INSIDE PARLIAMENT : Always looking on the bright side of life

John Major was dubbed "a latter-day Pangloss" yesterday after he brushed aside evidence of the growth of poverty in Britain with an assertion that the "vast majority" of people were better off under the Conservatives.

Invoking Voltaire's over-optimistic doctor at the start of a debate on inequality, Donald Dewar, Labour's social security spokesman, said the Prime Minister's claim was almost by definition a picture of a divided community.

"There are people on the right side of the arithmetic, and no one complains about that," he said.

But while pensioners' incomes on average were rising, 1.6 million of them existed on income support. And while many families were comfortably off, others with several children and on low wages were in real difficulty.

With the debate based on last week's disturbing report by the Joseph Rowntree Foundation, Mr Dewar said some in the Cabinet still believed in the trickle down theory - "help the poor by making the rich richer". But it had been destroyed by the experience of the last 15 years.

The report showed that income inequality was greater now than at any time since the Second World War. Incomes of the bottom 10 per cent of the population are now 9 per cent lower than they were in 1979, after housing costs.

Repeatedly challenged to say what Labour would do to close the gap, Mr Dewar spoke of a "fairer" tax system and the need to help people into work. Labour would have to be "prudent", he said.

"I don't argue that the meek should inherit the earth, but I certainly don't believe they should be cut off without a penny."

At Question Time, Tony Blair mounted a trailer to the debate by putting the Prime Minister to the test on his "welcome commitment" of last Thursday to reducing inequality.

"Given that the electricity grid is an absolute monopoly subject to no competition, will he act against the excesses of the few regional electricity chiefs who stand to make £50m out of share options on the back of it?" Mr Blair asked.

To Tory cheers, the Prime Minister replied with a blow to the belt: "I find much of Mr Blair's opposition to share options rather synthetic, since a good deal of his leadership campaign was financed out of the proceeds of share options."

The contribution of three senior executives of London Weekend TV -

Greg Dyke, Barry Cox and Melvyn Bragg - to Mr Blair's election has been exploited to the full by the Tories. But the Labour leader ignored the jibe,

merely noting that Mr Major

was "prepared to do nothing" on the profits of electricity bosses, before issuing a further challenge to him.

"Given that there are still around 1 million long-term unemployed, and given that his Government is proposing a £50m cut in help to the unemployed, will the Prime Minister therefore act in respect of that?" he asked.

Mr Major offered to help Mr Blair with some facts he had overlooked. There were ample statistics to show "the vast majority of people are better off", he said. Average incomes had risen by over a third since 1979 and vulnerable groups had been protected.

But Mr Blair took the answer to be another negative. "Whatever the Prime Minister says about reducing inequality, he will do nothing about greed at the top and nothing about protecting the unemployed at the bottom." Labour's motion for the debate, claiming Government policies had seen a trebling the number of families living on less than half the national average income and calling for a major welfare-to-work programme, was defeated by 291 votes to 252.

Peter Lilley, Secretary of State for Social Security, said it was simply not sensible to claim that because the rich were getting richer, the poor were getting poorer.

"It is arithmetically true that if the incomes of some better-off groups outstrip the average there will be more people below the average. But to define poverty purely as a fraction of average income is to distort the meaning of the word," he maintained.

One word which Mr Lilley may wish did not have such plain meaning is "meagre", which he used in an unscripted remark to describe current DSS benefit levels.

The Government, he said, believed that incentives to get people back to work and in-work benefits were the right approach - "not complacently assuming that you just have to make life ever more comfortable".

Unhappy with the word "comfortable", he added: "I don't pretend that the present level of benefits is anything more than meagre in the long run." Opposition MPs protested and Mr Lilley paused, but he dug no deeper.

"Meagre" is not a description of social support that will appeal to Alan Howarth, Conservative MP for Stratford-on-Avon, who recalled Disraeli's 1872 dictum that great object of the Conservative Party should be the elevation of the people.

The party had been at risk lately of neglecting the balance between competition and compassion.

"It is the role of government to maintain the cohesion of society, a society which embraces all its members. Extremes of inequality are not acceptable," Mr Howarth said.

"Ministers should note very carefully the outrage that has been expressed in this country at some of the extremes of pay increases and rewards we see for the directors of privatised companies. It isn't the politics of envy, it's the politics of fairness."

Another Tory backbencher, David Lidington, MP for Aylesbury, supported the call of the Archbishop of York, John Habgood, to promote marriage through tax cuts.

"Very few of us here are candidates for sainthood and we should speak cautiously. And, in the end, we cannot legislate to provide for human affection, one to another," Mr Lidington said.

But with those qualifications, he went on: "I do believe that what Dr Habgood said was right."

The Government should seek to provide an incentive for people to marry and stay married, perhaps concentrating it on lower-income couples - "because it's true that it is within a stable family with two parents present that children have the best chance of an upbringing which will allow them to develop their full potential".