I beg to move,
That this House believes that, with the introduction of taxation of unemployment benefit last July, all justification for the five per cent. abatement has disappeared; that it now constitutes a surcharge upon the benefit; and demands that full unemployment benefit should be restored immediately.
This is the fourth time that this matter has been debated. There is no need to apologise for bringing it forward once again in an attempt to wring from the Government a concession on the mean surcharge on unemployment benefit.
I shall refresh the memory of the House of previous debates and the two main arguments that the Government have advanced for not conceding the 5 per cent. abatement. The House chose to interpret previous Government utterances as an assurance that when tax was imposed on unemployment benefit the abatement would cease. In spite of that and by a textual analysis that would have done credit or discredit to the Bacon-is-Shakespeare theorists, the Government proved that what we all understood to be the facts were not so.
When he wound up the debate on the needs of disabled people, the Minister for Health said with absolute assurance that when disablement benefit comes into tax the 5 per cent. charge will be abated on their incomes. Lucky them. That is not what has happened to the unemployed.
The Government relied upon the textual analysis time and again. That trawling through words did no credit to the Government. It did no service to the unemployed. It would be unworthy of us if we trawled through Ministers' statements once again. Whatever the Government said or meant since the entry of unemployment benefit into tax in July, there has been no moral or logical justification for continuing the 5 per cent. abatement. In continuing it, the Government have transferred an abatement into a surcharge on the unemployed. It is a type of forced loan by which the victims of the Government's industrial blitz loan 5 per cent. of their insurance back to those who have caused the damage.
The second reason was that which the Minister of State used. No one reads an unconvincing brief with the solemnity that he can muster. [HON. MEMBERS: "Where is he?"] He is keeping a low profile. That has been his task throughout previous debates. I shall summarise what he said. It was that a line must be drawn somewhere and someone has to fall outside it; we just do not have the money to concede the abatement restoration.
Whatever may have been the justification in March when he said that first, since July there has been none. It is now accepted that the cost of restoring the cut for 1982–83 is £20 million and that in a full year it would be £60 million. Since unemployment benefit has been brought into tax, it will yield £650 million in a full year. It has been taxable for four months. I do not know precisely how much has been collected. Perhaps the Secretary of State can enlighten us.
Nevertheless, I can say with confidence that the amount already collected in taxation of unemployment benefit must exceed by far the cost of a full year's abatement of the surcharge. Let us not have from the Secretary of State or any other Government spokesman the cant about not being able to afford to restore the £60 million. It can be paid for and still leave extra revenue for the Government.
The hon. Gentleman knows that I have argued the same type of case as he has. Does he agree, however, that we are more likely to get Government sympathy if we recognise that from today many benefits have been increased by more than the rate of inflation? Does he agree that there would be more than eight hon. Members now present on the Labour Benches if that had not happened? Does he also agree that it is worth arguing with the Government that the savings to them of lowered inflation makes it possible to meet that sum just as easily as it would have been if the taxation argument had been met?
Although inflation rates will help the Government in their sums, the argument does not need to be based on that ground. The simple answer is that the 5 per cent. abatement was made in lieu of taxation. Whatever the hon. Gentleman may wish to do now as an excuse for wanting to fight the next time, I recall warning him on the last occasion that he was one of a brand of people who always intended to rebel the next time a debate took place.
The hon. Gentleman merely prolongs my contribution and reduces the time available for his. [Interruption.] The hon. Member for Grantham (Mr. Hogg) signed the amendment and then worked himself into a lather of abstention. Apart from his ever-open mouth, the hon. Gentleman has no qualification to talk about honesty in this House to anyone. I shall make my speech in my own way. I pray that whenever I need legal assistance I shall find someone other than the hon. Member for Grantham available in chambers.
My hon. Friend is right. No amount of effusion from the hon. Member for Grantham will hide the fact that his service to the debate is not very serious when one considers the plight of the unemployed. That standard of compassion is not typical of serious Conservative Members. It is, however, the sort of thing that gets Parliament a bad name. The unemployed do not understand how affluent young people can mock and make fun of a serious issue.
There is no reason why simple justice should not be effected. Why is the 5 per cent. abatement so unfair? There has been talk of the unprecedented level of unemployment in post-war Britain. Many people who never imagined themselves without a job have suffered that fate. With the abolition of the earnings-related supplement, the lowering of child dependency and the 5 per cent. cut, the unemployed have suffered grievously. If none of this had happened, one-third could be added to a single person's benefit and over one-half to a married couple's benefit.
The plunge for people no longer receiving a wage income is much steeper and more catastrophic than ever before. The hon. Member for Grantham should remember, when he is next tempted to giggle, that a million children depend on a parent now drawing unemployment benefit or short-term supplementary benefit. That is a tragedy and a scandal. The 5 per cent. abatement has added capriciously to the burden.
The abatement means that £1 a week, on the basis of last year's rates, was cut from the single person's unemployment benefit. With today's uprating, it has gone up to £1·10 a week for a single person. For a married man with a dependent wife, the figure of £1·60 a week, based on last year's rates, is now £1·75 a week. The very poorest and most unfortunate in our society are penalised. It is no wonder that one-third of all men who claim unemployment benefit have to top up the benefit by claiming supplementary benefit in addition. It is a sad fact that unemployment benefit is at its lowest as a proportion of average earnings for over 30 years. We are debating tonight the restoration of what is undeniably the meanest cut of all in unemployment benefit.
Everyone knows that the time has come for the House to take matters into its own hands. Both the Chancellor of the Exchequer in his autumn economic package and the Secretary of State for Social Services, during the Queen's Speech, debate revealed very little. They wriggled on this question and refused to commit themselves. The hon. Member for Bath (Mr. Patten) said—I paraphrase his words—that if he was unable to get an assurance of more action from his Front Bench during the debate, it would be time for the House to take matters into its own hands.
In the absence of any reply—none was forthcoming from the Leader of the House at the end of the Queen's Speech debate—this is the time when the House should act unitedly to show that the Government are wrong.
I shall deal with that point during my speech. If the hon. Gentleman obtains as precise an answer as he seems to expect, he will be doing well. According to the great caution shown in the Financial Times today, when it refers to what the Secretary of State will be saying,. there appears to have been a retreat from the "coming shortly" trailers of last week.
I wish to deal with the unfairness of the 5 per cent. abatement. Because there is no threshold and no personal allowances, many hundreds of thousands of unemployed who would not otherwise fall into the tax net have to pay the 5 per cent. abatement of their unemployment benefit. The absence of any threshold also means that they suffer the abatement from the first £1 of their income. There is not even the marginal help of the national insurance fund minimum wage. In all ways, it is therefore a more regressive tax than even the national insurance contribution has proved under the Government.
With the 5 per cent. abatement added to the liability for tax it becomes double taxation. Those who fall into tax have their income abated by 5 per cent. for unemployment benefit and find that their effective rate of taxation is higher than the standard rate when they come to pay because of the 5 per cent. abatement from the first £1 of their unemployment benefit.
Despite the evasions and the faltering uncertainties of contributions to the debate on the Queen's Speech, a great deal of information has appeared in the newspapers to suggest that the Government will concede rather than risk losing the Division tonight. There is some persuasive evidence for that belief if one pays careful attention to those on the Government Front Bench. The Chris Tavare of the ministerial team, the man who can occupy the Dispatch Box for 40 minutes without creating a single scoring fact, has been relegated from a speaking role. The Secretary of State, whom one imagines would be eager to make formidable and favourable announcements, is likely to speak instead. Is it therefore a good sign? I believe that it is not. I shall give my reasons in a moment.
According to the newspapers, the right hon. Gentleman will be saying nothing definite. The matter is to be handled on a "nudge, nudge" basis or by an approach in which it is hinted "You stick with us, boys, and it will be all right come the Budget, the next uprating, the revolution, or whatever you like." Nudge, nudge Norman will do his job on the Tory rebels tonight and all will go away happily convinced that the Government are firmer in their resolve than ever before.
However, if the Government give a commitment that they will uprate the benefit on an unspecified date, what will that mean? It will mean no more than what we were told in March and July by the Minister of State, Treasury, that when the time was right the cut would be restored. The time will never be right unless the Government face a revolt in the House that makes their defeat imminent.
I make this point in all seriousness to Conservative Members. A vote deferred tonight on restoring the benefit immediately is a vote won by the Government and a vote lost by the unemployed. All the problems and uncertainties about timing by the Chancellor will still remain if all that the Government say is "Yes, we are wholly committed, at a time of our choosing, to restoring that benefit."
Is not that a false use of the word "restore"? When the Government do that the money will go only to those who are drawing unemployment benefit. A large number of people who are unemployed now will not receive benefit in future. They will never get the money. A large number of people will also have exhausted their entitlement to benefit and will be on supplementary benefit. They, too, will not receive the money.
I agree with my hon. Friend. One talks about restoring benefit. One does not talk about restoring it to beneficiaries. Many of the people who suffered the 5 per cent. surcharge, as I call it, have now passed into the ranks of the long-term unemployed and are therefore on short-term supplementary benefit. They will never be compensated, but I hope that justice will be done to those who, one is assured by the Chancellor of the Exchequer, if by no other authority, will be unemployed during the forthcoming year.
If a date is set tonight that will be a great victory for the House of Commons. It will not be a matter of self-congratulation for the Government. However, I do not believe that a date will be set. I say to Conservative Members that to secure any date the House must vote for the motion for immediate restoration of the cut in unemployment benefit. We should mean that.
Already for more than four months the benefit has been abated and taxed at the same time. During that time the loss has been £20 to the single unemployed person and £32 to the married couple. The hon. Member for Rutland and Stamford (Mr. Lewis) said that the proper time may be the Budget. However, that is in another four months' time. The loss to single unemployed people and to married couples would be doubled. Therefore, we cannot view with such equanimity a deferral, which would double the period and the loss that is currently sustained by single and married unemployed people.
The hon. Member for Rutland and Stamford should also remember that that is not the only date that is talked about. The other date is at the uprating next November. It is true that no one will suffer for 16 months because unemployment benefit is surcharged by 5 per cent. No one is on unemployment benefit for 16 months. People receive it for only a year. However, at the current rates, uprated today that will mean a loss over the year to the single unemployed person of £57·20, and to the unemployed man with a dependent wife a loss of £91. That is nothing to the hon. Member for Grantham, but it is a considerable sum for the unemployed who are struggling to make ends meet in the midst of what everyone agrees is an economic blizzard. If we say "It does not matter because they will receive the money next November or March", it will appear that we are fighting the slump to the last drop of the unemployed people's blood. That would give to the Chancellor of the Exchequer, who is notably unenthusiastic about the restoration of the abatement, further room for manoeuvre, adjustment and the evasion of the will of the House.
The only way in which the House can proceed properly is to vote for the immediate restoration of the 5 per cent. The Government could have held out a sop to those on the Conservative Benches who were agnostic or hostile to what the Government are doing. They could have tabled an amendment to the motion. They have chosen not to do so. They are trying to commit all Conservative Members to a defence of the current unredeemed stance on this subject, which many Conservative Members found unconvincing last July and which they should find equally unconvincing now.
If we vote for immediate restoration we shall at least minimise the damage to the unemployed that has been done by four months of double taxation. Anything less will be an act of collective cruelty for which the House will be rightly blamed. Anything less will condemn many hundreds of thousands of our fellow citizens to a needless cut in their standard of living, which has already been cut by the cardinal sin of their being unemployed.
As my hon. Friend the Member for Woolwich, West (Mr. Bottomley) said in his intervention, it is right to remember that the debate is taking place on the day when we are increasing the amount paid in social security benefits by about £3 billion a year. That means that the annual social security budget will have increased to £32½ billion, making up about 28 per cent. of public spending. That is the proper context of the debate. The point that my hon. Friend sought to make probably explains why there are only six or seven Labour Members on the Back Benches.
I shall clear my throat and then I shall give way.
The hon. Member for Pontypridd (Mr. John) almost failed to recognise that context. Yet the fact is that those increases have been achieved during a period of worldwide recession that has been unprecedented since the end of the Second World War and that has led to pressures on the social security budgets of every nation that I can think of in Western Europe.
