Orders of the Day — Poverty

– in the House of Commons at 3:42 pm on 3rd February 1981.

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Photo of Mr Norman Buchan Mr Norman Buchan , Renfrewshire West 4:02 pm, 3rd February 1981

I beg to move, That this House deplores Her Majesty's Government's policies which are destroying the welfare state, eroding personal freedoms and increasing poverty among the unemployed, the elderly, the sick, the disabled, the working poor and families with young children. The motion is at least a damned sight better than the amendment. I have never seen such a wishy-washy amendment from any Government when faced with a major challenge on their policies. It contains at least one wild inaccuracy. The Government claim that their polices are the only ones which will achieve "real economic recovery" while at the same time protecting the most vulnerable groups in society. The burden of our charge today will be that the Government are doing precisely the opposite. Indeed, the amendment should read This House acknowledges that at a time of severe economic recession, the policies of her Majesty's Government are putting all the burdens on the backs of the poor. The most shameful thing about this period which history will record is precisely that at a time of continuing economic failure, largely as a result of their own policies, at a time when their policies are turning a short-term cyclical recession into a long-term industrial decline, at a time when, largely and specifically as a result of their own dogmas, we have the most appalling unemployment figures that most of us have known in our lifetime, the Government should choose to slash the incomes, curtail the rights and throw the greatest burden upon the backs of the poorest and weakest in our society—the sick, elderly and unemployed.

And it is even more shameful because it takes place against a background of two Budgets. The first gave 37 per cent. of the tax handouts—about £1½ million—to the richest 7 per cent. of the community. The second Budget gave 14 per cent. of the entire handout to the richest 2 per cent. of the community. As if to add philosophical salt to the wound, all of that has been done in the sacred name of freedom and the concept of rolling back the boundaries of the State. That has come from a Government who possess a Secretary of State for the Environment whose every action is invading and destroying local democracy, forcing policies on rents and rates which the community does not want and imposing sharp incomes policies on our poorest public sector workers.

Like other hon. Members who took part in Question Time today, I saw the Prime Minister during her television broadcast on Sunday. She was at her most obsessive. There was not a faint glimmer of doubt that she could be wrong. She seemed to regard it as a false kindness to show compassion or to intervene. I understand that her favourite parable is that of the Good Samaritan. I suspect that had she been the Good Samaritan, out of kindness and in the best Friedmanite doctrine she would have allowed the Levite to die and then proceed to cut his death grant.

All this has been done in the name of freedom. There are no freedoms where there is no choice, and for millions of people in our community there is now no choice. Nor are there freedoms without rights, and the Government are replacing rights with means tests. The right to work has been replaced by the appalling numbers who more and more are going on to supplementary, and, therefore, means-tested, benefits.

Both the right hon. Lady and the Secretary of State have recently been exalting the principle of charities and of voluntarism in our society. What they do not understand is that the voluntary organisations—and we welcome voluntary work in the community—can work only, and certainly work best, when they recognise that there is a wider family and community. Together they make up the community of the nation which creates the framework in which voluntarism can work best. The wider national framework is necessary.

That is shown, if it needs to be shown, by the strong opposition to virtually every step which the Government have taken by virtually everybody working in the voluntary sector. These people recognise how their voluntarism can best work even if the Government cannot. Whether in relation to pensioners, the unemployed, children, those concerned with families and, indeed, within the family itself, organisations such as the Child Poverty Action Group or the National Council for One Parent Families have all opposed the Government, and on all the aspects that I mention they are facing difficulties because of Government actions.

What do the voluntary bodies say about it? I should like to quote what some of them have said. The National Council for One Parent Families says this about a Government who are supposedly devoted to voluntarism: Government policies are devastating and demoralising one parent families. Local authorities need special help to cope with these growing numbers. But cuts in resources means less housing for the homeless, less day care for those in work and worse social services for those in trouble. Our belief that it had a commitment to one parent families is now wearing a bit thin. I take another group—the Disability Alliance. More in sorrow than in anger, it says: The Conservatives came to power with an impressive record of promises"— indeed they did— to chronically sick and disabled people. People with disabilities were left in no doubt that their needs would be given a special priority by the new administration. These expectations have not been fulfilled. A year after taking office, the Government appears to have forgotten its assurances to people with disabilities. The same points were made by Help the Aged: Since the elderly and particularly the frail elderly make the greatest demands on our social services, it is no wonder that they should be among those most affected by the current wave of cuts in central and local government expenditure. There are still too few sheltered housing schemes. Part-three accommodation is extremely expensive and is all too often more of an institution than a home. Now, even those essential services are being cut. In that sacred document "The Right Approach"—the Tory Government's textbook—they made a promise under the heading "The welfare of the community". It mentioned social security and said that our first priority must be to look after the retired, the disabled, the sick and the very poor. About that, the Child Poverty Action Group said: Behind all the fine words about 'protecting the needy', the Government has introduced a Budget which singles out social security claimants and families with children to bear the main burden of the sacrifices required by its economic policies, and which through a policy of means-testing divides the poor from the rest of society. The former chairman of the Supplementary Benefits Commission, Mr. David Donnison, said that a new set of priorities was required urgently if the casualties were not to mount still further.

What was the Secretary of State's view? He said: We believe that it is the duty of the strong to help the weak"— Good. He continued: and that is why we seek to help the most vulnerable in our society. These words are not just pious platitudes: look at the record. We shall take the right hon. Gentleman at his word and we shall look at the record. Let us go through the list in "The Right Approach". What have the Government done about the retired? They have ended the link with earnings or prices, whichever is the higher. As a result, if pensions had been uprated in line with the earnings index for the year ended November 1980, a pension for a single person would have been £28·10 and for a married couple £44·90. As a result of the Government's action single pensioners lost by 95p a week and married couples lost by £1·45.

If we were to pursue that to when linkage to earnings started, we should find that married couples would have been £3·50 better off than they are today. That is the measure of the Government's cut. The Government have tried to make a virtue of protecting pensioners from inflation. However, pensioners will never become better off while such arrangements continue. Not only has there been an immediate cut; as a result of the policy no pensioner can become better off. A person's pension is in line with inflation, but it will not improve on the rate of inflation.

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

The hon. Gentleman may have misunderstood a very complicated provision in the Social Security Act 1975, as amended. The provision places a floor under the uprating. It is open to any Government—we have repeatedly given this pledge—to ensure that as and when the prosperity of the nation improves pensioners will share in it. [Interruption.] It has happened before and I have little doubt that it will happen again.

Photo of Mr Norman Buchan Mr Norman Buchan , Renfrewshire West

I expected that intervention. I repeat that the policy means that pensioners can never become better off.

With reference to the Social Security Bill the right hon. Gentleman said: In the Social Security Bill we give the guarantee that pensioners and other long-term beneficiaries will be at the very least protected against rises in prices. Note the phrase "at the very least". What has happened? That phrase has now become "at the very best". The Government propose to claw back the 1 per cent. due to old-age pensioners—[Interruption.] Do the Government intend to drop that Bill? The Government propose to claw back the 1 per cent. and they complained about the earlier "over-provision." What a term! The Chancellor of the Exchequer said that they would claw back the 1 per cent. that resulted from the Government's misunderstanding of the inflation rate.

The Government say that pensioners have been over-provided for. That clawback must not be allowed to happen. I hope that the Chancellor of the Exchequer agrees with me. However, we have been promised a squalid little clawback Bill. Nothing quite so mean has yet been proposed by the Government. I almost prefer their major crimes to that little bit of vindictive meanness. I want a guarantee. Will the clawback end there? I understand that in Cabinet it was a close-run thing whether the Prime Minister would be prepared to break that pledge. We are told that it is a very leaky Cabinet. The Prime Minister has told us that it is very leaky. She sacked the most distinguished and stylish of all its members to bear out that the leaks were true. By definition, a leak does not matter if it is untrue. The Prime Minister was on the verge of going back on that pledge. We are entitled to ask about, and have evidence and proof of, the Government's intentions as regards sticking to that mean concept. We could get confirmation of that today.

The next group that "The Right Approach" claimed to support was the disabled. Earlier this month, my right hon. Friend the Member for Manchester, Wythenshawe (Mr. Morris), who was the former Minister with responsibility for the disabled, tabled a wide-ranging series of questions to find out what new initiatives the Government had in mind to mark the International Year of Disabled People, and at what cost. I have looked through the answers from nearly a score of Ministers. Every one made clear that there would be virtually no new extra expenditure to mark the IYDP.

We welcome the new Minister for Social Security, the hon. Member for Hornsey (Mr. Rossi), to the Front Bench. Like me, he is a newcomer and I wish him luck. I hope that he will have something to say on this subject. During Question Time the hon. Gentleman did not give much evidence that he had any intention—[Interruption.] I agree; he was very good. He got away with it. That is the definition of "very good" among Conservative Members. However, not a single pledge was given about further expenditure for the disabled. If that is good, he was very successful. The hon. Gentleman got away with his baptism. He will not get away for long if the Secretary of State does not encourage him to put some money where his mouth is.

The Government are good about promises. When the Conservative Party was in Opposition its members spent their time attacking every one of our provisions for the disabled as inadequate. No one in this party believes that we have done sufficient for the disabled. However, we would say that we at least made a start. We appointed a Minister and spent over £1,100 million on the chronically sick and disabled. We introduced new types of cash benefits. It is not enough, but it is a start. But every time a new benefit was announced someone denounced it as insufficient and called for more. Who was that? It was the right hon. Gentleman. In the IYDP he has an opportunity to go down in history, yet not one substantial benefit has been proposed to mark the occasion.

Perhaps alone in the world, Britain has not responded and has not brought forward any provision. The right hon. Gentleman is turning the International Year of Disabled People into a kind of sick joke. It is beginning to fray the nerves of those in voluntary work. In yesterday's edition of The Times an article referred to Colin Low, who is a blind lecturer in law. He was invited to the shindig at No. 10 to mark the glorious year of the disabled. He is president of the National Federation of the Blind. However, he will not go to the reception. He said that the reception at No. 10 Downing Street was an "obscene irrelevance" compared with what has been done for the disabled. Later on, The Times states: Mr. Hugh Rossi who has replaced Reg Prentice as Minister for the Disabled, told Professor Townsend he regretted Mr. Prentice's publicly stated view that disabled people should share cuts in public expenditure. I hope that the hon. Gentleman will tell that not only to Professor Townsend but to hon. Members. I hope that he will give us some evidence of his intentions.

The next on the list is the sick. What have they done to bear out the fine words in "The Right Approach"? The first thing that the Government did was to cut sickness benefit by 5 per cent. below the inflation rate. It was cut by 5 per cent. below the amount that the sick could reasonably have expected. The Government said that they would stick to their pledge of inflation-proofing pensions—although they would cut back any little bits that went over the top—but they have not done that for sickness. That means a real and direct loss, per week, of 85p for a single person and £1·49 for a married couple. That is the first evidence of the Government's attitude towards the sick. The earnings-related supplement has been reduced this month. It is to be abolished next year. The figures for 1978–79, the latest that I have been able to obtain, show that the average man earning £95 could have claimed a supplement of £14·49. The new measures taken by the Government mean that there will be a drop from £14·49 to £11, a loss of about £3·50, in the earnings-related supplement of a newly sick man.

The Government have changed the rule in relation to this complicated aspect. The new Minister will discover that this is a complex field. It takes a long time to find a way through. I do not wish to spend too long on some of the details. However, the change in the rules about the linking of periods of interruption of employment from 13 weeks to eight weeks has two clear effects. First, it will become more difficult to qualify for the invalidity benefit. Secondly, as the Disability Alliance points out, these changes will create an additional deterrent to work for the chronically sick and disabled. Yet so much is claimed to have been done by the Government in the name of incentives.

The long-term sick have been struck a double blow. Like pensioners, their benefit is no longer to be related to earnings or prices, whichever is higher. Unbelievably, any increase in the invalidity pension will be 5 per cent. below estimated inflation. The loss for a single person receiving invalidity pension benefit is £1·15 and for a married couple £1·85. For a family, the figure is £3·35. That indicates the extent of the Conservative Party's devotion to family policy.

Prescription charges are up by 500 per cent. In April 1979 the charge was 20p. It is now £1. The National Health Service was one of the two basic planks of the Welfare State to which all Governments were pledged. The Opposition recognise that all charges are bad. I would deplore it if what has happened were done by a Labour Government. Labour has done nothing to compare with what has happened now. All charges are bad, but these are prohibitive, the basic concept now being introduced for financing the NHS is, on the one hand, charges at this level and, on the other, the introduction, presumably, of one-armed bandits and lotteries. Those most outraged by this development are the very charities and voluntary organisations that the Government say they exist to defend and enhance. The charities and voluntary organisations see their support and income disappearing as a result of this policy. It shows the decline that has occurred since Beveridge and Nye Bevan.

Community care has commented on the shift to employer liability, euphemistically called "income during initial sickness", which puts the onus on the employer instead of the Government for the first eight weeks of sickness. It says Mrs. Thatcher and her colleagues have developed a remarkable talent for uniting the most motley groupings in opposition to their policies. When else, for example, have the Child Poverty Action Group, employers' associations, civil servants, Help the Aged, the Labour Party"— we are in good company— and the British Medical Association, the trades unions and a chunk of the insurance business condemned a policy as to a man? The policy is rejected virtually by every organisation, whether an employers' organisation or a supportive voluntary organisation. The Engineering Employers' Federation says: The EEF whose members employ some 2 million people will lead a major attack on the Government's proposals for payment of sick pay by employers when Parliament reassembles. I welcome allies from any direction, We have to ask whether the Government, in the face of such opposition, intend to go ahead with the proposals. We saw some sign, under pressure, of a watering down of the proposals in December. Why cannot the Government go the whole way and withdraw them? Among those affected will be the small business man, the apple of the Tories' eye. What a disincentive this gives the small business man to employ more labour.

I have left the unemployed until last, for the simple reason that they did not appear in the list in "The Right Approach". It did not talk of the unemployed among those to be looked after. There are 2½ million people—one in 10—out of a job. I have a hunch that the Government think that this is the fault of the unemployed themselves. They talk as though that were the case. The Prime Minister thinks that if people get the sack they should go and look for work. The Prime Minister's message for the unemployed is "Have sack, will travel". We see the effects of the Government's attitude on the morale of the unemployed. One of the unemployed, quoted in a recent publication, said: The public have a tendency to blame us for being unemployed … they think that we are lazy… I used to have the same view when I was employed… they should have a taste of it themselves". A man made unemployed at Consett said: I have looked for jobs almost every day since I was made redundant, but I do not have much of a chance. I suppose if I am honest I sometimes think I'll not work again. And I am 46. This shows the attitudes of despair that the Government have inculcated with their short, sharp, brutish campaign against so-called scroungers.

The Government do not like the unemployed—certainly not in practice. Unemployment benefit has gone up by 5 per cent. less than the rate of inflation. Earnings-related supplement has been reduced this month and will be abolished next year. That supplement, it should be remembered, is about £8.80 a week on average. The long-term supplementary benefit will be available to all after one year—we can say in mitigation that the Opposition welcome this—except for the unemployed. Why are they singled out? This will make a difference to them of £8.85 in the case of a married couple.

The Government, faced by mounting unemployment, must reconsider their decision to exclude the long-term unemployed from eligibility for the enhanced long-term rate of supplementary benefit. Even worse, more than half the unemployed do not even receive unemployment benefit. There are 780,000 on unemployment benefit only, 160,000 on unemployment benefit plus supplementary benefit, and over 600,000 on supplementary benefit only. And others get nothing. These figures are increasing as the number of long-term unemployed approaches the 500,000 mark. The associated poverty increases with the cutting of the unemployment benefit as more are pushed on to supplementary benefit. The Government's estimate last year was that another 110,000 would be put on supplementary benefit. Why have the unemployed been made to suffer this shabby treatment? Is it the cost? Or is it the obsession with the "Why work"? and the scroungers syndrome?

The Supplementary Benefits Commission, in its annual report, said: Incentives to work can only be effective if there are opportunities to work. To increase incentives while unemployment accelerates upwards is like trying to encourage somebody to jump into a swimming pool while the water is being drained out. Those who suffer most from Government policy are those like the unemployed, who are having to bear the brunt of such policies.

I come now to the bull point—families. The Prime Minister has said "We are the party of the family." In a speech to the WRVS, she declared Not only is the family the most important means through which we show our care for others, it is the place where each generation learns its responsibilities towards the rest of society". The crucial factor is child benefit. Child benefit shows a miserable increase below the galloping inflation that we face. It is only up 75p from last year—a loss in real terms of nearly 50p a child a week. The benefit should be at least £5…20. Most people in the child benefit sphere would recognise that even this amount is inadequate. I wish that the Government would put the money where its family mouth is and restore what has been lost by the cut.

We are told that those suffering poverty as a result of these policies are not finding the same treatment in the offices. More people are being turned down for lump sum grants or section 30 miscellaneous discretionary payments. The Child Poverty Action Group reports a big drop in the number of claimants asking for these grants for clothes and shoes because they appear to be told flatly that the law says "No", again they say, without any attempt properly to assess whether or not a discretionary payment should be made. They are finding case after case where people on other benefits living just above the supplementary benefit level are clearly being hurt where the new rule disqualifies them from lump sum payments. These reports are very disturbing and I am getting them from many hon. Members. I hope that the Minister will make a report shortly on the operation of this new scheme.

We are concerned also about the inadequacy of the scale rates. There is a whole list of things that require to be financed out of the scale rates—food, household fuel, the purchase, cleaning, repair and replacement of clothing and footwear, travel costs, weekly laundry costs, miscellaneous household expenses, and so on. All these have to be covered by the new scale rates that have been introduced. We have sought to have these costed, but how much money is coming for this enormous list of needs? My hon. friend the Member for Battersea, South (Mr. Dubs) asked the Secretary of State for Social Services what costings his Department has made of the items listed in paragraph 4(1) of the Supplementary Benefits (Requirements) Regulations 1980. The new Minister of State replied: None. Successive Governments have considered it right that beneficiaries should have the freedom to decide for themselves how to allocate the resources on those items,".—[Official Report, 23 January 1981; Vol. 997, c. 252.] Freedom to decide whether to apply for a pair of shoes or a blanket—what kind of freedom is this? We have to get the costings, otherwise we do not know if they are adequate. What a picture of Tory freedom that gives. The level of these benefits should be such that the beneficiaries could have an income which enables them fully to participate in the life of the community. All of us accept that, I should have thought. I wish they would give us the costings to ensure that it happens. Someone asked me "Could you live on it?" I am pretty sure that the poor cannot and I think that the family service unit, for example, can give example after example of how the poor are unable to live on the new kind of views that are coming through as a result of these policies.

The fate of the low-paid is little better. In the first place, family income supplement applies to only about 90,000 families. Incidentally, the Government have still not removed the discrimination against women. A woman who is the earner in a FIS-supported family does not and will not benefit until November 1983, when the Government will be forced to pay this by Common Market regulations. I never thought that the Common Market regulations were necessary to develop a sense of compassion in any British Government. Apparently that is the case with this Government. They are leaving it right to the last syllable of recorded time before they bring it in.

The combination of family income supplement and the tax proposals have deepened, sharpened and widened the poverty trap. For example, it means that a couple with two children on £55 a week would need to get a wage increase of over £20 per week in order to make them better off. A couple with four children earning £55 per week would need to get a wage increase of about £30 to £40 a week in order to escape from the vicious poverty trap. It is Government tax policy along with the benefits policy which has created this.

It does not need me to say this. We have a better witness here. "One is bound to ask, what can be more absurd? What can one think of a tax system under which someone who is so poor that he is entitled to draw a means-tested benefit finds himself paying tax to contribute towards the cost of it?" The right hon. Gentleman himself said that. His Government have made it worse. We hope to hear him say something about that today.

The truth is that the Government have created a kind of caste in our society in which the people in it have no means of gaining either independence or freedom, or a sense of respect because they feel trapped perpetually in a new permanently means-tested life in which virtually no action they can take can improve their condition. That is what poverty is about, and that is what freedom is about.

Photo of Mr Ralph Howell Mr Ralph Howell , North Norfolk

How can the hon. Gentleman make such cheap points when his Government were operating the same FIS system and even higher rates of income tax than this Government?

Photo of Mr Norman Buchan Mr Norman Buchan , Renfrewshire West

What this Government did was to introduce a Budget which among other things gave a hefty dollop to the rich at the top and abolished the lower income tax level at the bottom. If the Government want to find an answer to that charge that is one means of doing it. Secondly, they can do it by pushing up the threshold at which tax starts to be paid. This is the absurdity which the right hon. Gentleman talked about and which they have shied away from. The poor are getting poorer as well as there being more of them.

Unemployment and sickness benefit levels are now at their lowest in real terms since 1971. The benefit income when sick or unemployed for a married couple with two children was down from 67 per cent. in 1977 to 57 per cent. in 1980 as compared with average male earnings, and similarly with the retirement pension. Again, it is lower.

If the poor are getting poorer, it is also true that the poor pay more, because the necessities of life weigh much more heavily on a poor person's income. Electricity prices have gone up through Government action. Gas prices have gone up through Government action. Yet the Government have abolished the electricity discount scheme. That gave help to about 4 million poor consumers. That has been abolished and replaced by the narrow, small means-tested scheme for 350,000 people. We see the result. Every hon. Member who has constituents coming to his surgery sees the result in increasing disconnections and now by the new development of the installation of load limiters. We want to get something done about that.

Incidentally, my hon. Friend the Member for Woolwich, East (Mr. Cartwright) is bringing in a Bill on this subject. Now is the opportunity for the Government to show their evidence of intention by supporting that Bill.

There is one point on which I should like to get a reply. In Northern Ireland fuel costs are on average 50 per cent. higher than in the rest of the United Kingdom. This was understood, and a special allowance was made for it. That allowance has been abolished. It means about an extra charge of £2·50 per family in Northern Ireland. What a piece of meanness it is to apply that to that country of all countries with its present level of unemployment.

Photo of Ian Paisley Ian Paisley Leader of the Democratic Unionist Party

The hon. Gentleman is no doubt aware that gas prices in Northern Ireland are three times what they are in the rest of the United Kingdom.

Photo of Mr Norman Buchan Mr Norman Buchan , Renfrewshire West

As I said, I was averaging the figure, and the total fuel costs are about 50 per cent. higher than in the rest of the United Kingdom. But I am grateful for the intervention.

All this has been in the name of rolling back the boundaries of the State. We have a Government who have increased poverty among council tenants and slashed the freedom of local authorities at a stroke on rent and rates. If there is one clear way of alleviating the worst of this new kind of poverty, it must be through an increase in child benefits.

I turn to the man who gave the intellectual impetus to this new brutalism of the modern Tory Party—the Member for Aberdeen, South (Mr. Sproat). If hon. Members remember, it was his campaign against scroungers that gave the Tories the basis for much of their election campaign and gave them the push within the country to dare to get away with the policies that they have. What does this intellectual from the North tell us about child benefits? This is what the hon. Member said in an article about two weeks ago in the Glasgow Herald. I may say that he shares this column with me; there are four of us who do this column every month, so there is always one good column in the month. I regret to say that I cannot read my own to the House. The hon. Gentleman says this: Why doesn't the Government abolish child benefits? There is a good question. It would save about £3,000 million a year. To put it in perspective, that is about the same as we got from North Sea oil last year. This should make a lot of people think. Money from North Sea oil is supposed to be a magic part our national salvation. Yet here we are, chucking almost the same amount away on child benefits …Furthermore, why should the taxpayer fork out money to people just because they have children? I reckon that it's up to parents to work out how many children they want and can afford.Just think what we could do with that £3,000 million. We could greatly cut income tax, without increasing inflation … In that way, we could encourage people to work hard instead of just encouraging them to have children. This is the man who laid the intellectual basis for this Government's policy. We would like to get an answer.

Photo of Mr Tristan Garel-Jones Mr Tristan Garel-Jones , Watford

Intellectual by the hon. Gentleman's standards.

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

Does the hon. Member for Watford (Mr. Garel-Jones) agree with it?

Photo of Mr Norman Buchan Mr Norman Buchan , Renfrewshire West

The Government, having won an election on the promise of tax cuts—by God, we have seen the result of that—having won a campaign by arousing some of the worst attitudes among some of our people in relation to scroungers, have felt that they now have to fulfil those promises, and we have had the launching of this great new fraud campaign.

The Under-Secretary of State—the hon. Member for Wallasey (Mrs. Chalker)—said: If some people are able, through fraud and fiddling, to get money to which they are not entitled, it means there is less for those whose need is genuine". We say "Amen" to that. Certainly some people are capable of fraud and fiddling. We have had some good examples of fiddling, including the Vesteys. But the only Vesteys that the Government are concerned about are the street-corner Vesteys. That is the sort of fiddling that they are concerned about. We do not approve of scroungers at either end of the spectrum.

On 13 February the previous Minister of State—the right hon. Member for Daventry (Mr. Prentice)— announced the appointment of 1,050 additional staff to work on fraud and abuse. The aim was to save £50 million a year. How are they getting on? Have they reached the £50 million, or is it their failure to reach it that gives rise to the new guidelines for fraud inspectors? Is it tougher than they thought? How will they interpret the latest instructions to staff?

We have seen leaked in New Society and other newspapers something of the horrors of the new fraud guidelines that have been issued in order to try to implement the new campaign. I have asked that they be published. Only today I received a reply from the Secretary of State. I have not had time to digest it fully, but it is clear that the right hon. Gentleman is refusing to publish the guidelines. I wonder why. Nevertheless, for the sake of greater accuracy I thought that it would be wise to have a copy with me.

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

Before the hon. Gentleman reads the document to the House will he make it clear that in my letter to him I made it clear that the system that he is about to describe is that operated by his predecessors for many years in Manchester? It was found to work and is now being extended to other parts of the country.

Photo of Mr Norman Buchan Mr Norman Buchan , Renfrewshire West

No, I am dealing with the June 1980 amendments to the fraud investors' guide. The right hon. Gentleman must not mislead the House.

Photo of Mr Norman Buchan Mr Norman Buchan , Renfrewshire West

There are some interesting bits of reading in the document. One struck me especially. An indication is given of cases in which staff should not proceed to prosecution, and it is suggested that there should not be prosecution if The offender is of such low mentality that the court might be more sympathetic towards him than towards the Department". That is not suggesting that staff should refuse to proceed to prosecution because the person concerned is of low mentality and should be in care. It is not suggesting a sympathetic approach to that person. It merely suggests that there should be no prosecution, because the court might take a more sympathetic view towards him than would the Department. In other words, a British court of justice would be more sympathetic than the DHSS. That is a terrifying concept.

The Department's attitude denies a great deal of natural justice and extends and presses even more the question of humiliating investigations. And all in the name of cost-effectiveness. It is not the seriousness of the suspected offence but the cost-effectiveness that will be derived if it is prosecuted that is taken into account. We on the Opposition Benches believe injustice as well as equality.

