Reduction of Compulsory Up-Rating of Certain Benefits

Orders of the Day — SOCIAL SECURITY (No. 2) BILL – in the House of Commons at 4:08 pm on 21st May 1980.

Alert me about debates like this

Mr. Stanley Orme (Salford, West): I beg to move amendment No. 1, in page 1, line 5, leave out Clause 1.

Mr. Speaker: With this we may take the following amendments:

No. 20, in page I, line 16, leave out ' paragraphs 1 and 4 ' and insert ' paragraph 1 '.

No. 21, in page 1, line 18, leave out ' maternity allowance '.

No. 22, in page 1, line 19, leave out ' paragraphs 1, 2 and 3 ' and insert ' paragraphs 1 and 2 '.

No. 2, in page 1, line 19, leave out ' 2 '.

No. 3, in page 1, line 21, leave out ' invalidity pension '.

No. 23, in page 1, line 22, leave out ' and maternity allowance '.

No. 4, in page 2, line 1, leave out '4, 5,'.

No. 5, in page 2, line 2, leave out from ' benefit ' to ' and ' in line 4.

No. 6, in page 2, leave out lines 6 to 12.

No. 7, in page 2, line 17, leave out from ' benefit ' to end of line 19 '.

Photo of Mr Stan Orme Mr Stan Orme , Salford West

This iniquitous Bill proposes a major change in social security policy, and clause 1 is at the basis of the Bill. It affects the unemployed, the sick, those who suffer from industrial injury, widows, the disabled, and other categories. The whole purpose of the Bill is to cut entitlement to benefits by five points.

The uprating that will take place in November this year will be a cut in real terms, because it will not meet the rate of inflation forecast by the Government, let alone the rate of inflation as it may be in November.

We are talking of 24 November, which is two weeks later than the date on which benefit payments should have been made. In essence, that means that people will be robbed of their entitlement to two weeks' increases. That is rubbing salt in the wound. People will not receive their due entitlement under the law.

I stress that this Government have created a turmoil in the social security system. In reviewing sick pay the Government have introduced a Green Paper. It is not really a Green Paper. It is not a consultative paper; it is a White Paper. The Government intend that sickness benefit shall be available for the first eight weeks of sickness—payable through the employer—at a lower rate than the present national insurance rate.

A major inquiry into industrial injuries was undertaken by the Department of Health and Social Security. I quoted from the report in some detail in Committee. The interesting thing about that report—a report by officials—is that it came out overwhelmingly in favour of industrial injuries payments and underlined the need for them. Many people do not realise that industrial injuries payments are to be cut by this Bill. I am not prepared to use the word "abatement". We are talking about cuts, not abating benefits as such.

Apart from this review, we have changes in the supplementary benefits system and the prospect of taxation at some date in future and no guarantee when it is to take place, though 1982 is forecast. The Secretary of State is not in a position to give a firm date. We have all this against the current rate of inflation. The social security system is in disarray and is creating uncertainty for beneficiaries. The Bill will have a demoralising and frightening effect upon claimants and will undermine the whole system.

We are talking about the rights and entitlements of 22 million insured people. It is right to emphasise that clause 1, which we seek to debate, is the heart of the Bill. A great deal of publicity has been given to clause 6—an important clause to which we shall come later—but the Bill is about not clause 6 but the whole basis of the social security system and the national insurance principle as such.

The Government forecast a rate of inflation of 16½ per cent., and we have to put that against 22 per cent. which is the current year-on-year figure. We do not know what the rate of inflation will be in November this year, but we have the Secretary of State on record in Committee casting doubt on whether that 16½ per cent. can be met. Therefore, we have a right to put a direct question to the Government. We talk about 16½ per cent., but in clause 1 we are talking about benefits for the unemployed, the sick and the disabled being uprated by only 11½ per cent. If the inflation rate is higher than 16½ per cent., it will mean considerably more than a 5 per cent. cut for beneficiaries. Therefore, we are entitled to ask whether, if there is a shortfall, if the Government's forecast does not meet 16½ per cent. and the rate is higher in November, the Government will make good that shortfall for the millions of beneficiaries who will be affected. It is bad enough for the unemployed, for those who have suffered industrial injuries and for widows to lose 5 per cent., but the prospect that they may lose considerably more is disastrous.

4.15 pm

I have some figures which I want to put before the House. If the rate of inflation were 18 per cent., the shortfall for a married couple on retirement pension would be 55p per week. If it were 19 per cent., the shortfall would be 95p per week. If it were 20 per cent., the shortfall would be £1·30 per week.

I turn now to unemployed single people. Unfortunately, there are far too many in our society at the moment. Under clause 1, they will have their benefits reduced by 5 per cent. If the inflation rate is 18 per cent., they will lose £1·20 a week. If it is 19 per cent, they will lose £1·35 per week. If the rate of inflation is 20 per cent., they will lose £1·55 a week. That is a considerable amount on a bene fit for a single person of only £20·65 per week. The Government must tell the House what their policy will be if there is a shortfall.

My right hon. Friend the Member for Norwich, North (Mr. Ennals), who was the Secretary of State for Social Services in the previous Labour Government, is present. He will appreciate that when there was a shortfall under that Government they recommended that that shortfall be made good, and it was made good. Last year, because there was a shortfall in earnings, the Government refused to meet it. We are talking now not about earnings but about prices. If there is a shortfall in the prices forecast, we are entitled to know whether the Government will make good that shortfall.

Photo of Mr Patrick Jenkin Mr Patrick Jenkin , Redbridge Wanstead and Woodford

I think that it is right to put the facts on record. The right hon. Gentleman, perfectly properly, said that we are not talking about earnings. But he was plainly inaccurate in saying that the Government did not make good the shortfall last year. When the Government came into office and found that the pension uprating, which had been prospectively announced by the right hon. Member for Norwich, North (Mr. Ennals), would not be enough to meet the prices forecast of 17½ per cent., they added to that another 1·9 per cent., which was the shortfall on the previous year to which the right hon. Gentleman was referring. We made up the shortfall for the long-term benefits——

Photo of Mr Stan Orme Mr Stan Orme , Salford West

Not for the short term.

Photo of Mr Patrick Jenkin Mr Patrick Jenkin , Redbridge Wanstead and Woodford

No, not for the short term. There was no obligation to do that. But we made up the shortfall for the long-term benefits.

Photo of Mr Stan Orme Mr Stan Orme , Salford West

But not for the short term. In the Social Security Bill, the Secretary of State refused to make up the long-term benefit based on earnings. In the last month of the year earnings ex ceeded the benefit by about 1·9 per cent. The law still existed and it still does exist, as we know, because the Social Security Bill comes back tomorrow——

Photo of Mr David Ennals Mr David Ennals , Norwich North

We are basically talking about short-term benefits. The Secretary of State dealt with long-term benefits. Will my right hon. Friend confirm that in the last up-rating the Government did not compensate in terms of the short-term benefits that the House is now debating?

Photo of Mr Stan Orme Mr Stan Orme , Salford West

That is absolutely correct. We feel that we are entitled to ask what the Government will do against the current rate of inflation. It is bad enough for beneficiaries to have to wait two weeks longer than they should and to have 5 per cent. knocked off what they believe to be their entitlement, but it will be even worse, if there is a shortfall, if that shortfall is not to be met. This is absolutely crucial. We hope that we shall hear from the Secretary of State on this issue.

I want to raise one or two important issues of principle in the clause. First, I refer to the effects on the national insurance principle and its relation to supplementary benefit. It was surely the desire of previous Governments, including Conservative Governments, to reduce the number of people on supplementary benefits, to remove the poverty trap, and to direct people, and their benefits, as of right, through the national insurance principle. That principle was cut into by the Government. That will have a lasting effect on the whole system.

We now see a deliberate move by the Government to shift people who are on national insurance benefits to supplementary benefit. The Government's initial forecast is of 110,000 people being transferred to supplementary benefit, and, with that, the creation of 1,000 additional jobs in the Civil Service. So much for tackling administrative problems and bureaucracy. No doubt the Opposition will want to discuss in more detail the national insurance principle—that has been established and accepted, as of right, within our society—and the effect that the Bill will have on it.

I shall be brief as I know that many of my hon. Friends want to take part in this relatively short debate on this major clause. I want to come to the question of taxation. We think that we are entitled to ask the Government about this matter. Under pressure, not least from my hon. Friends and from pressure groups outside Parliament, the Government said that when economic circumstances permitted—the taxation situation in 1982 or 1983, or whenever the date would be—the question of invalidity benefit for the disabled would be considered. They said that they would take into account the five points when they assessed taxation and would bring up the rate to the correct amount. However, the Secretary of State did not give that guarantee for other benefits. If there is a five point reduction this year and a five-point reduction next year, the benefits will be affected by Government policy. The Opposition want to know whether the Secretary of State will restore the benefits to their correct level in the light of taxation.

As a result of what the Government are now doing, people who do not pay tax will lose benefit. That is the crucial factor. Many of the pressure groups outside Parliament, not least the Royal Association for Disability and Rehabilitation and the Disablement Alliance, say that when taxation of benefits is introduced a sensible Government should consider the level of taxation and where it would apply. The Government are not doing that. They are deeming that the people will lose that money irrespective of whether they are in the tax bracket. The people who are most in need are being penalised under the provisions of the Bill.

Those are facts. The breaching of the national insurance principle and the effects of taxation and the other measures will initially have a ripple effect upon the 22 million people who pay for national insurance benefits at present. We are dealing with the working population of this country, who pay taxation and insurance contributions week by week. The magnitude of what the Government are attempting has not been fully understood in the country. Obviously, we must increasingly turn our attention to that.

I now want to face the argument that the Government make about the size of the social security budget and the cuts that must be made in public expenditure. The basic point is this: we are not discussing cuts in public expenditure on benefits for which people have not contributed. We are discussing transfer payments for people who contribute weekly towards benefits to which they are entitled. When they need those benefits, there is a transfer payment. Therefore, it is not a matter of a simple cut in public expenditure. We do not accept that it is. When we discuss transferring contributions to people entitled to benefit, we mean transfers to those who pay national insurance contributions and who are entitled to benefits.

I now turn to the subject of industrial injury and sickness pay. Under the clause one of the most outrageous Government proposals is to cut injury benefit for people who need it at a crucial time in their lives. Unfortunately, with the speed of modern industrial technology, many people are seriously injured at work. Because of their injuries, they are often unable to follow their previous employment and, in many cases, will not subsequently receive the same wage or salary. Sometimes they must take more menial jobs. They take other work which does not carry the salary or wage which was previously earned.

That is bad enough in itself, but industrial injury also causes trauma. Industrial injury benefit does not put matters right. It is outrageous for the Government to say that they will cut industrial injury benefit in real terms at a time when a man or woman, because of family circumstances, need it. The Government have not given us a justifiable explanation.

My hon. Friends, who took part in a long debate through the night on industrial injuries benefits, will confirm that the case which the Opposition put to the Government was overwhelming. We based most of our arguments on the most recent paper prepared by the Department of Health and Social Security.

Photo of Mr Nicholas Baker Mr Nicholas Baker , North Dorset

We are talking about people who receive benefits and who therefore have a strong element of need. The right hon. Gentleman gave the impression that the recipients of these benefits were the neediest, the poorest in society. I ask him what evidence he has for that.

Photo of Mr Stan Orme Mr Stan Orme , Salford West

These statistics about the people who claim benefits show that if people become unemployed or sick—often those who are on reasonable salaries—their standard of living is drastically affected. They are entitled to the State benefit to which they have contributed. When I was in industry, I was told not to mind about contributing to such benefits but to be thankful that I did not have to claim them. When one must claim a benefit, one needs it. The vast majority of people who claim such benefits need them. There is no argument about that.

Photo of Mr Lewis Carter-Jones Mr Lewis Carter-Jones , Eccles 4:30 pm, 21st May 1980

For the first time in 17 years I have heard someone challenge the view that such people are the most deserving in our society.