For example, in France the Government are moving from an historic basis to a forecast basis of settling benefit increases. That will be familiar to the hon. Gentleman. In other words, they will forecast the rate of inflation. The purpose, as with the last Labour Government, is to save money. Nor have the French Government given any guarantee that they will make good any shortfall in their forecast. Other countries throughout Western Europe are facing similar problems.
Therefore, today's increases are the right starting point of the debate for two major reasons. First, almost all benefit rates are being increased today.
The Secretary of State has been trying to spell out that a great deal of money is being made available. How does he account for the report in The Guardian this morning, which said that a survey carried out by the Child Poverty Action Group revealed that about £2 billion of benefits have been eroded in the past three years?
The article was by Mr. Hencke who asked the Child Poverty Action Group to put together some information. The claim made in the article was that
almost every group of claimants is worse off than three years ago.
That is not so. It is untrue. If the hon. Gentleman looks at retirement pensions, supplementary benefit, the prescribed level of family income supplement and mobility allowance he will see that those facts are untrue. He can come to that point if he wishes. The figures are available, and we can deal with that matter.
The hon. Gentleman should read the article. I have stated what is being claimed. Two or three groups have been chosen. The figures are not a fair representation of the position. We shall gladly debate the issue at length with the hon. Gentleman if he wishes.
Almost all benefit rates are being increased today by 11 per cent. That 11 per cent. is made up of a 9 per cent. forecast for the increase in inflation between November 1981 and November 1982 plus a further 2 per cent. to make good the underpayment that had taken place in the inflation forecast of the previous 12 months. In other words, the rise in the retail price index exceeded the forecast by 2 per cent. We are making good that underestimate in this year's uprating.
That means that from this week benefits such as pensions and unemployment benefit will be increased by 11 per cent. That rate will be paid for the next 12 months. In time for the next uprating in November 1983 the Government will have to decide the amount by which benefits will be further increased.
In making that decision the Government will have to have regard to the fact that the actual rate of inflation between November 1981 and November 1982 will turn out to have been less than the 9 per cent. forecast. This week we shall make good all the previous underestimate. For November 1983 the Government will have to decide by what amount to adjust to take account of the overestimate. It is a necessary consequence of the system that we now have based on the forecast method that was introduced by the Labour Government.
That brings me to the second major issue. The Opposition motion calls not only for the restoration of the 5 per cent. unemployment abatement but for its immediate restoration. In other words, the Opposition are not saying that that should be done at the next uprating; they are saying that it should be done now.
I do not believe that that proposition should be supported. The changes in benefits that are coming into operation this week were part of the examination that the Government carry out each year and that were announced in the annual uprating statement in March after the Budget. That was the point that my hon. Friend the Member for Rutland and Stamford (Mr. Lewis) made. It represented not only the Government's judgment of the rates of benefit to be paid but their decisions on other changes in the system. For example, we decided to increase the limit on the amount of capital that a person can hold and still receive supplementary benefit from £2,000 to £2,500, which was a change that many of my hon. Friends pressed on me.
We increased the earnings rules for retirement pensioners and doubled the earnings limit for those receiving invalid care allowance. Mobility allowance not only goes up from £16·50 to £18·30 a week, but the allowance is no longer liable to tax.
All those decisions will, I believe, be broadly welcomed by the House, but there were other changes that the Government were being pressed to make. We had to decide at one and the same time how much money could be devoted to changes and what those changes should be. We had to decide among strong claims and decide what our priorities were. I believe that to do it this way is the only rational way of making such decisions.
If we seek to make decisions piecemeal the only effect can be that resources are pre-empted. As a general proposition, it must be right for the Government to make all decisions affecting uprating at one and the same time. That is no different for the forthcoming uprating. Over the next few months many will urge different courses on the Government. For example, we shall be urged to keep the adjustment on pensions to a minimum and to make other changes affecting other groups.
The Government will want to take all such factors into account when they make their decisions and would not be willing to agree to an immediate restoration of the abatement, because we have taken our decisions on the uprating of benefits to be paid this year. Those decisions represented our judgment of what the nation could afford. We would not be prepared to go back on them and particularly on a decision that has been debated and voted upon in three separate debates.
We would also not be willing to agree to immediate restoration on the ground that these decisions should not be taken piecemeal, which is not a sensible course for any Goverment. It makes financial planning impossible. But more than that, the Government are now considering all these issues. The House has only a few months to wait for all our decisions. They will all be subject to the scrutiny of the House. That is self-evident. It would be wrong to take the decision on this benefit as the result of an Opposition motion.
From what the right hon. Gentleman said it appeared that he or the Government might give way if it was not for our motion. No one will believe that.
Is the right hon. Gentleman saying that if the 5 per cent. is to be restored at all by the Government in no circumstances will it be restored before next November? He says that decisions should not be taken piecemeal. A reply that I received from the Minister of State shows not only that 5 per cent. has been deducted, but if the earnings-related supplement had continued the difference for a married man with a non-working wife would have been about 33 per cent. and for a single person 51 per cent.
I saw the answer. The right time to take the decision is not in the manner suggested but in the normal way for the reasons that I have stated.
I do not have the figures for the amount collected in the four months. But the tax paid greatly exceeds the cost of restoring the abatement. I shall ask my hon. Friend the Under-Secretary to give the hon. Gentleman the exact total.
We fully understand my right hon. Friend's resistance to the Opposition motion, but he would give his hon. Friends a great deal of pleasure if he made an announcement consistent with the undertaking given. Will he assure us that by April at the latest the matter will be put right?
If my hon. Friend will allow me, I shall try to answer the point that he has made.
On the principle of the 5 per cent. abatement—[Interruption.] The hon. Member for Newcastle upon Tyne, East (Mr. Thomas), who is apparently leading for the SDP, seems to regard this as a matter for great hilarity. He is the only representative of his party who has turned up for the debate, he was not present on the last occasion, and his general demeanour is a disgrace in a debate on such a serious subject.
The abatement was made as part of the Social Security (No. 2) Act 1980. It was a cut in the social security budget. No one pretends otherwise, and no one claims that it was an easy decision. The hon. Member for Pontypridd made a number of comments about that policy.
I will come to that if right hon. and hon. Members will just be patient.
My basic criticism of the speech of the hon. Member for Pontypridd is that he talks as though no cuts were ever made in the social security budget by the Labour Government, then supported by the hon. Member for Newcastle upon Tyne, East. The hon. Member for Pontypridd must know—if he does not, his right hon. Friend the Member for Norwich, North (Mr. Ennals) certainly does—that that is pure humbug. There was a series of cuts, ranging from the abolition of the Christmas bonus in 1975 and 1976 to the change in the whole basis of the uprating exercise. The uprating had hitherto been made on a historic basis, but the Labour Government changed it to a forecast basis, for one very good reason. As the former Chief Secretary to the Treasury, the right hon. Member for Heywood and Royton (Mr. Barnett), revealed in his book, that change saved the Labour Government more than £500 million, which today would be worth £1 billion—and that, of course, affected unemployment benefit as well.
Is the Minister saying that the system applied then by the Labour Government and now by himself is unfair or does he agree that it is fair? When he replies to that, will he also answer the question put by his hon. Friend the Member for Staffordshire, South-West (Mr. Cormack), who is my pair and a good friend of mine?
I am glad to hear the right hon. Gentleman's declaration of undying friendship for my hon. Friend. I shall answer both points.
On the first point, the former Chief Secretary says in his book:
I managed to obtain a change to fix the pension increase to be announced in the April, on the 'forecast' increase in earnings or prices to the following November. The reason was simple: with inflation forecast to show a substantial fall, if we had not made such a change, we would be increasing pensions and other benefits by nearly 30 per cent. when earnings and price increases were already falling.
Therefore, let us have no nonsense about that change being made for any other reason than to achieve a saving in the social security budget.
I do not hide from the fact that the Government made a cut in the social security budget as a contribution to reducing inflation. Those efforts have now resulted in inflation coming down to under 7 per cent., which is the lowest rate for 10 years. The reduction of inflation is also to the benefit of all those who depend on the social security budget—either directly, because pensioners find that their savings are not being eroded at the terrifying rate which had become the rule in this country, or indirectly, because only with low inflation is it possible to look forward to industrial recovery and the creation of the resources necessary to sustain the social security budget—and the creation of new jobs, which is the best possible thing that we can do to help the unemployed.
That is the position. Equally, however, I wish to make it clear that the Government do not regard the abatement of unemployment benefit as a permanent measure. A great deal has been said about the words of my right hon. Friend the Member for Wanstead and Woodford (Mr. Jenkin) when he was Secretary of State for Social Services, but I shall not swap quotations about that.
Of course, I understand the strong feelings of hon. Members on this, and in particular the argument made in the past by several of my hon. Friends, a number of whom are present today—that now that the benefit is in tax the abatement should be restored. I hope that, in their turn, they and the House will recognise that the words used by my hon. Friend the Minister of State, Treasury, and my hon. and learned Friend the Minister of State at my Department, still stand. As my hon. Friend the Minister of State, Treasury said on the last occasion that we debated this, the abatement will be made good. The matter is not only under review, but at the right time it will be restored—[HON. MEMBERS: "When?"] In other words, the argument is not one of principle. The case for restoration is accepted. It is a question of timing. [Interruption.] Hon. Members seem not to wish to hear my answers.
I suggest, first, that the right time is an annual uprating. I can certainly give an assurance that the whole question of abatement is now being considered by the Government—in the light of available resources and of what has been said previously by Ministers, and also taking into account the views expressed by hon. Members in the House including, of course, my hon. Friends. I hope that the House will recognise that with only a few months to go before the uprating statement it would be wrong to press the Government further at this point.
Again, I am grateful to my right hon. Friend, but I am still rather perplexed, as my hon. Friend the Minister of State, Treasury made precisely the same statement in July. He accepted that there was no difference about the principle and he said that the Government would restore the abatement. We believe that it should have been done long since. If for technical reasons it cannot be done immediately, we want it done by April at the latest. May we please have an assurance that that will be the case?
I cannot give my hon. Friend that assurance in the terms that he seeks, but the Government are considering the whole question of the abatement in the light of the uprating statement which comes after the Budget in March. That is not the same as the position stated by my hon. Friend the Minister of State, Treasury.
As I have said, I believe that this should be done in April. However, my right hon. Friend seems to have gone a little further. Nevertheless, when a statement of this kind is made, there is a danger that if the Conservative vote against the Government is not so strong today as it was on the last occasion the Government may imagine that we have changed our minds. I make it clear to my right hon. Friend that he must take the previous vote into account rather than today's, because we shall return to this matter if something is not done.
I can give my hon. Friend the absolute assurance that I and the Government respect and understand his strong feeling, and those of all my hon. Friends. There is no question about that.
We cannot do everything in social security. Some make a special case for unemployment benefit, and, as I have just said, I recognise the sincerity with which that case is put. However, I hope that it will also be recognised that the Government's funds are limited and that we are not prepared to promise ever more public spending, which can only come from increased taxes or increased national insurance contributions.
The Government are considering the whole question of the 5 per cent. abatement. We shall want to take into account the views that are expressed in this debate, and those that have been expressed previously by my hon. Friends. However, the Government should take all their decisions affecting the social security budget at one and the same time. On that basis I urge the House to reject the motion.
I do not wish to detain the House long on this rather sad occasion. The case is an overwhelming one and I shall stick precisely to the point of the 5 per cent. abatement. The position could not have been put better than it was by the right hon. Member for Chesham and Amersham (Sir. I. Gilmour) during the Queen's Speech debate, when he said:
It is astonishing that neither the Secretary of State nor the Chancellor of the Exchequer were able to say unequivocally this afternoon that the 5 per cent was to be restored. They know perfectly well that the fact that it has not been restored is disgraceful. I can see no conceivable reason why that has not been done."—[Official Report, 8 November 1982; Vol. 31, c. 345.]
I agree with the right hon. Member. Nor can there be any question as to the Government's commitment on this matter. The Secretary of State must know that his predecessor gave a clear commitment in Committee on the Social Security (No. 2) Bill that the abatement would be restored. He said:
as the unemployment benefit comes into tax so the rationale for the 5 per cent. abatement ends."—[Official Report, Standing Committee B, 30 April 1980; c. 526.]
