Social and Economic Policies

Bill Presented – in the House of Commons at 3:31 pm on 6th April 1987.

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Photo of Mr Bernard Weatherill Mr Bernard Weatherill , Croydon North East 3:31 pm, 6th April 1987

I must announce to the House that I have selected the amendment in the name of the Prime Minister.

Photo of Mr Roy Hattersley Mr Roy Hattersley , Birmingham Sparkbrook 3:32 pm, 6th April 1987

I beg to move: That this House notes with concern the increasing divisions within British society; condemns the Government for the constant pursuit of policies which have widened these divisions; and loold forward to the time when a Government is elected which is committed to the creation of one nation. May I begin by expressing my personal regret that the right hon. Member for Plymouth, Devonport (Dr. Owen), the leader of the Social Democratic party, is not with us today.

Photo of Mr Roy Hattersley Mr Roy Hattersley , Birmingham Sparkbrook

May I express my gratitude for the fact that the right hon. Gentleman has returned from what I understand was his mission to open Joanna Southcott's box, in order to predict more accurately the dates of flood, famine, pestilence and the end of the world. I understand that the right hon. Gentleman has no prediction to make about the second coming, as he believes that that has happened already. I shall now turn from the right hon. Member for Devonport to serious matters.

This debate is about a divided nation and a Government with double standards, a Government who insist that the highest paid must be paid more to increase incentives, but insist equally that the lowest paid must be paid less to preserve jobs. This debate is about a Government who can afford to abandon the investment income surcharge, but who can afford an increase in pensions of only 80p. It is about a Government who claim to support the family and family values but who increase homelessness, force families into bed-and-breakfast accommodation and prevent husbands from coming to Britain to join their British wives because those husbands are black or Asian.

The double standards of the Government are exemplified and demonstrated by the claims that they are making about the success of their economic policies. The Prime Minister says, and will repeat with increasing stridency in the weeks ahead, that Conservatism has produced prosperity.

Photo of Mr Roy Hattersley Mr Roy Hattersley , Birmingham Sparkbrook

I expected that someone would say that. Perhaps the hon. Gentleman will tell me, if that is true and we have the unique prosperity which the hon. Gentleman claims and about which he cheers, why we cannot afford to pay pensioner couples an additional £8 and a single pensioner £5 more, thus taking a major step towards returning pensions to the levels that they would have been had the Government not broken the link between increases in pensions and increases in earnings?

If we are so prosperous, why can we not increase child benefit by £3 a week, thus increasing its purchasing power and helping the hardest-hit families? If the economy is so buoyant, or our prosperity so certain and secure, why can we not provide a decent system of unemployment benefit for the 1·3 million men and women who have been out of work and on the dole for a year or more? There is now a greater number of long-term unemployed than the sum total of unemployed people in 1979. Why, if we are so prosperous a nation, do the Government make mean little cuts in maternity grant, death grant, housing benefit and mortgage relief for the unemployed?

The Government claim that they have created an economic miracle and define "economic miracle" as an average rate of growth of less than 1·4 per cent. a year, yet they refuse point blank to provide help for the hard-pressed families, pensioners and the unemployed. Either the claims of economic success are bogus, or the Government simply do not care about pensioners, the unemployed and the sick and poor.

Anyone who denies that the Tory party has cynically survived on double standards should answer two questions. What does the House imagine that the hon. Member for Ynys Môn (Mr. Best) would say to an unemployed man in his constituency who made six separate applications for supplementary benefit? Would he say that such a man had done nothing wrong, or would he excuse that man because he claimed that he did not under the rules? What would the hon. Member for Ludlow (Mr. Cockeram) say about a woman in his constituency——

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

Order. The tradition is that we do not criticise hon. Members, except by motion.

Photo of Mr Roy Hattersley Mr Roy Hattersley , Birmingham Sparkbrook

With the greatest respect, Mr. Speaker, your final comments were inaudible because of objections from my hon. Friends——

Photo of Mr Roy Hattersley Mr Roy Hattersley , Birmingham Sparkbrook

May I make two points? First, I notified each of the hon. Members that I intended to refer to them. Secondly, the notion that we do not criticise one another on matters such as this will come as a surprise to some of my hon. Friends. If you, Mr. Speaker, instruct me to abandon the points with regard to the behaviour of the hon. Member for Ynys Môn or the hon. Member for Ludlow, I shall do so, although I suspect that the country will not abide by your ruling and that we shall hear more about it in other places on other occasions.

I turn from the double standards—[Interruption.]

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

Order. I am bound by the rules of the House.

Photo of Mr Roy Hattersley Mr Roy Hattersley , Birmingham Sparkbrook

I say to my hon. Friends that I shall abide by your ruling. The point has been made, and it will be made, made and made again outside the House.

I turn from the double standards of the Tory party to the facts about the divided nation which, with your permission, Mr. Speaker, I shall be able to pursue.

Britain is a deeply divided society, and the gulf between the classes, regions and races has widened continually, consistently and comprehensively since 1979. It has not happened by chance or coincidence. The widening gulf between the rich and the rest, north and south, inner cities and outer suburbs, working and unemployed and black and white is the direct result — indeed, the intentional outcome—of government policy. That is the natural and inevitable outcome of the new Conservatism. The philosophers of the new Right, for whom the Prime Minister has open and apparently unrestrained admiration, base their hope of progress on increasing inequality. It is clear that——

Photo of Mr Neil Hamilton Mr Neil Hamilton , Tatton

What is wrong with that?