Photo of Mr Stan Orme Mr Stan Orme , Salford West

The House will listen to what my hon. Friend says because of his experience. I turn to the sensitivity about the word "cut". The Under-Secretary of State for Health and Social Security is a strong, hard-liner in these matters. She has little compassion. Her image has been badly dented. The Government prefer the word "abatement" to the word "cut". However, the Government are cutting in real terms benefits which are due to be uprated in November. In the short term there is to be a cut in the real value of child additions. That benefit is being reduced from £1·70 to £1·25. That is from the so-called party of the family, and it is a cut in cash.

Photo of Mr Matthew Parris Mr Matthew Parris , West Derbyshire

If the Government were able, for instance through subsidies to the National Coal Board, to depress slightly the price of coal so that it did not rise during a year quite as much as price inflation, and if I were to go round my constituency saying that the Conservative Government had cut the price of coal, would the right hon. Gentleman consider that to be a straightforward and honest way of presenting the position?

Photo of Mr Stan Orme Mr Stan Orme , Salford West

That argument carries no weight at all. We are talking about benefits which are to be cut in real terms in November. Under the Bill the benefits are to be cut by 5 per cent., but the cut could be considerably more. We are talking about the living standards of people who are in need of benefit.

Photo of Mr Raymond Ellis Mr Raymond Ellis , North East Derbyshire

The repercussions of the Bill are likely to have a spin-off effect in that they will lead to an increase in the price of coal because the National Coal Board will have to pick up the tab for sickness benefits, and so on.

Photo of Mr Stan Orme Mr Stan Orme , Salford West

I take note of what my hon. Friend says. He was forceful in Committee when dealing with clause 5 on retirement proposals for mine workers. I have no doubt that they will wish to pursue the issue in other directions. The Under-Secretary of State tried to slide away from the issue. We are due to debate it later.

The hon. Member for Plymouth, Sutton (Mr. Clark), who was present earlier but has left the Chamber, is somewhat right of Milton Friedman economically. In Committee he said: one does not have to wear one's heart on one's sleeve to have certain private misgivings about some of the sectors in which the reductions will fall."—[Official Report, Standing Committee B, 24 April 1980; col. 269] There are other Conservative critics. One said: No sane person would ever suggest penalising those in most need in order to hold down the public sector borrowing requirement … My conclusion is that one cannot rely on the economic decisions of this Government being taken with sensible social priorities in mind. In this context sensible means concentrating the effects of cuts on those who can afford them. That was stated in the Conservative journal Crossbow, published in the spring of this year. In other words, sections of the Conservative Party are disturbed at the provisions in the Bill. Until a short while ago one would have associated the Secretary of State with the sentiments in that publication.

Photo of Mr Reg Race Mr Reg Race , Haringey Wood Green

Did my right hon. Friend hear the broadcast on Radio 4 this morning in which there were exchanges between the hon. Member for Portsmouth, North (Mr. Griffiths) and others? Did he hear the hon. Member say that the Bill will increase fairness in society?

Photo of Mr Stan Orme Mr Stan Orme , Salford West

I heard the broadcast. I thought that my hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker) handled the matter well.

I turn to the question of disablement benefits. What is proposed represents another attack on the weakest and most vulnerable people in our society. My right hon. Friend the Member for Manchester, Wythenshawe (Mr. Morris) hopes to deal with that in more detail when we discuss clause 3. Some of my hon. Friends wish to deal with that issue and I do not want to take up time by covering all aspects. That does not mean that I am not anxious about disabled people. About 600,000 people will be affected by the cut in invalidity benefit. The disablement groups wanted to see the Minister, but he would not see them until after the Committee stage had been completed. They believed that they could argue and talk with the Government and perhaps convince them. They finished empty handed and outraged by the Bill's provisions.

In clause 1 the Government propose to dismantle vital areas of the Welfare State. They are undermining the entitlement to benefit. They are breaking down the national insurance system. They are making cuts in real terms for some of the most deserving cases in our society. They are creating confusion and disorganisation in the whole social security system.

The editorial in The Guardian today is close to the heart of the matter. I say to my hon. Friend the Member for Bolsover (Mr. Skinner) that at last we are getting some press coverage about issues other than clause 6. The opening paragraph of the editorial is crucial. It is headed "A dangerous real cut" and states: Today the Commons has its last opportunity of cushioning the biggest reverse the welfare state has suffered for fifty years. Not since the 1930s has any government attempted to cut social security. And indeed, since prices were falling in the 1930s the Social Security (No. 2) Bill, which reaches its report stage today, is even more drastic than the cuts which were introduced in the Depression. The sick, injured, unemployed and pregnant are all due to suffer a five per cent. reduction in their benefits next November because the Bill provides for an uprating which is five per cent, below the rate of inflation. That brings the issue together.

A future Labour Government will be left to pick up the pieces. They will re-examine the whole of the social security system, restore the right to benefit, simplify the system, reduce the poverty trap, and guarantee that people share in the prosperity of the nation. We shall attempt to repair the damage, but, in the meantime, I am afraid that our people will suffer.

Photo of Mr David Ennals Mr David Ennals , Norwich North

I was not a member of the Standing Committee. I wish to begin my speech by registering my protest and my regret that a Bill of such importance is being debated in a rushed manner as a result of the guillotine. It is appalling that those who were not members of the Committee have had so little opportunity for debate. That is one reason why I shall be brief.

I wish to use this occasion to make an appeal, as quietly as I can, to the Secretary of State to think again about the provisions in the Bill that affect the chronically sick and disabled, pregnant mothers, widows, those receiving invalidity pensions and those receiving disablement injury benefit. The decision to cut back on the uprating entitlement of those receiving unemployment benefit, sickness benefit, invalidity pensions, industrial injury benefit, and maternity allowance, together with the provisions in clause 3—which we shall discuss later—makes a major attack on what, up to now, have been the entitlements of the weakest section of our society. I agree with my right, hon. Friend the Member for Salford, West (Mr. Orme) that not only are they the weakest section; they have paid for those benefits over the years.

What is now being done is not only doing grave damage to the weakest in the community but is undermining the whole basis of the national insurance system that was introduced nearly 30 years ago.

Photo of Frank Field Frank Field , Birkenhead

I am slightly puzzled by the constant reference to the weakest section of our community. Is it not a fact that they are not the weakest section, because they are entitled to more generous national insurance benefits? The Bill will make them among the most vulnerable, because they will be pushed on to supplementary benefits.

Photo of Mr David Ennals Mr David Ennals , Norwich North

My hon. Friend is absolutely right. They are the people who are most entitled to receive benefits, which should be protected against inflation. This clause will take away that right, and many will be forced on to supplementary benefit.

As my right hon. Friend the Member for Salford, West said, the voluntary organisation which represent the disabled are now very angry indeed. They have approached many hon. Members on both sides of the House. Some have listened, some have not. They said that they were used to a Government who always listened to them and consulted them about the needs of those who were least privileged in our society. Now, whatever their political balance, they are having to face a Government who, quite simply, have their ears closed to the needs of the disabled.

Whatever may have been our party differences over the past 30 or more years, the paramount task of Governments and Secretaries of State of both parties has been to protect the needs of the chronically sick and disabled, those who have suffered industrial injury, and those, in increasing numbers, who have suffered the tragedy of unemployment.

As Secretary of State for Social Services from 1976 to 1979, with the help of my right hon. and hon. Friends on the Front Bench—I pay tribute to my right hon. Friend the Member for Manchester, Wythenshawe (Mr. Morris) for his tremendous battle for the needs of the disabled—I realised that this matter was among the most important of my responsibilities. I believe that I proved my convictions by the acts of the previous Labour Government. No Government in our history has done as much for the disabled as did the Labour Government who went out of power at the last election.

4.45 pm

I had every reason to believe—as did the people of Britain—that the policies of the Secretary of State and his party on the question of the disabled were similar to our policies. On 28 October 1978, when in opposition, the Secretary of State said: we regard more help for the disabled as a very high priority. He simply set aside that priority. The Conservative research department said, on 5 February 1979 Conservatives have singled out the disabled for priority within the social security budget ". That commitment has been torn up. The Conservative manifesto, when published in 1979, said: Much has been done in recent years to help the disabled I thank the Conservative Party. It was nice to see a reference in the Conservative manifesto to what had been done to help the disabled—mostly by new benefits that had been introduced during the time that I and my right hon. Friends were in office. The manifesto continued: but there is still a long way to go. The implication was that it would be a way forward, not backward. It continued: Our aim is to provide a coherent system of cash benefits to meet the costs of disability, so that more disabled people can support themselves and live normal lives. The Secretary of State knows that his measures will force more people on to supplementary benefit.

I do not believe that those who will be affected by this measure understand what will happen. There has been precious little publicity in the national press.

Photo of Mr Leslie Spriggs Mr Leslie Spriggs , St Helens

It is important to understand that the right hon. Gentleman, his Under-Secretary and the local officers, have taken people suffering from heart diseases and mental sickness out of disablement benefit and forced them to sign the employment register, on the threat of losing supplementary benefit altogether if they did not sign. How can those people find employment when they are disabled? Why do the Government do such inhuman things to human beings?

Photo of Mr David Ennals Mr David Ennals , Norwich North

I am grateful to my hon. Friend for his passionate intervention. I know that other hon. Members have evidence of that happening. The generality of the public in Britain, especially those who will be affected by the Bill, do not understand what Parliament is proposing to do and what the Secretary of State is trying to force through Parliament. If they knew, they would stand up and speak against it.

I do not believe that in his travels around the country, speaking to local Conservative Parties, women's conferences and so on, the right hon. Gentleman has told them exactly what cuts in public expenditure mean. Has he been spelling out exactly which people would be affected primarily by the cuts in public expenditure? He has not.

Photo of Mr Reginald Prentice Mr Reginald Prentice , Daventry

Will the right hon. Gentleman take it from me that two hours ago I was addressing a conference organised by RADAR, at which about 400 people were present representing many disablement organisations. I set out the reasons for the cuts, the state of play on the Chronically Sick and Disabled Persons Act 1970 and the central relationship between the economic situation and what we can afford. That was well received and I was well applauded by that conference.

Photo of Mr David Ennals Mr David Ennals , Norwich North

It may be that RADAR showed the right hon. Gentleman the courtesy that I suppose any respectable organisation would show to a Minister, but that is all that it was. I know and he knows that RADAR and the many organisations involved with it are deeply angry at what the Government are doing. They were not surprised by what the right hon. Gentleman said, because one of his earliest utterances in office was that the disabled could not expect to be excluded. It is one thing to say that they could not expect to be excluded from the cuts in public expenditure and another thing to pick on them, which is what the Government are doing, to pay for benefits for those who are at the upper end of the scale.

The Secretary of State has made a serious error of judgment in making the weakest, those in receipt of national insurance benefits, pay for the easing of the tax burden on the strongest. If he proceeds unmoved down the path that he has set himself, I believe that he will go down in history as the Secretary of State who began the dismantling of the rights inherent in the principle of the Welfare State, which goes way back to the Beveridge report known as "From the Cradle to the Grave ".

There is never any disrespect in the House for Ministers who have second thoughts. I am not referring to the decision taken in the House on economic sanctions against Iran. The right hon. Gentleman and the Minister of State had second thoughts on sight tests. I think that we all gave them credit for doing so. There were second thoughts on the payment of weekly payment benefit. The right hon. Gentleman may not have been committed to that proposal.

I hope that during the course of this debate and when the Bill goes before another place he will seriously think again. Now is the right time for him to think again. That is so for three good reasons. First, what is happening to the rate of inflation? The right hon. Gentleman said two or three months ago that the Government estimated that the rate would be 16½ per cent in November. He knows that there is no chance of the rate being 16½ per cent. in November. He knows that it is now 22 per cent. and that it will increase. I accept that later there will be a small fall. I do not suggest that the rate will increase for ever. However, the right hon. Gentleman knows that a 16½ per cent. uprating would not cover retirement pensioners let alone short-term beneficiaries.