Even worse are some of the internal documents. Those who are most horrified by the proposals are the social security officers themselves. The union involved is also upset, because it finds the process distasteful. I have seen some internal documents. We are told that pressure is applied to persuade people to drop their claims. A man meeting officials in those circumstances would not find it difficult to experience the sort of guilt that the Government have inculcated with their talk of scroungers, and might drop his claim under such investigation. I have also seen, from an unnamed area, other sorts of pressure. I have a document announcing good news and bad news. It states: I was pleased to announce our success in the level of savings we have achieved since the beginning of the year. It goes on to say that the news for November last year was not so good: Our results for that period indicate that we only just achieved our target". They have targets for savings on fraud! It is like telling a police station that it should have a target for the number of prosecutions that it brings. There is no requirement of justice involved. The document continues: results fluctuate from month to month and the most recent result is not typical. I would like …to reinforce what I said … that we cannot rest on our laurels". What sort of pressure is that to bring on the fraud special investigators who are trying to establish justice? It is a terrible document. The Government's new guidelines should be withdrawn, and I should like a public pledge from the Secretary of State today that he will withdraw them. If he will not, they should be published, so that all involved can examine them.

Photo of Mr Allan Roberts Mr Allan Roberts , Bootle

Will my hon. Friend also ask the Secretary of State why, if the guidelines are not new, members of the DHSS staff and union officials have been to see me on a number of occasions at my advice bureaux complaining about what management is requiring them to do? They tell me that they are being required to bully people out of benefits to which they are entitled.

Will the Secretary of State also explain why the long-term unemployed in Merseyside are being deprived of benefits because they are accused of not being enthusiastic enough about looking for work? It is not that they are turning down jobs; they are told that they are not enthusiastic enough in looking for work. That is a new concept and, given the unemployment that the Government have created in Merseyside, it is an insult.

Photo of Mr Norman Buchan Mr Norman Buchan , Renfrewshire West

That intervention is typical of many things that I have been told privately by hon. Members. We hope that we will get an answer from the Secretary of State, but the best answer would be for him to repudiate the document.

There are other scroungers. The Vesteys were mentioned, and they are good examples. Let us also consider the position of those working under wages councils. My hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker) asked about the number of firms not paying the full amount established by law through wages councils and he was told: Underpayment of wages including holiday pay, was found at 10,969 establishments during 1979".—[Official Report, 12 January 1980; Vol. 996, c. 511.] That is a lot of scroungers and a lot of money, but there is no special fraud squad to investigate those firms. The Wages Inspectorate still employs 270 civil servants, compared with the thousands pursuing—and we know the disgraceful ways in which they sometimes have to do their work—social security frauds.

Let us consider taxation. The Inland Revenue officers tell us: vast sums in excess of £3,000 million are not being collected". There is a source of scrounging, fiddling and fraud—£3,000 million; not the £50 million with which the Government are obsessed. They are more concerned with the street-corner Vesteys than with the real Vesteys, and the millions of pounds that we lose because of them.

Another matter that should be considered is the take-up of benefits. I wish that the Government spent as much energy on ensuring that people take up their benefits as they do in pursuing fraud. We were told today that unclaimed supplementary benefits total £400 million. Among the poorest of all, the single-parent families, there is a take-up of only 60 per cent. of benefits. Why do not the Government devote even a modicum of the energy used on fraud investigations to encourage the take-up of necessary benefits to which people are entitled as of right? That would serve the cause of justice and freedom better than does the Government's new tawdry document.

We have seen how the Government responded to the Strathclyde regional council, which attempted to encourage the take-up of benefits. The Government should have been the first to support it, but they attacked the council's efforts as being a political gimmick. The Undersecretary said: I objected to this crude exercise". In fact, it was merely an exercise to allow people to obtain their rights.

The right hon. Gentleman said that: Right at the heart of our Tory philosophy lies the principle of 'One Nation'. He went on to say that when Disraeli spoke about one nation he meant not some of the people but all of the people. He then said: that is the ideal which has inspired the approach of successive Conservative Governments from his time forward. It is certainly the ideal which inspires the present Government under Margaret Thatcher. However, the truth is, as the right hon. Gentleman said, that: If general living standards are rising, presumably society can afford to be more generous to the poor. Two things are wrong with that statement. One is the curious concept of the poor not being part of society and the second is the concept that we can do our duties by the poor only during a period of growth and increasing public expenditure. We reject both propositions. The poor are a part of our society. We shall not stand aside and see them made a separate caste in this way. They have rights, as everyone else does, and we are here to defend them. There is no freedom when that sort of concept develops. The safety net concept of this Government is now sagging so much that people who fall from the trapeze will probably fall on to the floor.

The debate on the Loyal Address two years ago was marked by an interesting speech by the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley), in which he quoted Professor Tawney, who said: It is assumed by the privileged classes that when the State holds its hand what remains as a result of its inaction is liberty. In reality, what remains for the mass of mankind is tyranny". The right hon. Member then added: —the tyranny of private wealth and private power, but tyranny nevertheless."—[Official Report, 16 May 1979; Vol. 967, c.228.] In December, the hon. Member for Wanstead and Woodford (Mr. Jenkin) said: The truth is that it is not greater equality that will end poverty. He said that only growth will end poverty. He then went on to attack Peter Townsend. He said: The Townsend approach, so beloved of the left, simply feeds the politics of envy—which has done more to sour human relations than almost any other single influence. I compare that with his written answer to my hon. Friend the Member for Bolsover (Mr. Skinner), who asked for the introduction of a comprehensive disability income. He said that: there is no prospect of any new benefits until the economy has improved. It would, therefore, be premature to produced plans for improvements in this area."—[Official Report, 12 January 1981; Vol.996, c. 489.] Therefore, it is no good the disabled being envious. They will not benefit much from their envy, even in this International Year of Disabled People.

Taking the Government's Budgets over the last two years and the social policies which they have developed, they have smashed the consensus that started from Beveridge with the Welfare State—the consensus of security against want without a means test. Alongside the bucket-shop economics that they have been introducing they have been bringing back the ethics of the workhouse.

David Donnison, the previous chairman of the Supplementary Benefits Commission, writing in New Society, two weeks ago, said: The older paternalistic brand of Toryism seemed to have died. After May 1979, as social security minister, Reg Prentice made the new philosophy brutally clear; 'If you believe economic salvation can only be achieved by rewarding success and the national income is not increasing, then you have no alternative but to make the unsuccessful poorer.' The Government's policies have been mean, petty, squalid and meretricious.

The Industrial Law Journal said it better than any of us in the issue of December 1980: For many people, lawyers and non-lawyers, the most startling feature of the legislation under discussion"— —the two social security Bills is that at a time of acute unemployment, a phenomenon now recognised to be caused principally by external economic factors rather than individual weakness, the Government has decided to reduce levels of benefit and thus the standard of living of the poor. The life of this Government has been nasty and brutish. It is our job also to make it as short as possible. When we come back into power, I give the pledge that no matter what difficulties we face—there will be plenty of difficulties when we take over—and left with the mess of the Conservative Party, our solutions will not be at the expense of the poor. When we are asked if we are our brother's keeper we shall reply, with Robert Blatchford, with a resounding "Yes". That is the message which I give to the right hon. Gentleman.

Photo of Mr Patrick Jenkin Mr Patrick Jenkin , Redbridge Wanstead and Woodford 4:56 pm, 3rd February 1981

I beg to move, to leave out from "House" to the end of the Question and to add instead thereof: this House acknowledges that at a time of severe economic recession, the policies of Her Majesty's Government offer the only effective way to real economic recovery, the creation of lasting jobs and a decent standard of living for all the people of this country while at the same time protecting the most vulnerable groups in society.". I congratulate the hon. Member for Renfrewshire, West (Mr. Buchan) on his first appearance on the Opposition Front Bench in a major debate on social services. If the length of his speech is any guide, he should earn a place by right in the Shadow Cabinet. It is difficult to know what importance the Opposition attach to social security. When the Leader of the Opposition appointed his Shadow Cabinet it seemed curious that social security, which is by far the highest spending programme, should not have entitled the hon. Member to a place in that body.

One quality shone through the hon. Gentleman's speech. It was the insistence, in virtually every sentence that he uttered, on more public spending, without giving the slightest indication of where that money would come from.

I shall turn now to the case that the hon. Gentleman made. I hope that he will excuse me if I set it out simply, but, I hope, fairly, in my own words, without the accompanying hyperbole to which he treated the House.

The Government are accused of rejecting the post-war consensus on social welfare. What is more, the Opposition's argument continues, the Government's monetarist policies—which the Labour Party denounces the more enthusiastically now that the right hon. Member for Leeds, East (Mr. Healey) is no longer Shadow Chancellor—have led to an increase in unemployment. They go on to say that only the election of a Labour Government—with or without the support of the Gang of 13, or however many it was at the last count—can save our social services by returning to first principles on redistribution and the pursuit of equality. They argue that only by adopting Socialist economic policies, whatever they may be, will we get out of the rut of the mixed economy and create more resources and more jobs.

I should like to deal with each of those propositions in turn and at the end of my speech to say a few words about the future of the Welfare State.

The world did not begin in May 1979, nor did Britain's problems. We inherited an economy in steep decline, no longer able to sustain the standards of welfare provision enjoyed in other countries—countries which had in earlier decades lagged behind us.

I do not blame the hon. Member for Renfrewshire, West or my predecessor, the right hon. Member for Norwich, North (Mr. Ennals), for that. The fault lies in our economic performance over the past two decades or more—years of low growth, rising inflation, crawling productivity and lost markets.

Photo of Mr David Ennals Mr David Ennals , Norwich North

Mr. David Ennals (Norwich, North) rose

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

I was forgiving the right hon. Gentleman—I was not blaming him. I shall not give way at the moment.

We also inherited from the previous Administration public expenditure plans which bore not the remotest relation to reality. We would have needed a miracle of Old Testament qualities in our economy to pay for them. To have gone ahead with those programmes as we inherited them would have meant higher inflation, higher taxes, higher borrowing and a swift return of the men from the IMF. It was inevitable, therefore, that we should review those spending plans. Since social security accounts for about a quarter of all public expenditure and is the largest sector of spending—£20,000 million a year—it was equally inevitable that some of the savings would have to come from that programme.

The hon. Gentleman dwelt on the savings with a loving dissection. I wish to put them into perspective before I remind the House of the priorities that we have set ourselves within the financial constraints—constraints, moreover, by which any Government in our position would have been bound.

First, other countries with far better economic records than ours have had to take similar measures in the face of the world recession. I shall mention only a few. Germany and the Netherlands have trimmed their uprating provisions. Denmark has done the same, and has also had to cut back on family allowances. Canada has reduced the level of income replacement for illness, injury and pregnancy. The Norwegians are studying our experience to help them in their review of social security. The story could be repeated for country after country. Are we really to believe that the Labour Party has discovered a secret formula that will protect us from the economic conditions affecting all our friends and competitors?

Photo of Sir Frederick Burden Sir Frederick Burden , Gillingham

What about Afghanistan?

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

My hon. Friend appears to be suggesting that Afghanistan may give us the answer.

The motion talks of destroying the Welfare State, which is absurd. By itself, the 1980 uprating of benefits added about 10 times as much to the cost of the social security budget as last year's cuts took away from it. That point seems to have escaped the Labour Party. In a full year, the uprating added over £3,000 million to our budget. The savings amount to about £270 million in benefits in 1981–82, rising to about £480 million in 1982–83. I do not pretend that those savings are negligible, but they mean that around 98 per cent. of the social security budget remains intact.

The social security budget has grown in real terms by £7,000 million over the past 10 years. The cost now amounts to about £1,000 for each household in the land. Even after our savings the total social security programme will still be rising in 1981–82 in real terms. With those figures in mind, I find it astonishing that any responsible party can put its name to a motion that talks about destroying the Welfare State.

Any Government in our position would have had to cut spending, unless we were simply to slash capital investment, which was what the Labour Government did, with all the consequent damage to the private sector and to the long-term strength of the economy. We had to tackle revenue spending. Given the huge growth of the social services budget over the past decade, to have exempted it from making any contribution to retrenchment would have imposed disproportionate cuts elsewhere. No Minister in my Department relishes having to tell the elderly and others in need of help and support that we cannot afford to do as much for them as they had hoped or as we would have wished. It is a measure of the Government's resolution to tackle our problems that we have been prepared to take the decisions and to argue them out in the House and in the country.

Of course we should like to have more resources to help all the disadvantaged groups in our society, but until the economy is restored to health and we are creating the wealth we cannot spend it. What we must do, and are doing, is to ensure that those in the greatest need are helped and protected as far as we are able. Let me therefore spell out as clearly as I can the five priorities that we have held before us in tackling poverty and preserving the fabric of our welfare services.

Photo of Mr Andrew Bennett Mr Andrew Bennett , Stockport North

The right hon. Gentleman is asking the poor and disabled to make sacrifices. What sacrifices are he and others on similar incomes making to get our economy right?

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

As the hon. Gentleman knows well, those are matters on which Parliament has voted. I was not aware that the hon. Gentleman had voted against them.

First, as we promised, we have maintained the value of pensions in line with prices. In cash terms, the pension for married couples is now nearly 40 per cent. higher than it was when we took office. Most benefits for the disabled have been fully protected against inflation. Mobility allowance has been increased ahead of inflation, and we have brought 30,000 of the older disabled into the mobility allowance earlier than was orignally planned. We have fully price-protected the safety net—the supplementary allowance level below which none shall fall.

Secondly, we have gone further than our manifesto pledge to the 900,000 one-parent families in the country. It is estimated that the number of one- parent families has increased in the past decade so that today about one in every eight families with children depends on a single parent. It is recognised on both sides that single-parent families face severe problems. That is why we have increased their special addition to child benefit—now to be renamed "one-parent benefit"—by 50 per cent. and extended entitlement to cover those relatives who, although not parents, are bringing up a child on their own.

For needy families in work we have doubled the family income supplement, with the result that about 11,000 more families are now entitled to it. The hon. Gentleman got the question of equal treatment wrong. I can well understand that. These are complicated matters, and I certainly do not hold it against him. We are not obliged by any European directive to extend the supplement to women, which was the point about which he was complaining. We have chosen to do so. The change will come into effect in 1983 at the same time as the changes to supplementary benefit, which we are obliged to undertake under a European directive. We are going further than the Community requires. I hope that the hon. Gentleman will now rise to give us credit for that.

Photo of Mr Norman Buchan Mr Norman Buchan , Renfrewshire West

I rise to express my perplexity. Every time that the right hon. Gentleman mentions the family income supplement he states that it must be dealt with in relation to the other benefits. No one can tell me why, least of all his Department. It is nonsense. There is no reason why it cannot be brought in now. If it had been linked to a Common Market timetable we might have excused the Government for shoving it to one side. But as the right hon. Gentleman says that it is not there is no reason why the measure should not be brought in now.

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

The hon. Gentleman's insatiability for doing everything now would be more impressive had the Labour Government done a little more.

Since November we have received about 18,000 more claims for FIS than in the same period last year. The average number of new claims per week is running at about 5,250, which is roughly double the normal intake. Bearing in mind that, by definition, FIS goes to low-income families whose breadwinner is in work, that is some indication that our recent publicity efforts are paying off. FIS is an essential part of the safety net for families. We believe that it is of the highest importance that all who can claim should do so.

Still dealing with families, in the reformed supplementary benefit scheme, about which I shall have more to say in a moment, new help is being directed to families with children. Moreover, the new tapered disregard for the earnings of one-parent families will help many more single parents to take part-time work. Those are small but important improvements for hard-pressed sectors of our society.

I know that there is concern in all parts of the House, not least among a number of my hon. Friends, about the future of child benefit. When we increased the benefit last year we undertook, subject—as such a commitment must always be—to economic and other circumstances, to uprate it each year to maintain its real value. With the Budget only a few weeks away, I cannot go further this afternoon. It is important—and we gave some indication of this when in Opposition—that child benefit should be looked at at the same time as the tax allowances are looked at in the Budget. It is not only the Chancellor who has to go into purdah at this time of year. We want to know the views of hon. Members. If the past is any guide, I know that a number of my hon. Friends will not be bashful in making their views known.

Thirdly, the steep rise in world energy prices, from which we cannot isolate ourselves, has posed acute problems for needy pensioners, the disabled and families on low incomes. So, last November, we introduced our £100 million package of help, bringing total spending on fuel help to £200 million. That was substantially higher than anything done by the Labour Government. Most of that help is rightly concentrated on the poorest of all—those who depend on supplementary benefit and family income supplement. More than 2 million people, 1½ million of them pensioners, are receiving worthwhile extra help thanks to our scheme. I stress "worthwhile" because the help given under this scheme is infinitely more worth while than the ill-fated electricity discount scheme, which spread small sums very widely. Last year we raised the supplementary benefit heating addition by more than the rise in fuel prices. We shall announce the next increase at the time of the Budget.

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

The new regulations introduced by the Government set out several criteria for giving exceptional needs payments to families having difficulty in paying their fuel bills. Will the Secretary of State explain how, under that system, someone who falls within all the criteria can still be disregarded and refused an exceptional needs payment?

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

The short answer to that is "Not without notice". If the hon. Gentleman lets me have the details of the case that he has in mind I shall ensure that it is investigated.

There is the question of making the best use of available resources. I believe that the whole country is behind the Government in their firm tackling of social security fraud and abuse. The right hon. Member for Norwich, North will know that we are building on what we recognise as the sound foundations laid by our predecessors. We are massively increasing the amount of benefit that we are saving as a result of the discovery of fraud. I do not know whether the right hon. Gentleman even bothered to try to persuade his colleagues to allow him to employ additional fraud investigators in his Department, where savings would substantially outweigh the cost of additional employment. When we employed additional people, I was told that it was the first time that any Government had made the sensible decision to trade off savings on benefit against the far smaller cost of employing additional people.

Photo of Mr David Ennals Mr David Ennals , Norwich North

The Secretary of State must realise that he is talking nonsense. It is true that the Government have a dual responsibility, to ensure that people who are entitled to benefits know of the benefits and receive them, and that those who receive benefits to which they are not entitled should be discouraged and prevented from doing so and, if necessary, prosecuted, and when I was Secretary of State that action was taken successfully. The right hon. Gentleman and his colleagues have so accelerated the anti-fraud campaign as to deter many people from claiming the benefits to which they are entitled.

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

I am not surprised that, faced with my earlier remarks, the right hon. Gentleman changed the subject. He was not able to persuade his colleagues to allow him to employ additional people. He had to take people away from other work, such as visiting, in order to have more fraud investigators. The House is entitled to know how the programme is progressing. I hope to make a statement about the results of the current campaign early in the next financial year.

Going beyond the social security budget, but still relevant to the needy, our final priority has been to protect the NHS and to ask local government to do the same for its most vulnerable groups. Spending on the NHS continues to rise in line with our predecessors' plans. It is right to remind the Opposition that, on current forecasts, spending on the personal social services in the five years from 1979 to 1980 will be higher in real terms than in the five years of Labour Government.

In the face of those facts—and they are facts—anyone who argues that we are destroying the welfare services of Britain is simply deceiving the people. My defence of our policies does not stop there. We have never regarded it as enough simply to batten down the hatches and maintain the existing system. As everyone knows, it is complicated. There are substantial overlaps with private provision, and the sheer cost of running the system, in terms of both manpower and money, is huge. We have therefore embarked upon a series of reforms that will simplify the system, cut out wasteful duplication, bring the short-term benefits within the tax system—to which the Opposition agreed in principle—and modernise the administration of the service.

The hon. Member for Renfrewshire, West had a certain amount to say about the new supplementary benefit scheme. It is early days yet, but all the indications are that the reforms have got off to a good start almost everywhere. Considerable credit is due to the staff and managers in my Department, whose efforts during the months that preceded the changeover deserve the thanks of the House. Nevertheless, we are not complacent. We are commissioning a number of independent research studies into different aspects of the new scheme. We are collecting statistics about certain aspects of the scheme, and we are undertaking special inquiries into the more sensitive areas.

One change has been widely welcomed, namely, that we have put claimants' rights on a legal footing and taken steps to ensure that they are aware of their rights.

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

If the hon. Gentleman will contain himself, I may have some good news—even for him. The rules are set out in regulations. The adjudication system has been remodelled on the lines of that tried and tested over many years for national insurance benefits. We have expanded the supplementary benefits handbook, which explains the rules of the scheme in layman's language. The handbook was praised by speakers on both sides of the House in an earlier debate. We are issuing written notices of assessment. It is astonishing that this has not happened before. Accompanying them will be an explanatory leaflet to all new claimants, and to other claimants where there is a major change. As hon. Members will be aware, further information has been made available by the chief supplementary benefit officer's decision to publish his guidance bearing on claimants' entitlement. All that represents a considerable improvement on what happened previously.

I can now announce a further step in our campaign for open government in relation to supplementary benefit—

Photo of Sir Frederick Burden Sir Frederick Burden , Gillingham

We must accept that my right hon. Friend's advice to Members to approach heads of local DHSS offices direct about subjects of great concern to constituents has been most helpful and has cleared the approaches for constituents. A great deal of credit for that should go to the managers of local DHSS offices.

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

I am obliged to my hon. Friend for his remarks. One of the unexpected but welcome by-products of the letter that I sent to every right hon. and hon. Member has been the number of letters that I have received from all parts of the House telling us about the splendid service from local offices. Those remarks have been passed on to the offices concerned and have been very much appreciated.

I want to announce a further step in our policy for open government in relation to supplementary benefit. We shall make publicly available the instructions to supplementary benefit staff—the so-called "S" manual. That manual replaces the "A" code under the old scheme. The fact that the old "A" code was never published led for many years to suspicion that somehow the scheme was being operated on secret instructions. The manual has, of course, to be overhauled to incorporate the new guidance now being issued by the chief supplementary benefit officer. We are working towards a manual that will contain all the information issued to local offices, bearing on entitlement to supplementary benefit. That revised manual will be made public. The revision will, of course, take some time, but it should be available around the end of the year. The important thing is that what I am announcing today is a firm decision in principle to publish. We shall work towards it as rapidly as we can. I hope that it will be welcomed by the many organisations concerned with claimants' rights.

Much of the case made by the hon. Gentleman turned on the rising unemployment, which, without doubt, is causing a great deal of hardship and distress in the land. I expect that the House will wish to debate this matter fully on Thursday in the debate on the economy, so I shall be brief about it now.

The hon. Gentleman is himself no stranger to arguments about unemployment. Indeed, one of the factors which he and I recognised when he was on the Government side, as we are now, and which, I think, establishes common ground between us, is one that I shall put to him now. Quite apart from the effects of the recession, and quite apart from the effects of technological change and of rising competition, we are having to cope also with an increase in the labour supply. There have been more young people and more married women coming onto the job market, which has been pretty static for several years as our economy has ground along in bottom gear.

Perhaps I may now quote something that was written in 1978: The 1,500,000 unemployed is therefore entirely due to an expansion of the work force in Britain. And over the next decade an additional 1,500,000 more will be in the labour force. That leaves, even with improved growth, a possible 3,000,000 by the end of the 1980s. To try to blame this"— the article went on— on the mishandling by any Goverment—Tory or Labour—does not get us very far. I am sure that the hon. Gentleman recognises that, because he wrote it himself, in the Glasgow Herald. I have it here if he is in any doubt about it. It appeared under the heading "Danger of Package Politics", with a splendid picture of the hon. Member for Renfrewshire, West. I repeat the closing words: to try to blame this on the mishandling by any Government—Tory or Labour—does not get us very far. I suggest that it has not got us very far this afternoon, either.

Photo of Mr Norman Buchan Mr Norman Buchan , Renfrewshire West

The Secretary of State has not read the entire article, which explained exactly what was happening in new technologies, and so forth, and this makes even more serious the fact that the Government do not recognise—[HON. MEMBERS: "Wriggling."] No, I am not wriggling. I suggest that the Secretary of State should read the entire article. What I was saying there—the Government should take it on board—is that there are deep-seated reasons, including major technological reasons, why fewer and fewer people are needed to produce the same volume of goods.

Therefore, if we are to recognise that and act accordingly, measures must be taken to ensure that it does not create a body of people at work and a body of people unemployed. Secondly, it makes it all the more necessary to take action in a developing situation such as this to ensure that our unemployed are treated as having rights, instead of being put on a means-tested basis. I wish that the Secretary of State would read the article.

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

I understand the hon. Gentleman's unease at being reminded of what he wrote two and a half years ago, but I fully concede, if he wants me to, that his remedies are not my remedies, and the House will have to decide at the end of today and on Thursday on which side it stands.

We on the Government Benches believe that in order to provide more jobs we must halt and reverse the long-term decline of the British economy. We need to reduce inflation to the levels of our successful competitors. We need lower interest rates. The Government must borrow less. We need a real shift from what Bacon and Eltis, in their widely praised book a few years ago, called the non-market sector of the economy towards productive industry.

That is the strategy on which we have embarked and, with inflation now coming down rapidly and with more and more forecasters predicting the beginning of a slow recovery later this year, it is reasonable for us to argue that, despite all the difficulties, we are more or less on course. Of course, there are casualties in the fight against inflation—mainly those who lose their jobs—but here, too, we are helping. In the coming year we shall spend no less than £570 million on special employment measures, much of it for the young.

The Opposition sometimes pretend—if they feel the need to say anything about it at all—that there is some quick, easy solution to all these problems, but it is very difficult to know what they have in mind. The other day the Leader of the Opposition called for more Socialism—more, apparently, than we have ever seen before. I was reminded of King Lear, who threatened to do such things—What they are yet I know not; but they shall be The terrors of the earth. They certainly appear to have terrified a number of his right hon. and hon. Friends.

Some right hon. Members on the Opposition Benches are more specific. They want higher borrowing and lower interest rates, both at the same time. I have to say that this is a combination that does not appear in the economics textbooks. They want, too, a lower exchange rate for sterling. Perhaps they could achieve that with other policies. I doubt that they would see the sort of gentle depreciation in the pound that they envisaged. What they would see is the sort of devastating run on sterling that has happened under virtually every Labour Chancellor of the Exchequer since the war.

On one thing we can depend with certainty. The policies which the Opposition seem to want would put us fairly and squarely back on the road to hyper-inflation. What would that do to provide lasting jobs for the unemployed? What would that do for the disabled? What would that do for single-parent families? What would that do for pensioners or for the low-paid, about whom the hon. Gentleman waxed so eloquent?

Inflation is the engine that destoys prosperity and creates poverty. Inflation is the biggest enemy of the poor. [HON. MEMBERS: "This Government put it up."] When Socialists talk about poverty, they talk about it not in absolute but in relative terms. For them, the way to abolish poverty is redistributive tax and spending policies that seek to produce not just equality of opportunity but what the Americans have called equality of result. We could argue the philosophical case for and against that view of the world, but what never ceases to surprise me is that so many Socialists do not appear to recognise the grossly unfair effects of inflation.

Inflation does not redistribute resources according to need. It redistributes them according to chance and according to muscle power. That is the sort of redistribution that the Labour Party offers us today. It has nothing whatever to do with elimination of poverty or the creation of a more just and fair society.

The truth is that what we are able to do for the poor, for the sick, for the retired and for families depends on what we can afford. The standard of social provision in any civilised society is largely the result of its economic performance. If we want better hospitals, we need more competitive industries. If we want higher benefits for those who cannot work, we need higher productivity from those who can.

