Mr. Robin Hanan:

We will try to cover the questions between us as thoroughly and briefly as we can so as not to take too much of the committee’s time. I overlooked referring to fuel poverty to which reference was made in the first round of questions. Unless we take action fuel poverty will get worse because nobody has projected that fuel prices will drop in the medium to long term. For a number of reasons with which we are all familiar fuel prices are likely to rise substantially. While special schemes and support schemes are useful the best way to tackle fuel poverty is to increase the amount of money available to people generally rather than simply to subsidise the fuel itself. It is also important to provide schemes to reduce fuel consumption which are much more broadly available. We have a problem at the moment but many schemes are only available to people who can afford to invest quite a bit of money in the first place and get the tax relief back.

We need schemes such as those in place in the Netherlands, Denmark and Germany under which people across the country can receive the advice they need on how to insulate their houses and turn them into what the Germans call energy producers rather than energy consumers through the use of a range of solar panels and various other measures. They can also receive advice on how to cut back on fuel consumption. All of these schemes must be made more generally available to those on low incomes. Many of them are available only to people who can afford to invest who get tax relief or special subsidies which account for a small proportion of the cost. That is a bigger debate, but it is another example of the reason poverty proofing is important. The climate change Bill is being discussed and it is important to poverty proof that legislation, as it is to poverty proof welfare schemes and so on to ensure they are available to everyone to create a more equal society.

We very much agree on the broader question raised of income equality. If we look at the societies in Europe and across the world that are most successful, there was a lot of detail documented in The Spirit Level in this regard. We are familiar with the fact that the Scandinavian countries, for example, which invest in social inclusion measures to a much greater extent and over a much longer period than we or many other countries in Europe do are not only the most successful in terms of all social outcomes - mental and physical health and education - they are also the countries heading the world competitiveness index. They are also the countries that have survived the recession or, as in the case of Finland which went into recession in 1990 because of special local circumstances to do with the border with Russia, that were able to come out of it relatively quickly as strong and cohesive societies. In the context of examining inclusive societies, they have a mix between taxation which is seen to be fair across the board - we have a situation where most people believe someone else is not paying his or her share of tax; the system is not seen to be fair, progressive and without major legal or illegal loopholes built into it which, as Mr. Ginnell mentioned, is particularly important - and welfare services that are seen to support people at times of unemployment.

One of the modern ideas replacing the Beveridge model across Europe which has been taken up by the ESRI and the Government in various reports is that of the active welfare state, sometimes known as "flexicurity". If we can provide people with a level of security, it makes it more possible to build a more flexible economy. We cannot restructure industries or expect people to move from lifelong dependence on one sector of the economy such as the building sector to other forms of work unless we provide adequate welfare supports, thorough training and access routes to employment, an issue I am aware the committee has been examining. The modern version of a welfare state is all about providing levels of income which make it possible for people to live a dignified life, while not preventing them from taking up work, in other words, the benefits people have when they are unemployed are not withdrawn if their income moves above a certain threshold but taper off to make it possible for them to return to work without hitting poverty traps. It is also about having access to adequate services, regardless of their level of income, the best of the medical and education systems, the best quality free transport services to get to work and so on. In other words, we should have a society that is cohesive which people believe they are contributing to and gaining from. We should not have one part of society resenting other parts because they believe people are either not contributing or are gaining too much.

We do not accept the view often expressed in the media that people on low incomes are not contributing their fair share of taxation. One of the biggest changes in recent years has been the shift towards VAT and consumption taxes which hit those on low incomes particularly hard. Those on low incomes are contributing a very high proportion of tax compared to most European countries and, as Mr. Ginnell pointed out, people on high incomes are relatively untouched by the taxation system in this country.

On the question of homelessness, there are many reasons-----