Secondly, there is something bizarre and almost ghoulish about doctors having a 30 per cent. increase in remuneration when their patients are having to accept an 11½ per cent. increase in their benefits. There is something sick about that contrast. I am attacking not the doctors but the Secretary of State for putting the doctors in that position. There is something sickening about doing so at a time when the right hon. Gentleman well knows that the Secretary of State for Employment—or is it for unemployment? I am not sure—has made it clear that unemployment will increase steadily. Therefore, the number affected by the measures in the Bill will steadily increase.

The right hon. Gentleman should think again. I say that apart from the inhumanity of his judgment. I believe that there will be deep anger when the British people learn what the rate of inflation is in November and what the increase in benefit is to be. The right hon. Gentleman should take that into consideration as well as all the other arguments that will be advanced during the debate. The time for him to reconsider is now.

Photo of Mr Richard Alexander Mr Richard Alexander , Newark

I do not wish to go too far along the road covered by the right hon. Member for Norwich, North (Mr. Ennals), save to say in defence of my right hon. Friend the Minister for Social Security that I was present at the meeting to which he referred. My right hon. Friend fairly pointed out the need for some of the measures in the Bill. The challenge that was issued to him and my right hon. Friend the Secretary of State was that they never explained what had to be done. That was not so.

The amendments that I have tabled seek to exempt maternity allowance from the reduction in the compulsory uprating of benefits provided for in clause 1. In making that suggestion I am not going behind my support for the principle that social security benefits that are designed to replace income should be drawn into the tax system.

All working women now pay full national insurance contributions. When they become pregnant they may claim the maternity allowance for 11 weeks before the baby is born, and the allowance is paid for 18 weeks from the date of the first payment. In reply to a question dated 15 April, my right hon. Friend the Minister for Social Security indicated that in the past year for which figures were available—namely, 1978,½277,000 payments of maternity allowance were made, and that over 50,000 recipients had annual incomes not exceeding their personal tax allowances. Therefore, they paid no tax, anyway.

The allowance is now worth £1850 and it is to be increased to £20·65 in November. The abatement of 5 per cent. represents £1 a week. That may not seem very much, but if there are 285,000 women all being made subject to the reduction of £1 per week for 18 weeks, the approximate saving is £5 million.

I shall concentrate on the 50,000 women who draw the benefit and have earned income below their personal tax allowances. The proposals are part of the package to bring social security benefits into the tax system. However, the clause as drafted in effect taxes an allowance that was designed to replace income when that income is not taxable.

At first sight one would think that supplementary benefit should be available for those women with earned income below tax allowances. However, a married woman is deemed to be supported by her husband, so supplementary benefit does not follow automatically unless their joint resources fall below requirements, to use the technical phase.

If my right hon. Friend will not concede the point of the amendment, I ask him, as did the right hon. Member for Salford, West (Mr. Orme), what will happen when the maternity allowance is brought into the tax system in April 1982. On 29 April my right hon. Friend the Secretary of State properly said: when it comes to tax, subject to the availability of resources "— we are dealing with invalidity pension in this context— we shall put it back to what it would have been had it stayed in step with retirement pensions this November."—[Official Report, 29 April 1980, Vol. 983, c. 1132.] I ask my right hon. Friend respectfully whether he will do likewise with the maternity allowance. Will he restore it in April 1982 to the value that it would have had if its uprating had continued in line with the other social security benefits—namely 16½ per cent. and not 11½ per cent.?

Without disrespect to the manner in which the Bill has been presented, and the way in which it has been handled by my right hon. and hon. Friends, these problems indicate what a jungle social security law is today.

5 pm

Photo of Mr Richard Alexander Mr Richard Alexander , Newark

Each successive Bill compounds the obscurity of the previous Bill. Surely the time has come to consider scrapping the social security system as we know it, and substituting for it a national minimum income, to which all those in need would be entitled. We could pursue a means test more fairly if we were courageous enough to do so. I am not opposed to cuts in public expenditure, but there should be more rationality in our social security system.

It is ridiculous that the child benefit and maternity grant are available automatically to families with incomes of, say £20,000 a year, without any note being taken of their financial circumstances. At the same time, without my amendment, clause 1 of the Bill will save £5 million at the expense of the lower socio economic classes who have non-salaried jobs and who are probably employed in manual work and are hourly paid, and for whom a 5 per cent. reduction is not inconsiderable. Why should all mothers be able to claim £4 a week for every child under 16? About 13 million children will qualify this year for child benefit, at a total cost of £2,585 million—according to the Government's blue paper. At a conference this afternoon——

Photo of Peter Bottomley Peter Bottomley , Greenwich Woolwich West

The reason is that the total level of child support has been reduced by 30 per cent. compared with its level 25 years ago. There has been a large cut. We may find greater agreement if we address our attention to the "waste" in personal allowances.

Photo of Mr Richard Alexander Mr Richard Alexander , Newark

I agree with my hon. Friend.

It is very expensive to pay child benefit completely across the board. Although I gave the figure of £2,585 million—according to the Government's blue paper—my right hon. and learned Friend the Chancellor indicated at a conference this morning that we are now spending £3·3 billion. I am suggesting that £5 million could have been found in another way. when the cost of child benefit is of such an order.

Photo of Frank Field Frank Field , Birkenhead

Is there not a danger, after a period when families have been discriminated against by successive Governments, of trying to find money for projects which favour families with children by cutting back on benefits to other families with children? Should we not direct more attention to the benefits received by childless people?

I was interested in comments about the loss of revenue in child benefits. The White Paper on public expenditure shows that loss of revenue from the two major tax allowances equals £10 billion. The group who received those tax allowances have benefited most over the last 20 years. Should we not look for money from the childless to support families with children, and not try to save money by cutting benefits to other families with children, however important the project.

Photo of Mr Richard Alexander Mr Richard Alexander , Newark

That raises further considerations. I accept much of what the hon. Gentleman said. But at the top end, people in receipt of child benefit do not need it.

The administration, and therefore the cost, of the present social security system is horrendous. We are taxing with one hand and, with different offices and different administrators, we are paying out with the other. When that happens, it shows that the tax thresholds should be raised still further, as the Chancellor of the Exchequer has already done. If it is too simple to conceive a minimum income administered by one set of civil servants only, there should be some means testing of social security benefits at the top end, and the poorly paid maternity allowance claimants should not have to suffer the abatement in this way.

I hope that my right hon. Friend will recognise that he is piloting legislation through a jungle, and I hope that he will resolve to institute further reforms along the above lines for the benefit of genuine claimants and the nation as a whole.

Photo of Mr Jack Ashley Mr Jack Ashley , Stoke-on-Trent South

I shall make a brief speech, lasting no longer than three or four minutes. I joined the debate a little late, through no fault of mine. I could not believe the intervention during the speech of my right hon. Friend the Member for Salford, West (Mr. Orme) by a Conservative Member who asked whether there was any evidence that disabled people were the poorest in our society. I nearly fell over the Bench. I could not believe it. It was one of the most staggering questions I have ever heard.

I constantly move among disabled people. A sad feature is that they do not complain about their poverty to people who are well off and comfortable, because they have a great deal of dignity and the disabled do not go begging. Understandably, it is people who do not know the disabled or who are not disabled who ask such stupid questions. As the Secretary of State and the Minister with responsibility for the disabled know, the reason why disabled people are being hit is that they are powerless. That is why this action is so disgusting. The disabled are powerless. They have no one to speak for them.

My right hon. Friend the Member for Norwich, North (Mr. Ennals) who did such a splendid job when he was Secretary of State for Social Services, spoke about the previous Labour Government's record. He spoke about the doctors receiving a 30 per cent. increase in salary. In the next few months trade unionists will fight for increases of 20 per cent., 21½ per cent. or 25 per cent.—or whatever is the rate of inflation. They will get it, because this Government simply cannot walk on trade unionists. But they can walk on the disabled without a fight. They know that, and they should be ashamed of themselves. People who cannot struggle or fight come to Members of Parliament in the most rational, dignified and restrained way. When the Minister with responsibility for the disabled said in an intervention a few moments ago that he was applauded at a RADAR conference, what did he mean? Did it mean that the people at that conference supported what the right hon. Gentleman said? What it meant is that disabled people are courteous people. It meant not only that they are courteous but that they lack confidence—the confidence to fight for themselves. They therefore lean over backwards to be agreeable. This lack of confidence is caused by their disability and by their poverty.

I do not like people asking for the resignation of Ministers, because that is often a cheap political gimmick. However, I want to ask the Minister responsible for the disabled whether he really feels that he should stay on in his job, given this cut—and it is a cut; he has used the word himself—in the living standards of disabled people. I am not making a personal attack. I would not do so. But, in terms of the Minister's job of looking after disabled people, I do not feel that he can stay on the Front Bench and condone the measures in this Bill.

The Minister's boss, the Secretary of State, is an honourable man, and he helped the disabled when he was out of office. In fact, I have worked with him. He must think again, because he simply cannot damage the living standards of disabled people who are living in acute poverty and hold his head high in this House. I beg him to change his mind.

Photo of Peter Bottomley Peter Bottomley , Greenwich Woolwich West

Following up for a moment the words of the right hon. Member for Stoke-on-Trent, South (Mr. Ashley), I think that it is worth noting that the intervention of my hon. Friend the Member for Dorset, North (Mr. Baker) was only phrasing in a slightly different way the points made by the hon. Member for Birkenhead (Mr. Field) about moving from insured to non-insured, from national insurance benefit to supplementary benefit. I think that the remarks of the right hon. Member for Stoke-on-Trent, South were, perhaps, on consideration, a little fierce. All that my hon. Friend the Member for Dorset, North did was to ask a question, in the same way as my right hon. Friend the Minister responsible for the disabled, in his intervention, was making the point that he had gone to the conference and explained the reasons for doing certain things, and that that had been, not necessarily approved of, but heard. The important point always is that cases should be made in advance.

Most people know that it is not my habit to make speeches which have already been made, whether from one side of the House or the other. Therefore, I should like first to assure the Government of my support, at least on this amendment I also go a stage further. If right hon. and hon. Members, such as the right hon. Member for Stoke-on-Trent, South and some others, are arguing that the increases which will follow the passage of the Bill will be below the level of inflation, I must ask what they will be arguing for during the coming pay round. Will they be arguing that the way in which one can reduce the impact of a 5 per cent. abatement is to try to encourage all of us to get our pay settlements—not necessarily our claims, but our settlements—abated by 5 per cent.? Or shall we be doing what some people appear to be suggesting, which is to argue that if the disabled and others are unable to maintain their standard of living, they will give every support for the lunatic policy of having pay claims, a year after the level of real incomes has risen by 6 per cent., trying at least to achieve that again or further?

It seems to me that we need to bring our bleeding hearts out into the open and talk about the general economic effects on the groups for whom we are arguing and try to look at the impact of our policies and actions in the rest of our lives, whether as trade unionists, politicians or people in industry.

Photo of Frank Field Frank Field , Birkenhead

Mr. Field rose——

Photo of Mr David Ennals Mr David Ennals , Norwich North

Mr. Ennals rose ——

Photo of Peter Bottomley Peter Bottomley , Greenwich Woolwich West

I give way first to the hon. Member for Birkenhead (Mr. Field).

Photo of Frank Field Frank Field , Birkenhead

I should like to pose a question. I am not out of sympathy with the argument that is being put forward, but when it is put to groups of workers, one very relevant question is posed, to which I have no answer. I wonder whether the hon. Gentleman will be able to answer it for me.