Photo of Mr Roy Hattersley Mr Roy Hattersley , Birmingham Sparkbrook

I am asked what is wrong with that. Will you allow me to criticise the hon. Gentleman, Mr. Speaker? I shall probably refer to him precisely.

Photo of Bill Cash Bill Cash , Stafford

Will the right hon. Gentleman give way?

Photo of Bill Cash Bill Cash , Stafford

The right hon. Gentleman and I were brought up in Sheffield during the 1950s and 1960s. He is saying that what has happened in Sheffield, among other places in the north, is the result of the Government's policies. Does he accept that what happened in Sheffield and other places throughout the north, north-west and north-east is the product of the decline that set in after the war, which had nothing to do with this Government, who have done a geat deal to sort out the problems and to restore economic prosperity to this country?

Photo of Mr Roy Hattersley Mr Roy Hattersley , Birmingham Sparkbrook

I would not accept that for a second. The hon. Gentleman boasts, as he is entitled to do, because it is a matter of great credit that he was born and brought up in Sheffield, but I hope that he will join me in congratulating Sheffield city council, which is sometimes derided by Ministers as a loony left council, on the commendation that it has received from the Department of Education and Science for running one of the best education systems in Britain.

I want to deal with the philosophy of the new Right and its tactics, which have been based and built on that philosophy. It is clear that Conservative tacticians believe that by neglecting the men and women whose votes they have already lost — the unemployed, the ethnic minorities and the one-parent families — they can concentrate resources on the purchase of votes in the prosperous south and in the prosperous suburbs. I believe that the modern Conservative party is profoundly wrong in that judgment and that its error of underestimating the British people was demonstrated in its Budget strategy. The Government had £6 million to spend, and they chose not to invest it on our future. All the evidence remains that it was not the Budget that the people needed and wanted.

The Labour party and I believe that the lasting and real success of this country, whether it is to be measured by a reduction in the crime rate or by increases in national income, is dependent upon the creation of one nation in which every citizen feels part of the whole community, with a vested interest in society's success. A more equal society will be a more prosperous society and a more peaceful society. The vast majority of the people want to see the freer and fairer society against which the Tory Government have turned their face.

Photo of Mr Dafydd Wigley Mr Dafydd Wigley , Caernarfon

The right hon. Gentleman has repeatedly, as in the terms of the motion, referred to one nation. Will he, in the forthcoming election, give Scotland and Wales the message that they are fighting for one nation?

Photo of Mr Roy Hattersley Mr Roy Hattersley , Birmingham Sparkbrook

The hon. Gentleman will discover as my speech continues that I prudently make a point of not referring to the regions, but refer to the nations and the regions. This is explicitly intended to meet the hon. Gentleman's point. If he wants me to elaborate, I shall do so. I agree with the point about the nationhood of Wales and Scotland. I deeply resent the idea that Wales and Scotland have been written off economically and socially by the Government. That is the view of many people who do not live in those two nations.

The Conservative Central Office is wrong to believe that the haves have no concern for the welfare and prospects of the have-nots. The well-off, the well-housed and the well-educated realise that they have the strongest vested interest in living in a society which is not ravaged by poverty and unemployment and which does not deny a decent house to millions of its families, does not discriminate against the black and Asian British, does not deny full-time education to working-class teenagers and does not provide a declining level of medical care for those families who cannot afford private treatment. The British people have more compassion and more commonsense than the chairman of the Tory party realises.

With the general election approaching, the more intelligent Conservatives will attempt to obscure the hard face of the real Tory party. Last Saturday the cosmetic treatment was applied by the Home Secretary and the Secretary of State for Energy, both of whom spoke in Oxford about disadvantage and deprivation.

My constituency is part of the inner city of Birmingham. let me tell those two right hon. Members what has happened since they joined the Government in terms of disadvatage and deprivation in the inner city that I know best. In my inner city ward, male unemployment is now almost 50 per cent. Improvement grants planned and promised by a Tory council cannot be financed. Career teachers in the secondary schools are being retrained to help young people face four or five continuous years on the dole. I hope that during the forthcoming election campaign the Prime Minister will come to Sparkbrook and express the Government's concern about the conditions in the inner cities. I can promise her a peaceful, but spontaneous, reception.

Photo of Mr Roy Hattersley Mr Roy Hattersley , Birmingham Sparkbrook

T will, probably for the last time, but certainly to the hon. Gentleman.

Photo of Mr John Stokes Mr John Stokes , Halesowen and Stourbridge

The right hon. Gentleman knows that my constituency is also in the west midlands, not far from his. If things are as had as he says, why is the Conservative party leading so heavily in national polls, and even leading by several points in the west midlands?

Photo of Mr Roy Hattersley Mr Roy Hattersley , Birmingham Sparkbrook

The hon. Gentleman, who has spent so much of his time parading traditional values, ought to spend a moment thinking, not about opinion polls, but about the real lives of the real people that we are debating. Those people include the 50 per cent. of male unemployed in my constituency, in whose interest I deeply resent what is happening as a result of the Government's policies.

Photo of Simon Hughes Simon Hughes Shadow Spokesperson (Environment, Food and Rural Affairs)

Does the right hon. Gentleman not accept that while his party and the alliance parties understand the inner cities, which are, mainly, no-go areas for the Government, the difference is that the alliance parties also understand and represent the rural poverty which exists in those areas, from which the Labour party is now entirely excluded?