That is the sum of the argument, and it does not need to be elaborated on.
However, having heard the Secretary of State, I must ask whether any self-respecting Back Bencher could buy a second-hand undertaking in that form from this man? There is no conceivable reason to believe that the form of words that has been repeatedly reiterated to Tory Back Benchers should be believed when reiterated yet again.
There is no discernible advance from the Government. We should need a microscope to find the progress referred to by the Secretary of State. There is no progress. My colleagues shall be voting tonight with the Labour Party. We agree with every word of the motion. In the word of the right hon. Member for Chesham and Amersham. it is a "disgrace" that the abatement has not been restored. It is one of the things that will cause the Government lasting regret when they reach the next general election.
I shall be brief, but not as brief as the hon Member for Newcastle upon Tyne, East (Mr. Thomas).
We have had three debates so far on this issue—this is the fourth. The House knows all the arguments and equally knows that the Government do not have an argument. If we did not know that before, we should have known it from my right hon. Friend's speech this evening. Shorn of its customary charm, that speech added nothing to our knowledge of these matters. As concessions go, that of my right hon. Friend was a trifle on the thin side.
Each time that we have debated this issue—on new clauses 4 and 13 of the Social Security and Housing Benefits Bill and on amendments to clauses 29 and 30 of the Finance Bill—the consequence of the Government being defeated would have been to restore the abatement. Therefore, in March I voted against the Government, in April I voted against the Government, and I should have voted in July against the Government if I had not been prevented from doing so by my appendix—or, rather, the lack of it. The rationale—I think that that is what it is called—of the abatement disappeared when we brought the benefit into tax and therefore, as people have argued ever since, we should restore the abatement.
Tonight the issue is slightly different. I understand why the Opposition have done what they have done. It is called parliamentary tactics. There is no reason why Oppositions should not try to embarass Governments and, indeed, their supporters from time to time. So I stand embarrassed. However, if we pass this motion, it will not restore the abatement, as would have happened on previous occasions when debating substantive legislation. So I feel under no obligation, as I did on previous occasions, to go into the Lobby with the Opposition. I see no reason why I should play their games. We might be wet—that is, we might be Tories—but I do not believe that I am wet behind the ears. So I shall not play the Opposition's game.
When an opportunity arises, if the Minister's concession is not quite as wholehearted next spring as it appeared to be today and if the Government do not see sense and do their duty, I shall again attempt to encourage as many of my right hon. and hon. Friends as I can to vote against the Government and defeat them. Tonight, however, with a marked absence of heroism, I shall abstain.
However, in future, if the Government do not change their mind, I shall press the House to reject the Government's case on a number of grounds. First, I do not want to indulge in an exegesis of what the hon. Member for Edinburgh, Central (Mr. Cook) called the sacred texts. I am prepared to rest my case, as my hon. Friend the Member for Grantham (Mr. Hogg) said in a memorable speech—that is overstating it; rather, I should say in a speech that we remember—the first time that we debated the issue. On that occasion, my hon. Friend said:
There is no doubt that many hon. Members, and people outside the House, believed that the abatement would be made good when unemployment benfit was brought into taxation. There is also no doubt that Ministers have made statements that gave colour to that belief."—[Official Report, 18 March 1982; Vol. 20, c. 516.]
I shall put it no stronger than that—"gave colour to that belief'.
To some extent, this issue touches on the Government's integrity. Resolution is a perfectly splendid thing when governing this country though it is always dangerous when one starts to confuse it with obstinacy. Resolution is nevertheless very fine in governing this country, but so, too, are integrity and a certain generosity of spirit. In this case, we may have forgotten about those two qualities.
My second argument, which I have mentioned before, comes to what I believe is the kernel of the Government's intellectual case about what has happened to the economy in the past two to three years. The Government's case, as I understand it, is that the ranks of the unemployed are the innocent casualties in the attempt to reverse a decade or more of industrial decline and to abate inflation. Whatever else one does with innocent casualties, it seems to me that the last thing one does is to subject them to what amounts to double taxation. If the Government were talking about the double taxation of doctors or bankers, or capital gains, many of my hon. Friends would be worried. We should be even more worried about the double taxation of families, many of whom are having to scrape by each week on about the cost of a dinner for two at Wilton's. That should matter to the Conservative Party more than it appears to do.
We know about the cost of restoration. It would cost about £60 million in a full year, which is about one tenth of the total value of the revenue raised from taxing the benefit. Cost is not an argument, but perhaps we have found one. On the radio last month, my right hon. Friend the Secretary of State for Employment, in what I take to be an attempt to defend the Government's position, said:
It would be really quite wrong at a time when we are asking people to be reasonable in their pay demands … to keep on remorselessly increasing benefits to those out of work.
It depends what one means by "remorselessly". I imagine that my right hon. Friend had temporarily forgotten about the abolition of the earnings-related supplement. I imagine that the cut in child benefit had slipped his mind, or perhaps that is where the word "remorselessly" comes in.
The last time that the House debated this subject, my hon. Friend the Member for Chippenham (Mr. Needham) made some exceptionally sensible remarks about the relationship between pay and benefits. I understand why it is a little more difficult for the Government when, for a change—it does not often occur—pay settlements are increasing by less than the percentage increase in unemployment benefit.
However, as my hon. Friend the Member for Grantham might say, with respect to the Government, they should have thought of that before they started going down such a road. The Government cannot expect the unemployed to pay the abatement just because the Government cannot get out of the difficulty without embarrassment.
The point was made fairly by my hon. Friend the Member for Beeston (Mr. Lester) when he said:
The issue will not go away. The longer it is left, the harder it will be to settle."—[Official Report, 13 July 1982; Vol 27, c. 861.]—That is correct. With unemployment at 3 million and rising, why must we cut benefits in order to restore the incentive to work? All the evidence suggests that people are far better off in work. The overwhelming majority of those out of work would prefer to be working.
There is some saloon bar prejudice to the contrary, but I do not imagine that this Government wish to run the country on the basis of saloon bar anecdotes. At a time when the gap between unemployment benefits and average earnings is increasing and at a time when the number out of work is increasing dramatically, it is ridiculous to suggest that we have a problem about the incentive to work. That is a cock and bull argument. The problem is not one of restoring an incentive to work but of restoring the prospects of work for those who want it. I hope that my right hon. Friends will abandon that ludicrous proposition.
The first day that we debated unemployment benefit abatement, we were told that the abatement would be restored "at the right time". I understand that the Government have not really made any allowance on that in its concessions at the Dispatch Box tonight. We were promised the abatement at the right time and that time appears to be now. The Government should not forget that.
I should be prepared to vote with the Government if they gave the House an early date at which they would restore the abatement, but until they do so I shall not support them. Flannel is not enough and fudge is not bankable.
I can see the case for what P. G. Wodehouse would have described as being a "tough egg" on the economy. Although I would not entirely take that view, I can understand the monetarist case. I cannot see the case for being mean. There has been much exaggerated argument as to whether the Conservative Party has changed for the worse in the past few years. Although I believe that opinion to be exaggerated, it is difficult to see a Harold Macmillan or Iain Macleod or Rab Butler coming to the Dispatch Box and putting the case for the matters that the Government are asking us to swallow.
I hope that the Government will see sense and that the abatement will be restored. I hope that several of my right hon. and hon. Friends will abstain tonight and that the Conservative Party will not entirely forget either its Tory tradition or its honour.
What we have heard from the Conservative Benches has been profoundly disappointing. The Secretary of State suggested that there is no extra money for the unemployed now. For today's unemployed, that means no extra money at all, although something may be done in 12 months time. Conservative Back-Bench Members are also unwilling to help today's unemployed. There may be pressure to do something about tomorrow's unemployed, but there is no hope for those out of work now. I worry that today's unemployed should receive a decent benefit, although it is also important to do something for tomorrow's unemployed.
Those who have been unemployed for the past four months have received unemployment benefit that is 2 per cent. below what it should have been because the Government incorrectly estimated the inflation rate last year. Benefit has been reduced by 5 per cent. because of clawback and it may also be taxed. The unemployed have been penalised in three ways already and the Government are prepared to do nothing for that group. The most that they can hope for is an announcement in the Budget, but the Minister gave no hope that any concession in the Budget would be backdated. We know that backdating is difficult administratively.
The Secretary of State talked about putting unemployment benefit in the context of other benefits. He should put it in the context of the unemployed in my constituency. I assume that there are some unemployed in his constituency and that some of them come to his advice surgery and ask for help. How does he face the problems that they present? Last week, a lady came to my surgery—she was clearly a careful housekeeper who would not waste money on silly purchases—and presented me with a simple problem. The grill and oven on her cooker had stopped working. How could she save, out of her husband's unemployment benefit, sufficient money to have it repaired? She was talking about £25 to £30, which was an impossible sum to her. Her second problem was that the washing machine had finally packed up on her. With three young children, but not very young children, the supplementary benefit rules could not help her.
Those who struggle on today's unemployment benefit must cope with such problems, knowing that the replacement of most household equipment is impossible.
We must examine the meanness of the 5 per cent. abatement in that context. We must also add the illogicality of what some have referred to as double taxation. It is not double, but triple, taxation. National insurance contributions are taken out of one's income after tax, so they have already been taxed. One Treasury Minister suggested that the revenue to the Exchequer of taxing national insurance contributions was about £2 billion. It seems logical to say "We do not wish to tax the contribution but we wish to tax it when you claim benefit". However, having said that we want to tax the contribution, it is illogical to tax the benefit. The Government then said that this was administratively difficult and introduced the 5 per cent. abatement, following which the benefit was brought into taxation. Effectively, that is triple taxation of unemployment benefit.
It is appalling that those burdens should be imposed on people with such a standard of living. The hon. Member for Bath (Mr. Patten) said that the level of benefit for a married man with two children was the equivalent of a meal for two at a particular restaurant. We must take into account the amount of money available for food in the case of the unemployed. When we consider that only 40p to 50p per person can be spent on each main meal during the week, we begin to realise the impossibilities of getting by on unemployment benefit.
The benefit may be adequate for people who are unemployed for three, four or five weeks, because they can defer all items of capital equipment. However, many people must now survive for a year on unemployment benefit before going on to short-term supplementary benefit.
The Government's message seems to be: "You will continue to live on that benefit well into the future." They should restore the 5 per cent. now. They should not hide behind the fact that this is an Opposition motion or that it is normal to make such announcements in the Budget. The unemployed need the money now, and if the Government do not give it now, the unemployed will get nothing.
I am pleased to follow my hon. Friend the Member for Bath (Mr. Patten), because he and I have been involved in a non-stop debate for some time. Sometimes I lead, and sometimes he leads, but we have been consistent in both our words and our votes.
I do not intend to repeat the long speech that I made on 13 July, which is on the record in columns 861 to 865 of Hansard. I do not retract a word from those remarks.
I recall that when we made that real bid to put this matter right, the Government position was fairly represented by the Minister of State, Treasury. His defence was that the Government agreed in principle but that it was not the right time. From what the Secretary of State said today, I detect a delicate political move and that "the right time" has now become "currently considered". I welcome that.
I agree with my hon. Friend the Member for Bath that it is not unreasonable for the Opposition to try to embarrass the Government by tabling a motion which is not technically possible. For the same reason as my hon. Friend, I shall abstain tonight rather than vote in the Opposition Lobby. Had the Opposition been rather more skilful at whipping their Members during the debate on 13 July, there might have been no need for this debate tonight.
I accept that totally, but that was the occasion when we could have achieved our objective. The same cannot be said about tonight's debate.
The principle that we have advanced time and again is not that this should be done in some annual review or announced in April. Rather, we seek to ensure—and we shall find some parliamentary means to achieve it—that the shortfall should be restored in the financial year in which the taxation was introduced. That occurred in July 1982, and we expect that the restoration will be made before July 1983.
I do not mind when the restoration is announced or whether it is introduced in the April Budget. The principle by which we stand is that the 5 per cent. abatement should be restored during the year in which taxation is introduced. The hon. Member for Pontypridd (Mr. John) has shown the considerable tax benefits that the Government have enjoyed as a result of not restoring the benefit.