If, for example, one says to Ford workers "Do not push for the whole of the wage increase that you would like because we wish to ensure a real increase in benefits for the disabled, the unemployed and the sick", the question comes back "By what mechanism can the increase that we forgo be channelled to those groups? "

Photo of Peter Bottomley Peter Bottomley , Greenwich Woolwich West 5:15 pm, 21st May 1980

I am very grateful to the hon. Gentleman, and with no disrespect to the right hon. Member for Norwich, North (Mr. Ennals) or the hon. Member for Bolsover (Mr. Skinner), I am glad that I picked him. The answer is that at present this does not happen and cannot happen. The reason is that successive Governments, including the present Government, have not laid on the line what are the considerations which will affect the level of benefits in advance.

The most important point—besides legislation, which may or may not be amended—is that if one takes the question of child benefit and the reduction of the real level of child support over the last 25 years, one must ask at what stage any Government have said what considerations they will use in advance. It is no good saying, after a year of prece-dented or unprecedented inflation "We are sorry, but we cannot afford to bring the level back to what it was in 1955." What we ought to be doing is not only talking early enough about the relationships between pay increases and growth, between pay increases and profit, or between pay increases and unemployment; we should try to lay out some of the medium-term ambitions of the Government both in terms of benefits and in terms of other areas of Government expenditure or transfer payments.

I do not believe that this has happened. I do not believe that the previous Government or the present Government have done it.

Photo of Mr David Ennals Mr David Ennals , Norwich North

Will the hon. Gentleman apply his mind to the question of benefits? When it comes to wage negotiations, levels of the RPI and so on are all part of them, as they were in the award for doctors and dentists. If the inflation rate is something totally different from 16½ per cent. in November, will the hon. Gentleman then still feel that it would be right to make a 5 per cent. cut, below 16½ per cent., for those covered by the clause?

Photo of Peter Bottomley Peter Bottomley , Greenwich Woolwich West

If the right hon. Gentleman had been listening, he would have noticed that there had not been any reference to the 5 per cent. issue on this clause. To be helpful to the House and, I hope, to the country, I am trying to make non-partisan points about a far better way of approaching the whole of this subject.

Photo of Dr Oonagh McDonald Dr Oonagh McDonald , Thurrock

Will the hon. Gentleman give way?

Photo of Peter Bottomley Peter Bottomley , Greenwich Woolwich West

No, I shall not give way. The debate will continue for only another one and a quarter hours, and the first two speakers took up a fan-amount of time. I should like to sit down shortly, having made the point that if we are really concerned about the level of increases in benefits and about the relationship between incomes from benefits and incomes from earnings, and about trying to reduce the increase in unemployment—which appears to be continuing, though not accelerating—we ought to start recognising the influence of pay settlements as well. I have absolutely no doubt that if the whole country settled for half of what it is likely to settle for during the next 12 months, or if we had all settled during the last 12 months for half of what we have settled for, not only would we now be more prosperous but we would find that we were able to do more for, or to take away less from, people who are presently getting certain benefits.

When we start talking about free markets, let us talk about free markets and ideas, and let us try to encourage each other to listen and to find a bipartisan approach that will help Governments of both major parties.

Finally, what I regret most of all is the whole area of child benefit being left out of this discussion. Perhaps I may make one partisan point—although I have tended to make a number. It is to say again how sorry I am that, to my knowledge, almost the whole of the parliamentary Labour Party forgot to vote in favour of—or actually voted against, on some occasions—the indexation of child benefit. That is the one benefit which is not being attacked, reduced, abated or dealt with in any way by the Bill. We did not get the opportunity of persuading the parliamentary Labour Party, including the hon. Member for Birmingham, Perry Barr (Mr. Rooker), to vote for it.

What has happened is that over a period there has been a far greater abatement, reduction or cut in child support that the 5 per cent. covered by the Bill. Any hon. Member who speaks today and does not recognise that ought to recognise that 14 million children and 14 million parents have been suffering even more than anyone who will be affected by the Bill.

Photo of Mr Lewis Carter-Jones Mr Lewis Carter-Jones , Eccles

The hon. Member for Newark (Mr. Alexander) compared the social security scheme with a jungle. However, one sometimes finds a clearing in a jungle. The Secretary of State and I have come to a clearing on perinatal care. The Secretary of State is convinced that better perinatal care will reduce perinatal mortality and handicap. Indeed, he shared a platform with me in Trafalgar Square at the inauguration of the "Save the Baby" campaign. We have both given evidence to the Select Committee on perinatal care.

We have stressed the need for early detection, early treatment, resuscitation techniques and intensive care units. Above all, we stressed that more money should be given to pregnant ladies if perinatal death and handicap is to be prevented. If the Secretary of State supported that campaign he must have supported that, because it was one of the five points involved. Those points were made loud and clear. The pregnant lady in social class 5 is particularly affected.

It has been argued that pregnant women in that class will receive the necessary money in 1983, when the tax arrangements have been brought to fruition. There will be a lot of pregnant ladies between now and 1983. The overwhelming majority of pregnant ladies will be in social classes 3, 4 and 5. The perinatal mortality and disability rate varies from about 26 per 1,000 in the worst areas, to about 6·8 or 7·0 per 1,000 in the better areas.

Pregnant women will be affected by the abatement. As has been said, abatement is a polite term for cut. The severe difficulties facing pregnant women will be compounded. My right hon. Friend the Member for Stoke-on-Trent, South (Mr. Ashley) pointed out that the disabled and poor would be most affected. My right hon. Friend the Member for Norwich, North (Mr. Ennals) pleaded with the Secretary of State. He asked him to reconsider this provision. It could be modified in the other place. The hon. Member for Newark tried to pick out maternity benefits. I share his concern. However, he and I may have specialised in this subject. Other hon. Members might pick out other needs.

I urge the Secretary of State to come back and to tell me that Britain's recovery does not depend upon this provision. Is the Secretary of State claiming that our recovery depends on saving 90p a week for 18 weeks? Is that the basis of our recovery?

Photo of Dennis Skinner Dennis Skinner Member, Labour Party National Executive Committee

My hon. Friend should not get carried away with the idea that the country is in a mess. There are about £15,000 million worth of North Sea oil assets round the corner. There would be a lot more money if Britain owned the oil. The Opposition should not fall for the idea that the country is in an economic mess. I have been involved in politics for 30 years. Every year Governments say that there is a political and economic crisis. They say that workers must pull in their belts and that the disabled must do without. They always tell us that there is a crisis. They always tell us that there will be jam tomorrow. My hon. Friend is wiser than that. He should understand that the Government are trotting out the same old idioms. Get rid of them!

Photo of Mr Lewis Carter-Jones Mr Lewis Carter-Jones , Eccles

I am delighted that my hon. Friend will no longer have to consider accepting invalidity benefit. I am glad that he has recovered and that he is back to his old form. However, I am addressing my remarks to the Government. It is true that North Sea oil could assist us. However, if we are to assist the coming valhalla—the great day that is about to dawn—we must ask whether that valhalla depends on 90p a week for 18 weeks. That is what the Secretary of State said.

In the jungle clearing, we identified one sector in which some good could be done. We have been told that the perinatal mortality rate has fallen. We must not claim too much credit. However, the reduction is due partly to the fact that there have been several debates on this subject. They have been reported in the press. As a result, people have become aware of their needs and requirements. That is great. The Secretary of State should not put a hiccough in those statistics. If there is a three-year gap, it will result in inadequate funding, and an increase in perinatal deaths. More money should be given. If a target can be identified from which massive social benefits will accrue, we should go for that target. The Government are burning it.

Photo of Mr John Hannam Mr John Hannam , Exeter

I shall speak briefly, but as forcibly as possible. Throughout my 10 years in Parliament, I have worked—with hon. Members from all parties—for a cause that is as worthwhile as any that I have come up against. We have sought to give a reasonable chance to the handicapped and disabled, and to ensure that they can lead lives that are as normal as possible. We have tried to ensure that they have family lives, mobility, education. We have tried to ensure that—as far as possible—they can train and work as others do. As the hon. Member for Eccles (Mr. Carter-Jones) stated, we must try to prevent handicap through research and perinatal care.

That 10-year period coincided with the development of the Chronically Sick and Disabled Persons Act 1970. Successive Governments have made considerable progress towards helping the disabled. I am proud of that progress and of the involvement of both myself and other hon. Members. We started from scratch in 1970. We are still endeavouring to catch up. We have not yet created the perfect world or system of social care for the handicapped and disabled. One could give many examples of the barriers that still exist in areas such as housing, access, education and social care. However, we have managed to lift the disabled and handicapped out of the dark holes of neglect into the light of a caring society. I am committed to that cause and I make no apology for that.

The Government have attempted to create a healthier balance between private and public expenditure. I support the underlying need to create more resources. Such resources are necessary if we are to have a healthier and more dynamic economy. I accept with regret the painful process of cuts, in the knowledge that they will lead to the creation of more resources for the disabled, the sick and the needy. They will also create more resources for the health service and for the welfare system. While the Government are reshaping their spending policies, some essential safeguards must be applied. The Conservative Party gave a commitment to protect those who cannot protect themselves. I do not believe that a near-bankrupt industrial economy can go on indefinitely guaranteeing cost-indexed benefits and wages. The previous Administration found this out to their cost. In that context, I express overall support for the painful but necessary remedies that the Government have applied.

5.30 pm

However, minimum standards and priorities must be maintained, or permanent damage will be caused and the years of work and expenditure will be wasted. This 5 per cent. abatement, however integral a part it is of the overall departmental cuts programme, will fall below those minimum standards, and therefore it cannot be allowed to continue for more than one year. Many disabled people on the higher level of invalidity benefit could lose about £2 a week at a time when they are suffering and accepting local personal social services charges and cuts. The overall objective of a disablement cost allowance to cover the unavoidable extra costs faced by the handicapped will be set back even further by what is, by all accounts, a rough and ready saving.

I make it clear to my right hon. Friend the Secretary of State that I am prepared to accept this harsh lowering of priorities only for this year of economic crisis. In fact, I believe that the Bill provides for only one year, and in succeeding years the Minister must think again. He has already given the welcome assurance that these benefits will be uprated again in 1983 by whatever parity is lost with the retirement pension. I, and many of my hon. Friends, do not like this measure, but we accept it reluctantly for one year ahead as part of the Government's overall recovery programme for the economy. I cannot possibly countenance a continuation of this discrimination against the disabled into 1981–82 and 1982–83. I hope that in his reply my right hon. Friend will give an assurance that he takes serious note of this declaration of intent and that he will restate in stronger terms his intention, regardless of the Treasury pressures, to restore the benefit level to that of the retirement pension.

I hope that my right hon. Friend will also give close consideration to a number of other points. Invalidity benefit is a long-term benefit meeting long-term needs. It is not a short-term benefit to be treated as such. Nearly all those who receive it will never be able to work again. The benefit is one of a group of benefits for people who are disabled or chronically sick. The others are the non-contributory invalidity pension, the war and industrial pensions and the attendance allowance. All of these benefits are rising by the full 16½ per cent. But the invalidity benefit will go up by only 11½ per cent.—well below the inflation rate. Why has this split occurred? Surely we should bring all the disablement benefits together under one general cost allowance, instead of widening the rag bag of invalidity and disablement benefits.

I conclude by putting my marker down on this issue. I hope that my right hon. Friend will exert all the pressure he can on the paymasters in the Treasury to ensure that this is the one and only year when this discriminatory abatement of benefit will occur. I expect him to restore the value of the benefit at the earliest possible opportunity and certainly within the next two years. In any case, I hope he will not go any further down this road next year. That would be too much for those of us who are involved in campaigning and fighting for the interests of the disabled. We cannot stand by and watch disabled people lose the hard-won ground of the last 10 years' campaigning.

Photo of Mr Clement Freud Mr Clement Freud , Isle of Ely

This debate has about it an air of déjà vu. A great deal of what has been said has been discussed before, both at Second Reading and in Committee. But the fact that we have discussed it before makes it no less relevant to discuss it again.

