The Committee deliberated.

Draft Report, (Poverty in Scotland), proposed by the Chairman, brought up and read.

Ordered, That the draft Report be read a second time, paragraph by paragraph.

Paragraphs 1 to 85, read and agreed to.

Paragraph 86 read, amended and agreed to.

Paragraphs 87 to 119, read and agreed to.

Paragraph 120 read, as follows:

'A number of measures aimed at helping pensioners are in place or in preparation. These include maintaining the basic state pension as the foundation of retirement income, reduction in VAT on domestic fuel, an increase in winter fuel payment, free television licences for people aged over 75, the minimum income guarantee, a new state second pension, stakeholder pensions, improved regulation of private pensions and better information to help people plan for retirement. The Better Government for Older People Programme is intended to test ways of delivering services for older people in a way which is better integrated and co-ordinated across agencies and is more user-friendly'.

Amendment proposed in paragraph 120, at end to add the words 'We recommend, however, that the winter fuel payment, the Christmas bonus and free television licences for the over-75s be consolidated into an increase in the basic state pension, with an adjustment to tax allowances'.—(Mr Desmond Swayne.)

Question put, That the Amendment be made.

The Committee divided.

Ayes, 1	Noes, 8
Mr Desmond Swayne	Mrs Irene Adams
	Miss Anne Begg
	Mr Russell Brown
	Mr Eric Clarke
	Mr Mohammed Sarwar
	Sir Robert Smith
	Mr Bill Tynan
	Mr Andrew Welsh

Paragraphs 121 to 123 read and agreed to.

Paragraph 124, read as follows:

'The introduction of the minimum income guarantee has helped to address the needs of the poorest pensioners and has begun to narrow the gap between rich and poor. We welcome this and recommend that the Government continues to increase the minimum income guarantee, particularly for those over 80 years of age, until it reaches a level commensurate with the minimum income standard to which we refer in paragraphs 150 to 152'.

Amendment proposed in paragraph 124, in line 2, to leave out from 'poor.' to 'a' in line 5 and insert the words, 'However, we recognise that this will only work if other recommendations on take-up are fully implemented. Therefore, in the meantime, at the very least the pension payable to those over 80 years of age should be increased to'.—(Sir Robert Smith.)

Question put, That the Amendment be made.

The Committee divided

Ayes, 2	Noes, 6
Sir Robert Smith	Mrs Irene Adams
Mr Andrew Welsh	Miss Anne Begg
	Mr Russell Brown
	Mr Eric Clarke
	Mr Desmond Swayne
	Mr Bill Tynan

Paragraph 125, read as follows:

'However, fundamentally we believe that the basis for support in old age should be the universal state pension, payable at the age of retirement. The state pension should be linked to the increase in average earnings. The extra income that would result would reduce the need for benefits (and the obstacle course presented by complicated claims forms) and overcome some at least of the time and effort currently required to administer the minimum income guarantee. It would allow the Exchequer to receive the extra tax that the more affluent pensioners would become eligible to pay; and would enable the wealth of a prosperous society to be directly shared by the elderly'.

Question put, That the paragraph stand part of the Report.

The Committee divided

Ayes, 7	Noes, 1
Mrs Irene Adams	Mr Desmond Swayne
Miss Anne Begg
Mr Russell Brown
Mr Eric Clarke
Sir Robert Smith
Mr Bill Tynan
Mr Andrew Welsh

Paragraph 126 read and agreed to.

Paragraph 127, read as follows:

'In its recent Report on The Contributory Principle, the Social Security Committee considered whether National Insurance contributions should be raised to pay for improvements to benefits, including the basic state pension. The Social Security Committee concluded " The Government Actuary's figures show that, in order to pay for earnings uprated benefits, the combined contribution rate for employers and employees would have to rise by 3.2 percentage points by 2020-21 and by 7.6 percentage points by 2060. In the context of real earnings growth, we recommend that the Government should consider this as one option for funding improvement to benefits"'.

Question put, That the paragraph stand part of the Report.

The Committee divided

Ayes, 7	Noes, 1
Mrs Irene Adams	Mr Desmond Swayne
Miss Anne Begg
Mr Russell Brown
Mr Eric Clarke
Sir Robert Smith
Mr Bill Tynan
Mr Andrew Welsh

Paragraph 128, read as follows:

'The Government was right initially to concentrate on the poorest pensioners, but we recommend that it should now ensure at the earliest opportunity that the level of state retirement pension is linked to changes in national average earnings'.

Question put, That the paragraph stand part of the Report.

The Committee divided

Ayes, 7	Noes, 1
Mrs Irene Adams	Mr Desmond Swayne
Miss Anne Begg
Mr Russell Brown
Mr Eric Clarke
Sir Robert Smith
Mr Bill Tynan
Mr Andrew Welsh

Paragraphs 129 to 155 read and agreed to.