Some insidious points are heard outside rather than in the House. The first concerns the increase in the basic unemployment benefit to the 750,000 people who do not qualify for supplementary benefit because they have too much in savings. As we all know, those who qualify for it get a decrease in supplementary benefit if they get an increase in unemployment benefit so that their income remains the same. Those 750,000 are required to live for a year on the basic unemployment benefit.
It is argued that somehow the uprating of £25 a week for a single man and £45 a week for a married man causes pressure on wages and that that is a base from which trade unions calculate their wage demands. Since I heard that argument I have talked to many trade union negotiators and employers. Not one confirms the fact that they base wage negotiations on basic unemployment benefit. I hope that that sinks that fallacy. My hon. Friend the Member for Bath talked about saloon bar myths. I wish that they finished in saloon bars. That myth extends beyond saloon bars and I have evidence that it persists in board rooms.
My second point relates to the "Why work?" syndrome. After the last debate on this subject on 13 July I was approached by the managing director of one of the thousand largest companies in Britain. He said that I had all my facts wrong and that what I had said was cockeyed. He had evidence to show that one of his assemblers who worked 39 hours, was married with two children and living in a council house, whose gross pay was £92·60, was worse off than an unemployed man in similar circumstances. He gave me a piece of paper which I have here which showed that the take-home pay of the employed man was £71·36 while that of the unemployed man was £77. I passed that document to the Library. The managing director said that he had had to negotiate a salary increase to cover that differential between the unemployed and the employed man.
The House of Commons Library—which I think is reasonably reliable in such matters—came up with figures that showed that the same man earning £92 a week would have take-home pay of £80·24, taking all allowances into account, while the unemployed man, far from his income being £77, took home £57·70. That is a difference of £22·54. I would be pleased if I thought that such myths finished in saloon bars. As has been said, people are better off in work. They want to work and they do not want to be on unemployment benefit.
The way forward is surely to use every parliamentary means to restore the 5 per cent. abatement in April if we want to see the fair taxation of unemployment benefit. Thresholds must then be raised to lift low incomes from any source, whether from employment or benefit, clear of taxation. That is an essential part of a benefit taxation. We should end the ridiculous anomaly under which the low-paid pay tax yet can claim family income supplement and pensioners pay tax yet qualify for rent and rate rebates. This question has come round four times and one has the feeling that is rather like an elephant straining at a gnat. Although it is a tiny pill for the Government to swallow, it would do much good to the House, to the body politic, and above all to the unemployed, who should concern us most.
I am pleased to speak after the hon. Member for Beeston (Mr. Lester) and I remember the speech that he made last July. I concur with much of what he and the hon. Member for Bath (Mr. Patten) have said.
The hon. Member for Bath spoke about sacred texts. Conservative Members should have as their sacred text the article that the hon. Gentleman wrote in The Observer about two weeks ago. He described the Chancellor of the Exchequer's economic policies as
an intellectually ramshackle case which we are obliged to swallow.
I have never equated abstention with courage and I am disappointed to know that the words uttered by Conservative Members will be followed not by a vote with the official Opposition but by abstention.
If the hon. Gentleman had seen the letter written by my hon. Friend the Member for Berwick-upon-Tweed (Mr. Beith) which appeared in The Guardian last week he would have read about the lie that is being put about that in some way alliance Members who did not turn up for that Division had a significant effect upon the result and he would realise that it was wrong to mislead the House in that way.
Order. The hon. Gentleman must not imply that the hon. Member for Staffordshire, South-West (Mr. Cormack) was repeating a lie. the hon. Gentleman should withdraw his comment.
In that case, I happily withdraw my remark. However, I stand by the fact that it was the fault not of the alliance that the 5 per cent. cut was not abated, but of many Conservative Members, who say one thing and do another. The same thing will happen this evening, when Conservative Members abstain.
I just want to clarify the point and I apologise to the hon. Gentleman if I am wrong. Will he assure the House that every alliance Member was here—with the exception of the hon. Member for the Isle of Wight (Mr. Ross)—when we voted last time? Will he tell us his party's voting record on the previous two occasions?
I do not carry the figures from Hansard in my head; that is why I referred Conservative Members to a letter written by the Chief Whip of the Liberal Party, which appeared in The Guardian last week. He set the record straight and made it abundantly clear that it was not the fault of the Liberal or Social Democratic Parties that the measure was accepted. There is no point in trying to shift the blame to the alliance. We have made our position clear. We would retain unemployment benefits at their present level and ensure that they were increased and linked to inflation. There is no question of the alliance abstaining tonight, because we shall vote with the official Opposition.
It is a question not of playing parliamentary games, as the hon. Member for Bath implied, but of standing firm on issues about which we feel strongly. I represent one of the ten constituencies with the highest levels of unemployment. As a result, I feel strongly about this issue and I hope that Conservative Members will listen to some of my arguments. At the beginning of the debate the hon. Member for Woolwich, West (Mr. Bottomley) suggested that because 20 million people would be marginally better off—2 per cent. better off—through a miscalculation in the level of inflation, we should not be concerned about the abatement in unemployment benefit.
The article in The Guardian repeated the result of a survey carried out on behalf of the Child Poverty Action Group which showed that
only some 204,000 disabled people on mobility allowance and a larger group of people on one-parent benefit can be said to be better off since 1979. For the remaining millions, a series of cuts and changes in social security payments over the past three years has combined to reduce the value of their benefits.
The survey pointed out—the Secretary of State disputed it—that 9 million pensioners, far from making a real gain today, are worse off.
The article then referred to invalidity pensioners. It said that
some people are losing as much as £5·50 a week or £286 a year.
It then catalogues many other people who will be worse off. I do not know whether the Child Poverty Action Group or the Secretary of State has the figures right but I have normally found that the Child Poverty Action Group gets its arithmetic correct. I hope that Conservative Members will bear those points in mind when they come to vote this evening.
I believe it was William Blake who once said:
He who would do good to another must do it in Minute Particulars.
Perhaps the Government should accept that advice. The Government have been singularly unsuccessful in observing that maxim. The 5 per cent. abatement will mean that the average unemployed single person will be £1·10p a week worse off. As the hon. Member for Bath said before, that is a total of about £60 million in a year, a relatively small amount—peanuts—in terms of the funds and resources available to the Government.
If the Christmas bonus for pensioners had been index-linked and increased with inflation, according to the Government's figures it would be worth £35 instead of £10. Again, that is a minute particular and perhaps a small matter, but for 10 million pensioners that £200 million would mean a great deal this Christmas.
The unified housing benefit regulations have been referred to by hon. Members. They come into force at the same time as abatement of unemployment benefit and replace rent rebates, rate rebates and rent allowances. What does that mean? It means that the 2 million poorest wage earners—we have heard before about the "Why work?" syndrome—will be 75p a week worse off. Again, the Government have not paid sufficient regard to "minute particulars."
We have heard a great deal about the unfairness of what is being done. In Britain today, as a result of the Government's monetarist policies, one in eight people is unemployed. In my area of Merseyside the figure is one in five. In Britain, 1,600 people a day have become unemployed—one every minute—since the Government were elected to office. Half the 3·2 million unemployed are in that position as a direct result of the Government's policies. Therefore, the Government have a special responsibility to do something about those people who are languishing in the dole queue.
We have heard a great deal about unfairness. In the words of Shakespeare,
Fair is foul and foul is fair
for many of the people of Liverpool who are languishing on the dole. About 45 per cent. of those living in inner city Liverpool are currently registered as out of work. At the Leece Street employment office—I almost made a Freudian slip: unemployment office would be a more appropriate term, because soon there will be more people out of work than in work in that area—14,000 people are registered as unemployed. In the nearby Old Swan employment office, 15,000 people are registered as out of work.
Ministers should not be surprised when they see the social consequences which have erupted on the streets in Toxteth, central Liverpool, Brixton and elsewhere. The devil will always find mischief for idle hands. In places such as Liverpool, 89,000 people have lost their jobs in the past 10 years and 45 per cent. of the people in central Liverpool are out of work. Compare those figures with the 4 per cent. out of work in the constituencies of many hon. Members in the South-East of England. That is unfair. The Government should pay special regard to the problems of disadvantaged areas such as Merseyside.
It is costing every family in work £1,000 a year to keep those out of work on the dole queue. It costs £5,000 a year and more, according to Treasury figures, in unemployment benefits, social security and the loss of tax that people would otherwise be earning. People do not want benefits. They want jobs. The Government are failing to provide them.
In my area, since the riots last year, the Government have handed out patrimony. They appointed the funeral director for Merseyside, the Secretary of State for the Environment. Since he came to us, we have lost another 10,000 jobs in the city of Liverpool. Instead of solving that problem, 10,000 trees have been planted on Liverpool's derelict land. Trees are no substitute for jobs. Government Members should realise the social consequences of doing nothing tangible to provide work for the unemployed, or at least to ensure that their standard of living is maintained.
Since the Government were elected, Liverpool has lost £63 million in rate support grant settlement. People have suffered as a result. For instance, the city council is contemplating closing the local welfare rights centre. It is there to help the unemployed and people receiving benefits. It has to close because the council cannot make a silk purse out of a sow's ear. If resources are not provided councils have to take such unpalatable decisions. That rights centre has dealt with over 4,000 cases since 1978.
The Government are waging a mean attack. It is miserable and mean to reduce funds for the most vulnerable. Last week I made another literary allusion when I suggested that Scrooge was alive and well and living in Downing Street. I was wrong. Scrooge saw the error of his ways. I doubt whether this Government will. They will have to face the ghost of elections yet to come. When they face the people, the people will treat them as they deserve to be treated for their mean and miserable act of reducing benefits to the poorest wage earners, the most vulnerable, the weakest and the most in need. For that reason we shall support the official Opposition tonight.
I shall not attempt to lecture the House so I shall not quote Blake or Shakespeare. When I listened to my right hon. Friend the Secretary of State for Social Services I was reminded of Richter talking to the second flute. He said:
Your damned nonsense can I stand once or twice but sometimes always by God never".
This is the most ridiculous debate that the House has been obliged to have. We have been round the course so many times. We have preached simply the message that we thought that the Government had embraced—that when certain things came into tax certain other things would happen.
The occasion is made particularly sad for me because tonight the Secretary of State completely accepted the logic of that argument. The fallacies and the thinness of his case were marvellously exposed by my hon. Friend the Member for Bath (Mr. Patten). We were sorry that on the last occasion my hon. Friend lost his appendix and could not be with us. Tonight he has shown that he has not lost his eloquence. He demonstrated, as few people can, and in a way that he has done consistently in articles in the press and in speeches in the House, just what a petty, mean nonsense this is.
A Government's reputation is made up, not of grand gestures and noble achievements, but of the little, not always unremembered, acts of kindness. For a Government to be mean in small things puts it at risk of failure in big things. The Government have made considerable achievements on the economic front. When they are obliged by policies that they are determined to pursue to cause the casualties referred to tonight, there is a pressing obligation upon them to do everything possible to help.
There is no politician in the House nor a party in the country that can with any credibility promise to reduce the dole queue significantly in the next four or five years, no matter what was said from Walworth Road last week. The fact remains that we are living with a real unemployment problem. But those statistics are made up of individual cases. Each one is a human tragedy.
It is inexcusable for us not to put that right at the earliest possible opportunity. The Government could have done so in July. We were placed in a circumstance that we did not wish—having to vote against our Government. Opposition Members who were here when their party was in Government know that that is not something that one does lightly. Nevertheless, we felt that we had no alternative. The Government put us in that position. Indeed, some of us have been in those circumstances before. In the April debate, some of us took the view that because the country was in the middle of an international crisis we should not vote. We did not. But in July we did, just as some of us voted in March.
What do we do tonight? I accept the argument and the logic of my hon. Friend the Member for Bath. It is not possible for the 5 per cent. abatement to be restored as a result of a Division tonight. We know that. Therefore, abstention, while it is never an attractive posture, is a reasonably honourable course. I hope, however, that we shall not be obliged to abstain.