We must look at what is being done to the recipients of invalidity and maternity benefit in this country in the light of what was promised. It is right to look at the Conservative manifesto, which says: We will honour the increases in retirement pensions. It is right to look at the abatement in the light of a Conservative manifesto statement which says: It is wrong to discourage people to wish to work after retirement age, and we will phase out the ' earnings rule ' during the next Parliament The Christmas Bonus, which the last Conservative Government started in 1972, will continue. I doubt the honesty of saying that the Christmas bonus will continue when there is an artificial retraction of two weeks to enable the Government to recoup exactly the amount of money which is being given back as a Christmas bonus. That is just like picking a man's pocket and then presenting him with ten-twelfths of what has been rifled from him and saying "This is your Christmas bonus, congratulations."

The hon. Member for Eccles (Mr. Carter-Jones) made a valid point about the perinatal situation. I believe that the Government are wrong not to take a long-term financial view. I was privileged one day last week to raise a matter on the Adjournment at three o'clock in the morning—none of us has had a lot of sleep lately. The subject that I raised was that of the problems of Down's syndrome children. I pointed out to the Minister at the time that it costs £100,000 for the lifetime of any one Down's syndrome child. The contributions that the Government make towards the Down's Children's Association is only £3,500 a year, when that association has proven success in getting children into educationally subnormal, "M" rather than "S", schools, at the relevant saving.

I return to the amendments. I want to place on record that what is being done is being done against the Conservative manifesto promises. The disadvantaged are being further disadvantaged at a time when there is a rise in expenditure on defence, a 32 per cent. increase in remuneration to doctors, and a £4 billion tax concession to high tax payers; when our own pay has gone up without any abatement, when Princess Anne gets more money without abatement, and when Mr. Ian MacGregor gets more money. The right hon. Member for Stoke-on-Trent, South (Mr. Ashley) suggested that the Minister with responsibility for the disabled should resign. Perhaps we could transfer him for some exorbitant fee and use that money to abate the abatements. It seems totally wrong to make this section of humanity suffer when so many other sections, including ourselves, are getting away with it.

I am not prepared to follow the hon. Member for Exeter (Mr. Hannam) and ask for an assurance that next year, the year after, some time or never, the Secretary of State will change his mind. My right hon. and hon. Friends and I will oppose every clause in this Bill because we feel that the wrong people are suffering. Even though I do not believe that we are as disastrously off as many people insist, there are people who are better able to take cuts than those whom the Secretary of State now seeks to disadvantage by the Bill.

Photo of Dr Oonagh McDonald Dr Oonagh McDonald , Thurrock

I wish to refer first to the remarks made by the hon. Member for Woolwich, West (Mr. Bottomley) when he sugegsted that, if we were really concerned about the incomes of the disabled, we should be prepared to lower our own wage demands in the coming year. The hon. Gentleman's argument is fallacious. It assumes that wage increases are the sole cause of increased inflation. In spite of the hon. Gentleman's expressions of loyalty to his Government, they do not share his view. They place the blame for increased inflation solely on increases in the money supply during any one year.

The hon. Gentleman's argument was fallacious for other reasons. He forgets that the income of the disabled has been deliberately cut by Government policy. They have not only failed to raise those incomes in line with inflation during the coming year but their actions have caused inflation, with increased gas and electricity prices and prescription charges, which fall heavily on many who claim invalidity benefit. They are not entitled to have prescription charges waived, because of the exclusive definitions. The Government impose those burdens on the disabled. Inflation does not depend on the wage earner reducing his wage demands and the money by magic being transferred to the disabled.

The Government are making deliberate decisions on how our vast resources should be deployed, as my hon. Friend the Member for Bolsover (Mr. Skinner) points out. Such decisions were taken in the Budget and are being taken in this Bill. They are clear. So far this Government have used our vast resources to make tax concessions that have almost entirely benefited the better off. To help implement that policy the Government have cut the incomes of the unemployed, the sick, people injured at work, pregnant women and the disabled in receipt of invalidity pensions. The Government's record is appalling. I do not know how the Secretary of State and the Minister can say that there is acceptance of these measures among the groups representing the disabled. We know that many disabled people are already hard pressed. We know that from our experience in constituencies and from the briefs that these groups send us. I cannot imagine how the Government expect those people to cope with an effective cut in their income when inflation is likely to be above the Government's forecast of 16 per cent.

My right hon. Friend the Member for Stoke-on-Trent, South (Mr. Ashley) pointed out what underlies the Government's policies. They attack the old, young, disabled and sick, who are not sufficiently organised and lack economic power to retaliate. They hope to push their policies to benefit further those whom they truly represent. They have no shred of respectable justification to pick on invalidity benefit in so doing. Two groups are particularly affected—the disabled and the long-term sick. Those people are struggling to live on an inadequate weekly income. Their children also suffer. The Government say that they want to encourage people to work, and they therefore cut unemployment and other benefits. However, what justification do they have for attacking the living standards of children of such people?

5.45 pm

With even the predicted rate of inflation child support for those on invalidity benefit, widows' benefit or retirement pension will be effectively cut by 6·1 per cent. as child support is being increased by only 10·4 per cent. I shall translate that into cash terms, which are easier to understand. I hope that people will then rise in revulsion against a Government who take away money from the sick and their children.

Photo of Mr Alan Clark Mr Alan Clark , Plymouth, Sutton

Like they did on 14 May.

Photo of Dr Oonagh McDonald Dr Oonagh McDonald , Thurrock

For a couple with two children on invalidity benefit the weekly loss will be £3·35, which is £174·20 for the whole year. A couple with four children will lose £252·20 over the whole year. A childless couple will lose only £96·20. The Government cannot justify such mean actions, which hit people who cannot defend themselves and who sorely need the support to which they are entitled. The invalidity pension and the support attached to it should be paid at the proper rate.

The Government talk of the need to make these benefits taxable and to bring them into line with other benefits and taxable income generally. They deliberately overlook the fact that 400,000 people currently receiving invalidity benefit have incomes that do not reach the tax threshold. They cannot justify such action merely to fulfil a principle of abstract justice. The Government wish to take resources from those who are in no position to defend themselves and to give those resources to the wealthy, who do not need them.

Photo of Mr Peter Griffiths Mr Peter Griffiths , Portsmouth North

I apologise for rising to speak when I was not privileged to hear the Front Bench speeches on these amendments. I was about constituency business. Hon. Members who served on the Committee know that I was most assiduous in attendance and participation at that time.

My meeting was valuable. Among the ladies to whom I spoke were some who were in receipt of long-term benefits, such as retirement and widows' benefit. They said that over a long period they have been disadvantaged compared with others on long-term benefits, who are listed in clause 1 and whose benefits have not previously been subjected to taxation or abatement. There is undoubtedly a strong feeling that the introduction of taxation of all long-term benefits will bring a greater feeling of equity among those who often live next door to each other in the same type of house and have the same sort of expenses even though their benefit arises from different sources which were not necessarily planned to give different levels of income.

Photo of Mr Peter Griffiths Mr Peter Griffiths , Portsmouth North

I hope that the hon. Gentleman will excuse me. I was asked to make sure that I left time for the hon. Member for Birkenhead (Mr. Field) who, I know, wishes to speak.

I should like to make a point about the choice of words of those Opposition Members who have described Government policy as an attack on particular groups. That is a highly unfortunate choice of phraseology when no one from the Government Benches, either on Second Reading or in Committee, has indicated the slightest pleasure in the task undertaken in the Bill.

It is the task of any Government to deal with problems that arise, whether pleasant or unpleasant. Duties are undertaken with joy or because they are necessary. I do not accept the argument that the savings made by the first two clauses of the Bill are too small to be considered. I know that Opposition Members will make similar attacks on each clause. It would be fair to argue against an abatement in only one section of the Bill but Opposition Members are attacking at each point. They fail to indicate where it would be possible to make equal savings if changes were to be made in this part of the Bill.

Conservative Members should make clear that we are tackling a problem the solution of which we believe to be unpleasant but necessary and that we are acting in a spirit of trying to achieve equity among those who live on long-term benefits, an equity which will be more nearly achieved when we reach a situation of taxation. A 5 per cent, abatement is not a satisfactory alternative, as I know my right hon. Friend recognises. It would be even less acceptable to continue with the present anomaly for the next two or three years, untouched and unchanged, at this time of economic crisis.

Photo of Mr Bernard Weatherill Mr Bernard Weatherill , Croydon North East

I thank the hon. Gentleman for his help. It would be unwise for any hon. Member to pre-empt my selection. Mr. Frank Field.

Photo of Frank Field Frank Field , Birkenhead

I am grateful to you, Mr. Deputy Speaker, for calling me in this debate. We are discussing the most significant measure that the Government have introduced in this Parliament. Indeed, clause 1 is the most significant clause that we shall see in the whole of the Parliament. The Bill marks the end of post-war politics which were based on the assumption that the Welfare State could be built on an ever-increasing national income. With or without this Bill, Opposition Members would have faced a major challenge in deciding how to behave in a period of slow or nil growth. I hope that we should have gone about the job differently, but the challenge would have been real.

The basis of our beliefs, I suppose, is best spelt out in Anthony Crosland's book "The Future of Socialism" where he talked about having our politics on the cheap. Everything could be done from growth. There would be no hard decisions. Growth could be used to pay for the continued expansion of the Welfare State.

With the end of growth, the Labour Party would have needed to consider whether we were serious about redistributing existing resources or bringing in similar measures to this Bill.

Another significant factor about this Bill is the link it makes between poverty and riches. Sixty years ago, R. H. Tawney reminded us— what thoughtful rich people call the problems of poverty, thoughtful poor people call, with equal justice, the problem of riches". This Bill, particuarly clauses 1 and 4, cannot be viewed separately from the two Budgets that the Government have so far introduced. Some hon. Members could be forgiven for thinking that we are now in a period of considerable difficulty in which everyone took cuts. One has only to look at what happened in the two Budgets of this Government.

The first Budget cut taxation by £4·5 billion. The richest 7 per cent. picked up £1,560 million. The tax cuts were smaller in the second Budget, but still the richest 2 per cent. took 14 per cent. of the net tax reductions. It is not true that this measure, particularly clauses 1 and 4, are necessary to pay for cuts that all are experiencing. This Bill, in particular, is necessary to help pay for the tax cuts in the first Budget and the Budget earlier this year.

I recognise that I have only a limited time in which to speak. I wish, therefore, to be slightly controversial in saying that I welcome the use of the word "abatement". I do not use the word "cut". I use the word "abatement" because it leads the Government into much greater difficulties. When information about the Bill leaked out and somehow arrived on the desk of Adam Raphael at The Observer, Government sources originally claimed proudly that this would be a Bill of cuts. Obviously, there was some feed-back about the public reaction. Perhaps the Bill was not quite as popular as some people in government had thought. The word "abatement" was therefore introduced and this linked as a necessary first step to taxing benefits.

Following this approach to taxing benefits, there is now the absurd position, admitted by the Secretary of State, in which large numbers of people have their benefits abated or, as some of my hon. Friends would say, cut, when they would not have paid tax. They are therefore experiencing cuts in benefits which under an ordinary system of the taxation of all benefits they would not. If the policy is "abatement" and not "cuts", the Secretary of State will be able to give a clear undertaking tonight that, when taxation is introduced, the abatements will be made good. This has not been given on all benefits. The right hon. Gentleman has given a half commitment on benefits to the disabled.

If these are real cuts to help pay for tax cuts to the rich that I have already outlined, there would be no commitment to make good the shortfalls—the cuts and abatements—later. If, however, it is a genuine first move to taxing benefits, it will be no problem for the Secretary of State to give a commitment that when the Inland Revenue can tax benefits—in 1982–83 or whenever the date is—the cuts made this year and in succeeding years will be made good. If that commitment is not forthcoming, we shall be debating a twofold cut in benefits. There will be cuts this year, next year and the year after, under the abating formula. Those much reduced benefits in real terms will be cut still further when they are brought into the tax net. I hope that the Secretary of State is genuine when he uses the word "abatement" as the first step to taxing benefits. Some hon. Members will rest a little more easily in our beds if that is so. However, if, as I fear, many of the clauses are closely interwoven with the Budgets in which we have seen a record redistribution of income to the rich, the Secretary of State may have difficulty in giving us that commitment.