Photo of Mr Roy Hattersley Mr Roy Hattersley , Birmingham Sparkbrook

I apologise to the hon. Member for Halesowen and Stourbridge (Mr. Stokes) because his triviality has been matched by the triviality of the hon. Member for Southwark and Bermondsey (Mr. Hughes). I intend to do what is expected of the Opposition and that is to talk about real people with real problems, and about the way in which those problems, have been intensified during the last nine years.

The problem that we see in the inner cities is the most dramatic and desperate manifestation of our divided! society. A majority of the British people have a moral objection to these divisions in all their manifestations. I know that all those people pay a price for living in a divided nation, as the the most typical and terrifying example of the penalties demonstrates. In the last eight years there has been a crime explosion in Britain. Total crime has increased by 50 per cent., burglary by 60 per cent., violence against the person by 44 per cent., theft by 39 per cent., and criminal damage—the vandalism that defaces so much of our country — by 91 per cent. In every community there is a growing fear that the crime wave will engulf us all.

While preaching a crusade against crime and making token attacks on its symptoms, the Government have fostered the conditions in which crime flourishes. The crime rate has escalated because of the great divide—the consumer boom and credit cards on one side, and unemployment on the other. That is not my judgment; it is the opinion expressed by Sir Kenneth Newman, the Commissioner of Police of the Metropolis. Between 1979 and 1986, the last year for which figures are available, gross earnings, that is to say the earnings before tax of the lowest paid 10 per cent. of the workers, increased by 80 per cent. Over the same period, the earnings of the most highly paid 10 per cent. rose by 180 per cent.

The increase received by the lowest paid was exactly the same as the increase in the retail prices index, so, while the rich grew richer, the absolute best that can be said about the real earnings of the poor is that they stood still. Inflation, however, hits low-income families far harder than it hits those higher up the income scale. Indeed, a special inflation index has been constructed for the low-paid. This index rose by 86 per cent. in a period of seven years in which the pre-tax earnings of the low-paid rose by only 80 per cent. At a time when the City began to pay what the Chancellor himself has described as "telephone number salaries", when the Cabinet Secretary's salary was increased by 50 per cent. and when the chairman of British Telecom doubled his own salary to celebrate privatisation, the real value of the gross earnings of the lower paid actually fell.

That was just the beginning. The gap that separates the income groups—the gulf between the rich and the rest--was actually widened by the tax structure. The Prime Minister always talks about income tax, conveniently ignoring national insurance contributions, which are also a direct tax. On an honest calculation, for a family with two children and one wage of half the national average the tax contribution has risen by 36 per cent., while for a similar family living on one wage of twice the national average the direct tax burden has fallen. Instead of reducing the discrepancy between the living standards of the rich and the rest, the tax system has accentuated it, and the richer the taxpayer, the greater the benefit. The taxpayer with five times average earnings has enjoyed a tax cut of 11·2 per cent., while the taxpayer with 20 times average earnings has had a bonanza of 25 per cent. Moreover, that calculation of the burdens placed on lower income families and the benefits heaped on the rich does not even include the near doubling of VAT, a tax by which the least well off are hardest hit.

The result of changes in gross earnings and tax rates has been, according to the Treasury's own figures, that the richest 10 per cent. have improved their standard of living seven times faster than the poorest 10 per cent. If the Government were re-elected the gap would widen still further, because the income tax cuts in the Budget would be wiped out by a massive increase in VAT. The tax cuts that help the rich will be maintained, but other increases will hit the rest.

The Paymaster General may seek to justify a system that increases unemployment by more than 2 million and cuts the living standards of the lowest paid, while giving the largest tax reductions—£3·6 billion in a full year—to those who need them least. That £3·6 billion turns out to be just a little more than the amount that we discover today has been denied to pensioners by the break between their annual increases and the level of earnings. A pensioner couple should be receiving £11 per week more than they receive today. When pensioners wonder why the Government have denied them that £11, I hope that the message will go out to them from the Tory party that they should be consoled by the knowledge that their sacrifice has not been in vain, because it has made possible tax cuts of £50 per day for the very highest paid.

In all these particulars, the Government can at least take credit for consistency. They have not only betrayed the old, who most need help. They have also betrayed the young, with an equal determination to assist the privileged few at the expense of the majority of pupils in our schools and sixth form colleges. The education budget allows £30 billion per year for the assisted places scheme in private schools—a subsidy of £30 million for children who are already advantaged and whose families already enjoy social and financial privilege.

Meanwhile, state schools are short of books and equipment. Urgent repairs and renovations wait to be done. At the same time, city technology colleges are being established in the most prosperous areas and the inner cities are being neglected. These city technology colleges are, as the new director of the CBI described them a month ago, at best irrelevant. At worst, they are a stark example of the deliberate creation of divisions within society. Thus, we are to have a city technology college in Solihull, while five miles down the road in Sparkbrook valiant work is being done in huge classrooms, in buildings that should have been pulled down 10 to 15 years ago.

The Secretary of State for Social Services seemed to scoff at me for representing the interests of my constituents. Let me tell him that the perspective of life in Great Britain is slightly different in Sparkbrook from that enjoyed in Sutton Coldfield. I propose, today and in other debates, to speak for the dispossessed, the disadvantaged, the underprivileged and all those who have been penalized——

Mr. Hattlersley:

I shall not give way immediately. I shall give the Secretary of State time in which the Paymaster General can tell him what to say.