In a melodious but unsatisfactory speech, my right hon. Friend showed that the Government will put the matter right at some time. All that his hon. Friend has to do when he makes his winding-up speech is say that the matter will be put right—in April at the latest. He need only say that it will be done in this tax year. He could then have the support of his hon. Friends here. He will know that the Government's reputation, while it may have been dented, will not have been badly tarnished and that he has restored the integrity and honour that my hon. Friend the Member for Bath talked about.
From time to time, Governments do the most extraordinary things. It is not worth the candle. Although the present matter is far more important, it reminds me of the ridiculous campaign more than 10 years ago on museum charges. The sum was paltry. The logic was indefensible and yet the Government persisted. The sum here is relatively paltry. The logic is utterly indefensible. Why cannot the Government do something?
It is a bit much having to listen to two logically indefensible arguments in a day. Some of us found this afternoon's statement a little difficult to swallow. This evening, my right hon. Friend the Secretary of State is telling us that for some extraordinary reason he cannot exactly announce the precise time now. I do not believe that there is any reason. I urge him to think of those who are unemployed in our constituencies. We all must think of them. As I said on a previous occasion when we debated these matters, there was a time when one could talk realistically and honestly in saloon bars and elsewhere about the people who did not want to work. They represent the minutest fraction of those who are out of work today.
In the West Midlands where unemployment has increased from about 5 per cent. to more than 16 per cent., and in pockets is higher than 20 per cent., there are few people who do not want to work. The vast majority do. They have every right to resent double taxation. They have every right to feel that the Government are not showing care, concern and understanding of their plight if they persist in this policy of folly.
I therefore make an appeal once more to my right hon. and hon. Friends on the Treasury Bench. Governments make mistakes. It is no bad thing, I beseech them in the words of Cromwell—one person that I shall quote—
think it possible you may be mistaken".
Governments make mistakes. Admit it and put it right this evening. Then a record that is not without its glorious moments will at least have one stain removed. Now is the time to do it. Do not let us be put in the ridiculous position of being accused of disloyalty on our own Benches because we stand up for the traditional one-nation principles of a true Tory party to which we are proud to belong.
Notices were at one time frequently displayed in the corner shop, saying "Don't ask for credit because a refusal will give offence." Tonight, the Government are asking hon. Members to give credit to a vague promise that something will be done about restoring the 5 per cent. unemployment benefit at some vague time in the future. That is not good enough. It causes offence not only on the Labour Benches in this House but among the unemployed outside. Like the hon. Member for Staffordshire, South-West (Mr. Cormack), I represent a West Midlands constituency and know of the deep feeling that exists.
No specific promise has been given for the future. With honourable exceptions among some Conservative Members who have spoken in this debate, there is the feeling among members of the Tory Party and its supporters that the unemployed are somehow living the life of Riley at the expense of the taxpayer and have no urge to find work. The realities of trying to live on unemployment benefit are considerably different, as anyone who has been unemployed will testify.
There are 62 people in Coventry chasing every job that is advertised. The vast majority of the unemployed want to work. However, the possibilities become fewer as week succeeds week. In the past year, 4,000 people have been made redundant by major firms in Coventry. That process continues. Hundreds more are projected as far ahead as April next year by the General Electric Company, not because of lack of orders but because of new technology. April is, of course, the magic date when several hon. Members say that the cut might be restored.
Male unemployment in Coventry has already reached 20 per cent. In some pockets, the figure is even higher. When hon. Members representing the area ask to see the appropriate Minister about redundancies or proposals to shut machine tool firms, the answer is that the Minister does not believe that he should intervene. In the same way, the Secretary of State for Social Services does not want to know about the unemployed.
The 5 per cent. should be restored in the year that tax is introduced. We are talking about 750,000 people who are almost, although not quite, at the bottom of the heap. Any savings that they may have soon disappear. That erodes another thing that is dear to the Tory heart, which is that one should stand on one's own feet. What incentive is there to save if, through no fault of his own, a man is sacked, which means that he must start drawing on his savings, not to maintain his normal standard of living but just to carry on living? That is the situation of people on the dole today.
The apt adjective "mean" has been used time and again. The Government have taken a mean approach. The amount of money involved is peanuts in the total budget. However, that is part of the approach by the Chancellor of the Exchequer on pensions. He proposes to claw back some pensions that he says people are receiving in advance. The Prime Minister hastily papers over the facts by trying to tell the pensioners that they will receive an early bonus of £50 this year. How ludicrous that is.
That attitude of toughness is becoming a virility symbol among members of the Government. It seems that unless they are seen to be tough they will not remain in their jobs long. However, the unemployed are not interested in whether Secretaries of State are virile. They want fair treatment now.
It was a pleasure to hear my right hon. Friend the Secretary of State. Unfortunately, on previous occasions we have not been able to hear his views on the argument. I detected a glimmer of hope in what he said. It was a much greater pleasure to listen to him than to the hon. Member for Newcastle upon Tyne, East (Mr. Thomas), who, once again, is not present. He was not here for the previous debate, nor at the previous vote, when he might have been here.
I listened carefully to my right hon. Friend's speech. I wanted to find in it sufficient reassurance that the 5 per cent. would be restored next March. I am sure that he and my hon. Friend the Under-Secretary of State want that very much. However, I believe that the Government somewhat resemble the Liberal-Democratic Party in Japan. There is a Fowler faction and a Howe faction.
The Howe faction does not often put its arguments in the House. My hon. Friend the Member for Bath (Mr. Patten) said that those arguments were better displayed in saloon bars and my hon. Friend the Member for Beeston (Mr. Lester) said that they were better displayed in board rooms. Wherever they are displayed, in the corridors of power they certainly have some influence. Because they have influence, however much my right hon. Friend says that he hopes to restore the abatement, I have yet to be convinced that he has the power to do so.
Therefore, it would be unwise of my hon. Friends who think like me to trust entirely the outcome and to cast our votes with the Government. which might give the Howe faction some reason to believe that the argument had been won and that the matter could be delayed once again. I shall briefly take the argument out of the saloon bar or the board room and put it on the Floor of the House. Two points need to be answered.
The first argument is that those in work who are low paid will feel aggrieved if the unemployed receive more money, because they receive lower pay increases, particularly at the moment, and that high wage demands are often the cause of people becoming unemployed. Those made redundant are often the colleagues of those who stay. People do not necessarily become unemployed because they are reckless in their wage demands. Often the work force is being slimmed down, and those who stay have not made a greater or a lesser pay demand than those who go.
Like the old-age pension, unemployment benefit is paid from the national insurance fund. The Government argue that the fund is separate; it collects contributions and pays benefits to people who have contributed over a set period. It pays out in return for past payment in by the contributor, and it would seem strange if the low-paid felt aggrieved at having to pay from their wages towards unemployment benefit when the contribution system has been accepted for many years. That may be true in theory, but in reality it is a pay-as-you-go scheme and has no funding. That is an anomaly that the House should consider.
But if the low-paid worker who is sensible over his wage increases feels aggrieved about the money paid to the unemployed, many of whom may have been his colleagues, why should he not feel equally aggrieved at pension increases, as they, too, come out of the fund? The unemployed are not different from the pensioners in that respect.
I welcome the increases in benefit and all the help that my right hon. Friend has given, but why should much of it have to come from taxing those who have been made unemployed? Sooner or later the unemployed will become pensioners, when they will be entitled to a higher level of pension at a rate of increase greater than inflation.
If the argument were taken to its logical conclusion, we would have a ridiculous proposition. Many current pensioners were unemployed in the 1930s and received benefits for that time from those who remained in work. Is it suggested that those who were out of work in the 1930s and who were benefited by those who were in work should have 5 per cent. deducted from their pensions to compensate for the fact that others had to support them in the 1930s? That is ludicrous.
The Government cannot have it both ways. They cannot argue that the national insurance fund is a separate fund to which people contribute and out of which they get benefits and in the next breath suggest that the contributions from the low-paid go directly to people who have become unemployed.
The second argument propounded in the smoking rooms is that the difference in income between those in and those out of work is too narrow and that there is no incentive to find work. It has already been said that for most people work is natural, vacancies are almost nonexistent and the answer is to raise thresholds and not to tax benefits.
One point that has not been mentioned has some validity. There is endless anecdotal evidence about the lack of plumbers, gardeners, window cleaners, decorators and so on. One hears the argument constantly, particularly in the South-East, that it is difficult to find someone to do such jobs. The cut in benefit will not flush skiving carpenters out of the woodwork where they have supposedly lived in such comfort. Such people simply do not exist, or if they exist they are in the wrong place. Cutting their benefit makes it more difficult for them to find work elsewhere. They need help with travelling costs for retraining. We must find ways to encourage people to move and we must provide adequate facilities to produce new skills or skills such as plumbing that are in short supply.
No, I must get on.
It is not sufficient to say that people must price themselves back into work until the Government can tell them what work they can price themselves back into. One can cut benefit to zero without producing one new plumber. There are millions of unemployed in Africa and Asia and they have no unemployment benefit, but there are remarkably few plumbers among them. Sufficient money should be provided for a man and his family to maintain their dignity while the breadwinner searches for new employment and a new skill. Just as we protect the old against the recession, so must we protect the unemployed.
I make no apology for putting forward the arguments of the Howe faction because in all honesty they should be deployed in the House and not always outside and they should be seen to be supported by those who believe in them. I believe that those arguments are false, but they carry great weight in the chambers and corridors of power. Therefore, much as I respect the speech of my right hon. Friend the Secretary of State and the hope that he gave us, I am not convinced that he will be able to achieve this uprating next March unless it is made absolutely clear to him and to the Government that they will not have the support in the Lobby to do otherwise.
I hope that enough of my hon. Friends will abstain today to ensure that the numbers are such that the Government will not dare in any circumstances to go back on the glimmer of hope that they have given us.
This is not a matter for abstention. Conservative Members should vote for the Opposition motion. If anyone thinks that abstaining will help the situation, he has another think coming. I admire those Conservative Members who have been honest and spoken from the heart about restoration of the 5 per cent. abatement. Many of them rebelled last time, but they seem to have thrown in the towel. That is clear from their contributions today.
I do not think that any Conservative Members understand unemployment. They do not have a clue. There are too many silver spoons over there. [Interruption.] Hon. Members may disagree. If they had ever held a really large, No. 10 size shovel, I might listen to them, but such is not the case. The real workers and the true representatives of the workers of the nation are all in the Opposition. The Conservatives are trying to bury the workers.
The hon. Member for Beeston (Mr. Lester) talked about restoration of the abatement, but he did not say that he would vote with the Opposition. I hope that he will, because there is no other way to shift the Government. Conservative Members should remember well enough the many promises that were made by their party in May 1979. All those promises have been broken. We all saw the posters on the hoardings about unemployment and how the Conservatives would reduce it. They were going to put the hospital service right. They were displaying all their compassion to the electorate, and the electorate fell for it. Let them just wait until next time. The electorate fell for it, but when the Government came into office they went in a different direction. Instead of reducing unemployment, they have more than doubled it.
At the same time, the Government have started to crucify those poor beggars who are trying to get work. They are made unemployed, but when it comes to benefits—incidentally, when they were working they paid to enjoy the benefit when anything such as sickness, unemployment or accident happened—the Government have the audacity to deny them their rights. At the next election, the electorate will deny the Tory Party what it sees as its rights. The electorate have had a real lesson and a real bashing, particularly the workers.
People want work. I remember when the Conservative candidate walked the streets of my constituency talking about scroungers, as did all Tory Members. There are getting on for 4 million of them now and I bet the Government are proud of it, because that was their intention. They wanted to bash the workers to get them into line, and make them do just what the Government wanted them to do. Those days happened in the 1930s. The youngsters of today who are supposed to be working have had a real lesson, one that their forefathers learnt way back in the 1930s.
The Tory Party does not represent the workers, it represents a different class. I am sick to death of hearing about the one-nation that we are supposed to have. All the Tories talk about it, including the Prime Minister. However, there is no doubt that there are two nations in this country—the working class and the people who have the money. All Tory Members have benefited from some of the policies being put through by the Government.
At long last, the people are waking up to what is going on. There is no doubt that the Government will get their lesson when the right hon. Lady the Prime Minister is prepared to go to the nation and let the people decide. I felt I had to make a small contribution to make it clear how the Labour Party feels, and how the people feel outside because the Government have ditched them. The people will not forget it. They will remember these things on the day of the next election.