The Bill is a massively important measure. I support the amendment to leave out clause 1, because the Bill marks the end of post-war politics. The Government have seized the nettle—that any Government would have had to seize—in a wholly improper way, by reducing the living standards of those who are most vulnerable.

The Bill also demonstrates more clearly than any Labour Member has so far been able to demonstrate to his constituents that the problems of poverty are interwoven with the problems of riches in this country. One has only to consider clauses 1 and 4 and the Government's first two Budgets to see the truth of that statement.

6 pm

Photo of Mr Patrick Jenkin Mr Patrick Jenkin , Redbridge Wanstead and Woodford

As the hon. Member for Isle of Ely (Mr. Freud) said, the debate has been in many ways a rehearsal of the arguments that we had at length in Committee. As so often, the hon. Member for Birkenhead (Mr. Field) made a point of great pertinence and, as we have come to expect of him one of scrupulous honesty. The hon. Gentleman made the point that, whichever Government had been in office, they would have faced difficult agonising decisions about how to cope with the burden of public spending at a time when, at least for the moment, growth has come to an end.

Photo of Mr Reg Race Mr Reg Race , Haringey Wood Green

My hon. Friend the Member for Birkenhead (Mr. Field) does not speak for the Opposition on this matter.

Photo of Mr Patrick Jenkin Mr Patrick Jenkin , Redbridge Wanstead and Woodford

No doubt the hon. Member for Wood Green (Mr. Race) will have an opportunity to speak later.

Photo of Mr Andrew Bennett Mr Andrew Bennett , Stockport North

Will the right hon. Gentleman give way?

Photo of Mr Patrick Jenkin Mr Patrick Jenkin , Redbridge Wanstead and Woodford

No. I have only a limited time available to me. I hope that hon. Members who served on the Standing Committee will forgive me if I repeat on the Floor of the House something that I quoted at greater length in Committee in order to make the point that the dilemma that any Government would have faced is not confined to the United Kingdom, but is a problem facing other countries in a comparable position.

Hon. Members who served on the Committee will recognise that I have here the report "Social Security in a Changing World".

Photo of Mr Patrick Jenkin Mr Patrick Jenkin , Redbridge Wanstead and Woodford

I quoted it in Committee, and it is relevant. It is a survey of the social security position in four European countries, including the United Kingdom, conducted by a distinguished American civil servant, Mr. Standford G. Ross, the Commissioner for Social Security in Washington. The report sets out the background against which we have to consider the clause. Mr. Ross wrote: Optimistic forecasts during the 1960s and early 1970s, which made expansion of social security programmes seem possible and desirable, were dealt unforeseen blows by the oil crisis and the combination of recession and inflation. Now, limited growth is generally forecast and social security has to confront the issue of how to deal with scarce resources in the 1980s and beyond. He went further: To help alleviate the future tax burden, countries are clearly committed to avoiding to the maximum extent possible future social security improvements that add to costs. He added: Benefit curtailments are expected to produce some marginal savings and most countries expect to develop these possibilities to some extent.

Photo of Mr Andrew Bennett Mr Andrew Bennett , Stockport North

Which other countries are actually cutting benefits? The American researcher said only that they were thinking about it.

Photo of Mr Patrick Jenkin Mr Patrick Jenkin , Redbridge Wanstead and Woodford

I quoted a number of cases in Committee and, as time is limited, I refer the hon. Gentleman to the Standing Committee Official Report. I referred to the Federal Republic of Germany, Holland, Italy and countries across the world including Canada and Australia. All those countries are, in one way or another, abating the uprating of benefits.

That is what the clause is about and what all those who have spoken in the debate have referred to. The clause is made up of a series of relatively small cuts. The hon. Member for Eccles (Mr. Carter-Jones) asked whether everything depended on 90p off the maternity benefit. Of course, we cannot single out just one benefit.

Photo of Mr Patrick Jenkin Mr Patrick Jenkin , Redbridge Wanstead and Woodford

We have to look at the combined effect of the clause. In the first full year, it will lead to savings of £130 million. I have made clear throughout the passage of the Bill that the overriding purpose of the first five clauses, and particularly of clause 1, is to save public spending. If it were not for that, I have little doubt that no Government would contemplate bringing forward such difficult, unpopular and unpalatable measures.

I was grateful that my hon. Friends the Members for Portsmouth, North (Mr. Griffiths) and Exeter (Mr. Hannam) recognised that no one takes such decisions with joy or anything approaching it. They are difficult decisions and we have no illusions about the dismay that they will cause among those who feel themselves affected. We have to take those decisions because, as I have said many times, the social security budget absorbs a large share of public expenditure.

Photo of Mr Reg Race Mr Reg Race , Haringey Wood Green

Why does the right hon. Gentleman not take the money from his rich friends?

Photo of Mr Patrick Jenkin Mr Patrick Jenkin , Redbridge Wanstead and Woodford

The social security budget has grown rapidly in real terms over the past 10 years. Ten years ago, it absorbed 17 per cent. of public spending. In 1979–80, it absorbed 27 per cent. of public spending. There was no way in which the Government could hope to achieve their overall spending objectives if the social security budget did not make a contribution.

The benefits in the clause share one characteristic which does not apply to a number of other benefits. The five benefits in clause 1 abated by 5 per cent. are those for unemployment, sickness and injury and the maternity allowance and the invalidity benefit with the unemploy-ability supplement under the industrial injuries scheme. They are all income maintenance benefits and are intended to replace earnings. They all have the characteristic of not being subject to taxation.

My hon. Friend the Member for Portsmouth, North stated firmly that it has been common ground for a number of years that, if the administrative obstacles could be overcome, those benefits should be treated as part of taxable income. I am grateful to have the support of the hon. Member for the Isle of Ely for that view.

Not one of the representative bodies that I have met to discuss clause 1 has argued against the principle of taxing those benefits. The benefits are not taxed and they ought to be.

Photo of Mr Jeff Rooker Mr Jeff Rooker , Birmingham, Perry Barr

But the right hon. Gen-tieman is not proposing taxation.

Photo of Mr Patrick Jenkin Mr Patrick Jenkin , Redbridge Wanstead and Woodford

Of course the Bill's provisions are not proper taxation. I recognise that. There will be some, though even with the invalidity benefit only a minority, who would probably not pay tax if it were applied at present levels and with present allowances. However, the overall yield from the clause is £130 million—less than one-third of what proper taxation on the benefits would yield. We estimate that to be of the order of £450 million in a full year based on the figures in the Red Book.

Photo of Mr David Ennals Mr David Ennals , Norwich North

Has the right hon. Gentleman estimated the number of people in the five categories who would not have to pay tax on their present earnings? How many people are due for a 5 per cent. abatement who would not have been liable to tax?

Photo of Mr Patrick Jenkin Mr Patrick Jenkin , Redbridge Wanstead and Woodford

The answer in the case of the invalidity benefit—the argument is here at its strongest and I accept it—is that of about 850,000 invalidity beneficiaries 250,000 people would not be liable to tax and about 150,000 people would be liable to pay less tax than would be yielded by the 5 per cent. abatement. The point was made frequently in Committee and has been fully conceded by the Government that this is not as satisfactory a way of dealing with this matter as if proper taxation could be introduced straight away.

Photo of Mr Patrick Jenkin Mr Patrick Jenkin , Redbridge Wanstead and Woodford

No I cannot give way. I must finish and I know that the hon. Member for Birmingham, Perry Barr (Mr. Rooker) is waiting to speak. The benefits to which this section applies ought to be taxed and we cannot wait until 1982 or 1983 to secure the contribution from the social security budget towards the Government's overall spending objectives. I have been asked what I shall do when proper taxation applies. I have made it clear that, in relation to invalidity benefit to which hon. Members on both sides of the House—in particular my hon. Friend the Member for Exeter-addressed themselves, we have given the undertaking, subject to availability of resources, to restore the invalidity benefit to the level which would have obtained without abatement.

That, since the benefit was introduced, has been equivalent to the retirement pension and I repeat that undertaking today. The reason why it is right to give that pledge on invalidity benefit is, as a number of my hon. Friends have made clear, that benefit is a long-term benefit. Since it was introduced more than 10 years ago invalidity benefit has, traditionally, maintained a parallel course with the level of the retirement pension. When it comes into taxation, subject to the availability of resources, we intend to restore that relationship.

The Government are not in a position, in relation to the other benefits covered by the clause, to give a comparable undertaking. I must make it clear that the decision will be faced at the time as to what would be the appropriate level of those benefits when they are brought into taxation. The House will know that we have published proposals for consultation in a Green Paper dealing with whether the first eight weeks of sickness benefit payment should be transferred to employers on the ground that about 80 per cent, of employees are currently covered by some form of sickness pay. The relationship between long-term and short-term benefits has not been a fixed one over a number of years and it was widening under our predecessors. It is a matter for judgment at the time, in relation to available resources, the general level of earnings, what the country can afford, the borrowing requirement and all the other factors as to what is the appropriate level when these benefits come into taxation. I can add to the pledge that I gave about invalidity benefit.

6.15 pm

The assurance that I have given about that benefit will also apply to the unem-ployability supplement which is the long-term incapacity equivalent of invalidity benefit under the industrial injuries scheme. That is also a long-term benefit. The same relationship applies and the same assurance, therefore, can be given, Concerning the short-term benefit it must be a matter for judgment when it comes into taxation in 1982 or 1983 whether we can restore the level of the benefit.

I noted carefully what my hon. Friend the Member for Exeter said about any possible repetition, under the powers in this clause, of abating the invalidity benefit for a further year. I cannot give him the categorical assurance that he sought and I am sure that he understands that. But I have no doubt at all that his point of view is widely shared by those who have had the interests of the disabled at heart over many years. I believe that any Government would be bound to take careful note of that viewpoint and I can give my hon. Friend that assurance so far as it goes.

Many hon. Members referred to the disabled. I think that it is right to point out that the abatement is not applied to a number of the other benefits which are available to the disabled. The abatement does not apply to the attendance allowance, to the industrial disablement benefit—which will not be taxed—to the mobility allowance which, as the House knows, is taxed already and which has been increased by substantially more than the retail price index.

Compensation and extra expenses benefits are not to be abated. They are benefits paid on top of earnings rather than in place of earnings. Nor are we abating the increases paid for children. The non-contributory invalidity pension will not be included in the abatement because of its comparatively low rate, though we shall consider whether it should be regarded as a taxable benefit when taxation comes in. We do not intend to abate the invalid care allowance. As the House knows, that allowance is already taxed.

A large number of benefits are not covered by this clause. They are not to be abated. They will be increased by the full amount of 16£ per cent. or, in the case of the mobility allowance, by over 20 per cent.

Photo of Mr Lewis Carter-Jones Mr Lewis Carter-Jones , Eccles

I take the point about the non-contributory element but is there not an indirect impact upon this benefit as a result of what the right hon. Gentleman proposes in the Bill?

Photo of Mr Patrick Jenkin Mr Patrick Jenkin , Redbridge Wanstead and Woodford

Not as far as I am aware, but if the hon. Member cares to write to me I will try to find out whether that is so. This clause does not affect the NCIP. The hon. Member for Eccles and my hon. Friend the Member for Newark (Mr. Alexander) referred to the maternity allowance and I understand the point that about 50,000 maternity allowance beneficiaries would have an annual income which would not exceed their personal allowances and would not be affected by taxation.

It is important to recognise that the basis of this estimate is the fact that the beneficiaries are women who become entitled to the maternity allowance early in the tax year who have no earnings before they become entitled to benefit. However, they would have had earnings in order to have built up a contributory record and thus become entitled to benefit. For perfectly good reasons which many of us would applaud they do not go back to work after they have had their babies. That means they have no earnings for the rest of the year.