The future of the Welfare State and the future competitiveness of British industry are therefore two sides of the same coin. Our social services will depend upon the success or failure of our efforts to rebuild our strength as a trading nation. Equally, the structure, the priorities and the quality of services that we are able to provide will help to create a social climate in which success is more likely. In other words, we have to develop a more competitive economy, while at the same time building on our traditional instinct for co-operation.

It is partly for that reason that I believe we should take a less monolithic view of our caring services, strengthening the voluntary movement wherever possible, not because it provides a cheaper way of doing things, but because it often provides a better way of doing things. To go back to the oldest metaphor in the argument, our statutory services should be a safety net, not a blanket that smothers initiative and self-help.

The challenge for the Government is threefold: first, to make the most effective use of the money that we can responsibly spend on health and social security, taking special care of those who are frequently the innocent casualties of the fight against inflation; secondly, to win that fight and rebuild the foundations of a stronger and healthier economy, able to sustain a higher standard of living for the British people and better social welfare; and thirdly, to enlist the energy, the imagination and the sense of community of our people in developing a broader base for the Welfare State, to which both parties are committed.

In the confidence that, whatever the difficulties, we have begun to discharge those tasks, I ask my right hon. and hon. Friends to support the Government amendment in the Lobby tonight.

Photo of Mr Jack Ashley Mr Jack Ashley , Stoke-on-Trent South 5:29 pm, 3rd February 1981

We have heard a speech from the Secretary of State which failed completely to answer the case put by my hon. Friend the Member for Renfrewshire, West (Mr. Buchan). I am shocked to find a Secretary of State so totally unable to deal with some fundamental points about poverty in Britain which were put to him by my hon. Friend.

The Secretary of State made a number of grave misjudgments in his speech. I shall deal with a number of those and his failure to answer my hon. Friend the Member for Renfrewshire, West. First, he said that inflation was the enemy of the poor. The real enemy of the poor is the Govenment's policy. This policy—pursued relentlessly ever since the Government came into office—has been most damaging to the poor people of this country. I wonder what the poor, the underprivileged, the unemployed, the single-parent families and the disabled will think when the Minister stands at the Dispatch Box and says "We are on course". What a statement to make!

The Secretary of State, by saying that there are no easy solutions, caricatures our case because we do not pretend that there are easy solutions. My hon. Friend the Member for Renfrewshire, West made a number of proposals which were not dealt with by the Secretary of State.

The Secretary of State mentioned the philosophy of the Conservative Party. I should like to make a few observations on the philosophy of the Conservative Party because there is no doubt that the philosophy of the Government is impoverishing the impecunious. The policies are harsh and divisive. They are oppressing the poor and damaging the disabled. The real problem is that the policies are based on a delusion. Let us get down to the heart of the policy propounded by the Secretary of State. His policies are dominated by the theory that by raising the living standards of the wealthy and lowering the living standards of the poor he can create an incentive society and thereby a prosperous nation. That is the philosophy of the Conservative Government—the theory of conservatism. It has not worked in the past, it has never worked throughout history, and it certainly will not work in the future.

When the great apostle of conservatism, Disraeli, spoke of two nations the philosophy was not working. It certainly did not work before Disraeli. It has not worked since Disraeli and the Government are a throw-back to the theory and principle adumbrated centuries ago and practised for hundreds of years which has failed and failed again. The reason why it fails is that instead of creating an incentive society it creates deep and dividing bitterness in our society. It creates anger and strife. It creates the kind of thing that St. Francis of Assisi would have frowned upon. The Conservative philosophy of helping the rich and damaging the poor creates bitterness and strife where there could be harmony.

I hope that the Secretary of State and his boss, the Prime Minister, will remember that and bear it in mind. The policy sometimes wins sullen acquiescence. It usually wins non-co-operation. I am speaking not now of industry but of social policies. It always creates deep and dividing distrust and sometimes genuine social unrest.

The main reason for this philosophy is ignorance of the lifestyle of millions of the very poor, the unemployed, single-parent families and severely disabled people. Despite the work of my right hon. Friend the Member for Manchester, Wythenshawe (Mr. Morris) when he was Minister and all those who supported him, despite the brilliant work of Professor Peter Townsend, despite the valuable work of the Child Poverty Action Group and all the groups which make representations to the Secretary of State, Ministers still do not understand the problems of the poor. What other reason can there be be for cutting incomes, pensions and benefits, for penalising the long-term unemployed, and for hitting the disabled?

That ignorance is compounded by hostility to poor people. I say that understanding the problems of the Minister. I know that he cannot wave a magic wand, but his party is hostile to the poor. I do not include all Conservative Members, because there are some good blokes on the Government Benches. There are some sincere hon. Members on the Back Benches. I hear them speak with sincerity about poverty. But the general philosophy of the Tory Party is hostile to the poor because it believes basically that the poor have nothing to contribute to its incentive society. The Conservative Party does not believe that it is worth while giving incentives to the poor.

The evidence of that hostility is in the scrounger campaign. The Secretary of State has not played a leading role in that campaign, although he has played a role. The leading role was played by the former Minister with responsibility for the disabled. I am not favouring scroungers. I do not favour pickpockets. We should try to stop both of them from operating. But the scheme which may save £50 million is being pursued with vigour and imposes fear on legitimate claimants. Many poor people are becoming afraid to claim their rights because of the vigour and the hostility with which the former Minister with responsibility for the disabled pursued that campaign.

I want to put to the Secretary of State a different principle touched upon by my hon. Friend the Member for Renfrewshire, West. I should prefer more effort to be put into not simply stopping the pickpockets but catching bank robbers. We should take a much closer look at the black economy.

I hope that the Secretary of State read the fascinating exchanges in the twenty-ninth report of the Public Accounts Committee. Sir Lawrence Airey, the chairman of the Inland Revenue, conceded under some pressure that no less than £3,000 million is lost in tax through the black economy each year. That is not £5 million but £3,000 million. The chairman was pressed by my hon. Friend the Member for Fife, Central (Mr. Hamilton). I suggest that in addition to the campaign against scroungers—and people who fiddle must be stopped—a campaign should be launched to deal with the black economy. In addition to the 1,000 people who have been recruited to stop the scroungers, a large number of people should be employed to end the black economy. If we wipe out the black economy, the £3,000 million should go to help the poor people in Britain. That money should be used to help the single-parent families, the long-term unemployed and the disabled.

The Prime Minister was asked recently about helping disabled people. She made a remarkable reply. I asked her a question and she said that it was of course the Government's intention to increase resources when they could. She also said: The International Year of Disabled People will, I hope, call forth a lot more voluntary effort on the part of the disabled. Most of us think that it is more laudable to try to do something for oneself than to get up and take a public stance on an issue to try to persuade the Government to do it."—[Official Report, 13 January 1981; Vol. 996, c. 1239.] What did the Prime Minister mean by that? She is not an insensitive woman. Did she mean that people who are suffering from muscular dystrophy, spastics or blind people should stand up and help themselves? People are using POSSUM only to open doors. Are they the type of people who should help themselves? Is that the philosophy that the Prime Minister is adumbrating?

I am deeply concerned by the answers provided by the Secretary of State today and by the Prime Minister. Severely disabled people cannot help themselves. The long-term unemployed cannot help themselves to jobs when there are no jobs. It behoves the Government to change their policy and to be more positive.

The Royal Association for Disability and Rehabilitation has written to me expressing its deep concern about the present Government's policy. Its evidence of hardship to disabled people was emphasised by the secretary of the Association of Directors of Social Services, Mr. Brian Whitecroft. He spoke of the figures produced by the Secretary of State and about what was being done to help. Mr. Whitecroft said: When inflation is taken into account there should be an increase to maintain the present level of services and maintain and expand the services of some 16 per cent. That has not been done. There have been some very serious cuts in those services.

The Secretary of State says that the voluntary associations should help. Mr. Whitecroft says that the finances for voluntary associations have been cut by 25 per cent.

All the facts about the philosophy of the Conservative Party, about the money that it has allocated and about its attitude underline the basic theme of the debate—that the poor of Britain are being damaged by this Government. I call upon the Secretary of State to think again. There is no need to pursue a policy which is damaging the underprivileged in our society. We are not asking for the moon. We are asking for a change of emphasis.

Please do not make us believe that Britain's economy depends upon oppressing such people. The Government must stop dividing the nation and jumping on poor people. They must give them some help and show a little humanitarian concern. I urge the Secretary of State to change his policy and to help people in the greatest need.

Photo of Mr Paul Dean Mr Paul Dean , Somerset North 5:46 pm, 3rd February 1981

I am glad to follow the speech of the right hon. Member for Stoke-on-Trent, South (Mr. Ashley). We all admire the courage which has enabled him to triumph over disability and the example and encouragement that he has given to other disabled persons. I shall comment on some of his arguments later.

First, I wish to comment on the motion tabled by the Opposition in their usual extravagant language, and the speech by the hon. Member for Renfrewshire, West (Mr. Buchan). Not for the first time the Opposition have shown a convenient disregard for their own record in office and a failure to face economic realities. I am talking not only of the current recession but about long-term trends.

Three key factors which cannot be neglected in social service debates stand out in sharp relief. The first is that the budgets for social security and health amount to over one-quarter of all public expenditure. For some years they have been growing three times as fast as the national wealth.

Secondly, there is a growing proportion of elderly, particularly very elderly, people. That trend will continue, with all the implications which it rightly has on pensions, health services and local authority personal social services. Thirdly, the growth rates in our economy are nothing like as good as they were some decades ago. They are not only British problems. The problems confront, to a greater or lesser extent, all advanced communities in Western Europe, America and elsewhere.

Present commitments to the Welfare State, the expectations that we have aroused and the improvements that we want to introduce are progressing much faster than the money to pay for them. That is the harsh reality. It is clear, as my right hon. Friend said, that if we are to maintain the essential fabric of the Welfare State against that background we must prune the non-essential, wipe out abuses and get better value for money.

Of course, these things are easier said than done. Cuts do not necessarily produce savings. Further, the all-important human factors have to be taken into account. There are areas where chopping a programme, if it affects the elderly or the disabled, can have a devastating affect on vulnerable individuals. The best example is in the personal social services run by the local authorities. I am glad to note that in Government thinking and in the thinking of local authorities there is now a shift of emphasis from cutting programmes to cutting costs within programmes.

I should like to give the House two illustrations of what I mean from my county council of Avon. It has been doing its utmost to respond to the Government's call for economies in public expenditure and to keep within cost limits. One of the factors that it has had to consider is the possibility of closing some of the older old people's homes and some of the training centres for the handicapped. When it examines those matters it is finding that although there may be short-term savings by these policies they will almost inevitably mean consequential additional expenditure elsewhere. We cannot go far down the road of closing old people's homes, and so on, without creating additional pressure on geriatric beds in the National Health Service. Avon county council is now trying to avoid closures of that sort, and it is making economies within the programmes.

Photo of Mr Paul Dean Mr Paul Dean , Somerset North

I should like to finish this point, and then I shall give way to the hon. Gentleman.

My second illustration concerns manpower. A substantial proportion of any local authority budget is spent on manpower. Here, Avon county council hopes that if it is able to save £500,000 on the social services budget through manpower it will be able to allocate additional resources to more important programmes and services, for example, better furniture and equipment for residential homes, day-care centres and more aids for the handicapped. It is also finding that it may be able to spend more on intermediate treatment and community support, thus relieving the pressure on residential care. It also hopes to be able to allocate more resources for boarding allowances for fostering children, thus saving capital expenditure

I quote those illustrations as two good examples of Avon county council responding to the need for economies while at the same time making every effort to preserve the essential fabric of the social services that it provides.

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

The hon. Gentleman has given a good example of a county council that may be—I do not have all the details—weighing up the pros and cons of the decisions that it will have to make. But what is the answer to Solihull district council, which is meeting today, and is about to cut the home help service by 24 per cent.? That can only lead to more people losing jobs involving looking after old people, and it will put pressure on old people's homes. The council will have to cut the field work staff by 62 per cent. That is a Tory-controlled authority. It is not following the Government's advice.

Photo of Mr Paul Dean Mr Paul Dean , Somerset North

I gave an example of a county council in the area that I know. I am suggesting to the House that the change of emphasis from cutting programmes to cutting costs within programmes is a policy that can be achieved. I hope and believe that the Government will encourage local authorities to do likewise.

The watchwords should be "Cut costs, not programmes for vulnerable sections of the community".

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

The hon. Gentleman is fortunate, in the sense that he is talking about Avon. The Black report clearly states that there are 10 inner city areas of this country where a cutback of any sort means despair for 30 or 40 years—areas with the highest perinatal mortality, the highest death rate, the longest housing queues, a decline in rate payment and a decline in rate support grants. How can those 10 authorities cope with the problem?

Photo of Mr Paul Dean Mr Paul Dean , Somerset North

I am saying that, given the need to economise, there are ways. I have quoted Avon county council as a concrete example of how it is possible, within limited resources, to save on costs without cutting programmes. I commend the example of the Avon county council to the hon. Gentleman's county council.

I turn now to the cash benefits. The Government are right to look for economies in short-term benefits—as they did last year—in order to maintain priority for the long-term benefits. There is a firm pledge from my right hon. Friend the Prime Minister with regard to the long-term benefits. She said in the House on 25 November 1980: The full value of the pension in terms of what it will buy will be preserved.…The undertaking is to compensate fully for price increases over the lifetime of a Parliament."—[Official Report, 25 November 1980; Vol. 994, c. 488.] That pledge has been honoured and more than honoured so far in this Parliament; and we have the word of the Prime Minister that it will be honoured in the future. In the light of that, there can be no justification for the extravagant language in the Opposition motion or for the extravagant language in the speech of the hon. Member for Renfrewshire, West.

There are two areas where the Government should aim to do better in 1981 than they were able to do in 1980. They should aim to do more for the disabled and families with children. I turn first to the disabled. I suppose that I should declare an interest, as a war pensioner.

In his opening speech, my right hon. Friend the Secretary of State described some of the welcome improvements that the Government have made in services for the disabled. I am still disappointed that the invalidity benefit was bracketed with the short-term benefits in 1980 and had an abatement of 5 per cent. I recognise that the Government are committed to restoring the position of invalidity benefit, so that it is equivalent to the retirement pension, as soon as the resources permit. I hope that resources will permit this year—this appropriate year, the International Year of Disabled People. We should not wait until the invalidity benefit is brought into the tax system because many of those in receipt of the benefit are below the tax level. If it is not possible to do that this year, I hope that the Government will look carefully at what is now being described as the "invalidity trap". That was well described in a recent paper produced by Disability Alliance. It said: Many invalidity pensioners are caught in what might be termed the 'invalidity trap'. Their income is too high for them to qualify for supplementary benefit at the ordinary rate, yet it falls below what they would receive were they eligible for supplementary benefit at the long-term rate. Because they do not qualify for the former they can never qualify for the latter, though their situation is a long-term one and their income is less than the minimum regarded by the Government as necessary for people in that situation. According to a parliamentary answer, there are about 100,000 in that category. I hope that this year the Government will be able to do for them what last year they did for the young disabled aged 16 and 17 years. That was a welcome removal of the anomaly for those young people, and I hope that the Government will consider seriously the possibility of enabling invalidity pensioners to qualify for the long-term rate of supplementary benefit after a year on invalidity benefit. That would go a long way to deal with those invalidity pensioners who are most in need.

I hope, too, that during this International Year of Disabled People the Government will feel able to take another initiative. In its manifesto at the last general election the Conservative Party stated: Our aim is to provide a coherent system of cash benefits to meet the costs of disability". That is clearly a long-term aim, but there is a case for a Green Paper in 1981. That would indicate that the Government mean what they say and intend to provide a positive response to the International Year of Disabled People. I recognise that there is a risk that a Green Paper will create expectations that cannot immediately be fulfilled, but against that there is a great deal of work to be done. There is no agreement among disabled organisations about the right form for a comprehensive income. I suggest that a Green Paper produced this year with a fairly prolonged period of consultation would be a most valuable step towards this long-term aim. I hope that when my right hon. Friend replies he will be able to give an encouraging response to that suggestion.

There is little doubt from the figures, including the impressive memorandum that we have had from the Child Poverty Action Group, that families with children have come out badly in comparison with childless couples. The traditional commitment of the Conservative Party to support family life needs reinforcement during 1981. Child benefit is now the main vehicle for family support. It is also one of the best ways of relieving the poverty trap and producing incentives to work. I do not wish to expand these arguments as I know that a number of my hon. Friends wish to do so.

The Government are pledged to uprate child benefit each year to maintain its value subject to economic and other circumstances. To increase it by whatever is required to maintain the value of the benefit seems to be a high priority in the Government's programme for this year.

In highlighting these three aspects I am suggesting what seem to me to be the three main priorities for progress during 1981—namely, the local authority personal social services, provision for the disabled and support for families with children. I support the Government's general policy, charcterised as it is by realism and humanity. I contrast that with the unreality and wishful thinking of the Opposition. I shall therefore have no hesitation in voting for the Government's amendment.

Photo of Mr Robert Brown Mr Robert Brown , Newcastle upon Tyne West 6:05 pm, 3rd February 1981

First, I turn to the Secretary of State's speech, which I did not think was worthy of him. I complain about the attempt to insult my intelligence. The right hon. Gentleman said that Socialists do not seem to understand the effects of inflation. I have been a life-long Socialist and I well-understand the effects of inflation on those whom I represent, who are not well heeled enough to build hedges against it. It is fair to say that there are many who are doing very nicely, thank you, under the policies of the right hon. Gentleman, and who have a vested interest in high inflation. Ask the property speculators if they want lower inflation.

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

I assure the hon. Gentleman that I had no desire to insult his considerable intelligence. However, he must acknowledge that if his party persists in calling at the same time for lower interest rates and higher public spending, that will be the road to hyperinflation. It will be the poor who will suffer most from that. If the hon. Gentleman will accept that, there will be nothing between us.

Photo of Mr Robert Brown Mr Robert Brown , Newcastle upon Tyne West

I do not accept that. However, I shall spend no more time directly on the right hon. Gentleman. I shall develop my speech as I go along.

I refer to the plight of the city of Newcastle upon Tyne, part of which I have the honour to represent in this place. We now have 18,544 of our citizens unemployed. That compares with 13,736 a year ago. That is an increase of 4,808, or 35 per cent. About 43 per cent. of council house tenants are in receipt of relief, such as social security benefit and rent or rate rebates. When I think of the deprivation being suffered by thousands of my fellow citizens in Newcastle, and when I recall the Prime Minister's words on the steps of No. 10 Downing Street, when she quoted St. Francis of Assissi on 4 May 1979, I feel outraged that she should have bastardised the words of a saint. Before I resume my place I shall justify fully the charge that I have made against the Prime Minister.

I turn to Government policy as it affects low-paid workers, and I declare a dual interest. I am a sponsored member of the General and Municipal Workers Union, and as the Member for Newcastle upon Tyne, West I represent many thousands of low-paid workers. The Tories do not have an overt policy for the low-paid, but some of their other policies on tax, social security and employment have been universally damaging to the low-paid. Far from increasing the protection available to a group that suffers disproportionately from the ravages of inflation—the right hon. Gentleman conceded that—the Government dismantled much of the existing protection.

The Government have increased the tax burden on the low-paid. They have pushed up the in-work poverty line—that is, the family income supplement—in such a way as to widen the poverty trap. They have reduced other social security benefits for the low-paid. They have abolished the fair wages legislation for workers not employed on Government contracts. They have destroyed the low-paid workers's chances of organising in unions, by abolishing recognition procedures. They have announced plans to cut back the staffing of the Wages Inspectorate, which polices legal minimum wages set out by the wages councils. They have imposed a direct pay policy on all but some of the lowest-paid public service workers by linking them to the 6 per cent. increase.

According to the new earnings survey of 1980, there are 1 million men aged 21 and over who are paid less than £75 a week, including overtime, and there are 2·5 million women aged 18 and over who are paid less than £75 a week, again including overtime—and I remind the House that £75 a week is the recognised figure for the low-paid. That totals 3½ million adult workers.

If we exclude overtime payments, the number of low-paid workers increased by 0·6 million men and 0·1 million women, making a total of 4·2 million low-paid workers. In addition, it is estimated that there are 250,000 low-paid young men, and 1·7 million part-time workers receiving a lower hourly rate of pay than would yield £75 for a 40-hour week. The total number of workers earning less than £75 per week or its equivalent could therefore be as high as 5½ million.

I turn to the effects of the Government's taxation policies on the low-paid. In each of the three Budget Statements so far the Government have damaged the interests of the low-paid. In the first Budget they cut direct taxes on higher-rate taxpayers by almost £1,500 million. One-third of all moneys distributed by tax cuts went to the higher-rate taxpayers, although they represent only 5 per cent. of the tax-paying population. Meanwhile, the low-paid received less in direct tax cuts than was immediately retrieved by the increase in value added tax.

The Government's second Budget abolished the £750 band taxable at 25 per cent. That had been introduced specifically to aid the low-paid. As a result, 2,275,000 taxpayers faced a rise from an initial 25 per cent. to a 30 per cent. tax rate. Yet the Tory election manifesto had claimed: We shall cut income tax at all levels.…It is especially important to cut the absurdly high marginal rates of tax both at the bottom and top of the income scale. So much for Tory manifesto pledges. Of the revenue forgone by the direct tax cuts, 10·1 per cent. finished up in the pockets of those earning more than £20,000 per year. They constitute only 1·5 per cent. of taxpayers. Only 26·6 per cent. of revenue forgone went to those earning less than £5,000 per year, although they comprise 41·2 per cent. of taxpayers.

In the most recent Tory statement, national insurance payments were increased as from April this year. As a result of that increase, the marginal tax rate—that is, the income tax rate plus national insurance contributions—will have been increased from 31·5 per cent. in June 1979 to at least 37·75 per cent. in April this year. In the same period, the marginal tax rate for a person earning £500 per week will have declined from 83 per cent. to 60 per cent. As I said, those are the people who have a vested interest in high inflation rates.

I turn to the Tory poverty trap. My hon. Friend the Member for Renfrewshire, West (Mr. Buchan) covered that subject very well, and gave examples. I charge the Government with having made the poverty trap worse by abolishing the lower rate tax band, by announcing a planned increase in national insurance contributions and by increasing the eligibility limits for family income supplement by so much as to ensure that even more families will be affected by the poverty trap because the overlap between tax thresholds and social security eligibility limits has been increased by so much.

I turn to social security benefits and the abolition of the means test for free school meals. Only recipients of family income supplement or supplenentary benefit are now eligible for school meals. That means that the loss of FIS inflicts a further immediate cash loss in terms of free school meals. The scrapping of the means test for free school meals has deprived 500,000 schoolchildren of school meals and has therefore cost their parents five times 35p, or £1·75 per child per week.

On prescription charges, the Prime Minister appeared on television during the election campaign and said, hand on heart, in front of millions of people, that although the Labour Party had claimed that the Conservatives would increase prescription charges they had no plans to do so. That is what the Prime Minister said, hand on heart, to the nation. But what have we got? A prescription charge of 20p has been increased to £1 per item. We all know that eligibility for free prescriptions is limited to a very few categories, such as old-age pensioners, and the Government themselves admit that the take-up is extremely low. It is not that the lower-paid do not need prescriptions. Studies have indicated that low-paid workers suffer higher average morbidity rates than do others. So the very people who need prescriptions unfortunately nowadays cannot afford to take them up.

I turn to the subject of collective bargaining. What the Tories have done through meddling with this process has always been to the detriment of the lower-paid. Schedule 11 of the Employment Protection Act enabled workers to make pay claims through their trade unions, either for the recognised terms and conditions arrived at by national collective bargaining in the industry or for the general level of terms and conditions of comparable workers in the same industry and the same district. In effect, schedule 11 established across the whole of industry the principle of fair wages embodied in the fair wages resolution, which applies only to workers engaged on Government contracts. Despite representations from employers' associations, fearful of the undercutting of recognised terms and conditions, the Government abolished schedule 11. They argued, of course, that it benefited the higher-paid rather than the lower-paid, but studies of cases brought under the schedule have shown that workers paid predominantly less than average were the main beneficiaries of that schedule, which the Government have now abolished.

Attempts have been made to influence the Government to abolish wages councils, which set legal minimum wages for almost 3 million workers. Indeed, a Ten-Minute Bill was introduced by one of the Tory backwoodsmen. So far, however, the Government have not resorted to that tactic—probably because the basic rates awarded by wages councils are ludicrously low. I do not think that any Opposition Member would deny that.

The Government have, however, significantly undermined the protection afforded by wages councils to low-paid workers in shops, hotels, restaurants, the retailing and clothing industries, hairdressing, and so on. They have done that by announcing cuts of one-third in the Wages Inspectorate. The level of underpayment is already appalling. The last available figures indicate that almost one-third of employers visited by the inspectorate were found to be underpaying. One-eighth of workers whose wages were examined were discovered to be underpaid, on average, by £67·31 per week. That is absolutely scandalous. Yet in the face of those facts, far from increasing the inspectorate, as they should, the Government are bent upon reducing it.

The Low Pay Unit estimates that the total loss of earnings through underpayment in 1979 was £22 million. My right hon. Friend was right to point out that there are scroungers in society who are scrounging bread out of the mouths of people who can ill afford it—and in the shape of employers, too.

I have already referred to the 6 per cent. pay norm for local authority workers. No sooner had Clegg dealt with his last case than the Government set about undermining pay relativities, which the Commission had spent so long on establishing. The Government have been anxious to impose reductions in the living standards of public service workers. In fact, it is fair to say that they are hell-bent on doing that. Once again, it is the low-paid, who lack industrial muscle, who are footing the bill for the Government's economic policy.

The Tories' 6 per cent. cash limit for public sector workers is nothing more than a straightforward 6 per cent. pay policy. No one can deny that. The consequent pay increases that local authority manual workers and NHS ancillary workers receive will not be enough to cover increases in council rents and rates that have been forced on local authorities as a result of the policies of the right hon. Gentleman who presides in Marsham Street. Worse than that, if press leaks are anything to go by the Government are not finished in their crucifixion of the low-paid. There have already been leaks from the Treasury suggesting that the Rooker-Wise amendments will be abandoned in the forthcoming Budget. That means that tax thresholds will increase tax more than the rate of inflation.

As well as increasing the tax burden of the lower-paid, this move is bound to increase the poverty trap. In addition, the Government's sickness benefit plans, about which even small employers are bitterly complaining, will make the lot of the lower-paid worse, at a time when they are badly in need.

I trust that what I have said justifies my claim about the Prime Minister's bastardisation of the words of St. Francis of Assisi.

Photo of Mr William Waldegrave Mr William Waldegrave , Bristol West 6:22 pm, 3rd February 1981

I shall in due course follow the argument of the hon. Member for Newcastle upon Tyne, West (Mr. Brown). He concentrated our minds on one of the most important questions, namely, where exactly the worst impact of this recession is falling. I shall return to the hon. Gentleman's line of argument. He added to the debate, which started somewhat slowly. I think it was the Duke of Devonshire—the one in Balfour's Cabinet—who said that he once had a nightmare that he was speaking in the House of Lords, woke up, and found that he was. I felt that the hon. Member for Renfrewshire, West (Mr. Buchan) woke up a couple of times during his prolonged speech, and perhaps that was a pity.

