Peter Mandelson addressing the Fabian Society (Dur 35") Government To Tackle Underclass The Government has unveiled plans for a new unit to tackle inequality. It will operate at Cabinet Office level and will be chaired by Tony Blair. The announcement was made by the Minister without Portfolio, Peter Mandelson. In a lecture to the Fabian Society, he described the exclusion of a growing number of people from mainstream economic and social life as the biggest challenge facing government. Labour's former deputy leader, Roy Hattersley, went on the attack on that point three weeks ago and the present announcement suggests the criticism has hit home. Mr Mandelson said he "profoundly disagreed" with claims by critics, including specifically Lord Hattersley's, that because Labour was not prepared to raise more taxes, it was no longer a force for a more equal society. Lord Hattersley later welcomed the speech, but appealed for "less PR and more philosophy".

Inequality to be tackled across government departments

"However, we will have achieved that result by many different routes, not just the redistribution of cash from rich to poor which others artificially choose as their own limited definition of egalitarianism."

The Prime Minister himself will chair the social exclusion unit which will examine new ways of preventing the growth of an underclass and will draw some members from business, local authorities and voluntary bodies.

Speaking to BBC Radio Mr Mandelson said the Prime Minister was dedicated to tackling social inequality. He said that ever since Tony Blair's first speech, the Prime Minister had underlined the need to "combat the legacy of the underclass".

"The Prime Minister believes that the Government's performance as a whole is insufficient to match the scale of the problem - and that's what we're going to address."

Lord Hattersley

...giving BBC Radio his reaction to the speech (Dur 3'32")

In today's speech, Mr Mandelson added that Mr Blair felt efforts were "insufficiently directed, that we spend a great deal of money and energy but too much of it goes to alleviating the effects of social exclusion rather than preventing it happening".

"Vast sums" of money were spent by different agencies, often on the same people through different programmes, without improving their ability to participate in the economy and society.

Tackling Disaffected Youth

The new unit would "draw together a panoply of new initiatives, shift the focus of government programmes towards preventing social exclusion and make recommendations for changes in policies, programmes and machinery effectively to attack social exclusion".

Issues it will initially tackle include action on disaffected youth, with new measures to deal with school exclusion, truancy and juvenile crime, and a drive to stop teenagers from children's homes drifting into homelessness and crime. Its remit will also have a racial dimension in recognition that people from ethnic minority groups figure disproportionately highly among the long-term unemployed, lone parents and those expelled from school.

He said: "It is a huge test for our vision of society and a test that we must not fail."

Thatcher had "Driving Energy"

This Labour government has been more fortunate so far than those of 1974 and 1964, because of a "realistic" approach to public spending, backed by a "clear sense of disciplined priorities", he said.

Shadow Social Security Secretary Iain Duncan Smith said: "The day after the unemployment figures fall once again, this policy is not about reducing unemployment.

"This is about reducing the unemployment of one man - Peter Mandelson - a job creation scheme to stop him causing trouble for everyone else, demanded by John Prescott and others."

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