Their maternity allowance would not fully absorb their personal tax allowance. But the overwhelming majority of them are married and are supported by their husbands. In those circumstances, bearing in mind that maternity allowance is a benefit which should be taxed and will, eventually, be taxed, it is perfectly proper that the abatement should apply to that benefit at this stage.

I fully share the objectives of those who want to see an improved maternity service in terms both of the Health Service and of income support. As the hon. Member for Eccles reminded me, he and I shared that platform in Trafalgar Square in aid of the "Save the Baby" campaign launched by the Spastics Society. As he knows, as anyone who served on the Select Committee knows, and as the right hon. Member for Norwich, North knows, I answered many questions on this subject recently. I hope that I left my commitment to that objective in no doubt whatever.

The level of benefits that the country can afford depends on its ability to generate the resources to pay for them. Until we have the economy generating the resources to pay for these benefits and to maintain the social security programme, there is an inescapable obligation on the Government—the hon. Member for Birkenhead hoped that a Labour Government would deal with it in some other way—to maintain public spending, which includes the social security programme, at a level which can be sustained by the country's capacity to pay for it.

Photo of Mr Patrick Jenkin Mr Patrick Jenkin , Redbridge Wanstead and Woodford

Tax cuts are part of the philosophy and measures to restore incentive and to give encouragement to generate the wealth on which the Welfare State depends. The Welfare State cannot exist independently of the nation's ability to pay for it. It is because the previous Labour Government were unable to understand the link between those two matters that we find ourselves facing these difficult decisions today.

I ask the House to reject the amendment and to allow the clause to stand as an important and significant contribution to the savings that must be made as part of the Government's overall economic strategy.

Photo of Mr Jeff Rooker Mr Jeff Rooker , Birmingham, Perry Barr

The Secretary of State has taken 22 minutes and not made out an argument why the clause should be kept in the Bill. He failed to do so in Committee and he has failed again, as have his hon. Friends.

It should be made clear at the outset that these are cuts. I point out to my hon. Friend the Member for Birkenhead (Mr. Field) that they are cuts. "Abatement" was the word that he used to hold the Government to account in two years, but these are cuts in benefits this year. There are cuts of £45 million in unemployment benefit, £30 million in sickness benefit, £5 million in the maternity allowance, £55 million in the invalidity benefit, and £5 million in injury benefit. That is a total of £140 million. That is in lieu of taxation. These benefits have been paid for. They are national insurance benefits, not supplementary benefits. They have been paid for by the contributions of people at work.

If the Government taxed them, they would get three times that amount—£420 million. That is the Secretary of State's argument. He has told us halfheartedly that it is unfortunate that some of those who will have the benefits abated or cut would not pay tax. We got out of him the fact that there are 400,000 on invalidity benefit. He did not mention unemployment benefit, but there are 200,000 on unemployment benefit and 50,000 on maternity allowance. For some unknown reason, the number covered by sickness benefit is not available; neither is the number in receipt of injury benefit. These are substantial numbers who will be attacked. They would be better off if the benefits were taxed. This is the crazy position into which the Government have got themselves on this clause.

We are under the guillotine. The Government do not want to debate the Bill in the Chamber, just as they did not want to debate it upstairs. That is why they introduced the guillotine, and why debate has been curtailed. But the key question is: what will happen at the time when the benefits come into tax? In respect of this clause and others the Minister said "When resources permit, we shall do the necessary".

In Committee, at column 681, I asked the Secretary of State what was the benchmark that the House and the country had by which to judge his performance. What is the economic performance of the country going to be when the benefit is restored to its original value? In order that we may judge whether the Secretary of State was telling the truth today, I asked what he meant when he said "if proper resources are available" or "if resources permit".

The right hon. Gentleman said: However, the yield from proper taxation will be three times what will be saved by clause 1. One is perfectly capable of looking at the accounts as a whole, at both revenue and expenditure. I do not therefore anticipate any difficulty in meeting the obligation to restore the benefits and fulfilling the pledge that I have given. When the benefits come into tax, the revenue will be there."—[Official Report, Standing Committee B, 1 May 1980; c. 681.] The Government will get three times that amount from tax. That is the yardstick by which we judge the Secretary of State. We judge him not only on invalidity benefit, but on all the other benefits, because on the day that they come into tax the Government will get £420 million. They will have enough money to restore the benefits to their original value. It is as well to put that on record.

The Government have produced the Bill in a rush. They have refused to meet pressure groups while the Bill has been in Committee. That is a fact. It has been admitted. The Bill has been introduced in a rush and bounced through the House. There are so many corrections coming to answers from the Department that it is just not true. Some of us are receiving letters and corrected answers regarding legitimate inquiries that we made about the effects of the Bill—information that we needed to do our job in Committee. The information was denied to us.

I propose to give the House one example, because the Ministers have come clean today. I suppose that they could have left it until tomorrow. However, I give them credit for having done it today. On 21 April I asked the Secretary of State if benefits payable under the new pneumoconiosis, byssinosis and miscellaneous diseases benefit scheme are affected by any provision contained in the Social Security (No. 2) Bill; and, if so, if he will give details.' The answer that I received from the Minister for Social Security was: They are not affected."—[Official Report, 21 April 1980; Vol. 983, c. 51–2.] That is pretty clear-cut.

One would have assumed that before the Bill was brought before the House it would be possible to answer that question. It is a containable industrial injuries scheme; it is well codified; and all the people in benefit are known. Yet today I received a letter from the right hon. Gentleman in which he said: In my reply of 21 April to your written question about the effect of the Social Security (No. 2) Bill on benefits payable under the … scheme, I said that the Bill had no effect on that scheme. I am afraid that that was wrong for the reasons given in the revised answer which I have sent to Hansard today and of which I enclose a copy.", I should add that the copy was not enclosed. You may like to know that 26 people in all will be affected in this way. The revised answer in Hansard stated that the Minister gave the following further information ". The fact that he said they were not affected was not mentioned. The revised answer read: The provisions of the Bill do not affect personal benefits payable under this scheme, but increases of those benefits payable in respect of unemployability and for a dependant wife are affected because their equivalents under the Social Security Act are affected by clause 1 of the Bill.

Division No. 320]AYES[6.30 pm
Abse, LeoAnderson, DonaldAtkinson, Norman (H'gey, Tott'ham)
Adams, AllenArcher, Rt Hon PeterBagier, Gordon A. T.
Allaun, FrankAshley, Rt Hon JackBarnett, Guy (Greenwich)
Alton, DavidAshton, JoeBarnett, Rt Hon Joel (Heywood)

One of the central points that we have tried to raise is the way that the Government slipped in the fact that industrial injuries benefits were also under attack. That was not made abundantly clear when the Bill was published. Those sections of our work force in the mining industry will take it amiss of the Government if their benefits and pension entitlements are affected.

Following the speech by my hon. Friend the Member for Birkenhead, it must be made abundantly clear that no Labour Government would have brought forward a Bill to cut national insurance benefits. Those of my hon. Friends who made this point should not pussyfoot about with a Government who are attacking the fundamental basis of the Welfare State. They are attacking not supplementary benefits, not the non-contributory part of the social security system, but the contributory part—the benefits that have been paid for under an insurance scheme. If any major insurance company tried to pull this rip-off on its clients, all hell would be let loose in this Chamber—and probably in the one down the corridor—about reneging on contractual obligations once the contributions had been paid and the benefits earned.

There is absolutely no way in which a Labour Government would have contemplated such a Bill, whatever the economic circumstances.

I hope that the Secretary of State will take that on board and not rely on what happens to be said by hon. Members on either side of the House in respect of what may or may not have happened in hypo thetical circumstances. Whatever the economic situation, there is no way that a Labour Government would have brought in such a Bills——

It being half-past Six o'clock, Mr. Speaker proceeded, pursuant to the Order [6 May] and the Resolution this day, to put forthwith the Question already proposed from the Chair.

Question put, That the amendment be made:—

The House divided: Ayes 236, Noes 282.