Photo of Mr Norman Fowler Mr Norman Fowler Secretary of State for Health and Social Security

I was objecting to the right hon. Gentleman's reference to Solihull. As he well knows, the area that is most improved and advantaged by the facility is Chelmsley Wood, which, of course, is part of Solihull. In the interests of honesty, the right hon. Gentleman should make that clear.

Photo of Mr Roy Hattersley Mr Roy Hattersley , Birmingham Sparkbrook

That is not true. I do not know, Mr. Speaker, whether I should abide by your ruling better by saying that the right hon. Gentleman has made a mistake, or by saying that he invented his answer. The college in Solihull will help most the privileged children of privileged families. Down the road in Sparkbrook, Ladywood and Small Heath, or, for that matter, in inner cities all over the country, there are overcrowded classes, dilapidated buildings, shortage of teachers of English as a second language and of teachers dealing with remedial needs. At the same time——

Photo of Mr Roy Hattersley Mr Roy Hattersley , Birmingham Sparkbrook

—parents are increasingly being asked to pay for or contribute towards essential equipment for their children's education. I am sorry to enrage the Secretary of State's sensitivities, but paying for equipment is one thing in Sutton Coldfield and quite another—it is impossible—in Sparkbrook and areas like it.

Children who live in underprivileged areas are those most in need of a regular school meal. In 1979 the law required every education authority to provide a midday meal up to a national standard of nutrition, at a national price of 25p. At that time two thirds of all school children had a school meal, but in 1980 the Tory Government abolished the obligation to provide such meals and removed the price limit from them. In areas under Tory-controlled authorities the average price rose from 25p to 67p.

Inevitably, the number of children taking school meals declined from more than 66 per cent. to barely 50 per cent. The provision of free school meals for those in special need simply does not protect many of the children who most need a school meal. Indeed, all means-tested systems of welfare and benefits inevitably discriminate against the least self-confident, the least articulate and the least determined.

All hon. Members must know from their constituency surgery work of the problems faced by applicants for discretionary grants, and of the confusion of tenants who are unable to calculate their full entitlement to housing benefit. They must know of the supplementary benefit recipient whose assessment has under-calculated his need. In my constituency surgery, an old, single, confused man —[Laughter] You can see, Mr. Speaker, why some hon. Members vote against televising the Chamber.

I repeat that I have seen in my constituency surgery an old, single, confused man who was refused a bedding allowance because new regulations introduced by the Government required him first to prove that he had made three attempts to find furnished accommodation. That is a disgrace to a civilised country, and I have no doubt that the complications of the benefit regulations are intended to reduce the number of successful applicants. It is part of the Government's campaign against so-called social security scroungers — a campaign which they have pursued with a determination which does not characterise the drive against wrongdoers in the City and in other parts of the community.

That is another example of Government policy, of Tory conduct and the damage that it does to the welfare of the most underprivileged members of society, but the Government's neglect of the generality of families is equally blatant and undeniable. Increases in child benefit are the most direct and cheapest way of helping low and moderate-income families, but increases in child benefit have not kept pace with increases in the cost of living. Their real value has fallen during the past eight years. That leads me to ask the Paymaster General a direct question on the subject. I shall give way immediately if he wishes to reply. Does he believe that child benefit should at least maintain its real value? As he knows, it has lost value during the past eight years. Does he agree that, as a minimum, it is therefore essential to put this benefit in some relationship to the index-linking and regular review procedure"?—[Official Report, Standing Committee A, 24 June 1975: c. 149.]

Photo of Kenneth Clarke Kenneth Clarke Paymaster General (HM Treasury), Secretary of State for Employment

I seem to remember speaking of voting for that during the period of hyper-inflation caused by the Labour Government, and I seem to remember the right hon. Gentleman voting against it.

Photo of Mr Roy Hattersley Mr Roy Hattersley , Birmingham Sparkbrook

The right hon. and learned Gentleman believed it then, but he does not believe it now that his talents have been recognised and he has been elevated to the glory of special assistant to Lord Young. I believe it now, and I believe that it should be introduced in a way that protects families and concentrates resources on them. All the evidence confirms that the families most in need, the 4 million unemployed, pensioners and families on wages that hold them below the poverty line, suffer from multiple deprivation under the Government. All the deprivations — low income, reduced services, reduced benefits, deteriorating housing and increasingly inadequate medical care—come together.

In Britain today, 800,000 families are in need of decent housing. Those families live in multiple occupation, in homes unfit for human habitation and in slums and tenements. The Building Employers Confederation reports an annual shortfall between demand and supply of 100,000 houses. That annual shortfall, like the total shortage, is the direct result of the Government's abandonment of public sector housebuilding. In 1978, 107,000 municipal houses were built in Britain. Last year the total was barely a quarter of that, at 31,000. Homelessness has doubled since the Government were elected, and let there be no doubt why that is: the Government have turned their back on those in greatest housing need. Meanwhile, the highest earners with the largest mortgages enjoy the highest tax relief on their investments and on their appreciating assets.

The remedy for the housing crisis will come when we again begin to build public sector housing. That process will help in the general reduction of unemployment, which has been the prime cause of increased poverty during the past eight years. The indictment of the Government for the jobs that they have lost and the unemployment that they have caused demonstrates two distinct tragedies: first, the widening gulf between those who are at work and those who are unemployed; and, secondly, the widening gulf between the nations and the regions of the United Kingdom.

