`Islands of division' growing

A leaked Whitehall document detailing how Government policies have contributed to a widening of the gap between rich and poor, creating "islands" of poverty, was seized on yesterday by Labour ahead of a Commons debate on the issue on Tuesday, writes Nicholas Timmins.

A note of a meeting of eight permanent secretaries, chaired by Sir Robin Butler, the Cabinet Secretary, is said to conclude that government policies aimed at providing more choice in education, health and housing and other fields have not helped the most deprived.

Details of the minute, disclosed in yesterday's Sunday Telegraph, quoted it as saying: "It was clearly not arguable that the number of poor people was increasing, even if it was not certain that in absolute terms the poor were getting poorer".

The minute added: "There was frequently a trade-off between policies designed to widen choice, e.g., in housing education and health, and policies targeted on the most deprived. It was often the better-off who were able to take most advantage of wider choice."

The findings reflect last week's report from the Joseph Rowntree Foundation, which warned of an unprecedented gap between rich and poor and said that short-term policies aimed at producing savings were creating long-term costs, including a rising benefit bill.

Among the policies singled out is the switch of housing subsidies from bricks and mortar to people, the resulting higher rents for "social housing" leading to more people dependent on benefit. The civil servants add that incentives for council tenants to move out and buy have led to "ghettos" of welfare-dependent housing, in which up to 80 per cent are unemployed.

Education policies are said to discourage schools from targeting under- achieving pupils. The abolition of the married couples allowance is said to have stimulated the growth of unmarried mothers. Bus deregulation has seen services withdrawn from poor areas, making travel to work more difficult.