Beith, A. J.Grimond, Rt Hon J.O'Halloran, Michael
Benn, Rt Hon Anthony WedgwoodHamilton, W. W. (Central Fife)O'Neill, Martin
Bennett, Andrew (Stockport N)Hardy, PeterOrme, Rt Hon Stanley
Bidwell, SydneyHarrison, Rt Hon WalterOwen, Rt Hon Dr David
Booth, Rt Hon AlbertHart, Rt Hon Dame JudithPalmer, Arthur
Bottomley, Rt Hon Arthur (M'brough)Haynes, FrankPark, George
Bradford, Rev. R.Healey, Rt Hon DenisPendry, Tom
Bradley, TomHeffer, Eric S.Penhaligon, David
Bray, Dr JeremyHolland, Stuart (L'beth, Vauxhall)Powell, Rt Hon J. Enoch (S Down)
Brown, Hugh D. (Provan)Home Robertson, JohnPowell, Raymond (Ogmore)
Brown, Ronald W. (Hackney S)Homewood, WilliamPrescott, John
Brown, Ron (Edinburgh, Leith)Hooley, FrankPrice, Christopher (Lewisham West)
Buchan, NormanHoram, JohnRace, Reg
Callaghan, Jim (Middleton £ P)Howell, Rt Hon Denis (B'ham, Sm H)Richardson, Jo
Campbell, IanHowells, GeraintRoberts, Albert (Normanton)
Campbell-Savours, DaleHuckfield, LesRoberts, Allan (Bootle)
Canavan, DennisHudson, Davies, Gwilym EdnyfedRoberts, Gwilym (Cannock)
Cant, R. B.Hughes, Mark (Durham)Robertson, George
Carmichael, NeilHughes, Robert (Aberdeen North)Rodgers, Rt Hon William
Carter-Jones, LewisHughes, Roy (Newport)Rooker, J. W.
Cartwright JohnJanner, Hon GrevilleRoss, Stephen (Isle of Wight)
Clark, Dr David (South Shields)Jay, Rt Hon DouglasRoss, Wm. (Londonderry)
Cocks, Rt Hon Michael (Bristol S)John, BrynmorRowlands, Ted
Cohen, StanleyJohnson, James (Hull West)Sandelson, Neville
Coleman, DonaldJohnson, Walter (Derby South)Sever, John
Concannon. Rt Hon J. D.Johnston, Russell (Inverness)Sheerman, Barry
Conland, BernardJones, Rt Hon Alec (Rhondda)Sheldon, Rt Hon Robert (A'ton-u-L)
Cook, Robin F.Jones, Barry (East Flint)Shore, Rt Hon Peter Step and Pop)
Cowans, HarryJones, Dan (Burnley)Short, Mrs Renée
Cryer, BobKaufman, Rt Hon GeraldSilverman, Julius
Cunliffe, LawrenceKilfedder, James A.Skinner, Dennis
Cunningham, George (Islington S)Kilroy-Silk, RobertSmith, Cyril (Rochdale)
Cunningham, Dr John (Whitehaven)Kinnock, NeilSmith, Rt Hon J. (North Lanarkshire)
Dalyell, TamLambie, DavidSnape, Peter
Davidson, ArthurLamborn, HarrySoley, Clive
Davles, Rt Hon Denzil (Llanelli)Lamond, JamesSpearing, Nigel
Davies, Ifor (Gower)Leadbitter, TedSpriggs, Leslie
Davis, Clinton (Hackney Central)Leighton, RonaldStallard, A. W.
Davis, Terry (B'rm'ham, Stechford)Lestor, Miss Joan (Eton £ Slough)Steel, Rt Hon David
Deakins, EricLewis, Arthur (Newham North West)Stewart, Rt Hon Donald (W Isles)
Dempsey, JamesLewis, Ron (Carlisle)Stoddart, David
Dewar, DonaldLitherland, RobertStraw, Jack
Dobson, FrankLofthouse, GeoffreySummerskill, Hon Dr Shirley
Dormand, JackLyon, Alexander (York)Taylor, Mrs Ann (Bolton West)
Douglas, DickLyons, Edward (Bradford West)Thomas, Dafydd (Merioneth)
Douglas-Mann, BruceMabon, Rt Hon Dr J. DicksonThomas, Jeffrey (Abertillery)
Dubs, AlfredMcCartney, HughThomas, Dr Roger (Carmarthen)
Duffy, A. E. P.McCusker, H.Tilley, John
Dunn, James A. (Liverpool, Kirkdale)McDonald, Dr OonaghTinn, James
Dunnett, JackMcElhone, FrankTorney, Tom
Dunwoody, Mrs GwynethMcGuire, Michael (Ince)Urwin, Rt Hon Tom
Eastham, KenMcKay, Allen (Penistone)Varley, Rt Hon Eric G.
Ellis, Raymond (NE Derbyshire)McKelvey, WilliamWainwright, Edwin (Dearne Valley)
English, MichaelMacKenzie, Rt Hon GregorWalnwright, Richard (Colne Valley)
Ennals, Rt Hon DavidMaclennan, RobertWatkins, David
Evans, loan (Abordare)McNamara, KevinWeetch, Ken
Ewing, HarryMcWilliam, JohnWellbeloved, James
Faulds, AndrewMagee, BryanWelsh, Michael
Field, FrankMarks, KennethWhite, Frank R. (Bury £ Radcliffe)
Fitch, AlanMarshall, David (Gl'sgow, Shettles'n)Whitehead, Phillip
Fitt, GerardMarshall, Dr Edmund (Goole)Whitlock, William
Flannery, MartinMarshall, Jim (Leicester South)Wigley, Dafydd
Fletcher, Ted (Darlington)Mason, Rt Hon RoyWilley, Rt Hon Frederick
Foot, Rt Hon MichaelMaxton, JohnWilliams, Rt Hon Alan (Swansea W)
Ford, BenMaynard, Miss JoanWlliams, Sir Thomas (Warrington)
Forrester, JohnMeacher, MichaelWilson, Gordon (Dundee East)
Fraser, John (Lambeth, Norwood)Mellish, Rt Hon RobertWilson, Rt Hon Sir Harold (Huyton)
Freeson, Rt Hon ReginaldMillan, Rt Hon BruceWilson, William (Coventry SE)
Freud, ClementMiller, Dr M. S. (East Kilbride)Winnick, David
Garrett, John (Norwich S)Mitchell, Austin (Grimsby)Woodall, Alec
Garrett, W. E. (Wallsend)Molyneaux, JamesWoolmer, Kenneth
George, BruceMorris, Rt Hon Alfred (Wythenshawe)Wright, Sheila
Ginsburg, DavidMorris, Rt Hon Charles (Openshaw)Young, David (Bolton East)
Graham, TedMoyle, Rt Hon RolandTELLERS FOR THE AYES:
Grant, George (Morpeth)Newens, StanleyMr. James Hamilton and
Grant, John (Islington C)Oakes, Rt Hon GordonMr. George Morton.
NOES
Adley, RobertArnold, TomBeaumont-Dark, Anthony
Altken, JonathanAspinwall, JackBell, Sir Ronald
Alexander, RichardAtkins, Robert (Preston North)Bendall, Vivian
Allson, MichaelAtkinson, David (B'mouth, East)Bennett, Sir Frederic (Torbay)
Amery, Rt Hon JulianBaker, Nicholas (North Dorset)Benyon, Thomas (Abingdon)
Ancram, MichaelBanks, RobertBenyon, W. (Buckingham)
Best, KelthGrist, lanNeubert, Michael
Bevan, David GilroyGrylls, MichaelNewton, Tony
Biffen, Rt Hon JohnGummer, John SelwynNott, Rt Hon John
Biggs-Davison, JohnHamilton, Hon Archie (Eps'm&Ew'll)Onslow, Cranley
Blackburn, JohnHamilton, Michael (Salisbury)Osborn, John
Blaker, PeterHampson, Dr KeithPage, John (Harrow, West)
Body, RichardHannam, JohnPage, Rt Hon Sir R. Graham
Bonsor, Sir NicholasHaselhurst, AlanPage, Richard (SW Hertfordshire)
Bottomley, Peter (Woolwich West)Hastings, StephenParris, Matthew
Bowden, AndrewHavers, Rt Hon Sir MichaelPatten, Christopher (Bath)
Boyson, Dr RhodesHawksley, WarrenPatten, John (Oxford)
Braine, Sir BernardHeddle, JohnPattie, Geoffrey
Bright, GrahamHenderson, BarryPawsey, James
Brinton, TimHeseltine, Rt Hon MichaelPerclval, Sir lan
Brocklebank-Fowler, ChristopherHicks, RobertPeyton, Rt Hon John
Brooke, Hon PeterHiggins, Rt Hon Terence L.Pink, R. Bonner
Brotherton, MichaelHogg, Hon Douglas (Grantham)Porter, George
Brown, Michael (Brigg & Sc'thorpe)Holland, Philip (Carlton)Prentice, Rt Hon Reg
Browne, John (Winchester)Hooson, TomPrice, David (Eastleigh)
Bruce-Gardyne, JohnHordern, PeterPrior, Rt Hon James
Bryan, Sir PaulHowell, Ralph (North Norfolk)Proctor, K. Harvey
Buck, AntonyHunt, David (Wirral)Raison, Timothy
Budgen, NickHunt, John (Ravensbourne)Rathbone, Tim
Bulmer, EsmondHurd, Hon DouglasRees, Peter (Dover and Deal)
Burden, F. A.Irving, Charles (Cheltenham)Rees-Davies, W. R.
Butcher, JohnJenkin, Rt Hon PatrickRenton, Tim
Buller, Hon AdamJohnson Smith, GeoffreyRhodes James, Robert
Cadbury, JocelynJopling, Rt Hon MichaelRidley, Hon Nicholas
Carlisle, John (Luton West)Kimball, MarcusRldsdale, Julian
Chalker. Mrs. LyndeKitson, Sir TimothyRifkind, Malcolm
Channon, PaulKnight, Mrs. JillRippon, Rt Hon Geoffrey
Chapman, SydneyKnox, DavidRoberts, Michael (Cardiff NW)
Churchill, W. S.Lamont, NormanRoberts, Wyn (Conway)
Clark. Hon Alan (Plymouth, Sutton)Lang, lanRossi, Hugh
Clark. Sir William (Croydon South)Langford-Holt, Sir JohnRost, Peter
Clarke, Kenneth (Rushcliffe)Latham, MichaelRoyle, Sir Anthony
Clegg, Sir WalterLawrence, IvanSainsbury, Hon Timothy
Colvin, MichaelLawson, NigelSt. John-Stevas, Rt Hon Norman
Cope, JohnLee, JohnScott, Nicholas
Cormack, PatrickLennox-Boyd, Hon MarkShelton, William (Streatham)
Corrie, JohnLester, Jim (Beeston)Shepherd, Colin (Hereford)
Costain, A. P.Lewis, Kenneth (Rutland)Shepherd, Richard (Aldridge-Br'hills)
Critchley, JulianLloyd, lan (Havant & Waterloo)Shersby, Michael
Crouch, DavidLloyd, Peter (Fareham)Silvester, Fred
Dickens, GeoffreyLoveridge, JohnSims, Roger
Dorrell, StephenLuce, RichardSkeet, T. H. H.
Douglas-Hamilton, Lord Jame"Lyel, NicholasSmith, Dudley (War. and Leam'ton)
Dover, DenshoreMcCrindle, RobertSpeller, Tony
du Cann, Rt Hon EdwardMacfarlane, NellSpence, John
Dunn, Robert (Dartford)MacGregor, JohnSpicer, Jim (West Dorset)
Durant, TonyMacKay, John (Argyll)Spicer, Michael (S Worcestershire)
Eden, Rt Hon Sir JohnMacmillan, Rt Hon M. (Farnham)Sproat, lain
Edwards, Rt Hon N. (Pembroke)McNair-Wilson, Michael (Newbury)Stalnton, Keith
Eggar, TimothyMcNalr-Wil30n, Patrick (New Forest)Stanbrook, Ivor
Elliott, Sir WilliamMcQuarrie, AlbertStanley, John
Fairgrieve, RussellMadel, DavidSteen, Anthony
Faith, Mrs SheilaMajor, JohnStevens, Martin
Farr, JohnMarland, PaulStewart, lan (Hitchin)
Fell, AnthonyMarlow, TonyStewart, John (East Renfrewshire)
Fenner, Mrs PeggyMarshall, Michael (Arundel)Stokes, John
Finsberg, GeoffreyMates, MichaelStradling Thomas, J.
Fisher, Sir NigelMather, CarolTapsell, Peter
Fletcher, Alexander (Edinburgh N)Maude, Rt Hon AngusTaylor, Robert (Croydon NW)
Fletcher-Cook, CharlesMawby, RayTaylor, Teddy (Southend East)
Fookes, Miss JanetMawhinney, Dr BrianTebbit, Norman
Forman, NigelMayhew, PatrickTemple-Morris, Peter
Fowler, Rt Hon NormanMellor, DavidThomas, Rt Hon Peter (Hendon S)
Fox, MarcusMeyer, Sir AnthonyThorne, Neil (Ilford South)
Fraser, Rt Hon H. (Stafford & St)Miller, Hal (Bromsgrove & Redditch)Thornton, Malcolm
Fraser, Peter (South Angus)Mills, lain (Meriden)Townend, John (Bridlington)
Fry, PeterMitchell, David (Basingstoke)Townsend, Cyril D. (Bexleyheath)
Gardiner, George (Reigate)Moate, RogerTrotter, Neville
Gardner, Edward (South Fylde)Monro, Hectorvan Straubenzee, W. R.
Garel-Jones, TristanMontgomery, FergusVaughan, Dr Gerard
Glyn, Dr. AlanMoore, JohnViggers, Peter
Goodhew, VictorMorgan, GeraintWaddington, David
Goodlad, AlastairMorris, Michael (Northampton, Sth)Wakeham, John
Gow, IanMorrison, Hon Charles (Devizes)Waldegrave, Hon William
Gower, Sir RaymondMorrison, Hon Peter (City of Chester)Walker, Rt Hon Peter (Worcester)
Grant, Anthony (Harrow C)Mudd, DavidWalker, Bill (Perth & E Perthshire)
Gray, HamishMurphy, ChristopherWalker-Smith, Rt Hon Sir Derek
Greenway, HarryMyles, DavidWaller, Gary
Grieve, PercyNeedham, RichardWalters, Dennis
Griffiths, Peter (Portsmouth N)Nelson, AnthonyWard, John
Warren, KennethWiggin, JerryYounger, Rt Hon George
Watson, JohnWilkinson, John
Wells, Bowen (Her-.'rd & Stev'nage)Williams, Oelwyn (Montgomery)TELLERS FOR THE NOES:
Wheeler, JohnWolfson, MarkMr. Spencer Le Marchant and
Whitney, RaymondYoung, Sir George (Acton)Mr. Anthony Berry.
Wickenden, Keith

Question accordingly negatived.

Photo of Mr Bruce Douglas-Mann Mr Bruce Douglas-Mann , Merton Mitcham and Morden

On a point of order, Mr. Speaker. When Divisions take place at this time of day, when traffic is heavy, could a greater latitude be allowed in respect of the time allowed for a Division? Could instructions be given to the police to ensure that a policeman is on duty to enable hon. Members coming from Dean's Yard to cross the road? Hon. Members with offices there face a serious hazard when coming to the House for a Division.

Photo of Mr George Thomas Mr George Thomas , Cardiff West

On the hon. Gentleman's latter point I shall of course see that the necessary instructions are given. A day when a timetable motion comes into effect is more straightforward than most other days because hon. Members know when a Division will take place. They should make provision accordingly.