Orders of the Day — Family Allowances and National Insurance Bill

Part of the debate – in the House of Commons at 12:00 am on 8th November 1967.

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Photo of Dr David Owen Dr David Owen , Plymouth, Sutton 12:00 am, 8th November 1967

I am grateful to the noble Lord for that intervention. I was not saying that the party opposite cuts back in a period of boom and growth. Some of their programmes in the period 1963–64 largely precipitated the balance of payments crisis. But when they have a period of deflation, as they had on three separate occasions, they cut back on vital social programmes, including such things as hospitals and schools. The record is there to be seen.

This Government, to a great extent, have not done this, and that is a great tribute to them. But I now detect a danger that the public expenditure programme is likely to be cut back. Let us get some sanity into the argument about public expenditure. It increases every year, but so does personal consumption. I would not argue that we can increase public expenditure and cut back personal consumption so that it does not increase. That would be electoral disaster, apart from anything else, and no one would advocate that.

But there is a real argument between the relative growth rates in public expenditure and personal consumption. I argue that if a Socialist Government face a situation where it is necessary to deflate the economy they must preserve public expenditure at the expense of private consumption. The balance must be shifted in favour of public expenditure. For a relatively small cut in personal consumption we get a large increase in public expenditure. It is necessary to keep up our rate of investment in social expenditure, and if it means cutting back slightly on personal consumption that cannot be helped.

There is a great educational point here for Labour supporters. We must convince people that the quality of life and even their standard of life is improved by social investment. It is all very well for a person to say, "Hospital treatment, benefits, and redundancy payments do not affect me". They may affect him. He may suddenly become ill, and then he will want the best hospital. He may want a kidney dialysis unit. One of his children may be ill, and then he will want it to have the best treatment. Persons who have just got married and have no children might not care about family allowances, but they may have children later. There may be some resentment among older people, but many of them are grateful for the way in which we look after children, and do not resent the fact that families, and sometimes their own children, do not have as difficult a time in bringing up their children as was formerly the case.

This is the central argument, and until the party opposite tackles the question of its underlying attitude to public expenditure and social expenditure, and can be honest on this issue, I will not take seriously any of its plans for the alleviation of poverty. The facts are that during a period of immense affluence in the postwar years the gap between the rich and the poor widened. In 1959 the indictment on the party opposite was expressed by Professor Titmuss in "The Irresponsible Society".

We must make sure that when the record of this Government is read we shall be able to say that they redressed the balance, kept faith with the people, increased social expenditure and tried to alleviate the hardships of the poor. Many steps have been taken, and the idea of geographical discrimination as envisaged in the Plowden Report must be expanded.

I now turn to the controversial point of private rents. I realise that this question affects only a small proportion of the people who are in poverty, but it is a major element in tipping some families into severe poverty. It is no good saying that they must have council houses. Many of them live in areas where they have to wait for five, six or seven years for a council house. The Labour Government introduced the new Rent Act. We have accepted the fact that private landlords will be with us for another decade, or perhaps two decades, so we must make the Rent Act work. We must accept the fact that the private landlord provides the roofs over the heads of some people who are extremely poor and who cannot get any other accommodation.

As we have introduced the rate rebate scheme and as rent rebates are introduced in more and more of our council houses, so in my opinion we must introduce a rent rebate scheme for private tenants. I know that such a proposal would be extremely difficult to implement, and I know all the arguments against it, but rent is a major element in the poverty of some people, especially in some of our city areas, and it must be tackled. It is no good saying that we should build more council houses; this Government have done more than any other in that respect. We shall have the problem of high private rents for the next 10 years.

We should bring in a scheme whereby a private rent should be paid only when it has been assessed as fair by a tribunal. We must use the existing machinery. We cannot subsidise private tenants, and we do not wish to bolster them. A rent rebate would be contingent on the rent having been assessed by a rent tribunal. I should like to see us developing imaginative policies in this way.

I welcome the Bill. It will mean that many families will find this winter a much easier one than would otherwise have been the case, and when the full amount of the increase comes in the spring it will represent a significant advance in our attempt to alleviate the burden on poor people.