After that enthusiastic speech on a motion that even technically would not stand up, I point out to the hon. Member for Ashfield (Mr. Haynes) that a large number of ordinary workers vote for the Conservative Party, and there are many more who will still vote for the Conservative Party at the next general election. He must know that among the workers in his constituency there are some of the best paid people in the country. To suggest that the workers are all badly paid is not realistic.
I shall read it in Hansard tomorrow to make sure that I got it right.
I shall turn my attention to my Front Bench instead. This matter has been around too long for our comfort. Spring has turned to summer, summer has turned to winter and we are still discussing an abatement that should have been removed long ago. My hon. Friend the Member for Bath (Mr. Patten) was making speeches about the abatement when he had his appendix. He is now making speeches about it having lost his appendix.
My right hon. and hon. Friends on the Front Bench may be smiling, but when this issue started in Committee there was soon a reshuffle of Ministers. So my right hon. Friend should be careful, because I think another reshuffle of Ministers is on its way—if leaks are anything to go by, although I am not entirely certain whether leaks are anything to go by now.
There was supposed to be a leak two days ago, to the effect that the Cabinet had discussed this matter and decided to make a concession. The Cabinet must then have had a quick meeting in the Lobby and decided that this was one leak that they wanted to correct, and that they would not make a concession tonight. I understand that. Clearly, this is a political ploy by the Opposition to try to put the Government and all of us on the spot. What surprises me is that, although there will be a great rush of bodies into the Lobby tonight, there is no sense of great occasion on the Opposition Benches. In fact, I am gratified that apparently more people are listening to me than listened either to the hon. Member for Pontypridd (Mr. John) or my right hon. Friend. Indeed, the Liberal-Social Democratic alliance Members are even fewer in number.
I have a problem. My right hon. Friend went further tonight than previous Ministers have done on the matter. Perhaps I may be allowed to give my assessment of what he said. He said two things—and he will correct me if I am wrong. First, he confirmed that the abatement was temporary, and that it would go. Secondly, he said that the right time to deal with it was when the Government, the Chancellor of the Exchequer and he as the Minister considered all these matters in the Budget.
It seems to me, therefore, that the Government must do something about the abatement, because there is not much time between March and the election, even if it is in 1984. The Government would be reneging on the promise that the Minister made at the Dispatch Box tonight if he did nothing about it. He could not deal with it before the next general election if he did not keep to what he said tonight.
The hon. Gentleman is repeating what the Minister said, but surely the Minister made it perfectly clear—I intervened, as the hon. Gentleman may remember—that the right time to do it, if it is to be done at all, is when the uprating of benefits takes place. At the earliest, that would be next November, so at the very least, unemployed people will have to wait another 12 months.
The fact remains that whatever uprating takes place has to be announced at the time of the Budget.
Whatever I do tonight, my right hon. Friend should understand that if the Government do not deal with the matter in the Budget, I will not only do what I have previously done and refuse to support the Government in the Lobby, but I shall take every action to persuade as many of my hon. Friends as I can to do the same. The Government had a thin enough majority last time. In March 1983, they cannot afford to have many more Conservative Members against them on this matter. The sum is paltry compared with the total budget. A promise was undoubtedly made and it has been repeated tonight. I realise that the promise would be difficult to affirm specifically now because of the way in which the Opposition motion is phrased. The uprating can be made only in a full year, so it must be made in March. The payment should have been made before, but it must be made in March for several reasons. The Government must do something or they will lose credibility. The Government must also be shown to be compassionate towards the poorest members of the community. Finally, the Government must understand that when their own Back-Bench Members feel strongly on a subject the Government are justified in changing their view.
Only one speech has been made from the Conservative Benches in defence of the Secretary of State, and that was his own. I should not misrepresent the rather paltry and lacklustre speech of the Secretary of State if I said that he was not so much defending his policy as avoiding the consequences. He spoke about uprating and many other things. It was only with the utmost reluctance and with pressure from the hon. Member for Staffordshire, South-West (Mr. Cormack) that the Secretary of State returned to the abatement of unemployment benefit at all. He touched on the subject lightly, but only to leave it again on a well-known tangent.
The Secretary of State used a special form of words. Shortly before giving a quotation the hon. Member for Staffordshire, South-West declared his aversion to all who use quotations. However, I must say of the Secretary of State's speech what Shaw said about language—that it was given to us to conceal our thoughts. No one did a better job than the Secretary of State in concealing the meaning of words. We all recognise that Ministers must be careful in their use of words from time to time, but rarely have such cloudy phrases moved a matter forward not one jot.
If the hon. Member for Bath (Mr. Patten) can really discern any movement in what the Secretary of State said, pathology has missed a great practitioner. So advanced is the rigor mortis in the words used by the Secretary of State that any discernible change in meaning must be a matter for a post mortem examination.
The Minister of State, Treasury said that the matter was now being actively considered, whereas, presumably, inertia existed before. On 13 July he said.
I have since reaffirmed that at the right time this benefit will be made good.
That has a familiar ring that we have heard in each of the three previous debates on the subject. He continued:
The matter is under review. It will be kept under review and I can only repeat that at the right time, it will be made good."—[Official Report, 13 July 1982; Vol. 27, c. 906.]
I envy the hon. Member for Bath his mental micrometer, because most of us could not discern any measurable movement. However, perhaps that slight movement is sufficient for the hon. Member to abstain rather than vote against the motion tonight.
The Secretary of State's speech was tawdry because, for example, we are talking about a married couple, with a dependent wife, who enjoy a weekly income of £40 a week on the uprating, at a time when average industrial earnings are more than £1·60 a week. We are talking about those to whom small sums such as £1·60 a week are important in their budgeting and in the prevention of the slide into dire poverty which is all too frequently a concomitant of unemployment. Yet, even if one believed that the Chancellor of the Exchequer will do something different in the next Budget—this will be the third year of abatements—at the earliest, the 5 per cent. surcharge cannot be rectified before November 1983. A married man with a dependent wife who becomes unemployed today will receive £91 less because of the 5 per cent. surcharge.
The Secretary of State made great play of the uprating of benefits. The principle is not the uprating of benefits, but that the unemployed receive only 95 per cent. of what is due to them. He talked about the unemployed having had to make sacrifices because of the fight against inflation, but that is not why the abatement was introduced. It was introduced by his predecessor in lieu of taxation because no scheme was ready. If the Secretary of State now says that the abatement is a contribution towards the fight against inflation, it means that the unemployed are paying twice, because their benefit is taxed and 5 per cent. has been cut from it in anticipation of taxation. The Secretary of State should not pretend that that is the reason.
We have heard much talk about saloon bars this evening, and some hon. Members talked as though they were the people outside. However, the hon. Member for Chippenham (Mr. Needham) brought us back rather nearer to the corridors of power and to the Treasury Minister who said that the total package was likely to improve work incentives. The greatest work incentive is the availability of work. Not many people on the unemployment register would wish to be there for a second longer than they must, and it causes them great unhappiness to be there. If that is the unspoken philosophy behind the cut, it is unjust and, hypocritical and the House should be unworthy to carry on with it.
What is the price of justice? We hear about both vast and small sums. The Treasury believes, with undershoots and overshoots, that £60 million is a small sum. I asked, so far without success but I hope that the Under-Secretary of State will reply, how much taxation has been taken from the unemployed since last July. At present, in a full year, the Secretary of State is making a 10 to 1 profit on the unemployed because the benefit has been taxed and the cut of £60 million meant that he could tax the entire benefit, with a yield of £650 million.
It is nonsense to suggest that £650 million is crucial to the future of our economy, whereas £590 million would destroy its moral fibre. The price of justice is always worth paying, be it large or small. When we have a proposition whereby money was taken from the unemployed because of the advent of taxation two years before the taxation came in, there is no justification for retaining the cut. Neither the Secretary of State nor anyone in the House has justified the cut.
We are told that there are inestimable technical problems. There are always technical problems when this House seeks to carry out a simple act of justice. It is said that it is only at the witching hour—or, like Brigadoon, once every 100 years when the ghost appears—that we can rectify a fault. All that is needed—this is so whether it is done immediately, as the motion seeks, or next April—to remedy the abatement is an order, and I promise the Secretary of State that if he introduced such an order tomorrow it would go through on the nod. Let there be no argument that we must wait for a year to put this matter right. We could do so tomorrow or we could do it in the Budget. However, we should not wait because we are cheating the unemployed by this double taxation.
What action should be taken by Conservative Members who are critical of the 5 per cent. abatement? They have talked much about the saloon bar. That surprises me, because they seem to be total abstainers rather than frequenters of the saloon bar. Apparently, not one of those hon. Members will join the Opposition in the Lobby. Instead, they will reserve their efforts for next time, which effectively means another four months.
I excuse no one who by design or accident prevented this measure from being carried last July. No part of my efforts caused it to fail. A principle is a principle irrespective of who pursues it. One Conservative Member talked about a party game. In that sense, all parliamentary manoeuvres are games, but it is common ground with most of us that this injustice should be put right at the earliest possible opportunity. That is why I reject the Secretary of State's tawdry approach. His speech was wholly unworthy of a Minister.
The only way for Conservative Members to show the Chancellor that they are serious—he has no voluntary intention of restoring this abatement—is to vote with the Opposition. In July, we voted with Conservative Members who tabled the amendment, even though it would have been easy to table our own amendment and to seek the glory—[Interruption.] The hon. Member for Beeston (Mr. Lester) who moved the amendment in July got much publicity and favour out of it—[Interruption.] I shall not talk to the Secretary of State who is totally irredeemable, as his speech showed. He is barely capable of understanding the most fundamental of these problems—[Interruption.] Neither shall I talk to the hon. Member for Lancaster (Mrs. Kellett-Bowman), who rarely but noisily intervenes in such debates.
I shall, however, talk to the total abstainers. There is always a case for taking a drink for medicinal purposes. The medicinal purpose now is to show the Government that they cannot cheat the unemployed. I therefore invite those Conservative Members to join us in the Lobby and to pass the motion.
The most remarkable thing about the debate is that it has ended with the hon. Member for Pontypridd (Mr. John) refusing to talk to almost all Conservative Members and it started with him virtually talking to himself by the look of the Labour Benches at that time.
It has been astonishing, given the talk of high principle and the aggressive terms in which at least some of the speeches have been couched, that so few Labour Members have been present. Indeed, some of the speeches showed signs that their makers had not intended to speak.
For all the talk of principles—I do not pretend that there are not principles to be discussed—my hon. Friend the Member for Bath (Mr. Patten) was right in the reasons he put forward for the motion being on the Order Paper. We all know that they have nothing to do with principle but everything to do with politcal calculation.
I make no great protest about that, any more than my hon. Friend the Member for Bath did. It is part and parcel of the way we too often operate in the House. All that I object to is having political calculation dressed up as if it were a moral crusade. [Interruption.] I specifically said that there are points of principle but that those are not the reasons for the motion being on the Order Paper. Labour Members know that as well as I do.
Yes. The right hon. Gentleman knows as much about cutting social services as any hon. Member. About a week ago the right hon. Member for Ebbw Vale (Mr. Foot) unveiled a programme that was a vast juggernaut of social security expenditure. There were billions upon billions of great schemes for pensions, the disabled, the improvement of child benefit and the extension of unemployment benefits almost with let or hindrance to many people.
Why then do we have this relatively miniscule proposal on the Order Paper? I shall tell the House why. It was hoped to harness a few of my hon. Friends to that juggernaut. I do not object to that. I understand it. I object only to having the moral crusade element built into the debate.
The hon. Member for Pontypridd asked for the yield of the taxation that has been levied on unemployment benefit since July. I regret that it is not possible to state precisely how much has been collected to date from that source. However, the estimated yield from taxing benefits paid to the unemployed—supplementary benefit as well as unemployment benefit—for the period from July 1982 to April 1983 is £375 million.