The House is not at its best on these occasions. There is no way in which one can look at the statistics about any of the poverty support schemes that have existed since 1945 and predict from them when changes in the Government have taken place. There is no monopoly of virtue on either side of the House in that regard. I could refer to various lists of statistics which show that in some areas, such as child support, most of the best figures have occurred under Conservative Governments. However, I would not claim that that was because we had a monopoly of virtue. All that that shows is that during the period since the war the economy has functioned relatively strongly for much longer under Conservative Governments than under Labour Governments. Such figures normally simply reflect the strength of the economy.

We do ourselves no great service by indulging in the worst kind of ping-pong politics, whereby as soon as we go into Opposition we say that everything would have been splendid had we only been in Government. Unfortunately, it is not as easy as that.

I now turn to the line of argument adopted by the hon. Member for Newcastle upon Tyne, West. I should like to concentrate on the question of where the impact of this peculiar recession is falling. It is a peculiar recession, because by no means everybody is worse off. I do not mean merely those who have benefited from cuts in the higher rates of taxation. In the last year, average earnings for those in work ran ahead of average increases in prices. That means that, overall, a large number of working people have had gains in real disposable income during the last 12 months.

The impact has fallen on smaller numbers who have experienced large falls in real disposable income, such as those who have gone out of work altogether, and particularly—to some extent I am arguing on the basis of instinct rather than figures—the lower-paid. When the figures are published in due course, I suspect that we shall find that the more highly unionised groups, many of them in the public sector, have kept ahead of inflation in the last year, and that it has been those at the weaker end of the employment market who have suffered.

I think that we shall find that workers earning about three-quarters of average earnings and below have taken the brunt of the fall in living standards, apart from those who have gone out of work altogether. But even among that group the impact has not been evenly spread. Within that group there has been a marked difference in the impact on those with families and those without. In fact, there has been a small improvement in the position of childless couples during the last year, both between the two Budgets and following the second one. One can arrive at the figures in various ways. If one merely takes the tax burden, one will see that there has been a small drop in the tax burden of a childless couple on three-quarters of average earnings. However, for a couple with two children in a similar position there has been quite a significant increase in the tax burden. According to the Child Poverty Action Group, that increase has been of the order of 11.6 per cent.

There are other ways of measuring the impact. Again, I must acknowledge the help of the CPAG. The Inland Revenue itself has produced an index, which in General Haig-type language it calls "the tax break-even-point-index". That measures the point at which money paid out in tax exactly balances the money received in cash benefits. According to that index, which the Inland Revenue has calculated by valuing child benefit and family allowances in cash terms back to 1945, there has been a marked deterioration in the position of a family with two children of seven index points over the last year, compared with the position of a childless couple. That seems to indicate that the impact of this recession, apart from the impact on those who have suffered by losing their jobs, is being felt by the lower-paid family in work.

What can the Government do about it? We know that there is only one great instrument at the Government's disposal which can attack this problem, and that is the instrument of child benefit. Before developing my argument and saying what I think should be done, I should point out that subsiduary arguments can be advanced in favour of that instrument. Mention has already been made of the effects of the "Why work?" syndrome and marginal tax rates. The hon. Member for Renfrewshire, West gave examples based, in fact, on the CPAG calculations of the poverty trap for families with children. According to the latest figures from the CPAG, a three-child family is worse off if it earns £81 than if it earns £61, assuming that it claims all the means-tested benefits to which it is entitled. For a two-child family, the figures are £75 and £55.

Over the past few years the situation has worsened. The Government have made the situation worse as a result of increased reliance on means-tested benefits, and as a result of the increased value of some of the means-tested items involved, such as school meals. The problem is becoming acute. That remains a subsidiary but powerful argument for child benefit.

The principal argument for reliance on child benefit is that it is the only weapon with which we can directly attack the problem of those on low pay who have families. In a different world, with a different economic situation, it might be posible to talk in terms of minimum wage levels, as the hon. Member for Newcastle upon Tyne, West said. At a time of recession it is not sensible to put much more weight on our mechanisms—such as they are—in this area, or to try to extend them. In such a recession we should try to distribute the burdens by redistributing cash through the tax system. Therefore, nothing other than child benefit can be used.

My right hon. and learned Friend the Chancellor of the Exchequer wrote to me on 11 April 1980. The letter must have been drafted by dozens of people with first-class degrees in various disciplines. Therefore, it was not a very clear letter. One could look at it from different angles. One could burn it, and see how the smoke blew in the wind. One could even tear it into pieces, throw it about like leaves in the wind—as they used to do in ancient Rome—and see how the pieces fell. One could do all those things to find out what the letter meant, and still not necessarily be much the wiser.

I think that it was intended to mean—if that is a meaningful concept in this context—two things. First, it was intended to mean that child benefit retains its centrality to Government policy vis-a-vis the family. Indeed, the letter is relatively clear on that point. There can be no doubt about the emphasis on the centrality of child benefit to the Government's family policy. Secondly, I think that the letter states that child benefit must advance with tax allowances. That is how I interpreted the letter, although it is a matter for scholastic debate whether the letter can be interpreted in other ways.

I hope that at the very least that is what my right hon. and learned Friend the Chancellor of the Exchequer and my right hon. Friend the Secretary of State for Social Services mean. I was interested when my right hon. Friend said that he had joined the Chancellor of the Exchequer in pre-Budget purdah. That is a hopeful sign. If it means that my right hon. Friend will be genuinely engaged in discussions with my right hon. and learned Friend before the Budget, about its impact on the social programmes, it is a great advance. I hope that my right hon. Friend was not using purdah as a protective device for avoiding answering a question in the House. That would be most uncharacteristic of him. I hope that it means that genuine discussions are going on between my right hon. and learned Friend and my right hon. Friend about the Budget's impact on the social programmes. If that is so, I am happy to allow my right hon. Friend to veil those discussions in the secrecy of purdah.

We know that my right hon. Friend is committed to the maintenance of a proper child benefit scheme, but there are some in my party—and many in the country—who are not. Last year I spoke on this subject in the House and I received many letters saying that it was nonsense to encourage people to have children. Some members of the Conservative Party may feel the same. The other day, I remembered those letters and I did a thing that it is always unwise for a Conservative Member or, perhaps, a Labour Member to do. I took a book off my shelf and read it. The book had been written by the former Leader of the Conservative Party, Lord Beaconsfield. It was called "Sybil". In that book, he analysed the social problems of the day.

The hero is, of course, the younger son of a peer. His older brother, Lord Marney, is a dreadful fellow, who goes about saying that it is the poor's fault for breeding in the first place. He says that they should look after themselves. No one talks like that nowadays. However, the descendants of people with such attitudes are still about. It behoves us to remember that the great Tory tradition of one nation does not even begin with "Sybil"; it begins with Burke and his letter to the electors of Bristol. That is where the slogan of "one nation" first appears. That great Tory tradition has to mean something in a recession and in hard times, or it means nothing.

What is adequate in terms of action on child benefit? I hope that tax allowances will be allowed to advance with inflation. If they are not, we shall again be allowing the impact of the recession to fall on the lowest-paid. If tax allowances are advanced and are not de-Rooker-Wise-Lawsoned—or whatever the phrase is—both they and child benefit will keep pace with inflation.

As a result, there would have to be an increase of about 50p or 60p in child benefit. That would be tolerable. It would be much better if my right hon. and learned Friend were to restore the value of child benefit to the level that existed when the Conservative Party came into power. That would mean an addition of a little less than £1. I am not so sanguine as to believe that that will happen.

This year, anything much less than 50p would make nonsense of the remainder of our family policy. Many of us would find it difficult to support the abandonment of that policy. A wide gap would open up between the rhetoric that we used and meant when we were in Opposition—just as the hon. Member for Renfrewshire, West means it now that he is in Opposition—and Government practice. It would mean that the coherent theme that we developed to link the different parts of our social policy had been lost. I refer to the family theme so eloquently described in an article in Tory Review last year, by my hon. Friend the Member for Oxford (Mr. Patten), who has recently been promoted to the Northern Ireland Office. When we were in Opposition we based our social policy on that theme of the family. Indeed, we based our approach to the election on that theme, and we have used its rhetoric since. That theme will be lost for good if we allow the effectiveness of child benefit to diminish further.

Photo of Mr David Ennals Mr David Ennals , Norwich North 6:36 pm, 3rd February 1981

I am tempted to take up the remarks of the hon. Member for Bristol, West (Mr. Waldegrave), but time does not permit me to do so. However, I warmly welcome everything that he said about child benefit. I think that he received a welcome from both sides of the House. He expressed the view that was expressed last week in the Select Committee on Social Services. It is the all-party, unanimous view that this step should be taken.

I am also tempted to follow the much less interesting speech of the Secretary of State, but I shall resist that temptation because there is one subject that I wish to bring to the attention of the House, namely, the serious plight of charitable organisations that care for children, the disabled, and the elderly.

On 19 January 1981 the Prime Minister told the ladies of the Women's Royal Voluntary Service how much she looked to the voluntary sector to plug the gaps—enormous in my view—in the Welfare State. That has always been the right hon. Lady's philosophy, and it has increasingly become the philosophy of the Government Front Bench. Last December, eight major charities, led by the Spastics Society, wrote to the Chancellor of the Exchequer asking for some relief from the intolerable burden of 15 per cent. VAT. The organisations involved were the Spastics Society, Dr. Barnardo's, the National Society for Mentally Handicapped Children and Adults, Help the Aged, the Save the Children Fund, the National Children's Home, the Royal National Institute for the Blind and the Royal National Institute for the Deaf.

Although it is hard to believe, not only did the Chancellor of the Exchequer say "No"; he refused to receive a deputation from those organisations. They make an invaluable contribution to the welfare of the least privileged in our society. The Spastics Society was forced to cut its services and had to close its careers and employment educational and advisory service, which is essential if spastics are to be found jobs.

A month after the Chancellor of the Exchequer had refused to see the deputation, he agreed to do for amateur sportsmen and their clubs what he had refused to do for the voluntary organisations. Even drinks and refreshments in clubhouses are to be exempt from VAT. How can the Chancellor possibly justify this concession when he has refused to help charities that are in serious financial trouble because of the imposition of value added tax?

Caring for the handicapped and the disadvantaged is surely more important and should be given greater priority than relieving such frivolous activities as golf and horse racing from paying the tax. Tim Yeo, the director of The Spastics Society, said: We are disgusted at this announcement. It shows that the Government really does not care that charities are struggling to maintain their services in the face of crippling burdens that they should not have to bear. It prefers to help sportsmen to buy their drinks on the cheap. The next action of the societies was to write to the Prime Minister. In the letter, sent on the day that the right hon. Lady was addressing the WRVS, they said: The virtual doubling of VAT in June 1979 from 8 to 15 per cent. has already compelled us to reduce or limit our services. Unless the burden of VAT is removed, further cuts or limitations will be forced upon us. This will bring inconvenience and hardship to those whom we try to help and inevitably make more people dependent on the already overstretched services of local authorities". In a further comment, Tim Yeo said: Commercial businesses recover all their VAT. Local authorities that run residential homes for the handicapped recover all their VAT. So why not The Spastics Society? and the other voluntary organisations that work with local authorities for the same purpose? He added: The Government must realise that we are in a very serious financial position with our highest deficit ever of £823,000. Big cuts in our services to some of the nation's most severely handicapped men, women and children have had to be made. Yet, as local authorities cut back, we are needed more and more. The Government must concede some help. Relief from VAT would be a start in a year that is being devoted to the problems of disabled people". On the same day as the Prime Minister made her appeal to the WRVS, the voluntary organisations made their appeal to the Prime Minister. They received a reply from the Prime Minister at considerable length, but it really amounted to only one word—"No". The Government would not help. Although they looked to the voluntary organisations to help, they would not do anything that would relieve their financial situation.

All that happened at the same time and on almost the same day as the Government issued a circular to health authorities indicating how they should use the power that the House had given them, to the fury of the Opposition Benches, to raise money for health purposes. We had made a great hullaballoo about this when dealing with the Health Services Bill. The Government had brushed aside our protests and described the new power as a modest extension of existing ways by which the National Health Service could draw on voluntary funds. We were accused of making political propaganda by deriding the sight of Health Service staff organising bingo sessions and shaking tins in the market square.

Mrs. Sara Morrison, chairman of the National Council of Voluntary Organisations—she is no Socialist, not even a Social Democrat, so far as I know—felt impelled to write to the Secretary of State for Social Services on 9 January explaining that the council had not raised any objection to the clause at the time because it believed the Government's assurance, to which I have referred, and because it thought that there would be consultation with the Government about any guidance on how the powers would be used.

The significance of the circular—DHSS health circular (HC (80) 11)—which was sent out on 18 December, just before Christmas, when presumably no one would notice, except the recipients—was grasped by the voluntary organisations only at the beginning of this year, and in her letter Mrs. Morrison expressed deeply felt concern, indeed, alarm, among the voluntary organisations. Four days later, Nicholas Hinton, director of the National Council of Voluntary Organisations, described the circular as potentially the most dangerous blow suffered by the voluntary organisations for years. By 20 January, one day after the Prime Minister had spoken to the WRVS, 45 leading charities said that they were extremely angry that they had not been consulted. They felt that they had been misled, and Nicholas Hinton, speaking on their behalf, said Patrick Jenkin should withdraw the circular. All hon. Members may not have read the circular. They may wonder what all the fuss is about. They have only to read the circular, which is in the Library, to find out what all the fuss is about. The circular envisages health authorities employing professional fund raisers, major public appeals, involving a wide range of staff, interest-free loans to pay for appeal costs, lotteries, bingo "on a large scale", sponsorship of pharmaceutical companies and donations from drink companies. Fortunately, the Government just managed to escape donations from tobacco companies. However, a pattern of large-scale fund raising was revealed. The Opposition had not realised that the proposals would be on such a scale. We, too, perhaps, had been influenced by the assurances that were given.

There are four objections to the circular. The first is that it will bring the National Health Service into direct competition for funds with the voluntary sector. The second is that public funds will be available for the starting costs of National Health Service fund raising, while the voluntary organisations have no such financial backing. Thirdly, the circular says that health authorites are in the best position to establish priorities for voluntary help which are compatible with their overall plans for providing services In the view of many voluntary organisations that will threaten the independence of the voluntary movement. The fourth objection is about the lack of consultation with voluntary organisations before the circular was issued. Nicholas Hinton was right when he pointed out that the charities that would expect to suffer most would be those coping with the physically and mentally handicapped and the frail elderly—in fact, those leading charities that are suffering most from the crippling burden of VAT.

If the Government believe that greater emphasis should be placed on the voluntary organisations and the voluntary movement, they have to do something to enable the voluntary organisations to be in a position to help. The first matter is VAT. It is appalling that there has not been a Treasury Minister on the Government Front Bench the whole day. A second requirement is that the Government should withdraw the health circular. I have tabled a question to the Secretary of State asking him to do so. I hope that he will decide to do so, in the interests of those organisations that both sides of the House respect. They have done fine work for the people of this country, but today they face dire problems because of the financial burdens placed upon them by the Government.

Photo of Ian Paisley Ian Paisley Leader of the Democratic Unionist Party 6:48 pm, 3rd February 1981

The right hon. Gentleman for Norwich, North (Mr. Ennals) will forgive me if I do not follow his remarks, but I support what he says in regard to voluntary organisations. It is important that the Government should take this matter on board and act as quickly as possible. It would not be right for the House to debate poverty without the case for Northern Ireland being placed fairly and squarely on the record. The Secretary of State, in summarising the policy of the Government, said that those most in need would be taken care of. I take issue with the Secretary of State on that enunciation of the Government's policy, because those most in need are not being taken care of. I am very glad that a member of the Government who has served in Northern Ireland is on the Front Bench today; I am sure that he will appreciate what I am about to say about Northern Ireland and its plight.

Northern Ireland is most in need because of the low incomes of its working people. The average income is well below the national average, while the cost of living is higher than anywhere else in the United Kingdom. Then there is the bad housing—housing not fit to be lived in. Some houses are without even one amenity. Some have neither electric light nor piped water, and none of the other amenities.

Transport costs in Northern Ireland are outrageous. Unemployment is twice the national average, with one in five unemployed. I am very grateful to the spokesman for the Opposition for bringing Northern Ireland into this debate and highlighting the energy costs. I regret that the Secretary of State made no response to that matter, which was placed before him by the Opposition this afternoon.

We have heard statements today to the effect that the poor are becoming poorer. In Northern Ireland the poor are becoming poorer and colder. This is very serious. If people in Northern Ireland have a gas supply, whether they be on the poverty line or below it, they have to pay three times as much for that gas supply as people anywhere else in the United Kingdom. If they are on an electricity supply they have to pay one-third more than anywhere else in the United Kingdom. If they are purchasing coal, they have to pay more per ton for each ton that they consume. So at every level of energy the people of Northern Ireland are at a great disadvantage. There is nothing that the Government are doing at present to deal with that. That is the seriousness of the situation.

Today in the House we have heard talk about the family. I believe in the family. It is the basic unit of society and should be defended at all costs. But let us remember that in Northern Ireland two out of every five children live in a household with an income at or below the level of minimum need. Let hon. Members just think of that. I am referring there to the report of the Supplementary Benefits Commission. That report states one family in ten is living in unfit accommodation; one in every ten households is living in overcrowded accommodation. The situation could not be much graver.

A survey made of households in Northern Ireland discovered that at least 35 per cent., or 150,330 households, were living below the needs level, while in the United Kingdom as a whole it is estimated that 21 per cent. of all households were living below the needs level. So hon. Members can see the great gulf between Northern Ireland and the rest of the United Kingdom. At least 191,040 children under 16 are being brought up in families with resources below the needs level. In short, at least 39 per cent. of Northern Ireland children are being brought up in a situation of economic disadvantage. Overall, 478,570 people in Northern Ireland live below the needs level.

If ever there was a case in regard to need and poverty, that case is Northern Ireland. Yet the Government tell us today that it is their policy to deal with those mostly in need. We do not find that happening in Northern Ireland. Of course, the unemployment figures are disastrous. We will soon have well over 100,000 people unemployed, with 40,000 unemployed in Belfast alone.

What amazes me is that while the Government are pursuing a policy of running down the gas industry, because they have refused to let Northern Ireland share in the natural gas from the North Sea, the workers in the gas industry who are going to lose their jobs are not to benefit in regard to redundancy pay as their counterparts in Great Britain would benefit. It has just been announced that the redundancy payment in Londonderry—a city that has more unemployed, perhaps, than any other part of Northern Ireland—will be half of what would be paid to workers in the rest of the United Kingdom. So here we have a people who are suffering terribly, and yet when it comes to payoffs they do not get parity with the rest of the United Kingdom. I want to put those matters firmly on record.

What is more, if jobs are to be saved in Northern Ireland, they will not be saved by the policy being pursued by the Government. The indigenous firms which have battled through all the difficulties and which have good order books but which have a serious problem of cash flow are the firms that should be helped, instead of the Government pouring £90 million and more into a firm like De Lorean. I hope that the firm will not go down, because it would be a tragedy if it did fail, but I think that jobs could be saved in a better and more secure way in Northern Ireland.

I would just underscore to the Government the seriousness of the situation. I know the Minister for Social Security knows what I am talking about, for he has been there and has seen the situation and knows that these are facts. Someone talked about realities. These are the stark realities of the situation in Northern Ireland. This Government must implement their policy of dealing with those in greatest need.

Photo of Mr Clement Freud Mr Clement Freud , Isle of Ely 6:59 pm, 3rd February 1981

It is significant that the last two speakers from the Government side both attacked the Government for their failure to do what they set out to do. They both made excellent points, one in the case of the people of Northern Ireland and the other—the hon. Member for Bristol, West (Mr. Waldegrave)—in respect of children who were suffering as a result of the Government's reneging on their promise on child benefit.

Earlier in the debate, when the Secretary of State, who has presumably now gone to Grantham, or wherever, was talking about a speech made by the hon. Member for Renfrewshire, West (Mr. Buchan), he complained bitterly that the hon. Gentleman had given no indication where the money was coming from. That is a valid point, because it is too easy, from the Opposition Benches, to ask the Government "Why not do this, or that?" when the proper answer will involve thousands of million of pounds.

I should like to point to a few sectors where the money could easily be found. It would alleviate precisely what the debate is trying to highlight, namely the increasing poverty resulting from Government policies". One policy that increases poverty is the assisted places scheme. It may not involve a great deal of money, but in the present economic climate it is an obscene way of advantaging the already advantaged at the direct cost to children who most need extra money—those in the maintained sector.

The money could come by taxing the windfall profits of banks. It must be wrong for a Government's fiscal policies fortuitously to advantage a whole sector of industry, allow it to keep the money, and distribute it in higher dividends to shareholders who probably do not need it. I know of few poor people who are dependent for their support on annual bank dividends.

A lot of money could be saved if the Government looked at the building societies. They are neither particularly sociable nor do they build anything. They own prime sites in the High Streets of our towns, when anyone who really wanted money would go to the outskirts and walk up to the second or third floor, provided that the loan was at the right price.

A great deal too much money is being spent for no other purpose than to advantage those who are already advantaged, and the latest news today is of yet another EEC parliamentary beano, which will cost the taxpayer £250,000 and enable 35 higgledy-piggledy European Members to see what someone else is or is not doing. There is scope for saving there.

I welcome the debate because, in common with most of my right hon. and hon. Friends, I came into Parliament for the express purpose of realigning the wealth of this land. The debate is trying to do just that. We have heard from several hon. Members about the poverty trap, and I should like to give some figures that have not yet been supplied.

The differential between a man earning £110 per week and a man earning £70 per week is £6·35 per week. When the comparison is made with a man earning £500 a week, it is found that the differential is not one-sixth, as it is with a man on £110 a week, but two-fifths—40 per cent.—compared with 16 per cent. That is exactly the sort of policy that could easily be reversed to work infinitely to the benefit of the lower-paid.

The hon. Member for Bristol, West mentioned child benefit. A 50 per cent. rise in child benefit would cost £275 million and would give the average family an extra £1 a week. To achieve the same effect for a standard-rate taxpayer by increasing the married man's allowance would cost £610 million. I asked the Treasury earlier this week what would be the saving to the country if we paid child benefit monthly in arrears. I was told that the saving would be £50 million a year. Surely at least that saving could be credited to child benefit and the benefit could rise by that amount, if not more.

We are discussing poverty, and it is interesting to note how different people have different concepts of the meaning of the word "poverty". I asked a trade union officer what poverty was and his answer was that it was £75 a week or less for a family with two children. I read a philosophical definition of poverty, which was the lack of command over resources relative to need". The Supplementary Benefits Commission defines poverty as an income that does not enable people to participate in the life of the community. That is probably the best definition. The poor need an income to enable them to participate.

Our current policy is not to keep people out of hardship and misery but to wait until they suffer it before taking action. The Secretary of State asked what the Government could do other than paying large sums in benefits. The first thing that everyone can do—the Government have no exclusive right to it—is to care. We cannot legislate for care, but we can provide a fertile atmosphere for it. In our society money has replaced caring. We pay people a pension and feel that we have done our job. I suggest that much rethinking will have to be done. Housing policy will have to be reviewed, because a great deal of poverty, in actual if not real terms, is occasioned by people being housed in the wrong place and in the wrong sort of house. People are housed where they need transport in order to get to work or where they need more heating than they can afford. Inevitably, either simply as a result of that or as a consequence of accident or illness, they get into debt, and when someone is in debt local authority housing policies do not consider applications for housing transfers. While practising such policies we are condemning people to everlasting poverty.

We can help, without much cost to the nation, by gearing secondary education much more towards that aspect of unnecessary policy. The hon. Member for Antrim, North (Rev. Ian Paisley) spoke about energy. In all the home economics syllabus in the secondary sector of our maintained education system there is little about the proper use of electricity—the economies of strip lighting as against light bulbs and the economies that can be effected by the proper use of the right heating apparatus.

Local authorities can and will pay something towards energy conservation, but they spend little advertising what they have a statutory right to do. I mentioned at Question Time today the doubtful morality of the Government's expenditure on advertising to encourage people to buy index-linked retirement certificates but not advertising available benefits that are unclaimed because people do not know about them.

While we are discussing poverty, the Government must not forget the new poor who will be created by their policy of denying State benefit in the first weeks of sickness. One must weep in advance for the frail man of 40 who becomes unemployed and seeks employment in a small company. That company—rightly, because it cannot afford not to do otherwise—will look at the man's health record, and if he is asthmatic or has an arthritic condition of the hip, or any other ailment, will say "We cannot employ him, because we cannot afford to pay the first weeks of his sickness benefit."

I shall end by quoting the Prime Minister, who said: For me, the heart of politics is not political philosophy. It is the people, and how they want to live their lives. The Prime Minister believes in choice. We know that she has a choice, and the right hon. Member for Chelmsford (Mr. St. John-Stevas), the hon. Member for Beeston (Mr. Lester) and the hon. Member for Shipley (Mr. Fox) know that she has a choice. I wish to ask her whether she believes that the poor have a choice. William Cobbett said that to be poor and independent is very nearly impossible. Nothing much has changed.

I remind the Prime Minister of something that Paul Johnson wrote before he became her great Fleet Street ally. He said: The real tragedy of poverty is not suffering or degradation, but waste. Over the centuries tens of millions in this country alone have failed to realise their potentialities and make, each one of them, his or her unique contribution to the wealth and happiness of all. No form of investment is more fruitful than that which breaks the reproductive cycle of poverty. I believe in that. That is why my right hon. and hon. Friends and I will support the Opposition motion in the Lobby tonight.

Photo of Mr Thomas Benyon Mr Thomas Benyon , Abingdon 7:11 pm, 3rd February 1981

I agree with much of what has been said in the debate, certainly much of what the hon. Member for Isle of Ely (Mr. Freud) said. I also agree with my hon. Friend the Member for Bristol, West (Mr. Waldegrave) on the questions of the uprating of child benefits. It is an inevitable occupational hazard to speak fairly late in a debate, because much of what one was going to say has already been said. I do not believe that that matters, if the weight of opinion in the House is felt by the Minister. Perhaps I should declare an interest on child benefit, as my wife has just given birth to our fourth child.

I should like to dispel the impression which has been given judging from one or two letters which I have received—possibly even in my own party—that child benefit is a form of soup kitchen or cash handout. That is a travesty of the truth.

Child benefit is not a soup kitchen. It was designed to place cash in the pockets of the mother who needs it most, so that she can look after her children. It gives a tax cut to the poorest families in the land, and is the surest way of alleviating the poverty trap or the "Why work?" syndrome. We inveighed against those inequities before the election in May 1979. Since that date, unfortunately, the poverty trap has become worse. Now—to give one example out of many—a couple with four children are better off earning £55 than £95 a week, in certain circumstances.

In Opposition the Minister described the poverty trap as devastating and a real blot on the face of the tax and welfare system. I know that he still believes that. I also know that he believes that the uprating of child benefit is one of the best ways to close the poverty trap. I wish him well in his battle against his Treasury colleagues.

