That is not so, because the restraints are imposed on the totality of expenditure by each local council. Within those restraints it is open to the council to choose its priorities and to obtain the best value for money from its spending and to concentrate on the desirable parts of its activity.

My hon. Friend the Member for Leominster asked about the possibility of conflict between the policies of my right hon. Friend the Secretary of State for the Environment and those of my right hon. Friend the Secretary of State for Social Services, but there is no such conflict of necessity in local government spending. The control is on the totality of local government expenditure because the Government expect local government to make its contribution to keeping down public spending. The authorities which complain loudest about what they describe as constraints on their spending in desirable areas often take themselves into penalties by increasing expenditure across the whole spectrum of services, including items such as bus revenue subsidies, sports and leisure and fringe activities of various kinds. If they concentrated on priority services and ensured that they obtained value for money there is no reason why the present system of local government spending controls should cause them to get into trouble when following sensible policies.

In this area, as in others, it is important to obtain value for money. We have spent a great deal of time in social policy concentrating on getting better value for money out of the Health Service and the social security system, as my hon. Friends have urged, but we have not always given the same attention to the ability of local government to obtain better value for the enormous sums that it spends on personal social services. We hope to assist local government to ensure that it does that.

In considering our response to the Barclay report, we have considered the future role of the social work service in the Department. We believe that there can be further development of the service's inspectorial role and, more important, of its ability to disseminate good practice among local authorities and to improve management techniques. We are at present consulting on new steps which we hope will generally help to improve the performance of local authority social service departments and get better value for the money spent.

Another key area touched on by my hon. Friends is the relationship between the Health Service and local authorities in caring for client groups, especially the elderly, and the help that the Government can give by developing joint financing and the policy set out in the document, "Care in the Community" produced a year or two ago. We have put a great deal of effort into developing that policy. It is extremely important that close co-operation is developed between health authorities and local government and that every encouragement and assistance is given to them to develop the community services required to move patients out of hospital and into more suitable community care.

There is an important role not only for the so-called statutory authorities—the health authorities and the local authorities—but for the voluntary sector. I entirely share the views of my hon. Friends the Members for Leominster and for Suffolk, South about the need to recognise the distinctive contribution that that sector can make. Again, in the so-called HASSASSA Act last Session, provision was made for the voluntary sector to have representatives on joint consultative committees considering joint financing policy in the future. We are now consulting about how that should be done as a welcome step forward, as in the various parts of the country where the arrangements are working best there are three parties involved.

Our commitment to joint financing is shown not just by constantly urging authorities to co-operate in the steps that I have described, but by making increasing funds available. In our first four years of office funds for joint financing were increased by 51 per cent. in real terms between 1978–79 and 1983–84. A sum of £96 million has been allocated for the purpose of joint finance in 1983–84. Last year we legislated and made other changes which gave increased flexibility to the rules on joint finance. They extended the period of taper in cases where the money was used for transferring patients out of hospital and gave authorities the ability to expend moneys for education and housing purposes as well as for health purposes.

In addition, we went along the lines outlined by my hon. Friend the Member for Suffolk, South. Over and above joint finance, we also gave health authorities the ability, for the first time, to attach money to patients and to transfer funds with patients for as long as necessary in particular projects. It is now open to a health authority, where there is a "Care in the Community" type project which takes specific patients out of unnecessary long stay in hospital into a community-based project, to finance those patients in the community for as long as possible. We have put no limits on the amount of finance to be expended in that way, nor on the duration of the finance for a particular patient.

In the long run, that will turn out to be more important than the extra money for joint finance or a change in the rules. It is a completely new approach to policy, which I hope health authorities, local government and voluntary bodies will take advantage of when looking at the possibilities in their localities within the JCCs and elsewhere.

Social security was the subject on which both my hon. Friends made their maiden speeches. A sensible theme to be introduced is the efficiency by which we provide income support to those who need it. I am grateful to my hon. Friend the Member for Stockport for acknowledging that we had reduced the administrative costs of the system to some extent by the new arrangements for sickness pay and housing benefit. In reducing administrative costs in this area, we increase our ability to distribute income and to provide support for the groups that need it.

All my hon. Friends who spoke on this subject were thinking on broader horizons, and in one way or another all advocated variants on the tax credit scheme. I took particular notice of my hon. Friends the Members for Mid-Kent and for Stockport, who are obviously new recruits to the enthusiastic band on the Conservative Back Benches who support tax credits.

In my time on the Back Benches, before ministerial responsibility gave me extra wisdom and restraint, I was such a supporter, and I have always listened with close attention to everything said by my hon. Friend the Member for Kensington (Sir B. Rhys Williams), who is the leading and acknowledged expert in this matter in the House. Most people who wish to get further into the subject have metaphorically sat at his feet at one time or another.