Paragraph 156, read as follows:

'The Secretary of State reminded us that the New Deal was not a mechanism for creating new jobs. It was designed to help people back into work by allowing people the experience, training and assistance to get jobs. Besides, many people had as a result of their New Deal involvement managed to achieve sustainable jobs. We accept this assessment, up to a point, and we support the Government's view that primacy should be given to ensuring that the workforce is adequately trained for the available jobs. But, we think it is important for the Government to keep an accurate record of subsequent developments in the working lives of New Deal participants. Such information should be placed in the public domain. Scottish Enterprise has commented on the "revolving door syndrome" which has been apparent during previous training for work programmes, where up to 25 per cent of those involved have been on the programme before'.

Amendment proposed in paragraph 156, in line 3, to leave out from 'jobs.' to 'We' in line 6.—(Mr Desmond Swayne.)

Question put, That the Amendment be made.

The Committee divided

Ayes, 1	Noes, 6
Mr Desmond Swayne	Mrs Irene Adams
	Mr Russell Brown
	Mr Eric Clarke
	Sir Robert Smith
	Mr Bill Tynan
	Mr Andrew Welsh

Paragraphs 157 to 173 read and agreed to.

Paragraph 174, read as follows:

'We therefore recommend that the Government should not be blind to innovation beyond that displayed by its assault on poverty through welfare to work programmes. Major diseases require intensive care; and there are areas of Scotland that, in our opinion, will not respond to the treatment currently on offer. Awareness of the nature of the problem and a willingness to invest public money in suitable job creation schemes should be a matter of priority. The jobs need to be sustainable in a globally competitive world and offer reasonable rates of pay to attract people from welfare to work'.

Amendment proposed in paragraph 174, in line 4, to leave out from 'offer.' to 'The' in line 6.—(Mr Desmond Swayne.)

Question put, That the Amendment be made.

Ayes, 1	Noes, 6
Mr Desmond Swayne	Mrs Irene Adams
	Mr Russell Brown
	Mr Eric Clarke
	Sir Robert Smith
	Mr Bill Tynan
	Mr Andrew Welsh

Paragraphs 175 to 222 read and agreed to.

Paragraph 223, read as follows:

'The enduring nature of poverty was recognised as far back as Biblical times. Over the years governments have attempted to alleviate the worst excesses of poverty. In an imperfect world the total elimination of poverty in any one country is unlikely. It is important, however, for society at large to continue the fight. It is diminishing for everyone concerned to be part of a community within which some people are forced into sleeping on the streets, enduring squalid and unacceptable living conditions or existing on an entirely inadequate income. Different governments will adopt varying methods of dealing with poverty. The current Government has placed much emphasis on providing opportunity to develop potential and skills and to getting people into work. This approach is commendable, but it should not overlook the plight of those whose circumstances do not allow them to engage in what is on offer. The benefits system has a place. Where it is used it should be generous and whole-hearted in its support for those in need. At the same time, extreme care needs to be taken to avoid abuse, undue reliance on benefits and the creation of poverty traps'.

Amendment proposed in paragraph 223, in line 5, to leave out from 'people' to 'on' in line 6 and insert the word 'sleep'.—(Mr Desmond Swayne.)

Question proposed, That the Amendment be made:- Amendment, by leave, withdrawn.

Paragraph 224, read as follows:

'The function of job creation cannot be left entirely to the market place. As Professor Sinfield has indicated, recent emphasis on individual responsibility has led to the neglect of the wider, structural causes of poverty. An innovative and radical strategy to develop quality jobs in areas of high and long-term unemployment is needed. The Government should not fight shy of following this route. At the very least a pilot project might be tested. Quality jobs in this definition does not of course necessarily mean well- paid white collar work; it could equally well refer to skilled and semi-skilled manual work—any type of employment that is meaningful and brings with it pride and heightened self-respect. With measures in place to counter the consequences of poverty like health inequalities, poor educational attainment, excessive drug and alcohol misuse, the knock-on effect of increasing employment opportunities could be profound'.

Amendment proposed in paragraph 224, in line 1, to leave out from the beginning to 'As'.—(Mr Desmond Swayne.)

Question put, That the Amendment be made.

The Committee divided

Ayes, 1	Noes, 7
Mr Desmond Swayne	Mrs Irene Adams
	Mr Russell Brown
	Mr Eric Clarke
	Mr Mohammed Sarwar
	Sir Robert Smith
	Mr Bill Tynan
	Mr Andrew Welsh

Annexes agreed to.

Resolved, That the Report, as amended, be the First Report of the Committee to the House.

Ordered, That the Chairman do make the Report to the House.

Ordered, That the provisions of Standing Order No.134 (Select Committees (reports)) be applied to the Report.

[Adjourned till Wednesday 1 November at Ten o'clock