to pay. After years of procrastination on this issue we look forward to seeing the Government’s response to the Lyons review, and we hope that it will get more favourable treatment than that accorded to the noble Lord, Lord Turner. My final point deals with that period in life when we become senior citizens, that period of old age when the state has a duty to ensure that we live our remaining years in dignity and freedom. I emphasise both words because they are interconnected; one cannot have dignity without Beveridge’s freedoms—most importantly, at this age, the freedom from want, as the noble Lord, Lord Desai, mentioned. That brings me to the Government’s response to the proposal for a universal state pension in the Turner report. I emphasise two groups in particular—women, who are disproportionately affected by poverty in old age, and ethnic minorities. From the Department for Work and Pensions research, we know that the wife has a very different tale from the husband, even where she has a private pension. She earns less throughout her life, starting and ending at 80 per cent of median earnings, and when she retires in 2005 at age 60, she can at best buy a life annuity of around £102 per week. The husband, on the other hand, starts work at 100 per cent of median earnings and continues at above earnings growth, falling back to 100 per cent of median earnings at retirement. At his point of retirement at age 65, he can buy an annuity of £370 per month. Some of us might acknowledge that women are the lesser sex, but by almost four times? I think not. Another pension scandal affects ethnic minorities, and we are now 10 per cent of the population with demographic trends pointing to an increasing trajectory. Yet, some 70 per cent of ethnic minority women are economically inactive. Those who are in employment have to deal with the issues of discrimination and economic disadvantage faced by the ethnic minority population as a whole, as well as their own gender disadvantage. They face, in the words of the Department for Work and Pensions report, a,"““potential three-pronged erosion of retirement income””." In reality, 23 per cent of Pakistani and Bangladeshi women are not accruing any basic state pension, compared to around 13 per cent of white women. Surely in looking ahead at the issues to do with social exclusion rather than inclusion the most fundamental measure must be that of supporting all citizens at a minimum level of independence that is commensurate with a rich society—I come from the Dahrendorf school in my approach to the role of the state. In not doing so, one stores up problems for future generations of a greater impact than we might guess at now. If the Government are serious about their commitment to social justice they need to prove it, with a more honest attitude towards caring for our older people. In concluding, I return to my three themes of nurturing our young, providing a fair framework to enable adults to avail of the opportunities that this age provides, and to respect our old and their contribution to our generation through giving them a proper safety net. From these Benches we are prepared to do our part to attain those goals.