In East Anglia, employees in work have increased by 8·5 per cent. in eight years; in the south-east there has been a job loss of about 2 per cent.; but in Wales the total number of jobs has fallen by almost 17 per cent.; in the north-west by 15 per cent.; in the northern region by 14 per cent.; and in the west midlands by 10 per cent. Exactly the same pattern applies for the long-term unemployed. In the west midlands, almost a third of the unemployed have been without work for more than a year. In the north and north-west, it is almost as bad at 29 per cent. To the Government, Scotland, Wales, the north, the north-west and the industrial midlands are distant countries about which they know little—and care even less.

A similar rule—neglect of those most in need—has applied to the provision of health care.

Photo of David Winnick David Winnick , Walsall North

Is my right hon. Friend aware that in my borough, which is in an area of high unemployment, low wages and the rest, no council dwellings have been built since 1979, simply because of Government policy? Does he know that more than 1,000 pensioners with firm medical recommendations from community physicians are waiting for special old-age pensioners' bungalows? Most of those people will never be rehoused. That is the deplorable state of public sector housing in my borough.

Photo of Mr Roy Hattersley Mr Roy Hattersley , Birmingham Sparkbrook

The tragedy of my hon. Friend's example is that it is not unique, but I do not diminish the importance of his point by saying that. Similar conditions apply throughout the country. They apply — this compounds the disgrace— in an economy that is soon to be projected as the most successful economy in Western Europe. Of course, that is untrue, and it undermines the Conservatives's claim to have anything resembling care and compassion for the people of the country.

The report from the Health Education Council entitled "The Health Divide", which managed to escape from the clutches of its Tory chairman last week, confirms my point. The report's conclusions are simple and stark. The health of upper income families has improved much more rapidly than has the health of families on low incomes. In some cases, the health of poorer families has deteriorated. The health divide is also a life expectancy divide, for the risk of death from coronary heart disease decreased by 12 per cent. among the professional classes, but increased by 6 per cent. among manual workers.

The report's conclusions have been challenged, but all the evidence supports the view that the report is correct. I offer four suggestions as to why it is wholly vindicated. First, it has been attacked by Woodrow Wyatt, the Plato of the News of the World When the Government are especially worried, they wheel out their most consistent toady to address the subject in the style and grammar of a Monday Club newsletter. Perhaps more important in terms of the report's credibility, "The Health Divide" does no more than confirm the class differences in health prospects and life expectancy which have already been demonstrated beyond reasonable doubt. It was the message of the Black report, which the Government tried to suppress eight years ago. Last year, Social Trends recorded that variations in the standard mortality rate by social classes were as high in recent years as they were 50 years ago. Only last August a survey of health prospects, led by the Lancet, concluded: The social gap has widened. Widening in equalities between social groups are evident in mortality from lung cancer, coronary heart disease and cerebrovasculic disease. Some critics of the report have suggested that it does not show the neglect in health care provided for the low-paid, but simply demonstrates that the low-paid are inherently unhealthy and that they are increasing in numbers. To argue that case is not to refute the report, but to confirm its basic premise. Low-income families are at greater risk from illness. Unemployment has increased to almost 4 million. Families living on or below the supplementary benefit level have increased by 50 per cent. to nearly 9 million during the lifetime of the Government. The health care of those families in special need, who should have been compensated for their deprivation, has been scandalously neglected.

I shall give one example—if pressed I shall gladly give more—of the coincidence between low employment and low subsistence levels and standards of health care. In Liverpool, over the past eight years, 22 per cent. of the total number of jobs has been lost. At the same time, in that area of unique deprivation, the Merseyside hospital authority has lost 16 per cent. of its hospital beds.

The tragedy of that situation is that the deprivation is transmitted from generation to generation. That is the message of every survey ever conducted into deprivation in this country. That is why the National Childrens Bureau once wrote of children in the inner cities that they were "born to fail." That is the meaning of the cycle of deprivation, about which the right hon. Member for Leeds, North-East (Sir K. Joseph) used to lecture us 10 years ago.

By dividing the nation the Government are prejudicing the prospects and destroying the hopes of both deprived and dispossessed members of this generation, and are doing exactly the same damage to their children and grandchildren. It is above all that reason — the permanent damage that it has done, and is doing, to this country — that makes the Conservative party wholly unfit to govern.

Photo of Kenneth Clarke Kenneth Clarke Paymaster General (HM Treasury), Secretary of State for Employment 4:10 pm, 6th April 1987

I beg to move, to leave out from "notes" to the end of the Question, and to add instead thereof: the Government's commitment to seeing all citizens of the United Kingdom share in the increased prosperity and improved public services resulting from the economic policies it is pursuing and applauds the Government's continuing commitment to the principles of one nation.". The speech that we have just heard from the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) was widely billed in some of this morning's newspapers as the relaunch of the Labour party in advance of the general election. If that is what was intended, it seems to me that the already melting number of Labour Members is a poor turnout for this great occasion.

Photo of Kenneth Clarke Kenneth Clarke Paymaster General (HM Treasury), Secretary of State for Employment

This is an Opposition Supply day. I have no doubt that Opposition Members have made the same decision as a high proportion of Members of the House — namely, that that story has all been heard before, and, as has just been revealed, the relaunch is a relaunch of all the same ideas and all the same policies, rehashed in the usual way.