One of the slightly odder strands in the argument—I say this to my hon. Friends as well—is the attempt to pretend that there is, or ought to be, some equation between the yield of that taxation and the unemployment benefit. That taxation was introduced—it is worth restating this to the House because it has not emerged in the debate—because of the unfairness of the existing system in which a man with a given income, solely derived from employment, would, in the course of a year, pay more tax than a man with the same income partly derived from his employment and partly from unemployment benefit.
As has been made clear, and as I am happy to repeat, the 5 per cent. abatement was introduced in the Social Security (No. 2) Act 1980 along with three or four other measures that were neither pleasant nor popular, as a necessary way of restraining the growth of public expenditure on social security. It was done with a view to enabling the social security budget, which constitutes about £1 in every £4 of Government expenditure, to make some contribution to the Government's fundamental aim of reducing inflation, strengthening the economy and thus of securing the future of employment in this country.
As the hon. Member for Birmingham, Perry Barr (Mr. Rooker) knows, and may well remind me, I was the Government Whip on that Bill. I cannot pretend that it was an easy or pleasant task to help to steer that Bill through the Committee. However, I believed that it was necessary then, and in the light of the improvement now emerging in the economy we have been shown to be right—[interruption]—I know that the Opposition are not very pleased about the fall in the rate of inflation and of interest rates, because it rather knocks on the head the story that they have been trying to sell. However, if the Opposition are truly interested in the problems of the unemployed they will recognise that it is of prime importance to them to—
The hon. Gentleman is right. That is the first sensible thing he has said this evening. We should be discussing how to get the unemployed back to work. However, we have taken the first step to getting people back to work by reducing inflation and interest rates and by creating the opportunity for business to rebuild on a firmer platform.
The measure that we have been debating, along with the other measures in the Social Security (No. 2) Act 1980, are among those that have played their part in producing the achievements that we can now see.
If it is a fact that the Government's economic policy will result in higher unemployment, is it not a basic tenet of Conservative philosophy that those who will suffer—the unemployed—should not have to do so unduly?
Yes, and I shall come to that point in a moment. My hon. Friends the Members for Chippenham (Mr. Needham), Bath and Beeston (Mr. Lester) will not hear me or my colleagues defending the position that was introduced by the 1980 Act on the basis that it is an essential part of creating incentives for people to work, or of creating a position in which people have no incentive to stay on benefits. That is no part of our argument tonight.
I shall set out some of the facts that should be weighed before hon. Members determine their attitudes to the motion. I emphasise that they are not in any way intended as arguments against restoring the abatement, although they are arguments against taking a decision in isolation, as the motion seeks to do. There has been some recognition, not least from my hon. Friend the Member for Beeston, that the effect of undertaking the policies set out in the motion would not—as appears to have been believed by most hon. Members—benefit the unemployed in general. At best, it would benefit about one in four of the unemployed.
It would benefit many people, but it would do nothing for the long-term unemployed, who have exhausted their entitlement to unemployment benefit. It would do little or nothing for many families with children, who would already be receiving supplementary benefit as well as unemployment benefit. Looking at it from the other side, the main beneficiaries of the motion would be those who had been unemployed for less than a year, whose spouses—whether husbands or wives—are working, those who are occupational pensioners, those who are single non-householders, such as young people who live at home with their parents, and those with more than £2,500 in capital. In no way do I wish to pretend that those people are undeserving—the reverse is true. I am glad that we have been able to help many of them by raising the capital cut-off this week to £2,500—a very welcome measure—but in deciding its attitude to the motion, the House should at least acknowledge that they are not the worst-off among the unhappy total of unemployed.
I have already referred to the increases in benefit which are taking place this week, which my right hon. Friend outlined, and which will be bringing substantial increases in income to all those on unemployment benefit as well as to those on other benefits. At the same time, by some of the changes we have made in the supplementary benefit system, we shall be adding to the range of those who can be helped in that way.
The statement of my right hon. Friend the Secretary of State at the beginning of the debate was a clear-cut undertaking and reaffirmation by the Government. This reflects something for which my hon. Friend the Member for Rutland and Stamford (Mr. Lewis) asked—that the abatement is not seen as a permanent measure. It was a clear undertaking—I speak again to my hon. Friend the Member for Rutland and Stamford—that this matter is being, and will be, considered by the Government in taking the decisions that need to be put together at the time of the Budget.
I shall not give way again.
My hon. Friends have spoken in terms of this being a special commitment, and I understand and recognise their feelings, but it is also a special commitment by, I hope, all Members on the Conservative Benches to concentrate available resources on those most in need. It is also our special commitment to restrain taxation and the burden of contributions so that new jobs can be created for the unemployed and, not least, it is a special commitment by all Conservative Members to a Government who seek to take their decisions in as orderly and rational a way as the uncertainties and the unpredictable nature of the world permits, a Government—
—who seek to balance claims against resources and to look at all claims against the totality of resources in a measured and coherent way.
The House is not being asked to endorse again the 1980 Act, though it did so at the time and, as I have said, I believe it has been justified by events. It is not being asked to endorse again the difficult judgment made by my right hon. and learned Friend the Chancellor and my right hon. Friend the Secretary of State earlier in the year about whether abatement should be restored in the uprating that takes place this week. The House has made a judgment on that on a number of occasions. I emphasise again to my hon. Friends that the House is not being asked to endorse the abatement as a permanent feature. We have made it clear time after time that that is not our intention.
The House is being asked to reject the motion, and, as my right hon. Friend said, to recognise that the right time for this decision to be made is in the context of all the decisions which will have to be taken at the time of the next Budget, in looking ahead to the next uprating. My right hon. Friend has given his assurance that it is being, and will be, considered. He has said that the argument is not one of principle but of timing. On that basis I seek the support of my hon. Friends in the Lobby tonight.
|Division No. 13]||[10.00 pm|
|Abse, Leo||Davis, Terry (B'ham, Stechf'd)|
|Adams, Allen||Dean, Joseph (Leeds West)|
|Allaun, Frank||Dewar, Donald|
|Alton, David||Dixon, Donald|
|Anderson, Donald||Dobson, Frank|
|Archer, Rt Hon Peter||Dormand, Jack|
|Ashley, Rt Hon Jack||Douglas, Dick|
|Ashton, Joe||Dubs, Alfred|
|Atkinson, N.(H'gey,)||Duffy, A. E. P.|
|Bagier, Gordon A.T.||Dunnett, Jack|
|Barnett, Rt Hon Joel (H'wd)||Dunwoody, Hon Mrs G.|
|Beith, A. J.||Eadie, Alex|
|Benn, Rt Hon Tony||Eastham, Ken|
|Bennett, Andrew(St'kp't N)||Edwards, R. (W'hampt'n S E)|
|Bidwell, Sydney||Ellis, R. (NE D'bysh're)|
|Booth, Rt Hon Albert||English, Michael|
|Boothroyd, Miss Betty||Ennals, Rt Hon David|
|Bottomley, Rt Hon A.(M'b'ro)||Evans, loan (Aberdare)|
|Bradley, Tom||Evans, John (Newton)|
|Bray, Dr Jeremy||Ewing, Harry|
|Brocklebank-Fowler, C.||Faulds, Andrew|
|Brown, Hugh D. (Proven)||Field, Frank|
|Brown, R. C. (N'castle W)||Fitch, Alan|
|Brown, Ronald W. (H'ckn'y S)||Flannery, Martin|
|Brown, Ron (E'burgh, Leith)||Fletcher, L. R. (Ilkeston)|
|Buchan, Norman||Foot, Rt Hon Michael|
|Callaghan, Rt Hon J.||Foulkes, George|
|Callaghan, Jim (Midd't'n & P)||Fraser, J. (Lamb'th, N'w'd)|
|Campbell, Ian||Freeson, Rt Hon Reginald|
|Campbell-Savours, Dale||Freud, Clement|
|Canavan, Dennis||Garrett, John (Norwich S)|
|Cant, R. B.||Garrett, W. E. (Wallsend)|
|Carmichael, Neil||George, Bruce|
|Carter-Jones, Lewis||Gilbert, Rt Hon Dr John|
|Cartwright, John||Ginsburg, David|
|Clark, Dr David (S Shields)||Golding, John|
|Clarke,Thomas(C'b'dge, A'rie)||Gourlay, Harry|
|Cocks, Rt Hon M. (B'stol S)||Graham, Ted|
|Cohen, Stanley||Grant, George (Morpeth)|
|Concannon, Rt Hon J. D.||Grant, John (Islington C)|
|Cook, Robin F.||Grimond, Rt Hon J.|
|Cowans, Harry||Hamilton, James (Bothwell)|
|Cox, T. (W'dsw'th, Toot'g)||Hamilton, W. W. (C'tral Fife)|
|Craigen, J. M. (G'gow, M'hill)||Hardy, Peter|
|Crawshaw, Richard||Harman, Ms Harriet|
|Cunliffe, Lawrence||Harrison, Rt Hon Walter|
|Cunningham, G. (Islington S)||Hart, Rt Hon Dame Judith|
|Cunningham, Dr J. (W'h'n)||Hattersley, Rt Hon Roy|