Unfortunately, last time child benefit was uprated the Chancellor of the Exchequer decided not to face the issue entirely, which will make it harder for him this time. This time he will need to add 95p to the value of child benefit to return it to its former level. That is vital. We have an obligation to raise child benefit in line with other personal allowances. No other tax allowance should be given greater priority than child benefit. If personal allowances are not to be raised in line with inflation, child benefit should be an exception to that.

The cost of uprating child benefit will be about £190 million. Each of us has his own pet method of how that money should be found. I take the point made by the hon. Member for Isle of Ely that there is no point talking about an increase in public expenditure without giving an indication that one has thought about how the additional money should be raised.

Substantial savings can be made through the monthly payment of child benefit—which the hon. Member for Isle of Ely also advocated—and the introduction of the autocredit transfer system. There will be savings on supplementary benefit, if child benefit is uprated, and further savings on the cost of families who have to go into care because they cannot cope with the burdens of poverty. The balance might be procured from uprating tobacco tax—each of us has our favourite, and that is mine.

The qualification "where resources permit" must be accepted. However, we were talking about improving the 1979 position of the disabled in "The Right Approach". No doubt, when resources permit, we shall bring forward policies that might benefit the disabled. However, it would be nice if the Government could undertake a Green Paper of the piecemeal benefits given to the disabled, to see how they could be rationalised into a disability pension which might be given as a right, as opposed to the claimant having to request the benefit being cast in the role of supplicant. Currently, applicants are compelled to apply for benefits which depend on the cause of his disability. For example, someone who is disabled at birth will receive less pension than someone who is disabled at work.

To date, the official response to a request for a Green Paper is that the hopes of the disabled might be raised unfairly. That is rubbish. We raised the expectations of the disabled in "The Right Approach" and in our manifesto. Disabled persons are not daft. They are as alert to the present economic climate as are the rest of the population. No doubt they realise that no improvement can be expected from the Government until there are available resources. However, such a Green Paper would at least give some credibility to the idea that the Government are conscious that there are problems to be solved.

The disabled face many problems. I take the point made by my hon. Friend the Member for Bristol, West that one does ill for any cause by overstating the case, or by trying to pretend, on a ping-pong basis, that until May 1979 everything was wonderful and now everything is appalling. Nothing is as simple as that. At the moment, the disabled and the unemployed face horrendous problems. I hope that hon. Members will bear with me if I outline some of the problems facing the disabled and the unemployed, many of which have arisen since May 1979.

There was the uplift in VAT in June 1979 and the uprating of invalidity benefit, which came only in November 1979. Prescription charges have increased five times, and not all invalidity pensioners qualify for free prescriptions. Electricity costs have spiralled. An ominous statistic that I saw recently in New Society on 8 September 1980 was that disconnections in London have doubled in the past year. A number of people simply will not pay, but in that bleak statistic will be included others who cannot pay. I have no reason to suppose that the disabled unemployed are not among them. Local authorities are cutting services that will be missed by the disabled.

Unemployment is at an all-time high. The disabled will be the last in line to be employed, especially as many employers are wary about the plans to shift on to them responsibility for payment of short-term sickness benefit. One cannot be surprised if they regard disabled applicants with some suspicion in such circumstances. It is not surprising that the unemployment rate for the disabled is double that for those without disability.

Many unemployed disabled are in a "Catch 22" situation. If they work, even part-time, they are likely to lose their invalidity pension. Then, of course, invalidity benefit is being cut by 5 per cent., which is a great problem for them. They cannot get full-time work, and part-time work does not provide a living wage. If they do part-time work they are likely to lose all their sources of income. The Manpower Services Commission can help to set up in small businesses only those with physical disabilities. I believe that the mentally handicapped do not qualify. A constituent of mine is in that precise position.

Also, invalidity pensioners do not qualify for free school meals for their children. Lastly, as has been stated several times, charities are suffering sorely from the problems created by VAT. It would be absurd to suggest that all those problems have occurred in the past 18 months, but I mention them to give an indication of the work yet to be done.

I do not know what it is like to be seriously handicapped, although I am quite deaf. Occasionally, arrogantly, one imagines that one can understand what certain disabilities must be like. However, I am sure that it is not possible to understand the problems of others' disabilities. A man who is deaf cannot imagine what it is like to suffer a nervous breakdown. A deaf woman cannot imagine what multiple sclerosis is like. We might think that we know, but the reality is that we do not. The disability is unique to the sufferer. Each person who is disabled lives with his own problem, which no one else can fully understand.

In the same way, short of genius, it is impossible for a man who is well-off to understand poverty. I make no pretence of being able to appreciate fully the problems that face the unemployed disabled. It would be hypocrisy for me to pretend to do so. All that the Government can do is to provide services and benefits, remembering as we do so that we are dealing with people and not statistics.

I note with interest that the debate is about poverty. It is easier to talk about poverty than about the poor; it is easier to argue about the state of unemployment than about the unemployed. It is often a trap to believe that the theories of abstract ideas are things in themselves. We must reorganise benefits for the disabled without patronising them. They do not want our sympathy. They wish to lead full lives, integrated in the community. A Government can do only so much, in a co-ordinated effort with the disabled, their families, local authorities and voluntary organisations.

It must be a sustained programme of reform. It would be too easy to indulge in a vigorous one-off demonstration of concern in this the International Year of Disabled People. It would be like a brief national outpouring of concern for the victims of remote foreign earthquakes—a quick payment to salve our national conscience and assuage our guilt at having done so little in the past, and then "Let's get on with the next item on the agenda."

The problems of the disabled, the unemployed and the poor will not go away. There are no easy solutions for this or any Government. They cannot sweep the problems away year after year, hoping that they will be forgotten. It is profoundly depressing that the position of the disabled unemployed has grown worse in the past year. However, I am optimistic that the Government will respond to the challenge, which is clearly our overriding duty, and will place the disabled unemployed as our highest social priority.

Photo of Mr Ernest Roberts Mr Ernest Roberts , Hackney North and Stoke Newington 7:25 pm, 3rd February 1981

We have proved this afternoon that the Government's policies are responsible for increasing poverty. In an excellently researched book, Professor Townsend recently pointed out that 26 per cent. of our population—about 14 million people—could be said to be living in poverty. Hackney bears out what Professor Townsend said and what we have said. The Government are responsible for increasing poverty.

I wish to say a few words about the economics of poverty. I make my remarks on the basis of information that I have received from the many hundreds who visit my advice centre and from the thousands of letters that I receive as a Member of Parliament, and on the evidence that is only too obvious in my area. Anyone can see the obvious poverty of an area that has a high percentage of old-age pensioners and an absence of young people because they have left the area. We now have about 18,000 people on housing waiting lists, and hundreds of homeless temporarily in bed and breakfast accommodation. People are squatting in fairly large numbers. We have over 5,000 single-parent families, with all their problems. I challenge the libel that they drink or gamble away then-child benefit. They use it to try to eke out their poverty stricken existence. Hackney has the highest infant mortality rate in Britain and a high number of mentally ill people, the causes being mainly poverty and distress. Massive gas and electricity bills are continually brought to me. They are debts owed by the unemployed and by people on social security.

Hackney is an area where people have some of the lowest incomes in London, with mass unemployment and no investment. The advertisements on one page of the local paper indicate the poverty—18 jumble sales are advertised for one weekend. That is the way that my constituents have to provide for their needs. They receive social security as a right and not because they are scroungers. The Government are making the situation worse by their policies and their inability to solve the problems of inflation. Their taxation policies go against working people and the unemployed, as do their cuts in housing, hospitals, schools, social services, health, and so on.

"Inequalities in Health" has been referred to. On the first page the Secretary of State for Social Services states that there is … little sign of health inequalities in Britain actually diminishing and, in some cases, they may be increasing. It will be seen that the Group has reached the view that the causes of health inequalities are so deep rooted that only a major and wide-ranging programme of public expenditure is capable of altering the pattern. I am glad that the right hon. Gentleman understands that. He continues: I must make it clear that additional expenditure on the scale that could result from the report's recommendations—the amount involved could be upwards of £2 billion a year"— that is a measure of the neglect of the people in Britain, £2,000 million a year— is quite unrealistic in present or any forseeable economic circumstances … I cannot, therefore, endorse the Group's recommendations. That is an indication of the poverty being suffered by people in Britain.

The Government attack local authorities. They attacked Hackney for alleged overspending when it tried to solve the deplorable social problems of poverty. The council faces massive rate burdens and its tenants face massive rent increases. Those are burdens on an already impoverished community, yet that area adjoins the City of London, whose banks, insurance companies and multinational headquarters are bursting at the seams with wealth. The comparison between those two areas exemplifies Britain's problems—a nation of the very rich and the very poor, the "haves" and the "have nots"—Disraeli's two nations.

That position is brought out sharply in the report of the Royal Commission on the Distribution of Income and Wealth, which was published in eight volumes. When the report was published, more than 23 million people earned less than £3,000 a year, yet about 17,500 people earned up to £12,000 per year, or four times as much. Other people—more than 4,000—earned 17 times as much, namely, up to £50,000 per year. Others were receiving more than £100,000 per year. The figures do not include those who receive unearned income from investments. That disparity of incomes in Britain causes the massive deep-seated problem of poverty.

The Hackney Gazette said in a recent editorial: Nothing very surprising in the new report on Hackney which predicts even more vandalism and violence in an area that was once renowned for the closeness of its down-at-heel community.Unfortunately, those of us who live and work in Hackney have been only too aware for many years of the gradually increasing levels of violence and wanton destruction…Their conclusion is that while nothing will bring back the Hackney of pre-war days, it would be inviting trouble if central government does not allocate resources to halt the decline and to maintain the fabric of Hackney. Those are the views of the local press, which speaks on behalf of the local people.

The Minister asked where the money would come from. Let me be emphatic about this. One has the illusion that Britain is broke. This is a wealthy country. It is the second wealthiest country in the world. It is the second largest investor overseas—second only to the United States. Currently the gross national product is running at a rate of £200,000 million. That is a considerable amount of wealth and it is going into the pockets of those whom the Government truly represent.

This week The Sunday Times estimated the nation's reserves at $27½ billion—in other words, $15 billion net of all debts. The money is there to be used—if the Government have the will to use it—in the interests of the people of Britain. This country has a considerable amount of wealth, which should be used to solve the problems of poverty. The TUC has made it clear how the problems can be solved, namely, through a £6 billion budget boost—a £600 million increase for State industry, £710 million for a manpower programme to provide 520,000 jobs, £250 million for private industry, £750 million for higher pensions, £500 million for education and £300 million for school meals and milk. The money could come from the sources to which I have referred. All that would help those who suffer from increasing poverty.

The only solution to the problem of poverty is the removal of this Government, who are responsible for the poverty, and the election of a Labour Government who will create a new type of society in Britain.

Photo of Mr Tristan Garel-Jones Mr Tristan Garel-Jones , Watford 7:36 pm, 3rd February 1981

I want to follow the argument of the hon. Member for Hackney, North and Stoke Newington (Mr. Roberts), who quoted One or two novel statistics. The first and perhaps most surprising remark was that the number of jumble sales that take place in his constituency is a valuable indicator of the level of poverty. My hon. Friend the Member for Woolwich, West (Mr. Bottomley), who takes a considerable interest in these matters, is reputed to clothe himself entirely from jumble sales. Perhaps optimistically, I place another interpretation on the upsurge of jumble sales in the hon. Gentleman's constituency. It is that those marvellous events are usually organised by Conservative women, to whom I shall refer later. No doubt the Conservative women of Hackney are being spurred into great activity in an attempt to remove the hon. Gentleman from the seat that he now occupies.

Other statistics that he not surprisingly used, in view of his position before he entered the House, were those put forward by the TUC. The hon. Gentleman is a Member to whom the House should now listen with special attention. His past position in the TUC and his present contacts there place him in an important position in the Labour Party as it is today. We must listen with great care and attention to the figures that he puts forward. I do not know where he obtained some of his figures. He said that Britain was the second wealthiest nation in the world. He then suggested that an expenditure of £6 billion should be undertaken. Presumably, he feels that that money can be obtained simply by confiscating wealth from the rich. I do not think that that statement merits serious consideration by the House.

I wish to confine my remarks principally to the question of child benefit and the need further to consider it. First, I want to say a few words about the remarks of my hon. Friends the Members for Somerset, North (Mr. Dean) and Abingdon (Mr. Benyon) about a Green Paper on the disabled. I support such a move, especially in the International Year of Disabled People. Returning to the question of poverty, and those affected by it, I recall asking a millionaire acquaintance why he had joined the Labour Party. The reason that he gave, which seemed convincing, was that as a young man he remembered seeing children, with no shoes on their feet, and suffering from rickets, running around in the streets of our major towns.

The first fact that we ought to establish today, in order to put the problem into perspective, is that poverty on that scale has now been eradicated and what we are now talking about is relative poverty in a State of relative affluence. Anyone who smiles at that need only glance at the problems faced by the one-third of the world that we know as the Third world. I have no doubt that the people of the Third world would regard as affluence what we in this country choose to regard as poverty, though I hasten to add that I do not make that point in order to minimise the problems of the relative poverty that we face in this country.

I turn now to the basic thrust of Government policy and the difficult decisions that they have to take. My hon. Friend the Member for Somerset, North brough out the essential point to be borne in mind, that over the past decades expenditure on our social services has increased at three times the rate of growth in the creation of wealth. I believe that that figure is not disputed on either side of the House. I realise that there are such members as the hon. Member for Hackney, North and Stoke Newington who believe that there is a crock of gold somewhere that can simply be confiscated and handed out, but I think that, apart from the small minority of hon. Members who take that view, it is generally recognised in the House that it is necessary to look to the business of creating wealth.

It is my contention that while that is being done, and while the nation faces its present difficulties, the Conservative Party, if it looks to its origins and its basic beliefs, is particularly well suited to operate with humanity and imagination a policy directed to the necessary creation of wealth. Although it is true that the Tory Party has no dogma, I believe that it has always attempted to do what seems best at the time. That is no bad philosophy in the context of problems such as those that we face today. Without detaining the House for long, since I know that others wish to speak I shall expand a little on what I mean.

I believe that in two areas already the Government have begun to show that at the edges they are prepared to intervene against what the Opposition take to be the party's dogma—to intervene to help those who are in difficulty. I refer, of course, to the considerable expansion that has rightly taken place in the youth opportunities programme for helping the younger unemployed. Moreover, on industrial policy, I refer to a speech made by my right hon. Friend the Prime Minister in which she referred to "constructive intervention". Many of us hope that in the coming months and years the Government will be building on that concept in order to intervene in the economy not only through purchasing policy but through Government investment such as that which took place in Inmos, in order to help to create more employment opportunities.

My first theme, therefore, is that a Conservative Government are in a position ideologically to make decisions of that kind to help in areas of need when they arise. There is no ideological inhibition restraining us from so doing.

Having mentioned industrial and employment policy, I turn next to social policy and pick up the remarks of my hon. Friend the Member for Bristol, West (Mr. Waldegrave), who referred to an article published by my hon. Friend the Member for Oxford (Mr. Patten). The title of that article asks a question: One Nation at the Hustings—Two Nations in reality? Those of us who take an interest in Tory social policy believe that at the core of that policy must be help and support for the family. As my hon. Friend the Member for Oxford said in his article: The great debate in the Tory Party today on social policy should be centred on how we can help the family in all its different manifestations". As my right hon. Friend knows, many of us on the Conservative Benches still regard that as a central issue. We believe that he is at one with us in that belief. But we are worried that that central part of our policy may be beginning to slip away from us, and we very much hope that when, as he says he must do now, he enters into purdah with my right hon. and learned Friend the Chancellor of the Exchequer, he will defend as vigorously as he can that central core of Conservative social policy, which must be the maintenance of the family.

Those of us on the Conservative Benches who press for child benefit do so not only in the confidence that my right hon. Friend the Secretary for State is behind us and supporting us, as we know he is, but in the knowledge of what was said in the letter from the Chancellor to my hon. Friend the Member for Bristol, West, which we now refer to as the "Waldegrave letter". In that letter my right hon. and learned Friend said that he had no intention of going back on our earlier policy on child benefit. We believe, therefore, that we have the powerful combination, as I may so call it, of my right hon. Friend the Secretary of State and the Chancellor of the Exchequer on our side, but, as if that were not enough, we have with us the Conservative Women's National Advisory Council. I assure hon. Members on the Opposition Benches that there is perhaps no organisation more powerful or more influential in the Conservative Party than that council. It has not only done a great deal of work on child benefit but has expressed itself as deeply concerned about child benefit and the heavier financial burdens which will fall upon families with children in 1980". Therefore, those of us who advance this case believe that we have good allies, and we believe that the Government wish to do what we are advocating.

There are two general points to be made about child benefit. I acknowledge that all hon. Members now in the Chamber who take an interest in these matters will be well aware of them, but they are points that bear repetition, because they are not well understood outside. For example, whenever I make a speech about child benefit I find that it is not a popular issue in the country. One receives a lot of letters from old-age pensioners, from the disabled and from all manner of people, who ask "What are you doing?". The hon. Member for Renfrewshire, West (Mr. Buchan) referred in this context to an article in a Scottish newspaper written by one of my hon. Friends. I think, therefore, that the two basic points that I am about to make bear repetition, since it is important that people generally understand this matter.

Child benefit was introduced to take the place of the old child tax allowances. The child tax allowances were in no way regarded as a social service. They were there to achieve some sort of equity at all income levels for families with children as compared to families without children. That is the first fact to be established. This is not a social service handout. In a sense, it is another fiscal or tax weapon.

The second point to be made—again, I do not wish to overstate it, and I know that my hon. Friend the Member for Norfolk, North (Mr. Howell) has done a great deal of work on it—is one that those who support the Conservative Party would certainly believe to be important, and I hope that many who support the Labour Party would take the same view. Child benefit helps the person who is in work, as opposed to the person who is unemployed. It is important to stress that for every £1 that is paid to a person out of work £1 is deducted from any unemployment or supplementary benefit that that person receives. That is an important point for people to understand.

The third aspect of child benefit to be emphasised is that it is what is referred to as an indiscriminate benefit. It is collected by the very rich and the very poor. I am in two minds about this. On the one hand, I think that there are significant advantages in paying it to everybody, since that upholds the principle that it is the old child tax allowance, and there is considerable benefit to be derived from that. If in his discussions with the Chancellor my right hon. Friend fights, as I am sure he will, to uprate child benefit this year and he finds it necessary that those who pay tax above the standard rate should pay tax on their child benefit, I should not regard that as a retrograde or offensive step. The sum involved is about £40 million, which in the context of the total expended on child benefit may sound trifling. It is, nevertheless, a contribution.

In advocating an increase in child benefit the next question that we have to ask is whether the family is slipping behind other sectors of the population. The answer to that must be an unqualified "Yes". Some of my hon. Friends referred to statistics supplied by the Child Poverty Action Group. I would add one more to them, namely, that in the last two decades the proportion of income tax and national insurance contributions paid by a childless couple on three-quarters average earnings has increased by 122 per cent., whereas the proportion paid by a family with two children, one under 11 and one over 1, has increased by 382 per cent.—about three times as much. That is how the position of families is being steadily eroded.

It is worth noting that since the Government have been in office—I am referring to the years 1978–82—the tax burden for a childless couple has increased by 1·3 per cent., whereas for the family on three-quarters average earnings with two children it has increased by 11·6 per cent. My hon. Friend the Under-Secretary looks rather surprised. The statistics that I am now using were part of the memorandum presented by the Child Poverty Action Group.

As my hon. Friend the Member for Bristol, West said, by whatever yardstick one chooses to measure that—whether by tax-free income, the tax break-even point, or changes in net disposable income—the position of families vis-a-vis single people has steadily been eroded. He effectively made the point that low income families above all suffer from inflation. That is another point that we have to bear in mind. Another example is the increase in school meals since April 1979. When the Government came to office the price of a school meal was 25p. The average price of today's school meal is 45p. Higher fuel bills and grants for school uniforms and children's clothing are being cut back. Those are the factors that affect low-income families. Both my hon. Friends the Members for Bristol, West and for Abingdon (Mr. Benyon) gave figures that I do not wish to repeat. It is worth reminding ourselves and the nation that a couple with two children are still better off earning £55 than if they earn £75. A couple with four children are better off earning £55 than £95. That is a point that bears repetition.

Those of us who are concerned about this problem have three options to offer to the Government. The first and perhaps the most important is that child benefit should be increased by 95p. That is the figure needed to restore child benefit to the level at which it stood in April 1979. On the other hand, if one assumes that the personal tax allowance will be increased in line with the Lawson-Rooker-Wise amendment, that would be satisfactory. That would involve an increase in child benefit of approximately 70p. Some of my hon. Friends and I would be in difficulty if the increase in child benefit announced this year by my right hon. and learned Friend fell below 50p, which is the absolute bare minimum at which it would retain its present value.

What is the cost of all this? The cost of a 95p increase in a full tax year would be £522 million. The cost of a 70p increase would be £385 million. The cost of a 50p increase would be £275 million. For the year 1981–82 it would be significantly less than that, because the cost falls in only part of the financial year.

The hon. Member for Isle of Ely (Mr. Freud) made the point that when looking at this kind of expenditure one must bear in mind the cost-effectiveness of child benefit. I shall suggest ways in which the extra expenditure could be paid for. As the hon. Member for Isle of Ely rightly said, a 50p increase in child benefit as a bare minimum would mean, for a family with two children, £1 per week. To achieve the same effect by altering the standard rate of tax by increasing the married man's tax allowance would cost £610 million. That has an added disadvantage, which the hon. Member for Isle of Ely did not mention. When the tax threshold is moved it does not affect the very poor, because they are not in the tax net anyway. The reason why we stress this is not only its cost-effectiveness; it is that if one tries to do it through the tax allowance it leaves out altogether the very poor.

The Opposition are quick to suggest that the Government should make this expenditure, but they are not quite so quick to suggest how it may be financed. The hon. Member for Hackney, North and Stoke Newington made suggestions. However, he is a smash-and-grab merchant, who believes that there are pots of gold somewhere to grab and hand out. Conservative Members have a responsibility to make suggestions on how this could be financed.

I shall confine myself to my private hobby-horses. The first obvious suggestion is to increase the revenue tax on alcohol and tobacco. From those two items alone, by quite modest rises of 10 per cent. or 15 per cent. as much as £1 billion could and should be raised in the coming Budget for many other reasons. That alone would finance a rise in child benefit sufficent to bring it back to the April 1979 level.

Another policy that I have advocated in the past—I am delighted to see that my right hon. and learned Friend the Chancellor and the Prime Minister are not entirely opposed to it—is a windfall profits tax on the banks. That is dangerous territory for a Conservative Party, but we are entitled to say that a great deal of the interest on dead money that sits in clearing banks accrues as extra profit as a result of the increase in minimum lending rate. Those are not profits in the true sense of the word. They are not gained by business acumen and expertise. In the real sense of the word they are windfall profits. I should have no objection if my right hon. and learned Friend found it necessary to lay his hands on £30 million, £40 million or £50 million-worth of those profits. But that is a one-off tax, which will not provide a continuing income for any Government because we all expect the minimum lending rate to come down shortly. Such a tax could be operated only when minimum lending rate was in excess of 10 per cent.

My other point concerns capital taxes. Many of my hon. Friends have pressed hard for my right hon. and learned Friend to do something about capital transfer tax and other capital taxes. I do not think that there can be a single Conservative Member who does not believe that to be important. Equally, many of us would say that we should not be looking at capital taxes when we have serious problems of poverty and need among families throughout the country. I hope that my right hon. and learned Friend the Chancellor will not feel it necessary to do anything at all about capital taxes this year.

A network of tax allowances has built up. One of the side arguments in favour of child benefit is that it is a step towards sorting out the nightmare of tax benefits that stretch not only to many companies, for which taxes have become virtually voluntary, but down the system to people applying for tax relief at the DHSS. In my constituency elderly people sit at a counter and negotiate with the clerk about whether they are to be given an allowance to buy blankets, gloves or a winter coat. That has arisen not from the policies of a particular party but from our desire to tailor-make social benefits to individuals. That system of individual benefits no longer stands up, good though the sentiments behind it are. We must move towards phasing out the network of tax reliefs at all levels.

With that in mind, I hope that my right hon. and learned Friend the Chancellor of the Exchequer will not feel it necessary to raise the threshold on mortgage relief. I hope that he will leave it at its present level, which will provide a considerable saving.

I turn to the question of tax thresholds and the Lawson-Rooker-Wise amendment. If the Government believe it necessary to raise the tax thresholds, so be it. However, in the difficult times that we face and the sacrifices that we are asking people to make, this is not the time to lower the tax thresholds at the top end. There is no justification for that. My hon. Friend the Member for Wolverhampton, South-West (Mr. Budgen) argued that by doing so the Government would index-link the very wealthy against inflation. If there is anybody who needs to be protected from inflation it is the very poor, not the very wealthy.

My hon. Friend the Member for Wolverhampton, South-West said: It is possible to argue that inflation hits the poorest hardest and that the poorest have the least means of avoiding the effects of inflation. The same argument cannot be extended to the rich." [Official Report, 3 June 1980; Vol. 985 c. 1347.] Even if tax thresholds are to be lowered at the lower band I hope that it will not be felt necessary at this juncture to do so at the top end.

We are asking the Secretary of State to reaffirm the Government's belief in child benefit and to reaffirm what we believe to be the central core of this Government's social policy. We are asking him to ensure that child benefit does not become, in the words of my hon. Friend the Member for Oxford, another addition to the list of "also rans". If he does what we ask him my right hon. Friend the Secretary of State will be restating a coherent social policy, around which we can unite and ask the country to face the difficult sacrifices that are facing it.

Photo of Mr John Maxton Mr John Maxton , Glasgow Cathcart 8:03 pm, 3rd February 1981

I wish to make only two comments on the speech of the hon. Member for Watford (Mr. Garel-Jones). He compared the people of the Third world with the poor in Britain. Most of my hon. Friends will take that point. However, his comparison is a little hypocritical for a member of the Conservative Party, which is increasing poverty in this country and helping to make the appalling poverty in the Third world even worse by its aid programmes, trade policies and education policies.

Photo of Mr John Maxton Mr John Maxton , Glasgow Cathcart

No. The hon. Gentleman took a long time with his speech.

Photo of Mr Tristan Garel-Jones Mr Tristan Garel-Jones , Watford

What about import controls?

Photo of Mr John Maxton Mr John Maxton , Glasgow Cathcart

Import controls would be selective and would not necessarily improve the position of the poor.

The hon. Gentleman said that the family was at the core of the Conservative Government's social policy. Family life is eroded by unemployment. Anybody who has seen unemployment in poor areas knows of the psychological degredation felt by the breadwinner when he loses his job. It can break up a family and make family life more difficult. When Conservative Members talk about the family they should remember that violence, for instance, is more likely in a family where there is unemployment. In a household where there is unemployment, children are more likely to be taken into care. The statistics in Strathclyde region certainly bear that out.