The first stage of the rocket got off to a bad start. Having arrived at the last moment, the right hon. Member for Sparkbrook seemed to be a little flustered and breathless, no doubt having just had a good lunch in the City, which I do not begrudge him. Having failed to notice the leader of the Social Democratic party, the right hon. Member for Plymouth, Devonport (Dr. Owen), in his place only four seats away, the right hon. Gentleman threw away a good joke. I suspect that the failure to see the right hon. Member for Devonport was a Freudian slip; a case of wishful thinking in view of the present state of play in the opinion polls. I advise the right hon. Member for Sparkbrook to get a little more used to that gap along the Front Bench because, from the Government Benches, it seems that the two right hon. Members will be changing seats after the election and that the right hon. Member for Devonport will speak from the Dispatch Box, while the Labour party will have moved below the Gangway. That will be the Labour party's fate if the attack on the Government's policy that the Opposition motion represents is pursued. It is fundamentally mistaken.

I refer, first, to the allegations about the Government in the Opposition motion. The Government are committed to encouraging a society in which wealth is created, a society in which that wealth creation benefits all our citizens, and a society which offers equality of opportunity, above all, to all its citizens. Our concern is to ensure that our people are better off, that they all enjoy rising standards of living, a better quality and quantity of health, better quality education and better public services, all of which we are achieving.

Photo of Kenneth Clarke Kenneth Clarke Paymaster General (HM Treasury), Secretary of State for Employment

Of course, that does not imply that what we are seeking to create is a uniform society in which there are no differences. To some extent, differences are bound to exist. Those differences will change, and always do change, in any society as the economy changes. It will always be the case, and always has been, that at any given moment some industries in some areas may prosper and develop more than elsewhere. Over any given period, earnings in some occupations will rise more than others because skills and talents in limited supply will be rewarded more highly. That is inevitable. It is part of the process of society in history.

However, differences are not the same as divisions, and people who try to elevate the differences that exist into divisions within a society are doing that society a gross disservice. Socialists have always based their politics and their approach to politics on an emphasis on the divisions in society. It is in their interests to paint those divisions in exaggerated colours. They need to point to divisions in society as the justification for state activity to tax and spend on particular interests.

Conservatives, on the other hand — members of the present Government—do not believe in huge inequalities in income or differences in lifestyle. As I have said, we believe, and we have always stated that we believe, in equality of opportunity. We believe in the stability of society that the idea of "one nation"— a classic Tory philosophy—creates. As every trade unionist knows who has argued about differentials, as all trade unionists have at some time, differences of income have a purpose in society. They encourage people to develop the skills that are in demand. They provide incentives for people to advance, to lead and to change society for the better.

Let me give an example. I find it odd that the party that talks with concern about the brain drain complains about all wider income differences. Surely we all recognise that a major response to such a problem is to raise the incomes of top scientists and, if possible, to reduce their tax rates. The Labour party says, "Give them more facilities, but bring back punitive tax rates." Would that stop the brain drain? I beg to differ. Our policy would produce bigger earnings differences, but it would also encourage scientists to work and create more wealth in our society, and that is beneficial for everyone.

Photo of Nick Raynsford Nick Raynsford , Fulham

What about the nurses?

Photo of Kenneth Clarke Kenneth Clarke Paymaster General (HM Treasury), Secretary of State for Employment

The nurses have had a bigger increase in their real living standards in recent years under the Government than they had under the Labour Government. Their living standards fell under the Labour Government.

My right hon. Friend the Secretary of State for Social Services and I are back in harness again today, and we well remember the strike in the Health Service, supported by the Labour party, when the biggest objection that the Labour party and trade unions had to the settlement that we were endeavouring to make was that we were paying the nurses a bigger increase than was paid to people in the unions affiliated to the Labour party. That strike was extended by the Labour party because it did not want us to pay more to nurses than to the people in the National Union of Public Employees and the Confederation of Health Service Employees, to which the Labour party is so indebted. We set up the review body. We have given a real increase in living standards to nurses, and the Labour party tried to block every step along the way. I am talking about inequalities in income and the higher position of nurses in the earnings league table. That is a product of what we have done.

The mistake that is made over and over again by the Opposition is to assume that any changes that widen differences, as long as they are not called differentials, are always harmful, but such changes can be beneficial to everyone in society—I stress, everyone—simply because total wealth and income are raised. If one uses incentives and rewards intelligently, everyone can share in that growth. Someone has to create wealth before the politicians fall to sharing that wealth out.

I know that the right hon. Member for Sparkbrook does not agree. It would be surprising if he did. We would not be on opposite sides of the House if we agreed. The right hon. Gentleman made it most clear in the postmortem of the Labour party's election defeat, when he went on a "Newsnight" special on 31 July 1983 and said : We are not the party of equality of opportunity. That is a view of society of the Conservative party…We are the party of equalty of outcome". That was the main thrust of what the right hon. Gentleman said today. The result was that he made a great deal in his speech, when he got down to it, and spoke eloquently of the faster earnings growth of the better off in society. Obviously, he objected to that.

If we look at the percentage changes in real take-home pay while the Government have been in office, it is true that between 1978–79 and 1987–88 people on five times average earnings enjoyed real increases in pay greater than those on half average earnings. We took away all the higher, punitive rates; I do not deny that. As a result, those on five times average earnings received an increase in real take-home pay of 38 per cent., compared to an increase of 20 per cent. for those on half average earnings. People at every level of earnings received a remarkable increase in take-home pay.