|Dalyell, Tam||Healey, Rt Hon Denis|
|Davies, Rt Hon Denzil (L'Ili)||Heffer, Eric S.|
|Davis, Clinton (Hackney C)||Hogg, N. (E Dunb't'nshire)|
|Holland, S. (L'b'th, Vauxh'll)||Pitt, William Henry|
|Home Robertson, John||Powell, Rt Hon J.E.(S Down)|
|Homewood, William||Powell, Raymond(Ogmore)|
|Hooley, Frank||Prescott, John|
|Horam, John||Price, C.(Lewisham W)|
|Howell, Rt Hon D.||Race, Reg|
|Howells, Geraint||Radice, Giles|
|Hoyle, Douglas||Rees, Rt Hon M (Leeds S)|
|Huckfield, Les||Richardson, Jo|
|Hudson Davies, Gwilym E.||Roberts, Albert (Normanton)|
|Hughes, Mark (Durham)||Roberts, Allan(Bootle)|
|Hughes, Robert (Aberdeen N)||Roberts, Ernest Hackney N)|
|Hughes, Roy (Newport)||Roberts, Gwilym(Cannock)|
|Janner, Hon Greville||Robertson, George|
|Jay, Rt Hon Douglas||Robinson,G.(Coventry NW)|
|Jenkins, Rt Hon Roy (Hillh'd)||Rodgers, Rt Hon William|
|John, Brynmor||Rooker, J.W.|
|Johnson, James (Hull West)||Roper, John|
|Johnston, Russell (Inverness)||Ross, Ernest (Dundee West)|
|Jones, Rt Hon Alec (Rh'dda)||Ross, Stephen(Isle of wight)|
|Jones, Barry (East Flint)||Rowlands, Ted|
|Jones, Dan (Burnley)||Ryman, John|
|Kaufman, Rt Hon Gerald||Sever, John|
|Kerr, Russell||Sheerman, Barry|
|Kilroy-Silk, Robert||Sheldon, Rt Hon R.|
|Kinnock, Neil||Shore, Rt Hon Peter|
|Lambie, David||Short, Mrs Renée|
|Lamond, James||Silkin, Rt Hon J.(Deptford)|
|Leadbitter, Ted||Silkin, Rt Hon S.C.(Dulwich)|
|Leighton, Ronald||Silverman, Julius|
|Lestor, Miss Joan||Skinner, Dennis|
|Lewis, Arthur (N'ham NW)||Snape, Peter|
|Lewis, Ron (Carlisle)||Soley, Clive|
|Litherland, Robert||Spearing, Nigel|
|Lofthouse, Geoffrey||Spellar, John Francis (B'ham)|
|Lyon, Alexander (York)||Spriggs, Leslie|
|Mabon, Rt Hon Dr J. Dickson||Stallard, A.W.|
|McCartney, Hugh||Steel, Rt Hon David|
|McDonald, Dr Oonagh||Stoddart, David|
|McGuire, Michael (Ince)||Stott, Roger|
|McKay, Allen (Penistone)||Strang, Gavin|
|McKelvey, William||Straw, Jack|
|MacKenzie, Rt Hon Gregor||Summerskill, Hon Dr Shirley|
|Maclennan, Robert||Taylor, Mrs Ann (Bolton W)|
|McMahon, Andrew||Thomas, Dafyd (Merioneth)|
|McNamara, Kevin||Thomas, Jeffrey (Abertillery)|
|McTaggart, Robert||Thomas, Mike (Newcastle E)|
|McWilliam, John||Thomas, Dr R. (Carmarthen)|
|Marks, Kenneth||Thorne, Stan (Preston South)|
|Marshall, D(G'gow S'ton)||Tilley, John|
|Marshall, Dr Edmund (Goole)||Tinn, James|
|Marshall, Jim (Leicester S)||Torney, Tom|
|Martin, M(G'gow S'burn)||Townsend, cryil D, (B'heath)|
|Mason, Rt Hon Roy||Urwin, Rt Hon Tom|
|Maxton, John||Varley, Rt Hon Eric G.|
|Maynard, Miss Joan||Wainwright, E.(Dearne V)|
|Meacher, Michael||Wainwright, R.(colne V)|
|Miller, Dr M. S. (E Kilbride)||Walker, Rt Hon H. (D'caster)|
|Mitchell, Austin (Grimsby)||Wardell, Gareth|
|Mitchell, R. C. (Soton ltchen)||Wellbeloved, James|
|Morris, Rt Hon A. (W'shawe)||Welsh, Michael|
|Morris, Rt Hon C. (O'shaw)||White, Frank R.|
|Morris, Rt Hon J. (Aberavon)||White, J. (G'gow Pollok)|
|Morton, George||Whitehead, Phillip|
|Moyle, Rt Hon Roland||Wigley, Dafydd|
|Mulley, Rt Hon Frederick||Willey, Rt Hon Frederick|
|Newens, Stanley||Williams, Rt Hon A.(S'sea W)|
|Oakes, Rt Hon Gordon||Williams, Rt Hon Mrs (Crosby)|
|Ogden, Eric||Wilson, Gordon (Dundee E)|
|O'Halloran, Michael||Wilson, William (C'try SE)|
|O'Neill, Martin||Winnick, David|
|Orme, Rt Hon Stanley||Woodall, Alec|
|Owen, Rt Hon Dr David||Woolmer, Kenneth|
|Palmer, Arthur||Wrigglesworth, Ian|
|Park, George||Wright, Shelia|
|Parker, John||Young, David (Bolton E)|
|Pavitt, Laurie||Tellers for the Ayes;|
|Pendry, Tom||Mr. Frank Haynes and|
|Penhaligon, David||Mr. Derek Foster|
|Adley, Robert||Finsberg, Geoffrey|
|Aitken, Jonathan||Fisher, Sir Nigel|
|Alexander, Richard||Fletcher, A. (Ed'nb'gh N)|
|Alison, Rt Hon Michael||Fletcher-Cooke, Sir Charles|
|Amery, Rt Hon Julian||Fookes, Miss Janet|
|Ancram, Michael||Forman, Nigel|
|Arnold, Tom||Fowler, Rt Hon Norman|
|Aspinwall, Jack||Fox, Marcus|
|Atkins, Rt Hon H.(S'thorne)||Fraser, Rt Hon Sir Hugh|
|Atkins, Robert(Preston N)||Fraser, Peter (South Angus)|
|Atkinson, David (B'm'th,E)||Fry, Peter|
|Baker, Kenneth(St.M'bone)||Gardiner, George(Reigate)|
|Baker, Nicholas (N Dorset)||Gardner, Edward (S Fylde)|
|Banks, Robert||Garel-Jones, Tristan|
|Beaumont-Dark, Anthony||Glyn, Dr Alan|
|Bendall, Vivian||Goodhart, Sir Phillip|
|Bennett, Sir Frederic (T'bay)||Goodhew, Sir Victor|
|Benyon, Thomas (A'don)||Goodlad, Alastair|
|Benyon, W. (Buckingham)||Gorst, John|
|Best, Keith||Gow, Ian|
|Bevan, David Gilroy||Gower, Sir Raymond|
|Biffen, Rt Hon John||Grant, Antony (Harrow C)|
|Biggs-Davison, Sir John||Gray, Hamish|
|Blackburn, John||Greenway, Harry|
|Blaker, Peter||Grieve, Percy|
|Body, Richard||Griffiths, E.(B'y St. Edm'ds)|
|Bonsor, Sir Nicholas||Griffiths, Peter Portsm'th N)|
|Boscawen, Hon Robert||Grist, Ian|
|Bottomley, Peter (W'wich W)||Grylls, Michael|
|Bowden, Andrew||Gummer, John Selwyn|
|Boyson, Dr Rhodes||Hamilton, Hon A.|
|Braine, Sir Bernard||Hamilton, Michael (Salisbury|
|Bright, Graham||Hampson, Dr Keith|
|Brinton, Tim||Hannam, John|
|Brittan, Rt. Hon. Leon||Hastings, Stephen|
|Brooke, Hon Peter||Havers, Rt Hon Sir Michael|
|Brotherton, Michael||Hawkins, Sir Paul|
|Brown, Michael(Brigg & Sc'n)||Hawksley, Warren|
|Browne, John (Winchester)||Hayhoe, Barney|
|Bruce-Gardyne, John||Heath, Rt Hon Edward|
|Bryan, Sir Paul||Heddle, John|
|Buchanan-Smith, Rt. Hon. A.||Henderson, Barry|
|Buck, Antony||Heseltine, Rt Hon Michael|
|Budgen, Nick||Higgins, Rt Hon Terence L.|
|Bulmer, Esmond||Hogg, Hon Douglas (Gr'th'm)|
|Burden, Sir Frederick||Holland, Phillip (Carlton)|
|Butcher, John||Hooson, Tom|
|Butler, Hon Adam||Hordern, Peter|
|Carlisle, John (Luton West)||Howe, Rt Hon Sir Geoffrey|
|Carlisle, Kenneth (Lincoln)||Howell, Rt Hon D. G'ldf'd)|
|Carlisle, Rt Hon M. (R'c'n)||Howell, Ralph (N Norfolk)|
|Chalker, Mrs. Lynda||Hunt, David (Wirral)|
|Channon, Rt. Hon. Paul||Hurd, Rt Hon Douglas|
|Chapman, Sydney||Irvine, Rt Hon Bryant Godman|
|Churchill, W. S.||Irving, Charles (Cheltenham)|
|Clark, Hon A. (Plym'th, S'n)||Jenkin, Rt Hon Patrick|
|Clark, Sir W. (Croydon S)||Johnson Smith, Sir Geoffrey|
|Clarke, Kenneth (Rushcliffe)||Jopling, Rt Hon Michael|
|Clegg, Sir Walter||Jossph, Rt Hon Sir Keith|
|Colvin, Michael||Kellett-Bowman, Mrs Elaine|
|Cope, John||Kershaw, Sir Anthony|
|Corrie, John||Kimball, Sir Marcus|
|Costain, Sir Albert||King, Rt Hon Tom|
|Dickens, Geoffrey||Knight, Mrs Jill|
|Dover, Denshore||Lamont, Norman|
|du Cann, Rt Hon Edward||Lang, Ian|
|Dunn, Robert (Dartford)||Langford-Holt, Sir John|
|Durant, Tony||Latham, Michael|
|Eden, Rt Hon Sir John||Lawerence, Ivan|
|Edwards, Rt Hon N. (P'broke)||Lawson, Rt Hon Nigel|
|Eggar, Tim||Lee, John|
|Elliott, Sir William||Le Marchant, Spencer|
|Eyre, Reginald||Lennox-Boyd, Hon Mark|
|Fairbairn, Nicholas||Lewis, Kenneth (Rutland)|
|Fairgrieve, Sir Russell||Lloyd, Ian (Havant & W'loo)|
|Faith, Mrs Sheila||Lloyd, Peter (Fareham)|
|Farr, John||Luce, Richard|
|Fell, Sir Anthony||Lyell, Nicholas|
|Fenner, Mrs Peggy||Macfarlane, Neil|
|MacGregor, John||Rumbold, Mrs A. C. R.|
|MacKay, John (Argyll)||Sainsbury, Hon Timothy|
|McNair-Wilson, M. (N'bury)||St. John-Stevas, Rt Hon N.|
|McNair-Wilson, P. (New F'st)||Scott, Nicholas|
|McQuarrie, Albert||Shaw, Giles (Pudsey)|
|Madel, David||Shaw, Sir Michael (Scarb')|
|Major, John||Shelton, William (Streatham)|
|Marland, Paul||Shepherd, Colin (Hereford)|
|Marlow, Antony||Shepherd, Richard|
|Marshall, Michael (Arundel)||Shersby, Michael|
|Marten, Rt Hon Neil||Silvester, Fred|
|Mates, Michael||Sims, Roger|
|Mawby, Ray||Skeet, T. H. H.|
|Mawhinney, Dr Brian||Smith, Dudley|
|Mayhew, Patrick||Smith, Tim (Beaconsfield)|
|Mellor, David||Speller, Tony|
|Miller, Hal (B'grove)||Spence, John|
|Mills, Iain (Meriden)||Spicer, Jim (West Dorset)|
|Mills, Sir Peter (West Devon)||Spicer, Michael (S Worcs)|
|Miscampbell, Norman||Sproat, Iain|
|Mitchell, David (Basingstoke)||Stainton, Keith|
|Moate, Roger||Stanbrook, Ivor|
|Montgomery, Fergus||Stanley, John|
|Moore, John||Steen, Anthony|
|Morris, M. (N'hampton S)||Stevens, Martin|
|Morrison, Hon P. (Chester)||Stewart, A.(E Renfrewshire)|
|Mudd, David||Stewart, Ian (Hitchin)|
|Murphy, Christopher||Stokes, John|
|Myles, David||Stradling Thomas, J.|
|Neale, Gerrard||Taylor, Teddy (S'end E)|
|Nelson, Anthony||Tebbit, Rt Hon Norman|
|Neubert, Michael||Temple-Morris, Peter|
|Newton, Tony||Thatcher, Rt Hon Mrs M.|
|Normanton, Tom||Thompson, Donald|
|Nott, Rt Hon John||Thorne, Neil (Ilford South)|
|Onslow, Cranley||Thornton, Malcolm|
|Oppenheim, Rt Hon Mrs S.||Townend, John(Bridlington)|
|Osborn, John||Tripper, David|
|Page, John (Harrow, West)||Trotter, Neville|
|Page, Richard (SW Herts)||Van Straubenzee, Sir W.|
|Parkinson, Rt Hon Cecil||Vaughan, Dr Gerard|
|Parris, Matthew||Viggers, Peter|
|Patten, John (Oxford)||Waddington, David|
|Pattie, Geoffrey||Wakeham, John|
|Pawsey, James||Waldegrave, Hon William|
|Percival, Sir Ian||Walker, Rt Hon P. (W'cester)|
|Peyton, Rt Hon John||Walker, B. (Perth)|
|Pink, R. Bonner||Walker-Smith, Rt Hon Sir D.|
|Pollock, Alexander||Wall, Sir Patrick|
|Porter, Barry||Waller, Gary|
|Prentice, Rt Hon Reg||Ward, John|
|Price, Sir David (Eastleigh)||Warren, Kenneth|
|Prior, Rt Hon James||Watson, John|
|Proctor, K. Harvey||Wells, Bowen|
|Pym, Rt Hon Francis||Wells, John (Maidstone)|
|Raison, Rt Hon Timothy||Wheeler, John|
|Rathbone, Tim||Whitelaw, Rt Hon William|
|Rees, Peter (Dover and Deal)||Whitney, Raymond|
|Rees-Davies, W. R.||Wickenden, Keith|
|Renton, Tim||Wiggin, Jerry|
|Rhodes James, Robert||Wilkinson, John|
|Ridley, Hon Nicholas||Williams, D.(Montgomery)|
|Ridsdale, Sir Julian||Winterson, Nicholas|
|Rifkind, Malcolm||Wolfson, Mark|
|Rippon, Rt Hon Geoffrey||Young, Sir George (Acton)|
|Roberts, M. (Cardiff NW)||Younger, Rt Hon George|
|Roberts, Wyn (Conway)|
|Rossi, Hugh||Tellers for the Noes:|
|Rost, Peter||Mr. Carol Mather and|
|Royle, Sir Anthony||Mr, Antony Berry.|