Some Government Members, particularly the Secretary of State, should visit my constituency if they want to see what is happening to the poorer people. In my constituency there is a large housing scheme with a population of 38,000. It is one of the largest public housing schemes in Europe. Even before 1979—and I am being honest—the levels of unemployment and multi-deprivation were far too high. Since then, unemployment and deprivation have reached disastrous levels. It will not be long before they reach crisis levels.

It is difficult for me to obtain unemployment figures for that housing scheme. It is a clearly recognised community, but it has no unemployment benefit office, no jobcentre and no DHSS office. People who have to register as unemployed spend about 5 per cent. of their incomes on travelling to register for work. The Government have already cut their incomes by not raising the levels of benefit by the full amount of inflation. That should not be tolerated.

I understand that unemployment is running at about 25 per cent. in the scheme as a whole. That is probably a conservative figure if one takes into account the number of people on short-time work and the number of women who have been employed but who have not registered. In certain pockets of the scheme with populations of 9,000 or 10,000 unemployment is probably over 50 per cent.

The poverty effects of the Government's actions in cutting unemployment benefit are seen most clearly in such areas. The problems will be increased with the disapperance of the earning-related supplement.

Unemployment and social security benefits have always been on the breadline. In such circumstances people have to be saints in terms of patience and abstinence. They have to have the financial skill of chartered accountants in order to live and maintain a basic standard. They live on the breadline. If they are not to get into debt, they cannot afford the occasionl packet of cigarettes or the occasional pint of beer or even take their kids to the cinema. This Government are making their plight even worse.

The Secretary of State made great play of the fact that old-age pensions and some other benefits, but not unemployment benefit, are going up with inflation.

As the hon. Member for Watford said, inflation hits the poorest hardest. This Government's direct policies have made inflation harder for the poorest than for the rest of the community. The Government have insisted that local authorities put up rents way above the current level of inflation. They have insisted that the Gas Council and the electricity boards put up their prices way above the level of inflation.

The Government have also cut the special needs payment for clothing from supplementary benefits. With regard to food, as everyone knows, the poorer a person is the more he pays, and the more he pays for his food the poorer he is. Poor people cannot afford to shop at the supermarkets, because normally there is no big supermarket in the area in which they live. They do not have a car to transport large amounts of produce bought in bulk, and even if they have a car they do not have a freezer in which to store the food. All the benefits of low pricing in the hypermarkets and the advance of the freezer are lost to the poorest in our community. Therefore, they have to shop in the corner shops where the average prices are at least 15 per cent. higher than in the supermarkets. The poor are being hit harder by inflation. Even with inflation-proofing—in many areas the Government have not implemented that—they are being hardest hit.

I see the effects of increasing unemployment and social deprivation in my constituency. There is no doubt that more people are being disconnected from electricity supplies. That creates enormous risks, not simply in terms of hypothermia but in terms of direct physical risks to young children whose families are having to use oil heaters and candles. For young children under the age of 5, the risks in that sort of environment are enormous. Glasgow has one of the highest fire risks in the whole of Britain.

The number of children that have been taken into care as a result of unemployment is increasing. Vandalism is increasing. Education is being cut. It is not simply a matter of what is being paid to the poor. The back-up services on which they rely are being cut by local authorities. The home-help services and the social work back-up services are also being cut, or at best they are being maintained at the same level, and with increasing unemployment that means a real cut. Tenants are facing massive rent and rate increases. Conservatives tend to forget that council house tenants pay rates. In Glasgow, the district authority is saying that it will not be able to maintain its housing stock at the present level in the current financial year. It is not a matter of increasing or improving standards, redeveloping houses or building new houses for the old and disabled, but simply a matter of maintaining them at their present level. That cannot be done, because of Government cutbacks.

Repairs on housing will not be carried out, so the people who are already poor will suffer even more. Those people are poor and they are getting poorer. They are also being hounded by fraud squads that have been established by the Government. I should not like anyone to think that that is not happening. At my surgery, people have already complained about the way in which investigations are being carried out. They are carried out on pure speculation. First, an anonymous phone call seems to be the greatest source of information for the investigators. Secondly, they see people in their working clothes. Anyone who knows working class areas knows that jeans and an anorak are common uniform, whether a person is unemployed, walking the streets because he has a bad back, on invalidity benefit, or at work.

I know of one case where it was clear—although there may be a difference in the wording of the interview that took place—that a person was intimidated into coming off sickness benefit. He was told that there was some suspicion that he was working. There was little or no evidence, but the investigator told him that he believed that he had been working since September and that the Department would have to be repaid £1,000. He was told that if he could not pay £1,000, a warrant sale—as it is known in Scotland—would have to be carried out on his property and household chattels, and that he might be prosecuted. One can imagine that in those circumstances the man signed himself off sickness benefit for one short weekend. I assure the House that he is now back on sickness benefit, and the Department made some sort of apology for what happened. That sort of thing is happening; I have heard of similar cases.

A skilled motor mechanic—many skilled motor mechanics are unemployed in the West of Scotland—who is fit, healthy and employed for more than four months is in trouble. He is likely to be investigated by fraud squads, probably on three different occasions and on three different counts. That goes against every principle of British justice. As soon as the Department becomes suspicious, it stops payment. It acts as investigator, prosecutor, jury and judge in its own cause. Even if the appeal takes only three or four weeks, a family is without money for that period, and it is not only on the poverty level but is in penury, and has to survive by begging from the social services department. That sort of activity by the DHSS is increasing.

Some Labour Members have been accused of scaremongering when they say that there will be an increase in violence on the streets. I do not think that that will happen in the short term, but we shall see a genuine threat to democracy. Elected members of local government—particularly in my party—are becoming increasingly frustrated because they, who have been elected, are unable to carry out the policies on which they were elected. In some cases they are having to take the blame for carrying out this Government's policies. In those circumstances, the ability to encourage people to stand for a local position must be eroded. The poor in my area will not suddenly start storming the barricades, but they are becoming increasingly apathetic. They no longer believe that local authorities or the Government can do anything for them.

There is real danger to democracy, not necessarily from violence on the streets but from apathy on the part of people who no longer believe that democracy works for them. It is happening in many areas where unemployment is at the level of that in my constituency. It is my fear that democracy is being threatened by increasing poverty.

Why are the Government doing it? There is little logical sense in their economic case. They are not solving the economic problems, and in the long run they are not solving the problems of inflation. It seems increasingly that what they are trying to obtain by their policies is a subservient working class that will be able to give them cheap labour for their friends and enable them to become even wealthier.

Photo of Mr Peter Griffiths Mr Peter Griffiths , Portsmouth North 8:19 pm, 3rd February 1981

The motion in the names of the Leader of the Opposition and others is about poverty. Because it seeks to list some of the groups to which the term "poor" may be applied, the debate has tended to concentrate on the problems of individual disadvantaged groups in our society. If, at this late hour, I do not repeat the list and add my own strength of feeling to the problems that have been described for such groups as the disabled, the unemployed, families on low wages and those with sizeable families to keep on small incomes, it is not because I do not feel as strongly as do my hon. Friends or Labour Members, but because I feel that the hon. Member for Isle of Ely (Mr. Freud), when he spoke about what is poverty and what poverty means, introduced a new perspective into the debate.

I shall identify a group that is slightly different from those that have been spoken about. It is a group that is additional—I am not putting it forward as an alternative—to those that have been identified.

The groups identified in the motion, which was moved by the hon. Member for Renfrewshire, West (Mr. Buchan), might be called the visible poor. They are groups that are recognisable. We know of them because they often have vocal advocates. They have organisations that speak on their behalf, or they are strongly organised themselves. They organise demonstrations. These are the visible poor, whose needs are regularly drawn to our attention and about whose needs there is little doubt. Nevertheless, they are not the only people in our society who are suffering from the relative poverty to which we are referring. Absolute poverty in the world-wide sense, or historical sense, does not now exist in Britain.

At the very end of his speech my right hon. Friend the Secretary of State said—I hope that I am not misquoting him—that the Government should take special care of innocent victims of inflation. I identify a group of people whom I describe as the invisible poor, or the new poor, and who are the innocent victims of inflation. They are all relatively poor. They are poor relative to those who live round about them. They are relatively poor in terms of their expectations during their working lives.

I am talking about those who saved while they were at work and who by their own thrift and self-denial expected a relatively comfortable standard of living during the years after their retirement. I add to that group a section of society that is often made up of women, although not entirely, who have given up career and marriage prospects to look after elderly parents. During the time that their parents are alive, and sometimes after their death, these people, very often women, and especially single women, suffer from the relative poverty to which I have referred.

In many instances the members of this group receive State benefits. Certainly many of them are eligible for old-age pensions. Their additional income comes from their savings, perhaps from small pensions, which may have been eroded by inflation. I take issue with the hon. Member for Isle of Ely when he says that none of the poor depend upon investment income. I think that he was talking about investment in banks, but many of those who are relatively poor have placed their savings in fixed interest accounts and are dependent upon small investment incomes that have been gravely eroded by inflation.

Those people are the new poor. They are the invisible poor, because they do not allow their poverty to show. They do not appear down-at-heel. They do not demonstrate. They do not draw attention to the problems that they face. To my mind, that makes them the more deserving. They should be identified within our society, the burdens that they face should be recognised, and our efforts should be developed to try to help them. Their problems are sometimes referred to in a slightly sneering manner as "genteel" poverty. I believe that poverty of that kind should excite our admiration, in that there are people who live on very small incomes but manage nevertheless to maintain a respectable front to the world. They manage to retain their pride and to make sure that they do not draw the attention of the world to their problems.

Often, these people are the contributors to our society. When they go along to luncheon clubs for the elderly, for example, often it is not so much to receive a lunch as to organise the function itself. Very often, they are the stalwarts of voluntary and charitable organisations. Certainly, the Conservative Party could not go on for very long without the selfless services of people in that category. These people are the contributors to society. They make very small claims on the social services. They may receive their rate rebates, but, they make few claims upon society as a whole. Their relative poverty shows in the fact that their houses become shabbier and they are able to make fewer bus journeys to go to clubs and societies, where they make a positive contribution for their friends, their neighbours and society in general.

All too often, I fear, it means that these people may be suffering as much from restrictions of diet and heating as those who have lower incomes but who have lower outgoings. They are people often left in larger houses, which are difficult to maintain, extremely difficult to heat and require a great deal of expenditure. They therefore find themselves forced to cut down on the essentials of life in order to maintain the standards that they had hoped to be able to maintain in their retirement years without the kind of sacrifice that they have to make today.

I wish to refer to a matter which perhaps has not had all the attention that it might have had in the debate, namely, the amendment in the names of my right hon. Friend the Prime Minister and others. It deserves a great deal of support. It does not cut directly across the original motion, although the wording may appear so to do. It addresses itself to the broad national problem rather than to the difficulties of individual groups. Opposition Members may laugh, but I do not see this as a matter for levity. It should have the serious attention of all hon. Members, so that we may identify the problems, and so that the people who are the subject of the debate may feel that they are receiving the serious consideration that they deserve.

The groups to which I have referred will not be greatly helped by minor changes in the social security system. By varying individual benefits, one may indeed help particular groups. Clearly, families with children are greatly helped if one increases child benefit. The people to whom I am referrng are not likely to be helped by this kind of project, nor will they be helped by the grandiose proposals put forward yesterday by the TUC for £6·2 billion to be spent to rejuvenate the economy. In the short run, that would undoubtedly help some of the groups that have been identified today, but in the longer term it would once again fuel the fire of inflation.

The people on whose behalf I have been speaking are those who have suffered most from inflation. They are people on small, relatively fixed incomes. They have no way of protecting themselves against inflation in the way that the rich can—on that I agree with Labour Members—and as some poorer groups can. The poorer groups are protected by powerful vocal groups outside this House, which can influence hon. Members. The group to which I am referring depends entirely upon the success of the Government's policies. In 1979 they voted for a Conservative Government because they believed that that was the most likely way to do two things: first, to tackle inflation, and, secondly, to cut direct taxation, particularly by raising the thresholds at which direct taxation affected their relatively small incomes.

Those who voted for the Government on that basis will never forgive us if, after the sacrifices that they have made, the Government lose their nerve and back off from their basic priority. The Government were elected on one clear and absolute priority—to fight inflation. They ought to be given a great deal more credit for the success that they have achieved. Inflation has already come down to single figures—[HON. MEMBERS: "Oh!"] It has come down rapidly.

Labour Members who served on the Committee that considered the Social Security (No. 2) Bill will recall that the right hon. Member for Salford, West (Mr. Orme), who led for the Labour Party, said that we should not raise benefits by only I6½ per cent, as the level of inflation could not possibly be down to that level by November. That was refuted at the time, both by my hon. Friend the Under-Secretary of State for Health and Social Security and my right hon. Friend the Secretary of State. We were right. The rate of inflation went down to 16 per cent, in November.

Photo of Mr Peter Griffiths Mr Peter Griffiths , Portsmouth North

No. The hon. Gentleman's laughter has been his contribution.

The Government's programme for the reduction of inflation is on target. This is the only way in which the new poor will be helped. The Opposition's motion is ill-judged and ill-timed. Therefore, I am directly opposed to it. I enthusiastically endorse the amendment, because therein lies the hope for the new poor, the invisible poor and those who need the support and help of all sections of the House.

Photo of Mr Allan Roberts Mr Allan Roberts , Bootle 8:34 pm, 3rd February 1981

If it has not done anything else, the Opposition's motion has given well-known wets in the Conservative Party the opportunity to come out of the woodwork and try to salvage some of the social policies that they believe in. Those policies seem to be ignored by the Prime Minister and her Cabinet. I understand that the Prime Minister is unwilling to listen to the CBI, the TUC or others who regret the vicious and unfeeling nature of her policies. The right hon. Lady and her Government are not likely to listen to their own Back Benchers. She considers them to be heretics.

The hon. Member for Portsmouth, North (Mr. Griffiths) spoke about the new poor. Perhaps I should describe them as the poor rich or the genteel poor rich. I am sorry that the hon. Member for Portsmouth, North is having trouble with members of his Conservative association. They are beginning to realise that the Government's policies also hit them. They are not making as much money and are not as affluent as they had anticipated they would be when they voted Conservative and decided to work for the Conservative Party in the hon. Gentleman's constituency. That is a strange note to introduce into a debate on poverty.

I turn to the hon. Member for Portsmouth, North's hon. Friends, who are obviously more on the Left of the Conservative Party. Led by the hon. Member for Bristol, West (Mr. Waldegrave), and with the hon. Member for Watford (Mr. Garel-Jones) bringing up the rear in defence of his marginal seat, those hon. Members made a very good case for increasing child benefits. The main thrust of their argument seemed to be based on the virtue of non-means tested benefits. It seemed to be based on the idea of a universal benefit that would go to all those with children—whether rich or poor.

Indirectly and directly, those hon. Members attacked the whole idea of selective benefits and means-tested benefits. I hope that they and their party will apply that criterion to all the other benefits. I hope that the Conservative Party will accept that a non-means tested benefit represents a much more effective way of dealing with poverty and of giving benefits to those who most need and deserve them.

Those who are rich, and those on high incomes who receive child benefit, pay for it through the tax system. Indeed, they contribute to other people's child benefits. That seems a fair and equitable way of organising things and does not involve forms and means tests.

The Secretary of State, the hon. Member for Watford and others challenged us to say how we would pay for increased benefits, for a social programme and for the public expenditure that we advocate. It should not be paid for by an increase in indirect taxation. I hope that the Chancellor of the Exchequer will listen to me. He certainly will not listen to his own Back Benchers. I plead with him not to increase indirect taxation to pay for increases, in child benefit or anything else, or to reduce the public sector borrowing requirement. An increase in indirect taxation will particularly hit those who are poor, those on lower incomes, and those who are unemployed. Those who receive widows' pensions and those in receipt of DHSS benefits or unemployment benefit pay the same amount of VAT on a product as does a millionaire.

If taxation has to be increased to fund social benefits, an increase in direct taxation is the fairest and most equitable way of collecting the revenue. I do not shrink from the prospect that the next Labour Government will have to increase taxes in the early years of their Administration to pay for the social benefits that a civilised society should provide. I do not object to the idea of a wealth tax. I plead with the Government to keep, and not to sell off, the profitable parts of our nationalised industries. Some of the money that accrues from them could be used to provide a social wage.

I ask the Government, and certainly the next Labour Government, not to replace Polaris but to cut defence expenditure in a way that will also reduce public expenditure. I can give figures to show how this Government's policies are increasing public expenditure. In the quarter ended 31 March 1980, expenditure on unemployment benefit in Great Britain was £210·8 million, compared with £168·5 million in the same quarter of 1979 as a direct result of increasing unemployment created by the Government.

I speak as one who represents a Merseyside constituency. The Secretary of State, if I recall his remarks correctly, said that social benefits, the future of the Welfare State and the future of British industry are interrelated. The problems of the hon. Member for Portsmouth, North, pale into insignificance compared with the unemployment and poverty in the Merseyside development area. During August 1980, 4,782 redundancies were notified in the Merseyside employment service area compared with only 850 in August 1979. In the Merseyside special development area, 3,424 redundancies were notified in August 1980 compared with 766 in August 1979. The industries that have been hit include printing, paper, publishing, transport, communications, the construction industry and the manufacturing industry.

In the special development area of Merseyside 102,685 people are unemployed—the massive figure of 14·8 per cent. That is the background against which my constituents are having to grapple with the economic problems created by the Government. There is more to come. The docks in Merseyside will create more unemployment. Tate and Lyle threatens to close the Lark Lane factory in Liverpool with the loss of well over 1,000 jobs. The loss of those jobs is blamed by the management not on the unions but on Government policy and the consequencies of our membership of the European Economic Community.

Courtauld's, on Merseyside, is likely to make people redundant as a direct result of Government policy. The company has to compete not with the poor nations of the world but with Japan and the United States in synthetic fibres. The Governments of both those countries—yes, even the United States Administration—give aid and assistance to their textile industries to compete with Courtaulds and to knock our manufactured man-made fibres out of the British market. The Government take no action. As a result, unemployment and poverty increase on Merseyside.

More people in my Bootle constituency, as in other parts of the country, are becoming long-term unemployed, dependent on unemployment benefit and eventually on DHSS benefits. It is against the background of the greater dependence of the people of this country on DHSS benefits and the amount of money that the Government has to find for unemployment and DHSS benefits, which is out of control, that accusations are made—I believe them to be justified—that the Government in trying to fulfil their pledge, made during their scandalous election campaign on the issue of the scroungers, are trying to force people entitled to DHSS benefits off those benefits.

The Secretary of State made a number of statements that misled the House about the way in which the Government are proceeding in trying to deal with fraud and abuse in DHSS benefits. The right hon. Gentleman said that he had managed to increase the staff employed in the DHSS to deal with fraud and abuse. This is grossly untrue. In the House of Lords on Thursday 27 November, in answer to a question about reductions in Civil Service staff, the Lord President of the Council said that the figures for DHSS were: staff in post on 1 April 1979,98,369; staff in post on 1 April 1980, 97,917; target staff in post on 1 April 1984, 87,700. That is a quite significant reduction of 10,000 planned in the staff of the DHSS.

It is in the light of those reductions that the Secretary of State has had about 1,400 staff switched from other work in order to deal with fraud and abuse. The whole social security system is being altered in the way that local offices work and in the way that fraud and abuse are being investigated in order to justify the figure of £50 million which the Secretary of State claimed would be saved by the tracking down of people who were fiddling the system. It has become obvious that that figure of £50 million was plucked out of the air without any facts or figures to justify it.

The Government are not likely to save £50 million, because there is not £50 million to be saved. Indeed, to get somewhere near the £50 million, shock troop tactics are now being developed in the DHSS to force people who are receiving benefits and are entitled to them to go off those benefits. What is happening, despite what has been said by Conservative Members and Ministers, is that a team of special investigators is arriving at a local office of the Department of Health and Social Security, picking out files at random and visiting families in order to try to ascertain whether there is fraud and abuse and to persuade these people, by whatever method they can, to give up the benefits which they are now receiving.

Internal documents from the DHSS show that this is happening. The fact that the staff in the DHSS themselves are complaining about the methods that they are being asked to use in order to save money also justifies the claims that I am making. I have here a document—the minutes of a Whitley Council meeting which took place on 23 October 1980 at St. Martin's House, Bootle, in my constituency, where the union side met management. According to these minutes the trade union side said that it understood that there had been a change in policy with regard to the use and role of special investigators in the region.

Apparently the investigators would no longer fully investigate cases of suspected fraud, pursuing them to prosecution if necessary, but would concentrate on knocker campaigns which involved visiting claimants where there was a suspicion of fraud or abuse and being able to persuade the persons concerned to withdraw claims for benefit. They go on in this document to complain about these techniques and point out that the management are even saying to staff that their promotion prospects will be dependent upon how many people they get off benefit, in the way policemen are promoted based on the number of prosecutions they get.

There is a document from the management side which says: There will be no question of random selection—only cases selected by reference to criteria along the following lines will be investigated". Remember, there is no question of random selection, but anyone who is in receipt of a benefit who has a marketable skill or trade, for example, motor mechanic or building trade, can be investigated at random. Anybody with a record of self-employment can be visited at random. Anybody with a significant money-earning occupation which could nevertheless be followed on a casual or spare-time basis can be visited at random. Anyone who is apparently in good health and fitness can be visited at random, as can anybody whose current unemployment has lasted for more than four months. All those people can be visited without any other justification and attempts can be made to persuade them to give up benefits. Yet we are told that there is no question of random selection. What the staff of the local offices are being asked to do is totally undesirable.

The unemploment review officers who used to operate from DHSS offices and try to help the long-term unemployed to get work—and that was a difficult job in Merseyside—are now being used to deal with abuse. The 36 unemployment review officers in the Merseyside region have been supplemented by other officers and given the job of getting the long-term unemployed off the books. That is called benefit savings.

I have examples of those officers persuading or forcing the long-term unemployed off benefits for no other reason than that they are not sufficiently enthusiastic in seeking work, even though they have not turned down jobs. The DHSS staff also object to that and those who object most to the new tactics are the staff in local offices. They see part of their job as being to make sure that people get the benefits to which they are entitled. Those staff are having a lot more work to do as a result of special investigation teams moving into areas, picking out files at random, persuading people to come off benefits when they should continue to claim benefits, and moving out, leaving the local staff to pick up the pieces.

The Under-Secretary said on television that that sort of thing was not happening, but I know that 44 cases were picked out at random from the local office that operates in her constituency of Wallasey. They were visited and some were wrongly persuaded not to continue claiming benefits. Since the special investigation team left her constituency, the local staff has had to pick up the pieces and help those concerned, who have got into considerable difficulties as a result of the tactics of that special investigation team.

The policy being forced on the DHSS staff by the uncaring Government and their uncaring Ministers is a disgrace to a civilised society. It goes against natural justice and causes considerable hardship among those who are least able to defend themselves. Despite what the hon. Member for Portsmouth, North said, I know of no strong army representing the unemployed and those receiving DHSS benefits. I know people who strongly represent employers or trade unionists at work, but those on supplementary benefit do not have much bargaining power.

I recently received a letter that indicates the sort of situation brought about by the Government's unfeeling policies. A lady wrote to me in these terms: In February of this year my husband became ill and claimed sickness benefit. He had not previously sent in a claim in 34 years work. He was noted for his integrity and was a very respected member of the staff. On June 12th a woman came to the door and demanded to see him; I can not express it in any other way. It was most upsetting as my husband was at that moment dying. His death took place a few hours later. That is the sort of situation being created by the special investigation teams which are operating not only in selected areas but throughout the country. Even if the Government claim that the methods have been used previously—though they have not—they cannot claim that they have been used throughout the country before. Special investigation teams were established in only a few areas and operated under different terms of reference. They now operate throughout the country, and the Government should be ashamed of the way in which they are operating.

The Government and their spokesmen have not yet convinced me today that they care about those in need, the unemployed and those who are worst off in our community. I believe that their policies, which have pushed up inflation and are now designed to bring it down, are also designed to do that at the expense of those in most need in our community. They hope to protect those whom they represent—the wealthy in our society, the people who contribute to Conservative Party funds and the sort of people represented by the hon. Member for Portsmouth, North.

Photo of Mr Robin Squire Mr Robin Squire , Hornchurch 8:55 pm, 3rd February 1981

I hope that the House will accept my apologies for having had to miss some of the earlier speeches. Because of that, and because of the little time that is left, my contribution will be short. I hope that the hon. Member for Bootle (Mr. Roberts) will not object if I do not follow him down the path that he took.

I endorse what my hon. Friend for Portsmouth, North (Mr. Griffiths) said about inflation. All hon. Members have accepted that inflation hits the poor particularly hard. It is therefore of great relevance, in a debate on poverty, to consider what is happening to inflation.

Putting aside party rhetoric, there is no question but that price increases in the last six months of last year were low, and welcome because they were low. The increases were of about 3·7 per cent. We would be the last to suggest that that represents an annual inflation rate, in the way that we all understand inflation rates, of 7½ per cent., but it is undeniable that it represents inflation coming down rapidly. It is the first welcome sign of relief to those who are most in need.

The hon. Member for Glasgow, Cathcart (Mr. Maxton) made a point to which I shall refer, although it has only passing relevance to the problem of poverty. He spoke somewhat darkly about problems that might arise, civil disorder and disinterest. He cited local government. I do not believe that I take second place to many Conservative Members in my knowledge of and fight for local government. With great respect, I say to the hon. Member that the problems of which he speaks and the poor calibre of many local council candidates have been with us for many years. I am sure that on reflection he will agree with that.

I welcome the fact that in spite of all the rumours a few months ago about cuts in all benefits across the board, the Government have maintained retirement pensions, widows' pensions and supplementary benefits. At the time I felt strongly that it would have been wrong if those benefits had not been uprated in line with inflation and with our commitments. As someone who fought for the uprating of those benefits, I welcome what has been done.

My prime concern has already been expressed by other hon. Members, particularly Conservative Members. It was eloquently expressed by my hon. Friend the Member for Bristol, West (Mr. Waldegrave). That concern relates to child benefit. I make no apology for returning to this matter, because if poverty in this country is not a matter of starvation—and we know that it is not—and if it is not the sort of poverty that was experienced in the 1930s—and by and large it is not—none the less it remains poverty that is associated in the main with large or larger families in poor housing and in poor environments and breeds a train of problems for which, ultimately, society must pay.

I am convinced, even if for no other reasons—there are many others—that child benefit stands out clearly as the easiest and greatest way to assist these people. We should be ashamed that a written answer in January this year showed that the level of child benefit was lower in real terms than the equivalent child support—which then consisted of child tax allowances and family allowances—paid when Sir Winston Churchill was Prime Minister in the early 1950s. Neither party can be proud of that fact.

With respect to the hon. Member for Bootle, I believe that in this case blanket benefits are the right way to tackle the problem, and in that I am backed up by many more qualified than I. We still do not have a proper, full tax credit scheme. When we have such a scheme, under which benefits can be more easily and properly directed to those most in need, the concept of blanket benefit fades away.

Finally, let me say that I, too, would have great difficulty in supporting action that did not raise child benefit by at least 50p at the next uprating.