Perhaps single people on half average earnings would have preferred the position under Labour between 1973–74 and 1978–79, when they did better compared to those on five times average earnings. However, it is only a comparison between the two periods. Between 1973–74 and 1978–79 the low earners lost only I per cent. in real take-home pay, while those on five times the average lost 18·5 per cent. The Labour party was happier when its policies resulted in everyone becoming poorer in terms of take-home pay, but the very low-paid becoming poorer at a slower rate than the very highly paid.

The right hon. Member for Sparkbrook made much of the fact that a higher proportion of earnings is paid in tax now than in 1979.

Photo of Mr Roy Hattersley Mr Roy Hattersley , Birmingham Sparkbrook

If the figures that the Minister has quoted are correct, why do the Treasury tables published in the second week of January show that the lowest decile had increases of only 3·5 per cent. over the appropriate period? That does not even meet the increase in inflation as measured by the low-income inflation index.

Photo of Kenneth Clarke Kenneth Clarke Paymaster General (HM Treasury), Secretary of State for Employment

The earnings of the lowest decile—that is those who at one time are in the lowest 10 per cent. of earnings; it is not the same people all the time— kept pace with inflation. I have the answer here, unlike the right hon. Gentleman, who was making such convoluted comparisons that he had to read his text especially carefully when he came to his earnings and taxation figures. He is being highly selective. He knows perfectly well that a comparison of the period from 1973–74 to 1978–79 with that from 1979 to now shows that the entire population have received much larger increases in take-home pay recently than they did under Labour, and that significant sections of the population suffered actual decreases under Labour. Equal misery was the policy of the last Labour Government. People are now sharing in growing prosperity.

Photo of Mr Roy Hattersley Mr Roy Hattersley , Birmingham Sparkbrook

I ask a simple question. Are the Treasury figures right, or wrong? During the Government's term of office, have average earnings in the lowest decile increased by 3·5 per cent.? That is a simple statistical question. Is the answer yes, or no? If it is yes, all that the Minister said a moment ago is nonsense.

Photo of Kenneth Clarke Kenneth Clarke Paymaster General (HM Treasury), Secretary of State for Employment

The answer is yes, but all that I said a moment ago is not nonsense. Those people have received a real increase.

Photo of Mr Roy Hattersley Mr Roy Hattersley , Birmingham Sparkbrook

An increase of 3·5 per cent. in eight years?

Photo of Kenneth Clarke Kenneth Clarke Paymaster General (HM Treasury), Secretary of State for Employment

That is much better than what the Labour party achieved. The figures that I quoted for those on half average earnings and those on five times the average. and the figures for married and for single people across the incomes bracket, are vastly better in terms of take-home pay than anything achieved during the years of total economic failure under the last Labour Government. The partial quotations given by the right hon. Gentleman cannot conceal that.

The right hon. Gentleman also made much of the fact that a higher proportion of earnings is now paid in tax than in 1979, and the hon. Member for Blackburn (Mr. Straw) is anxious to repeat that allegation. I find complaints about the high level of tax a somewhat curious tactic for the Labour party to employ. One of the daftest moments that I recall in the Chamber during the past few months—indeed, one of the daftest moments for several years—was when the Leader of the Opposition attacked my right hon. Friend the Prime Minister during Question Time for her policy of high taxation. Those who believe that the Labour party is criticising us for reducing taxation too much should note that on 12 February—it is at column 456 of the Official Report—the Leader of the Opposition called my right hon. Friend "high-taxer Thatcher". That contrasts rather with the reaction to the Budget by the Labour party and, indeed, the Liberal and Social Democratic parties.

The figures for take-home pay that I have just cited show that those in work are much better off now that they are paying a higher proportion of their higher incomes in taxation. The secret behind what we all realise is a great increase in living standards for those in work is that real earnings have risen substantially, whereas they did not rise before we began the economic revival. We have experienced such a significant rate of economic growth, and such a significant increase in real earnings, that people in work are very much better off. They can afford to pay more taxes, and those taxes are being used to provide better public services.

When the right hon. Member for Sparkbrook was making his tax comparisons, he neglected, in his excitement, to mention that if the present tax system were the same as the system in 1979, people would be paying a much higher proportion of their incomes in tax.

Photo of Mr Roy Hattersley Mr Roy Hattersley , Birmingham Sparkbrook

The Minister is rehearsing the passage, which I anticipated, about how well the economy is doing. Will he answer the question that I related to that? If we are doing so well, why can we not afford to pay pensioners an increase related to average earnings?

Photo of Kenneth Clarke Kenneth Clarke Paymaster General (HM Treasury), Secretary of State for Employment

We have more than maintained the real value of the pension at a time when the number of pensioners has increased by 1 million, as we did throughout the economic recession that dogged the first two years of our period of office, when we were assigned to sort out the mess left behind. I shall return to the question of pensioners in a moment. The right hon. Gentleman will not then laugh at our record on pensions compared to that of his Government. Pensioners, along with the rest of society, have benefited considerably from the improved prosperity that we now enjoy.

I have dealt with the right hon. Gentleman's points about incomes and tax. I do not believe that rising real incomes for those in work are the answer to everything. In my present job, I am acutely aware of the danger that increasing real incomes may go only to those in work and that growth in the economy may pass by the unemployed — especially the long-term unemployed. We cannot allow society to divide into a group of insiders becoming better off in work, and a group of outsiders remaining in low incomes for long periods. Pay bargaining can easily reflect that, particularly the kind of pay bargaining often encouraged by the Labour party.