Although my hon. Friend gave clear expositions of his ideas on the subject, none of us should be deceived into thinking that the solutions to these problems will ever be administratively simple or are likely to be very cheap. He should not, therefore, lead us to the expectation that there is a rapid answer to these problems that could be instantly applied by a Government, however willing.

My hon. Friend often addresses himself to the question of cost. His arguments about how one should regard transfer payments, how one should regard them when considering the total level of public expenditure and how they should appear in the Government accounts, are matters that he should address to the Chancellor of the Exchequer, and I shall make sure that his views are drawn to my right hon. Friend's attention.

My hon. Friend spoke of the relationship of the tax system to our income support policies and explained what has been his theme for some years. In his opinion, the way properly to bring them together is to develop the principle of universality of benefits and get away from the overdependence of selective means-tested benefits which he believes has entered our system.

My hon. Friend acknowledged the Government's record on child benefit, which is the pre-eminent example of a non-tested benefit introduced originally as one step on the way to a full-blown tax credit system. It had its genesis in the tax credit Green Paper produced by the Conservative Government in th early 1970s. I remind my hon. Friend that, following my right hon. Friend's Budget earlier this year, child benefit now stands at a record level in real terms.

My hon. Friend said that we should now wind up the entire national insurance principle and change to his system. But one advantage of the national insurance system is that it brings home to today's wage earner the continuing cost of contributing to a system of income support for pensioners, the unemployed and so on. My hon. Friend touched on a basic income guarantee scheme, which appears to be the latest worked-up version of his ideas which he has prepared in conjunction with Mrs. Hermione Parker.

To illustrate my belief that my hon. Friend's answer to the problems is not administratively simple or necessarily cheap, I point out that he and his co-author accept that at 1981–82 prices the net cost of their scheme is estimated by them to be between £73 and £86 billion. They say that that should be raised by taxation and suggest an average tax rate of between 41 and 50·5 per cent.

I do not have time to go into great detail, but that shows the colossal scale of the change that my hon. Friend and his co-author contemplate. I do not criticise them for not having the details worked out in every particular, but it does not take long to discover that the effects on some taxpayers would be fairly startling. There would be gainers and losers. A large number of householders would be hard hit by those proposals. The indirect costs of introducing the scheme would be considerable. Although most people urging tax credit schemes say that they would reduce costs, it is not possible to ignore the transitional costs involved when the wage systems of all employers would require fundamental amendment, quite apart from the enormous costs of transforming the current systems of the Inland Revenue and the DHSS.

I do not say that simply to knock down all my hon. Friend's visionary ideas, which will obviously be added to by my hon. Friends the Members for Mid-Kent and for Stockport who have enthusiastically supported his proposals, but it is a difficult area and the practical snags are enormous. I assure my hon. Friends that as we continue with the social security policy and respond each year to the public spending pressures and the state of the economy and determine to what extent we can go beyond our election pledges—we will undoubtedly maintain our pledges to pensioners and others—we will also keep sight of our long-term aims.

My right hon. Friend the Secretary of State feels strongly that we cannot simply proceed from one public spending round to the next and from one Budget to the next with a system which plainly cries out for a great deal of reform, simplification and greater efficiency. As we carry on with our policy and respond to the needs of the economy, we will have to keep sight of our long-term aims. That is obviously the message from my hon. Friends the Members for Kensington, for Mid-Kent and for Stockport.

All the new ideas came from the Conservative Benches this evening. The hon. Member for Bishop Auckland came in at the end, as the last solitary contributor from the Labour party, to make a scholarly contribution which at one point accepted the constraints on resources and the almost inexorable growth in demand for social services of all kinds. He admitted that 35 years after the introduction of the national insurance system, many people still had to depend upon means-tested benefits and that the system had not realised its founders' objectives.

However eloquently the hon. Gentleman spoke, he produced no new ideas. That is always so of his party. He used the same old phrase, "sado monetarism" and made a routine speech which implied that the answer was to identify the needs, produce the money and pour it into a system which he accepted has many deficiencies. The Labour party had not found a new social policy after four years in Opposition. After it recovers from its present trauma it will have a long way to go, but is has another four years to produce something.

I recommend the hon. Member for Bishop Auckland to go back to the drawing board. He can do no better than look at the various drawing boards which my hon. Friends consulted when composing their speeches this evening. The intelligent, constructive and creative contributions were made by my hon. Friends. The creative contribution which the Conservative party makes, coupled with the obvious care and compassion that my hon. Friends have for people who need the support of the social security system, provides the best hope for the future.