Entry: "Tackling Poverty Conferance - 16 October 2003"

Thank you Mayor and GLA
I’m Delighted to be here in Tower Hamlet, an areas with the highest density of poverty so its appropriate that we’re here. It also an area with the highest aspirations.
Tower Hamlets Children recently had the highest increase in educational achievement in the country. We’ve also had improvements by some sections of our ethnic minority community, which have outstripped all other groups. And of course, we have the first Bangladeshi Council Leader, Cllr Hellal Abbas, who will be speaking later.
I’m going to start by outlining the situation in Tower Hamlets and then go on to look at the two key issues that, in my view, have the greatest impact on poverty:

Employment

Housing

And then look at how these two issues affect different groups in London,
In particular ethnic minority groups and gender groups

Tower Hamlets

The Classic Tale of two cities. The City of London and the Docklands. Immense wealth, cheek by jewel with the worst housing in the UK; over 17’000 waiting list and overcrowding with 16 people in 2 bedrooms. So how much deprivation are we talking about?

In the Governments Indices of deprivation through which it funds neighbourhood renewal funding to the 88 poorest boroughs, shows that ALL Tower Hamlets wards bar one are in the UK’s 10% most deprived areas. Unemployment, which is approximately 4% nationally and 7% in London, yet in Tower hamlets it’s nearer 12%. Unemployment Rates for Ethnic Minorities are twice that of the white population. The average Wage for white Londoners is £12:11 per hour, and yet the average wage for Bangladeshi Londoners is only £5:92 per hour, less than half.

There is undoubtedly a skills shortage and an issue around low-skilled Londoners.
While London’s unemployment rate has dropped, these jobs have largely gone to managerial and professional workers from outside London, leaving low-skilled workers behind.

Now of course there have been successes
In 1997, in my constituency – Bethnal Green and Bow there were around 1’000 young long-term unemployed. Today following the introduction of the new deal for young people, that figure is down by 2/3 to just 310. And unemployment today stands at its lowest since 1975. In Bethnal Green and Bow since 1997, we’ve managed to get 2’000 people off benefits and into work. But despite this success, the Governments measures to tackle poverty and deprivation have had the least impact in London.

I’m grateful to the GLA for producing its excellent report ‘making work pay in London’. It chimes with what No.10 is doing (that must give you a heart attack Ken) in the PM’s strategy unity report on London. Both reports show that policies to help people avoid the benefit trap work less well in London. This means that couples with children, working on the minimum wage outside London are £17:79 better off than if they stayed on benefits. But for the same couple in London they would have to earn 46% above the minimum wage to be £17:19 better off - It doesn’t take a rocket scientist to work out why! The cost of living in London is so much higher and yet this is not adequately accounted for either in benefits or wages.

Labour research estimates that workers living in London needed at least £3’287 PA more to compensate for higher costs. When the National Minimum wage was introduced in 1999, the low pay commission calculated that approximately 1.3 million workers have a pay rise.

2/3 of these workers were part timers and 70% of them were woman.

Whilst people in London benefited, there was a much greater benefit to those in the North where the cost of living is lower.

When the minimum wage was intro the Socialist Workers Party called for a minimum wage of £5 per hour. Even with low inflation the minimum wage is up to £4:50 and soon it is going up again to £4:80

The Tories said we would lose a million jobs but we’ve gained a million jobs. So the argument over the minimum wage is won. But now we have to win the argument, if not for a regional minimum wage differential, then at least for that differential to be addressed through other means.

In my view, one of those other means is housing. For example through the way housing benefit is distributed. I’m sure the chancellor will want to take a look this, because he is so personally committed to tackling poverty and especially child poverty. Informal London weighting exists, but it doesn’t benefit the poorest.

So, for example, managers in London earn 30% more than their counterparts in the rest of the country. Sales assistants earn 10% more. But for some of the lowest paid, e.g. shelf-fillers + check out staff, they actually earn less than their counterparts outside London.

Overall, Government has increased by 300% council funding for housing from £750 million in 1997 to £2.5 billion this year.And we have doubled funding for affordable housing to over £5 billion. It’s a huge achievement but in tower hamlet its not enough. We need to use all the leavers available to us, for example through planning. I’m going to bore you with a Parliamentary Question I submitted recently

I asked Keith Hill

‘What measures he is taking to ensure that affordable housing
made available through planning gain is family sized accommodation’

He replied
‘On the 27th July, the office for the deputy Prime Minister 1published for consultation Influencing the size, type and affordability of housing, which set out proposed changes to the current policies on planning for affordable housing. The aim of these updates is to improve the match between the housing planned and the needs of the community. The consultation period closes on 31st October.

In Tower Hamlet there are seven Sure Start programmes.

Weavers and spitalfields has the highest overcrowding
1’270 children after 4
Working with 650 of the poorest children at present, providing activities such as speech and Language training at nursery.
Working with Fathers in Mosques to develop parenting skills
Also hoping to build a crèche in the new London Muslim centre.

Women

40% of UK woman have income of less than £100 per week and woman earn only 81p in every £ compared to Men. One of the major problems is the lack of affordable childcare. We need proper infrastructure for childcare, in the same way we’re building infrastructure for transport. For Woman, it has an even greater effect on them entering the Labour market than transport. This also adds to the benefit trap, meaning that Single parents are better off on benefits than they are working and paying for childcare.