9 pm

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

The debate has ranged widely, as was the intention of our motion. The Secretary of State was here to defend the Government's policies. He is the first Secretary of State for Social Services who I have heard talk about going into purdah before the Budget. His speech could be taken as an application to be the next Chancellor. It is frightening that he may succeed. He has been tipped from the Opposition Benches for that position. I do not know why, several weeks before the Budget, he will not tell us his Department's thinking on the future of social security benefits but hides behind the fact that the Chancellor of the Exchequer will not talk about tax allowances and rates at this time.

Until the hon. Member for Portsmouth, North (Mr. Griffiths) spoke, the Secretary of State was the only speaker to defend the Government. I have not been present for every speech, but I understand that every Conservative Member attacked the Government for failing in some of their election promises and for misleading voters, and pleaded with them to keep the promises that they made when in Opposition about child benefit, the disabled, tax thresholds, and so on. There has been a fair degree of unison in opposing the Government.

I welcome to the debate the Minister for Social Security. Anyone who has served in the Northern Ireland Office deserves our respect. However, the hon. Gentleman will find that he has come to no sinecure in the DHSS.

We have been criticised for saying that everything started to get worse in May 1979. That is the point of our motion. Poverty has increased since May 1979 as a result of the Government's policies. Last week, from the press and television, we learnt of the Salvation Army setting up a soup kitchen in Crowland, in Lincolnshire, in the constituency of the hon. Member for Holland with Boston (Mr. Body). The local authority has abolished school meals at the secondary school, and on Monday the local fish and chip shop is closed. The Salvation Army citadel is about 100 yards away and it set up a soup kitchen for the children. There can be no better one-off example than that to show how things have increasingly gone from bad to worse under this Government.

Many hon. Members have mentioned the Government's policy of trying to frighten people into not claiming benefits. Reference has been made to the right hon. Member for Daventry (Mr. Prentice), the former Minister for Social Security, the shock troopers who he set up to frighten people off and the DHSS internal memoranda about organising the campaign.

On more than one occasion, when seeking to defend his role, the Secretary of State said that he never fed the argument about the so-called scroungers. Of course, that was carefully left to the Back Benchers of the Conservative Party. On at least two occasions, when speaking from the Dispatch Box he denied that he played any role in the argument.

When searching through my files recently I came across a few pieces of paper which, in 1978,I had labelled as the Jenkin scrounger-abuse speech. I want to remind the Secretary of State of the part that he played in fermenting fear in many millions of our citizens who are afraid to claim their benefits. In four columns in Hansard, he made three references to the matter. He said However, we all know that many of the people are not reached. We all know that there is a great deal of abuse. By its very nature no figure can be put against that abuse. There has been another turn around since the election. The Government are now claiming all sorts of figures relating to the amount of abuse. Two columns later, the Secretary of State said We must strengthen the investigatory machinery and curb abuse of the system. He stated in the next column Because it is known that abuse is widespread, people are reluctant to find themselves labelled as scroungers."—[Official Report, 21 November 1978; Vol. 958, cc. 1137–40.] That very thing is happening today. People are afraid to claim benefits. During that speech the right hon. Gentleman was pulled up by one of my hon. Friends for distorting the position while speaking from the Opposition Front Bench. He has played his role in fermenting the campaign that was mounted by the Government during and since the last general election.

Many hon. Members have quoted examples from the Government's new instructions. I want to quote one that has not been touched on in the debate. New Sociefystates that one of the areas of suspicion where a fraud may arise is for instance, where a claimant has been on benfit for over a year without applying for a lump sum grant. If a claimant receives benefit for a year and applies for a lump sum grant he will find that the rules have been changed. He will not receive the grant, because the Government say that the weekly benefit should meet all his needs. Yet if he does not apply for a grant, that is marked against him because the Government think that he has more income than he needs to survive. That is a Catch 22 position. The Government cannot deny that they have put people in that fearful position.

The additional staff that have been employed as social security fraud investigators should be employed by the Inland Revenue. The Inland Revenue's staff has been cut since the Government came into power. I want to quote one figure about the rip-off of the tax system, which receives a great deal of support from the Government. The annual report of the Board of Inland Revenue showed that £61 million was written off as irrecoverable—£23 million of which was because it lost the taxpayer. The Inland Revenue actually could not trace the taxpayer. Another £7 million or £8 million was written off because the amount recovered would be insufficient to justify the costs of proceedings. We could make the same case about some of the small amounts of social security fraud—although, of course, we do not condone them. The Government have found a way around that. The social security offices so frighten claimants at the interview that there will be no need to mount a prosecution. The claimants cannot be defined in the same way as the Inland Revenue tax evaders. The Government cannot put a figure on it.

Photo of Mr Arthur Lewis Mr Arthur Lewis , Newham North West

Do the figures include the legal dodging of the Vestey group? Lord Thorneycroft, a great Tory, supported that legal dodge.

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

No, and the figures also did not include the legal dodging of the Rossminster group. The figures that I quoted are official Inland Revenue figures for the amount that it has written off.

Photo of Mr Tristan Garel-Jones Mr Tristan Garel-Jones , Watford

What about Lord Brayley?

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

The difference between the hon. Gentleman and Labour Members is that we make the same speeches whichever side of the House we are on. That is not the case with Conservative Members. The figures are infinitesimal compared with the tax abuse. But they are known figures by the Inland Revenue. They are higher than the amount of social security fraud that the Government claim they will stop.

Photo of Sir Frederick Burden Sir Frederick Burden , Gillingham

For which year were those figures?

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

The hon. Gentleman was in the Chamber when I said that I was quoting from the latest report of the Board of Inland Revenue.

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

The latest report, the 122nd report.

Photo of Sir Frederick Burden Sir Frederick Burden , Gillingham

To which year do the figures relate?

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

It is the latest report of the Board of Inland Revenue, published in February last year.

Photo of Sir Frederick Burden Sir Frederick Burden , Gillingham

Relating to the Labour Government's period in office.

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

They are the figures for 1978. I do not deny that. I am not condoning what is there reported. The truth is that the figures have got worse under this Government. I do not draw any distinction between tax abuse under a Labour Government and tax abuse under a Tory Government. Neither do we condone social security abuse under either Government. We make the same point, that the amounts of known social security abuse, worth about 2p in every £5,000 paid out in benefit, are infinitesimal compared with the amount of tax avoidance and abuse. All we ask is that the Government put the same proportionate effort into seeking out tax abuse as they have done for social security abuse. But we know that they will not do that.

I turn now to what was said by certain hon. Members on the Government Benches. I refer, in particular, to the hon. Member for Watford (Mr. Garel-Jones), who spoke while I was out of the Chamber but who, I understand, made a passionate plea that the Government should not renege on child benefit. I understand also that he made some remarks regarding what he hoped the Chancellor would not do about the tax thresholds. I gather that he said that the Chancellor should not this year index-link the wealthy.

I hope that most hon. Members appreciate that last year the Government actually altered the indexation provisions of the Finance Act 1977 so that they automatically indexed the wealthy each year, which was not done by the provision introduced by one of my former hon. Friends and myself in 1977. Incidentally, the hon. Member for Watford voted for that change last year.

The issue of the tax thresholds is of great significance, as even the Secretary of State believes. Perhaps, to be more correct, I should say as he "believed", in the light of what he said in a debate on the poverty trap in 1977. He will recall that debate on a Friday morning, initiated by his hon. Friend the Member for Norfolk, North (Mr. Howell). I note in passing that that hon. Member has been conspicuous by his absence today, but I shall refer to him later, though not in derogatory terms.

The Secretary of State then said: The tax threshold is now so low that even those on means-tested benefits are paying tax—for instance, those on family income supplement. That is still the position today. The right hon. Gentleman said that the reason—that is, for the poverty trap— is mainly, though not solely, the high initial tax rates and the absurdly low tax thresholds. Between 1977 and today the Labour Government introduced a lower tax rate band so that those just above the poverty trap went in at only 25p in the pound. Since then, of course, this Government have raised the high marginal rate for those just coming out of the poverty trap.

The right hon. Gentleman will remember also saying: The first and most important thing is that tax thresholds must be raised. All this was in connection with overcoming the problems of the poverty trap He went on to use a telling phrase in respect of child benefit which is worth putting on record now in view of the importance which several hon. Members on both sides have attached to it in the present debate. I add this especially in view of the speech by the hon. Member for Hornchurch (Mr. Squire). This is what the right hon. Gentleman said that morning, referring to what he had said earlier in the year: I repeat the pledge which I gave on that occasion"— that was in May 1977, and he quoted his own words— I must state clearly, without any 'ifs' and 'buts', that it will be our intention when we win the next general election to introduce a full child benefit as soon as it is practicable as the first stage of phasing in a tax credit scheme.If I am asked why we give that pledge, it is, first, because that is the way to restore the position of the families."—[Official Report, 17 June 1977; Vol. 933, c. 786–94.] Of course, the Tories were holding themselves out as the party of the family at that time, although everyone who looks at the figures, whether nationally or in his own constituency, knows that the position of families has vastly deteriorated under this Tory Government.

The Chancellor of the Exchequer also knows only too well the powerful reasons why he must raise the tax threshold at least in line with the cost of living. He gave four categorical reasons, which are listed under early-day motion 118. To do anything less will plunge families into a position worse than they are now, and worse than they were under the Labour Government.

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

Will my hon. Friend care to reflect that the Government have allowed the disaggregation of income for tax purposes for families on high incomes where there are a number of children in the family? For example, it is possible for an individual on a high income to covenant part of his income to his children, thereby gaining an additional personal tax allowance for each child. Therefore, is not the bleating by the Government about child benefit totally out of line?

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

I believe that at Question Time last Thursday the Chancellor said what a good thing he had done for charities in the last Budget. He sought to give the impression that he had made a change in the last Finance Act that benefited charities in general. But it was a change that benefited the well-off, who are able to use covenants to increase their net income.

The figures that the Opposition use are mainly figures supplied by the Government. One can find plenty of other figures to show the position of families. Nearly all groups in society, not just families, are worse off than they were a year ago. In pre-Murdoch days—on 4 January this year—The Sunday Times looked at 11 groups in society. It would be interesting to see whether things go according to plan and whether this exercise is repeated next January. It did not give average figures, because they can conceal as much as they reveal. The survey used figures based on the Government's family expenditure survey of 7,000 households. The figures were put through a computer, taking into account the spending patterns, and produced comparative figures. Of the 11 groups, five were worse off and six were better off. The five worse off were the pensioner couple, the low-paid manual worker's family, the semi-skilled worker's family, the skilled worker's family and the young white-collar worker's family.

Those are figures from a Government that bleated a great deal about improving incentives for the skilled. I cannot go into details of particular examples about the income of the wife or the children, whether there was investment, or what amount was spent on various items. The single female pensioner was better off, but because averages were not used this example shows what can go wrong if one is not very careful.

The single female pensioner quoted, who was better off by 12p a week, was in receipt of old-age pension of £27·15 a week, £7·75 a week in building society interest and £6 a week other investment income. She was not a typical single pensioner, but she was only 12p a week better off in 1981 than she was in 1980 because of the changes made by the Government. Also better off was the young single civil servant, the middle-class couple working in London, the middle manager's family, the senior manager and the company director. They were better off in the period January 1980-January 1981.

Those figures were not dreamed up by the Opposition but were supplied by the Government, following the Government's detailed surveys of what the population spends.

Many hon. Members have referred to the effect on the disabled of the Government's changes since they came to power. It is incredible that at last the BBC has woken up to the fact that the Social Security (No. 2) Act was not just about strikers' families. It has taken the corporation a long time to wake up to the fact that the people suffering mostly under that Act, as we said at the time, are the elderly, the disabled and the working poor.

I have read several interviews with representatives of disabled persons groups who complain about what the Government have done. I mentioned the Solihull district council in an intervention earlier. It has always been Tory-controlled and I fear that it always will be. However, its majority will be reduced in the near future. There are no Tory wets in that part of the world, and today the council has been making certain decisions. I do not have the results, but I have no doubt about them. It will cut the home help service by 24 per cent. That is in direct contradiction to what the Government say to local authorities. They say "Do not affect the people in need by your cuts. We want savage cuts, but please do not affect them because we receive complaints and cannot defend such action."

The Solihull council is to reduce its social work staff by 62 per cent. I understand that for all practical purposes the social work department will cease to exist before long. Such cuts are indefensible.

Photo of Mr George Park Mr George Park , Coventry North East

Is my hon. Friend aware that out of 66 professional social workers the Solihull council intends to dismiss 35?

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

That reflects the percentage that I used.

I should like the Minister of State to answer several specific questions. The Government should make a statement about their intentions on child benefit. The House deserves nothing less. I hope that I shall receive confirmation of a written answer to the hon. Member for Hornchurch. He asked about the 5 per cent, abatement that the Government can still make to this November's uprating. The former Minister of State said: These benefits will be increased … It is not proposed to make use of the power … to abate … by up to 5 per cent."—[Official Report, 19 December 1980; Vol. 996, c. 532.] Will 1 per cent., 2 per cent., 3 per cent., or 4 per cent, be involved? Alternatively, do the Government not intend to use the power?

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

The Chancellor of the Exchequer made the position clear in his statement last November. He said that the 1 per cent, over-payment this year on prices would be compensated by a 1 per cent, reduction next November. That is the only proposal that we have in mind. The provision for that in terms of the long-term benefit will be in the Social Security Bill that we hope to introduce later this month.

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

That means that the Government do not propose to use the power in the Social Security (No. 2) Act but that they will abate the benefit under another piece of legislation. Benefits will not go up as they should. That cannot be denied.

Two Conservative Members have been conspicuous by their absence today. I refer to the hon. Members for Norfolk, North and for Kensington (Sir B. Rhys Williams). One hon. Member was in for part of the debate but did not appear to seek to take part in the debate. Jointly they employ a research assistant by the name of Hermione Parker, who produced a report. However, the hon. Members could not find time to use the evidence in that report to defend the Government.

The report states, and substantiates with Government figures, that so far under this Government there have been no real cuts in direct taxation except for the tiny minority of people with an income of more than £500 a week. There were no real direct cuts if one takes into account tax cuts, the increase in inflation and other changes made by the Government. The report was published by the Outer Circle Policy Unit, which sent me a copy.

Photo of Mr Tristan Garel-Jones Mr Tristan Garel-Jones , Watford

The hon. Gentleman seemed to be implying that my hon. Friends had in some way attempted to cover up the work that was carried out by their research assistant. Perhaps he did not intend to imply that. As far as I am aware, my hon. Friends made that work available not only to colleagues but to the Child Poverty Action Group.

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

No, I did not intend to imply that; far from it. But I should have thought that hon. Members could have attended the debate today because they could then have added weight to their document, which was sponsored under the parliamentary research system. My hon. Friend the Member for Wood Green (Mr. Race) and I have carried out a similar exercise with the Low Pay Unit, and we have not hesitated to use the material.

Hermione Parker makes a telling assessment that the Government are bringing about a revolution in social policy that is not desirable, without Parliament or Ministers realising what is happening. I assume that Ministers do not realise what is happening. There was a reference to Tory social policy today, and I was reminded of a remark by my right hon. Friend the Leader of the Opposition, in a previous debate, that Tory social policy seemed a contradiction in terms, given the record of this Government since 1979.

So far, the pensioners have been hit hardest. Whatever the Secretary of State may say, however hard he may try to wriggle out of it, and however strongly the Tories may claim that the Prime Minister promised that pensions would keep up with the cost of living—the pensioners will have to pay for that promise this year in order to keep the Prime Minister to her promise—they cannot wriggle out of the fact that if they had not changed the law and the system by which the pension is operated, instead of the present pension for a married couple being £43·45 it would be £44·90, If the law had not been changed by this Conservative Government the pension today, of £27·15 for a single person, would be £28·10 under the old Labour-introduced law. That cannot be denied.

There is an all-party sponsored early-day motion on the Order Paper. The hon. Member for Brighton, Kemptown (Mr. Bowden) and my hon. Friend the Member for Holborn and St. Pancras, South (Mr. Dobson), the joint chairmen of the all-party group on pensioners, have their names at that top of the motion. The name of the hon. Member for Kemptown appears first. At present this is the only motion on the Order Paper that has a Conservative Member's name at the top and a majority of the Members signing it from the Labour Party. The motion asks the Government to protect the pension. About four or five, or possibly six Conservative Members have signed it. They ask their Government to reconsider their intention to introduce the legislation that the Secretary of State has promised. That legislation would, in effect, cut the pension.

I wish to make two brief references to the unemployed and to child benefit. Many hon. Members referred to the unemployed, and I have no doubt that we shall hear more on Thursday. It cannot be denied that the unemployed have suffered most under this Government. Only today, in a written answer to my hon. Friend the Member for Stockport, North (Mr. Bennett), the Prime Minister refused to consider putting the unemployed on to the long-term rate of supplementary benefit, even though she said that the Government were aware of the case for this change.

Many organisations have warned the Government about the social consequences of the rising rate of unemployment. I should like to quote part of a letter that I received from one of my constituents a few weeks ago, which states: I tell you … when I'm made redundant in the summer and there comes a time when my missus and laddie face real want then the rule of law is going out of the window. My constituent goes on to write about tax abuse and the way in which the wealthy have gained under this Government and are continuing to gain. He is only one of millions who are suffering and who will not accept the Government's policies.

We will not condone the breaking of the law, but we must heed the warnings that are coming to our notice. The Government are aware of what was said in the Welsh Select Committee and they know what members of the TUC have said, but the message is coming unsolicited from the ordinary people of Britain who are not yet unemployed but who can see a stark future. They will not take it lying down.

My next question to the Minister concerns child benefit and the change to a four-weekly system. I asked the Secretary of State yesterday whether the benefit order books had yet been printed for a four-weekly cycle. I had information to the effect that they had been. I asked the right hon. Gentleman whether they had been ordered and printed. He told me that no books had yet been printed, and I now repeat the other part of the question, namely, whether the books have yet been ordered. The Minister will not need me to remind him that the Government's consultation remains open until the end of February. It is rumoured—the information came to me via a sub-postmaster—that the books have already been obtained or ordered.

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

He obtained the information from Washington, from the child benefit centre. Have the books been ordered? I am told that they have not yet been printed.

The former Leader of the House, the right hon. Member for Chelmsford (Mr. St. John-Stevas), who is obviously resting and recuperating at present, referred in his letter of resignation—if one can call it that—to his belief in one nation and his fight for that in the Cabinet, with the clear implication that the Cabinet did not believe in one nation.

I shall quote a paragraph from the last report of the Supplementary Benefits Commission, which was published in the autumn of 1980, when the commission was bemoaning cuts in the Welfare State provision. It claimed: the creation of family allowances, the National Health Service, the major social insurance schemes … were not merely administrative inventions, they were deliberate attempts to rally … what might easily have become a divided and demoralised nation. It referred to the role played in the past by the SBC and the SSAC and added: A free State will not survive unless its people feel loyalty to it. If the State is not interested in them, why should they be interested in the State? It was quoting the present Lord Privy Seal in February 1980. Those words ought to be taken on board by the Government, by the Minister of State, and certainly by the Prime Minister. The groups that are referred to in the Opposition's motion consider that the State, run by this disgusting Tory Government, is no longer interested in them.

Photo of Mr Hugh Rossi Mr Hugh Rossi , Haringey Hornsey 9:33 pm, 3rd February 1981

First, I thank the hon. Member for Renfrewshire, West (Mr. Buchan) for his kind words of welcome and good wishes to me. Like the hon. Gentleman, I come to a complex and difficult subject with a fresh mind. I hope that in consequence the House will forgive me if I do not go into matters of great detail this evening. I shall try to answer broad-brush questions on various Government policies.

The debate is concerned principally with poverty—an issue that must be of great concern to us all as individuals who are fortunate enough not to be subject to it, and above all of concern to the Government. It is a highly charged and emotive subject, and it is very difficult to have a discussion that is not free from exaggeration, hyperbole and even distortion and misrepresentation. The debate has not been free from those elements.

Even the right hon. Member for Stoke-on-Trent, South (Mr. Ashley), to whom we all listen with the greatest respect in debates of this kind, could not resist the temptation to be a little less than fair. He claimed that it was the philosophy of the Conservative Party to raise the living standards of the rich and to lower those of the poor in order to give the poor greater incentive to become rich. [HON. MEMBERS: "Oh!"] That catcall from the Opposition Benches indicates how reason and fairness are put to one side when we are discussing matters of this kind.

What has been said by the Opposition is, of course, a cynical gloss and misrepresentation of our views. We have repeatedly made it clear that our care and concern is to look after and protect the most vulnerable in our society, and I shall deny anyone who says to the contrary. What we have said—and this is no more than plain common sense—is that we cannot do all that we want to do until the country has earned the money to do it. Therefore, the priority must be to reduce inflation and return to a sound economy. Once we have done that we can do all the things that are being urged upon us from both sides of the House to help the less well off in our society, to bring in a comprehensive system to help the disabled, to end the hotch-potch of benefits that we have and to increase child benefit.

Those are all laudable objectives, but, as a responsible Government, we must strike a balance between longer-term policy objectives and shorter-term economic priorities. The overriding need must be to reduce inflation, and the poor stand to gain the most from that. Indeed, our policy is succeeding. Since inflation reached a peak of 21.9 per cent, it has fallen every month. It is now 15.1 per cent., measured over a 12-month period. The underlying trend is even better, because taken over the past six months the rate of inflation is below 10 per cent, and still falling. Moreover, as my right hon. Friend mentioned, over the past year the standard of living in this country as a whole has risen by an average of 2 per cent.

The Opposition say that the Government's record does not show care and concern for the poor, and the motion refers to the dismantling of the Welfare State. But what are the figures? As my right hon. Friend pointed out—and I repeat this because it is clear that the Opposition did not hear it—we are spending £20,000 million a year on social security, which is a quarter of all public expenditure. Is that dismantling the Welfare State?

Photo of Mr Hugh Rossi Mr Hugh Rossi , Haringey Hornsey

No, I cannot give way, as the hon. Member for Birmingham, Perry Barr (Mr. Rooker) has left me too little time. The right hon. Gentleman must forgive me if I do not give way.

Moreover, the upgrading this year will add a further £3,000 million in a full year. It is rubbish to say that these measures are undermining the Welfare State.

Let us consider the details of what we have sought to do. One-parent families have benefited considerably from the measures taken by the Government. I noted that references to family income supplement were much absent from the speeches of Opposition Members when they were talking about poorer working families. After all, it was a wicked Tory measure to produce a family income supplement to raise the level of income of the poorer working families. Yet we have maintained and upgraded it. The average FIS payment is now £10, and the majority goes to one-parent families.

In pursuing his theme of hostility to the poorer people the right hon. Member for Stoke-on-Trent, South referred to the efforts that are being made by the Department to prevent fraud and abuse of the system. That criticism was re-echoed by many Labour Members. I say categorically that there has been no departure from the standards of fraud investigation developed during the previous Administration. [HON. MEMBERS: "Rubbish".] The standards are the same.

As reference has been made to it, I shall quote from the guide that has been issued to the officers concerned. I shall quote paragraphs 9 and 10, and when I have finished hon. Members can judge for themselves whether this problem is being dealt with in as sympathetic and humane way as possible, given the circumstances that always arise when fraud is being committed. It states: We want you to be effective and get results. But those results must be achieved in ways which are consistent with the administration of a major social service. Investigation must invariably be fair and unbiased and have regard to the legal constraints set out in this Guide…firm measures against fraud must not result in the unacceptable treatment of perfectly honest people … This combination of effective investigation and scrupulously fair methods calls for a continuous sense of balance in the sensitive area of work". That is the instruction given to all the officers concerned in this work, and it is a standard that has always been maintained by the Department of Health and Social Security.

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

I am grateful to the Minister for giving way, especially as time is short. The objection that I raised was that the Government were failing to deal with an even greater fraud, that of tax evasion, and refusing to deal with something that is far bigger and greater than a little bit of scrounging. We are all against scrounging.

Photo of Mr Hugh Rossi Mr Hugh Rossi , Haringey Hornsey

I have no sympathy at all for the tax evaders either, because every pound that is fiddled by people getting social security benefits to which they are not entitled, or every pound that people do not pay in tax which they are legally obliged to pay, is a denial of money for those in our society whom we wish to help. It is a pound less for the blind and the disabled. I have no sympathy at all with that.

The question of prosecution has been mentioned. A change in policy has taken place. We do not prosecute as rigorously and vigorously as did the previous Administration, because we find that it is far easier and cheaper to make sure that these abuses are stopped without dragging people before the courts. Labour Members talk about humanity. When I practised as a lawyer and defended people who had been accused of fraud, I know that they would have given anything to be able to settle the matter before appearing before a judge, by paying the money which they had defrauded or stolen.

Photo of Mr Hugh Rossi Mr Hugh Rossi , Haringey Hornsey

If we could get the money back in that way, would it not be better for the public purse? Would it not be better for all those concerned if this draconian measure of prosecution—with all the panoply of the law that it involves—were used only in serious cases? The Government have adopted that attitude.

Photo of Mr Norman Buchan Mr Norman Buchan , Renfrewshire West

The hon. Gentleman has misunderstood the gravamen and gravity of the charge. Removal from prosecution was not done for humane reasons. The Government have sharpened the pressure on those officers who carry out interviews. As I said earlier, the Government have not made the policy more humane by avoiding bringing prosecutions. For example, a person of low mentality would not be prosecuted. However, that failure to prosecute would arise not from humane motives, but from the fear that the court might take a more humane view of the matter than would the Department.

Photo of Mr Hugh Rossi Mr Hugh Rossi , Haringey Hornsey

I do not accept that statement for one moment. That is not the case.

I turn to one other matter that was specifically raised and for which I have responsibility, namely, the Government's position on the International Year of Disabled People. I have been asked what steps the Government are taking. For the Year, the DHSS has allocated £103,000 to the secretariat of the Voluntary Organisations Committee. Discussions are taking place about a larger amount that could be allocated to cover the whole of 1981. This year, the main thrust must be borne by the voluntary organisations. The community as a whole should be involved in the International Year. We must try to create a greater realisation of the problems of the disabled among the general public and to change their attitudes towards the disabled. That can be done to better effect through the great wealth of voluntary organisations than through circulars and leaflets from a Department.

For example, the Department of the Environment has given a grant towards the setting up of a competition amongst architects. They have been challenged to produce a design suited to the needs of the disabled. Anyone who goes into a public building such as a cinema or theatre knows how far this subject has been from the minds of architects.

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

Mr. Carter-Jones rose

Photo of Mr Hugh Rossi Mr Hugh Rossi , Haringey Hornsey

I shall not give way. [Interruption.] I do not know how many speeches we are listening to, Mr. Speaker, but I should like to make my own.

Photo of Mr Hugh Rossi Mr Hugh Rossi , Haringey Hornsey

I turn to some of the contributions made by my right hon. and hon. Friends. My hon. Friend the Member for Somerset, North (Mr. Dean) referred to the personal social services. He expressed satisfaction that the Government were asking local authorities not to allow their economies to affect the services that they provide for the less able members of our society. My right hon. Friend the Secretary of State has made that perfectly clear.

Certain figures have been quoted. Cuts in budgets have been mentioned. Overall, the cuts that have been made have occurred, not in actual expenditure but in programmed expenditure. The latest returns from local authorities indicate that the overall expenditure on personal social sevices is being maintaind at a level 4 per cent, higher than in 1978–79. This does not mean that some authorities are not cutting some expenditure. We regret it where that happens. Given that there is a real increase in expenditure, this shows that local authorities, as a whole, have heeded the words, the request and the plea of my right hon. Friend.

My hon. Friend the Member for Somerset, North and others of my hon. Friends raised the question of a Green Paper to deal with disablement benefit. It is the Government's long-term objective to introduce a comprehensive, rational benefit scheme for all disabled persons. This can be done only through increased public expenditure. At a time when it is still impossible to forecast what additional financial resources will be available for these purposes, it would raise expectations unnecessarily if we went as far as to publish a Green Paper even on the basis of a long-term consultation.

It is not necessary for us to publish a Green Paper for the purposes of long-term consultation. Consultation with the interested bodies is a continuing process. It takes place all the time. We heed the representations made to us from all sources about the manner in which the benefits can be restructured and retailored. One hopes that when the day comes that we have additional resources, this will be the time for us to come forward with firm proposals, but not now.

My hon. Friends the Members for Watford (Mr. Garel-Jones), for Abingdon (Mr. Benyon), for Homchurch (Mr. Squire) and for Bristol, West (Mr. Waldegrave) have urged that the Government increase child benefit. I listened with care to the cogent arguments that were advanced. I shall ensure that my right hon. and learned Friend the Chancellor of the Exchequer is made aware of the depth of feeling that exists on this matter. I must add a word of caution. Child benefit now costs £3,300 million. Each family receives £4.75 per child per week tax free, irrespective of other personal income. Most families today are still better off under child benefit than if the old system of family allowance plus child tax allowance had been retained and revalued in line with prices.

The benefit, as now cast, is extremely expensive. Every 10p of benefit costs £56 million net of adjustments to other benefits. Although the Chancellor will pay heed to what has been said, I trust that my hon. Friends will understand the size of the commitment that they seek to urge upon him. I remind my hon. Friends that we are committed to the child benefit system. It is our intention, subject to economic and other circumstances, to uprate child benefit each year to maintain its value.

Photo of Mr Hugh Rossi Mr Hugh Rossi , Haringey Hornsey

I cannot give way. I have only a few minutes left to speak.

The hon. Member for Antrim, North (Rev. Ian Paisley) referred to my translation from Northern Ireland and stated that I was aware of the problems there. I regard it as a privilege that I had the opportunity of serving in Northern Ireland. I regret now not seeing the many friends that I made in the few months I was there—charming, delightful, but impossible people they may be. Nevertheless, one cannot but have a great affection for them.

The hon. Gentleman said that there were special problems in Northern Ireland, as indeed there are, and of course in other parts of the United Kingdom. Northern Ireland has particular problems as regards unemployment and fuel costs. They are the most glaring, apart from the troubles themselves.

But earnings in the Province are coming up to approximately the level of earnings in the rest of the United Kingdom, although there remains a gap. Nevertheless,' Ministers are conscious of the problem and the hon. Gentleman well knows, because we have had this discussion on other occasions, that the total public expenditure of the United Kingdom in Northern Ireland for the year 1980–81 will be of the order of £2,400 million for a population of about 1½ million. That is a recognition of the special problems in Northern Ireland, because the per capita expenditure in Northern Ireland is far higher than it is in any other part of the United Kingdom.

In regard to energy costs, the hon. Gentleman will recall that last summer the Secretary of State for Northern Ireland reappropriated funds and also secured £48 million from the contingency reserve fund, of which £30 million was used for this precise purpose of cushioning the effects of high energy costs for the people of Northern Ireland. Of course, they currently benefit from the very special package of fuel benefits that have been introduced by my right hon. Friend the Secretary of State at the Department in which I now serve.

The help to poor consumers has risen to over £200 million a year in Great Britain. This help is most concentrated on the poorest—those receiving supplementary benefit and family income supplement; their heating addition has been boosted by more than the rise in fuel prices during the period November 1979 to November 1980.

I reject the accusation of the Opposition that this Government do not have concern for the poor or for the people of Northern Ireland. I must tell the hon. Gentleman that the newly formed Social Security Advisory Committee held its second meeting, under the chairmanship of Sir Arthur Armitage, in Northern Ireland only a week or so ago. That indicates the concern that there is for the problem of poverty in Northern Ireland.

I have sought in the time allotted to me to answer some of the charges made by the Opposition against the policy of this Government. I reject them totally and utterly, but before I resume my seat I must say to the hon. Member for Perry Barr, in answer to the specific question he asked me concerning the four-week books, that they have not been printed nor have they been ordered, and no decision will be taken until the consultation period has been ended. So, as with most of the information he has given the House today apparently from some anonymous sub-postmaster, he is entirely inaccurate in the allegations that he has made, as have been totally inaccurate the allegations made by other right hon. and hon. Gentlemen opposite.

I conclude with the theme that I began on. In dealing with poverty we are dealing with an emotive subject that concerns us all. But it is of no help at all to those who suffer poverty to have their suffering treated as a political football in a game of confrontation between the political parties. We should have greater concern for all that they suffer.

Question put, That the original words stand part of the Question:—

The House divided: Ayes 258, Noes 304.

Division No. 60][10 pm
Abse, LeoDuffy, A. E. P.
Adams,AllenDunn, James A.
Archer, Rt Hon PeterEdwards, R. (W'hampt'n S E)
Armstrong,RtHon ErnestEllis, R. (NED'bysh're)
Ashley, Rt Hon JackEnglish,Michael
Ashton,JoeEnnals, RtHonDavid
Atkinson,N.(H'gey,)Evans, Ioan (Aberdare)
Bagier,Gordon AT.Evans,John(Newton)
Barnett, RtHonJoel (H'wd)Faulds,Andrew
Beith,A. J.Field,Frank
Benn, Rt Hon A. WedgwoodFlannery,Martin
Booth, RtHon AlbertFoot, Rt Hon Michael
Boothroyd,MissBettyFord, Ben
Bradley,TomFoster, Derek
Bray, DrJeremyFoulkes,George
Brown, Hugh D. (Provan)Fraser, J. (Lamb'th,N'w'd)
Brown, R. C. (N'castle W)Freeson, RtHon Reginald
Brown, Ronald W. (H'ckn'yS)Garrett,John (NorwichS)
Buchan,NormanGarrett, W. E. (Wallsend)
Campbell,IanGilbert, RtHonDrJohn
Cant, R. B.Gourlay.Harry
Carmichael,NeilGraham, Ted
Carter-Jones, LewisGrant,George(Morpeth)
Cocks, Rt Hon M. (B'StolS)Grimond, Rt Hon J.
Conlan,BernardHardy, Peter
Cowans, HarryHarrison, RtHon Walter
Cox,T.(W'dsw'th,Toot'g)Hart, RtHon Dame Judith
Craigen, J. M.Hattersley, Rt Hon Roy
Cryer,BobHeffer, EricS.
Cunliffe,LawrenceHogg, N.(EDunb't'nshire)
Cunningham, DrJ.(W'h'n)HomeRobertson,John
Davies, Rt Hon Denzil (L'lli)Howell, Rt Hon D.
Davies, Ifor(Gower)Howells,Geraint
Davis,Clinton (HackneyC)Huckfield,Les
Davis,T.(B'ham, Stechf'd)Hudson Davies, Gwilym E.
Dean, Joseph (Leeds West)Hughes, Robert(Aberdeen N)
Dobson,FrankJay, Rt Hon Douglas
Douglas,DickJohnson,James(Hull West)
Dubs,AlfredJones, Rt Hon Alec (Rh'dda)
Jones, Barry(East Flint)Roberts,Albert(Normanton)
Jones, Dan (Burnley)Roberts,Allan(Bootle)
Kaufman, RtHonGeraldRoberts, Ernest(HackneyN)
Ken, RussellRoberts,Gwilym(Cannock)
Kilroy-Silk,RobertRobinson, G. (CoventryNW)
Kinnock,NeilRodgers, RtHonWilliam
Lambie,DavidRooker, J. W.
Lestor, MissJoanSever,John
Lewis,Ron(Carlisle)Sheldon, RtHonR.
Litherland,RobertShore, Rt Hon Peter
Lofthouse,GeoffreyShort, Mrs Renée
Lyon,Alexander(York)Silkin, RtHon J.(Deptford)
Lyons, Edward (Bradf'd W)Silkin, Rt Hon S. C. (Dulwich)
McGuire,Michael(Ince)Smith, Rt Hon J. (N Lanark)
MacKenzie, RtHonGregorSpriggs,Leslie
Maclennan,RobertStallard, A. W.
McMahon,AndrewSteel, Rt Hon David
McNally,ThomasStewart, Rt Hon D. (WIsles)
Marshall,DrEdmund(Goole)Taylor, MrsAnn(BoltonW)
Marshall, Jim (LeicesterS)Thomas,Datydd(Merioneth)
Martin M(G'gowS'burn)Thomas,Jeffrey(Abertillery)
Mason, Rt Hon RoyThomas, Mike (NewcastleE)
Maxton,JohnThomas, DrR.(Carmarthen)
Maynard, MissJoanThorne,Stan(PrestonSouth)
Mellish,RtHon RobertTinn,James
Millan, RtHonBruceUrwin, RtHon Tom
Miller, Dr M. S. (EKilbride)Varley, Rt Hon Eric G.
Mitchell,R.C. (Sotonltchen)Wainwright,E.(DearneV)
Morris, Rt Hon A. (W'shawe)Wainwright,R.(ColneV)
Morris, Rt Hon C. (O'shaw)Walker, Rt Hon H.(D'caster)
Morris, RtHon J. (Aberavon)Watkins,David
Morton,GeorgeWeetch, Ken
Moyle, Rt Hon RolandWellbeloved,James
Mulley, RtHon FrederickWelsh,Michael
Newens,StanleyWhite, Frank R.
Oakes, Rt Hon GordonWhite, J. (G'gowPollok)
O'Neill, MartinWigley,Dafydd
Orme, RtHon StanleyWilley,RtHon Frederick
Owen, Rt Hon Dr DavidWilliams, Rt Hon A.(S'sea W)
Paisley, Rev IanWilliams,SirT.(W'ton)
Park,GeorgeWilson, RtHonSirH.(H'ton)
Parker,JohnWilson, William (C'trySE)
Prescott,JohnYoung, David (BoltonE)
Price, C. (Lewisham W)
Race, RegTellers for the Ayes:
Radice,GilesMr. Ron Leighton and
Richardson,JoMr. Austin Mitchell.
Atkins, RtHonH.(S'thorne)Bendall,Vivian
Benyon,W.(Buckingham)Glyn, Dr Alan
Berry, HonAnthonyGoodhart,Philip
Best, KeithGoodlad,Alastair
Bevan, DavidGilroyGorst,John
Biffen, RtHonJohnGow, Ian
Biggs-Davison,JohnGower,Sir Raymond
Body,RichardGray, Hamish
Boscawen,HonRobertGrieve, Percy
Bowden,AndrewGriffiths, E.(B'ySt. Edm'ds)
Braine,SirBernardGrist, Ian
Brittan,LeonHamilton, HonA.
Brooke, Hon PeterHamilton,Michael(Salisbury)
Brotherton,MichaelHampson,Dr Keith
Bryan, Sir PaulHavers, Rt Hon Sir Michael
Butler, HonAdamHenderson,Barry
Carlisle, John(LutonWest)Heseltine, RtHon Michael
Carlisle, RtHonM. (R'c'n)Higgins, RtHon Terence L.
Chalker,Mrs. LyndaHill,James
Channon, Rt. Hon. PaulHogg,HonDouglas(Gr'th'm)
Chapman,SydneyHolland, philip(Carlton)
Clark, Hon A. (Plym'th, S'n)Hordern,Peter
Clarke,Kenneth(Rushcliffe)Howe, Rt Hon SirGeoffrey
Costain, Sir AlbertJenkin, RtHon Patrick
Dean, Paul (North Somerset)Jopling,RtHonMichael
Dorrell,StephenJoseph, Rt Hon Sir Keith
du Cann, Rt Hon EdwardKershaw,Anthony
Durant,TonyKing, RtHon Tom
Dykes, HughKnight,MrsJill
Eden, RtHon Sir JohnKnox,David
Edwards, Rt Hon N. (P'broke)Lamont,Norman
Eggar,TimLang, Ian
Emery, PeterLatham,Michael
Fairbairn,NicholasLawson, RtHon Nigel
Faith, MrsSheilaLennox-Boyd,HonMark
Farr,JohnLester Jim(Beeston)
Fenner, Mrs PeggyLloyd, Ian (Havant & W'loo)
Finsberg,Geoff reyLloyd, Peter(Fareham)
Fisher, Sir NigelLoveridge,John
Fletcher, A.(Ed'nb'ghN)Lyell,Nicholas
Fookes, Miss JanetMacGregor,John
Fowler, RtHon NormanMacmillan, RtHonM.
Fraser, Rt Hon Sir HughMcNair-Wilson, P. (NewF'st)
Fraser, Peter(South Angus)McQuarrie,Albert
Fry, PeterMadel,David
Galbraith, Hon T. G. D.Major,John
Gardner, Edward (SFylde)Marten,Neil(Banbury)
Maude, Rt Hon Sir AngusScott,Nicholas
Mawby, RayShaw, Giles (Pudsey)
Mawhinney,DrBrianShaw, Michael(Scarborough)
Meyer, Sir AnthonyShersby, Michael
Mills, Iain (Meriden)Sims,Roger
Mills, Peter (West Devon)Skeet, T. H. H.
Moate,RogerSpeed, Keith
Montgomery,FergusSpicer,Jim (West Dorset)
Morgan, GeraintSpicer, Michael (SWorcs)
Morris, M.(N'hamptonS)Sproat,Ian
Morrison, HonC.(Devizes)Squire,Robin
Morrison, Hon P.(Chester)Stainton, Keith
Myles, DavidSteen,Anthony
Needham,RichardStewart, Ian (Hitchin)
Nelson, AnthonyStewart, A.(ERenfrewshire)
Normanton,TomTapsell, Peter
Nott, Rt Hon JohnTaylor,Robert(CroydonNW)
Oppenheim, Rt Hon Mrs S. Thatcher, Rt Hon Mrs M.
Osborn,JohnThomas, Rt Hon Peter
Page, John(Harrow, West)Thompson,Donald
Page, Rt Hon Sir G. (Crosby)Thornton,Malcolm
Page, Richard (SWHerts)Townend,John(Bridlington)
Parkinson,CecilTownsend,CyrilD, (B'heath)
Parris, MatthewTrotter,Neville
Patten,Christopher(Bath)van Straubenzee, W. R.
Patten, John (Oxford)Vaughan, DrGerard
Pattie,GeoffreyViggers, Peter
Pawsey, JamesWaddington,David
Peyton, Rt Hon JohnWaldegrave,HonWilliam
Pink,R.BonnerWalker-Smith, RtHonSirD.
Porter,BarryWaller, Gary
Powell, Rt Hon J.E.(S Down)Walters,Dennis
Prentice, Rt Hon RegWard, John
Price, SirDavid (Eastleigh)Warren,Kenneth
Prior, Rt Hon JamesWatson,John
Proctor, K. HarveyWells, John (Maidstone)
Pym, Rt Hon FrancisWells,Bowen
Rathbone,TimWhitelaw, RtHonWilliam
Rees, Peter (Dover and Deal)Whitney,Raymond
Rees-Davies, W. R. Wickenden,Keith
Renton,TimWiggin, Jerry
Rhodes James, RobertWilkinson,John
Rhys Williams, SirBrandonWilliams, D.(Montgomery)
Rifkind, MalcolmYoung, SirGeorge (Acton)
Rippon, RtHonGeoffrey
Roberts, M. (Cardiff NW)Tellers for the Noes:
Roberts, Wyn (Conway)Mr. Spencer Le Marchant and
Rossi,HughMr. Anthony Berry.
Rost, Peter

Question accordingly negatived.

Question, That the proposed words be there added, put forthwith pursuant to Standing Order No. 32 (Questions on amendments):—

The House divided: Ayes 290, Noes 255.

Division No. 61[10.14 pm
Aitken,JonathanAmery, RtHon Julian
Ancram, MichaelFraser, Peter (South Angus)
Arnold,TomFry, Peter
Atkins, Rt Hon H.(S'thorne)Galbraith, HonT. G. D.
Atkins, Robert(Presfon/V)Gardiner,George(Reigate)
Atkinson, David(B'm'th,E)Gardner, Edward (SFylde)
Baker.Kenneth(St. M'bone)Garel-Jones,Tristan
Baker, Nicholas(NDorset)Glyn, DrAlan
Bendall,VivianGow, Ian
Bennett, Sir Frederic(T'bay)Gower, Sir Raymond
Benyon,Thomas(A'don)Grant, Anthony(HarrowC)
Benson,W.(Buckingham)Gray, Hamish
Best, KeithGreenway, Harry
Bevan, David GilroyGrieve, Percy
Biffen, RtHonJohnGriffiths, E.(B'ySt.Edm'ds)
Biggs-Davison,johnGriffiths, Peter Portsm'thN)
Blackburn,JohnGrist, Ian
Boscawen,HonRobertHamilton, Hon A.
Boyson, DrRhodesHamilton, Michael(Salisbury)
Brooke, Hon PeterHastings,Stephen
Brotherton,MichaelHavers, Rt Hon Sir Michael
Brown, M. (BriggandScun)Hawkins, Paul
Browne,John(Wincester)Hawksley, Warren
Bruce-Gardyne,JohnHayhoe, Barney
Bryan, Sir PaulHeddle,John
Burden,SirFrederickHiggins, Rt Hon Terence L.
Butler, Hon AdamHogg,HonDouglas(Gr'th'm)
Carlisle, John(LutonWest)Holland, Philip(Carlton)
Carlisle, Kenneth(Lincoln)Hooson,Tom
Carlisle, Rt Hon M.(R'c'n)Hordern,Peter
Chalker, Mrs. LyndaHowe, Rt Hon Sir Geoffrey
Channon, Rt. Hon. PaulHowell, Ralph(NNorfolk)
Chapman,SydneyHunt, David (Wirral)
Churchill,W.S. Hunt,John(Ravensbourne)
Clarke, Kenneth(Rushcliffe)Hurd,HonDouglas
Clegg, SirWalterIrving, Charles(Cheltenham)
Cockeram,EricJenkin, RtHon Patrick
Cope,JohnJohnsonSmith, Geoffrey
Costain,SirAlbertJoseph, Rt Hon Sir Keith
Cranborne, ViscountKaberry,SirDonald
Dean, Paul (North Somerset)Kershaw,Anthony
Dorrell,StephenKimball, Marcus
Douglas-Hamilton,LordJ. King, RtHon Tom
Dover,DenshoreKnight, MrsJill
du Cann, Rt Hon EdwardKnox, David
Durant,TonyLang, Ian
Dykes, HughLangford-Holt,SirJohn
Eden, Rt Hon Sir JohnLatham,Michael
Edwards, Rt Hon N.(P'broke)Lawrence, Ivan
Eggar,TimLawson, Rt Hon Nigel
Emery, PeterLennox-Boyd,HonMark
Eyre,ReginaldLester Jim (Beeston)
Fairbairn, NicholasLewis, Kenneth(Rutland)
Fairgrieve,RussellLloyd, Peter(Fareham)
Faith, MrsSheilaLoveridge,John
Fisher, SirNigelMacKay,John(Argyll)
Fletcher, A.(Ed'nb'ghN)McNair-Wilson,M.(N'bury)
Fletcher-Cooke,SirCharlesMcNair-Wilson, P.(NewF'st)
Fookes, Miss JanetMcQuarrie, Albert
Forman,NigelMadel, David
Fowler, Rt Hon NormanMajor,John
Maude, Rt Hon Sir AngusShaw, Giles (Pudsey)
Mawby, RayShaw,Michael (Scarborough)
Maxwell-Hyslop,RobinShepherd, Colin(Hereford)
Meyer, SirAnthonySilvester,Fred
Mills,Iain(Meriden)Sims, Roger
Mills, Peter(WestDevon)Skeet, T. H. H.
Miscampbell, NormanSmith,Dudley
Moate,RogerSpeed, Keith
Montgomery,FergusSpicer,Jim (WestDorset)
Morgan,GeraintSpicer, Michael (SWorcs)
Morris, M.(N'hamptonS)Sproat,Ian
Morrison, HonC. (Devizes)Squire,Robin
Morrison, Hon P. (Chester)Stainton,Keith
Myles, DavidSteen,Anthony
Neale,GerrardStevens, Martin
Needham,RichardStewart,Ian (Hitchin)
Newton,TonyTapsell, Peter
Normanton,TomTaylor, Robert (CroydonNW)
Oppenheim, Rt Hon Mrs S.Thatcher, Rt Hon Mrs M.
Osborn,JohnThomas, Rt Hon Peter
Page, John (Harrow, West)Thompson,Donald
Page, Rt Hon Sir G. (Crosby)Thornton,Malcolm
Page, Richard (SWHerts)Townend,John(Bridlington)
Parkinson,CecilTownsend, CyrilD.(B'heath)
Patten,Christopher(Bath)van Straubenzee, W. R.
Patten,John (Oxford)Vaughan,DrGerard
Pawsey, JamesWaddington,David
Peyton, RtHon JohnWaldegrave,HonWilliam
Pink, R. BonnerWalker-Smith, Rt Hon Sir D.
Porter,BarryWaller, Gary
Powell, Rt Hon J.E. (S Down)Walters,Dennis
Prentice, Rt Hon RegWard, John
Prior, RtHonJamesWells,John(Maidstone)
Proctor, K.HarveyWells,Bowen
Raison,TimothyWhitelaw, RtHon William
Rees, Peter(Dover and Deal)Wickenden,Keith
Rees-Davies, W. R.Wiggin,Jerry
RhodesJames, RobertWilliams,D.(Montgomery)
Rippon, RtHonGeoffreyTellers for the Ayes:
Roberts, M. (CardiffNW)Mr. Spencer Le Marchant and
Roberts,Wyn(Conway)Mr. Anthony Berry.
Rossi, Hugh
Abse, LeoBeith, A. J.
Adams,AllenBenn, RtHon A. Wedgwood
Archer,Rt Hon PeterBoothroyd,MissBetty
Armstrong, RtHonErnestBottomley,RtHonA.(M'b'ro)
Ashley, Rt Hon JackBradley,Tom
Atkinson,N.(H'gey,)Brown, Hugh D. (Provan)
Bagier,GordonA.T.Brown, R. C. (N'castle W)
Barnett,Guy(Greenwich)Brown,Ronald W.(H'ckn'yS)
Barnett, RtHonJoel (H'wd)Buchan,Norman
Campbell,IanHowell, RtHon D.
Cant, R. B.Hudson Davies, Gwilym E.
Carter-Jones, LewisHughes,Robert(Aberdeen N)
Cartwright,JohnHughes,Roy (Newport)
Cocks, Rt Hon M. (B'stol S)Janner,HonGreville
Cohen,StanleyJay, Rt Hon Douglas
Cowans, HarryJohnson,James(Hull West)
Craigen, J. M.Jones, RtHonAlec(Rh'dda)
Crowther, J. S.Jones, Barry (East Flint)
Cunliffe,LawrenceKaufman, RtHon Gerald
Cunningham,G.(IslingtonS)Kilfedder,James A.
Cunningham, DrJ.(W'h'n)Kilroy-Silk,Robert
Davis, Clinton (HackneyC)Leadbitter,Ted
Davis, T. (B'ham, Stechf'd)Leighton, Ronald
Dewar,DonaldLewis,Arthur (N'ham NW)
Duffy,A. E. P.McElhone,Frank
Dunn,James A.McGuire,Michael(lnce)
Dunwoody,Hon MrsG.MacKenzie,RtHonGregor
Edwards,R. (W'hampt'nSE)McMahon,Andrew
Ellis, R. (NED'bysh're)McNally,Thomas
Ennals, RtHon DavidMcWilliam,John
Evans, Ioan (Aberdare)Magee, Bryan
Field, FrankMarshall,Jim (LeicesterS)
Fletcher,Raymond(Ilkeston)Mason,Rt Hon Roy
Foot, RtHon MichaelMaynard,MissJoan
Ford, BenMeacher,Michael
Forrester,JohnMellish,RtHon Robert
Foster, DerekMikardo,Ian
Foulkes,GeorgeMillan,RtHon Bruce
Fraser, J. (Lamb'th,N'w'd)Miller, Dr M.S. (EKilbride)
Freeson, RtHon ReginaldMitchell,Austin(Grimsby)
Freud,ClementMitchell,R.C.(Soton Itchen)
Garrett,John(NorwichS)Morris, Rt Hon A. (W'shawe)
Garrett, W. E. (Wallsend)Morris, Rt Hon C. (O'shaw)
George,BruceMorris, RtHonJ.(Aberavon)
Gilbert, Rt Hon Dr JohnMoyle, Rt Hon Roland
Ginsburg,DavidMulley, RtHonFrederick
Gourlay,HarryOakes, Rt Hon Gordon
Grimond,RtHonJ.Orme, RtHon Stanley
Hamilton, W. W.(C'tral Fife)Owen, Rt Hon Dr David
Hardy, PeterPaisley, Rev Ian
Harrison, RtHon WalterPalmer,Arthur
Hart, RtHon Dame JudithPark, George
Holland,S.(L'b'th, Vauxh'll)Powell,Raymond(Ogmore)
Race, RegSpearing,Nigel
Radice, GilesSpriggs,Leslie
Richardson,JoStallard, A.W.
Roberts.Albert(Normanton)Steel, Rt Hon David
Roberts,Allan(Bootle)Stewart, Rt Hon D.(WIsles)
Roberts, Ernest (HackneyN)Stoddart,David
Robinson, G. (Coventry NW)Straw,Jack
Rooker, J.W.Taylor,MrsAnn(BoltonW)
Ryman,JohnThomas, Mike (Newcastle E)
Sheldon, Rt HonR.Tilley,John
Shore, Rt Hon PeterTinn,James
Short, MrsRenéeTorney,Tom
Silkin,RtHonJ.(Deptford)Urwin, RtHonTom
Silkin, Rt Hon S. C. (Dulwich)Varley, Rt Hon Eric G.
Smith,Cyril(Rochdale)Walker, Rt Hon H.(D'caster)
Smith, Rt Hon J. (N Lanark)Watkins,David
Weetch,KenWilson, RtHonSirH.(H'ton)
White, FrankR.Woodall,Alec
Whitlock,WilliamYoung, David (Bolton E)
Willey, RtHon FrederickTellers for the Noes:
Williams, Rt Hon A.(S'sea W)Mr. Joseph Dean and
Williams,SirT.(W'ton)Mr. George Morton.
Wilson, Gordon (DundeeE)

Question accordingly agreed to.

MR. SPEAKER forthwith declared the main Question, as amended, to be agreed to.


That this House acknowledges that at a time of severe economic recession, the policies of Her Majesty's Government offer the only effective way to real economic recovery, the creation of lasting jobs and a decent standard of living for all the people of this country while at the same time protecting the most vulnerable groups in society.