The reason why academics often ask why pay restraint has taken a long time to be achieved, despite high unemployment, is that trade unions and employers have no interest in remembering the long-term unemployed when negotiating settlements" but that has been the whole point of our policies on employment, work experience and training for the last two or three years. We must ensure that the long-term unemployed—indeed, all unemployed people — do not become outsiders. We want to take them back into the main stream of the economy. The measures that my right hon. and noble Friend the Secretary of State for Employment and I keep pushing forward are intended to achieve that in a more purposeful way than has so far been attempted. We have also concentrated on regional differences and the inner cities in all our activities in the Department of Employment, the Manpower Services Commission and wide parts of the Government. We have an ambitious range of employment and training measures to ensure that the unemployed are drawn back into the labour market to enjoy the benefits already enjoyed by those in work.

We are spending about £3 billion this year, and we are spending it where it is most needed. In the present financial year the Manpower Services Commission has spent roughly twice as much per head of the labour force in the areas—usually categorised as the north, hut to be found in various parts of the country—where the decline of traditional manufacturing industry has had the greatest effect on jobs, as it has spent elsewhere. We are targeting our policies to ensure that divisions in society are not created and to ensure that the more prosperous economy that we are producing provides benefits for those who might otherwise be excluded.

Our spending has been concentrated on the young and the long-term unemployed. We know that every young person needs training, and a sound introduction to working life, as soon as he leaves school. That is what we offer through the YTS, on which every 16 and 17-year-old school leaver is now guaranteed a place, so that none of them need be unemployed any longer.

Many of the long-term unemployed need personal help, and we provide that in our restart interviews, which are intended to help them return to the labour market. From now on we offer that help, on an individual and personal basis — man-to-man, woman-to-woman or woman-toman—every six months. In this way we shall be giving direct help to over 1 million people.

The problems that many long-term unemployed face in terms of illiteracy, poor education and a real lack of skill are being tackled by the Government through the job training scheme and job clubs. People are being given motivation and skills to help them back to work. We are also finding new ways to tackle inner-city problems. In the inner-cities initiative we are combining the resources of central Government with the private sector, and with the talents of individual residents, to create opportunities for enterprise and employment in the rundown inner areas of some of our large cities.

That package of measures cannot be challenged. Each of those policies, all of which are aimed at reducing the divisions in our society and helping the disadvantaged, has been belittled and attacked by the Labour party, not least by the right hon. Member for Sparkbrook.

Photo of Kenneth Clarke Kenneth Clarke Paymaster General (HM Treasury), Secretary of State for Employment

I shall give way in a moment.

When the right hon. Member for Sparkbrook is not making his "one nation" speech he is fond of attacking all those measures, and he tries to draw on his experience in his own constituency. I am not sure whether the right hon. Gentleman has ever lived in Sparkbrook. I lived for six years in what is now his Sparkbrook constituency. However, I am glad to say that the boundary commissioners did not include my ward in his Sparkbrook constituency, so I was never represented by him. I remember Sparkbrook in the 1960s. It was the first area in any city to which the phrase "inner-city policy" was applied. The Sparkbrook initiative goes back 20 years, when the right hon. Gentleman was first elected. Therefore, his claim that the deprivation in Sparkbrook has been created by Thatcherism and the Tory Government is a little wide of the mark to those who know the area that he represents.

It is not true that every part of the right hon. Gentleman's constituency is deprived. The areas that will be served by the city technology college are not so deprived as the prosperous bits of Moseley that fall inside his constituency. However, this is not the time to give the right hon. Gentleman an A to Z to Birmingham, in an effort to fend off those who are fighting to deselect him as the Member for Parliament for Sparkbrook. When he attacks job clubs and the restart programme, and when his hon. Friend the Member for Kingston upon Hull, East ( Mr. Prescott) — who is not here today—calls the YTS a "skivvy" scheme and tries to undermine all that we are doing for the long-term unemployed, they do damage to the residents of Sparkbrook, and of Peckham, and to people in the north. After listening to today's speech by the right hon. Gentlman, it is clear that the Labour party has no alternative to offer those who find themselves in that position.

Photo of Mr Allan Roberts Mr Allan Roberts , Bootle

If the Minister is so keen on the restart programme, will he remember that on Merseyside 28,175 people were interviewed under the Government scheme but that only 295 were placed in jobs? That is a 1 per cent. success rate in an area of massively high youth unemployment. Furthermore, youth unemployment is fuelling the drugs problem in that area.

Photo of Kenneth Clarke Kenneth Clarke Paymaster General (HM Treasury), Secretary of State for Employment

If the hon. Gentleman tables a question about that matter—he may already have done so —I shall make yet another attempt to clarify that point, as I do for every Opposition Member. The figure to which the hon. Gentleman referred relates to those who have been directly placed in jobs after an interview. I have explained over and over again that that is no measure of those who find work after training, under the enterprise allowance scheme, and all the other opportunities that they are given. This is yet another example of a Labour Member of Parliament seeking to belittle a highly successful scheme, simply because Opposition Members are terrified that we shall be seen to be successful in reducing the number of long-term unemployed. Long-term unemployment is being reduced. In fact, as a result of all Government's policies it has been coming down for the past six months.

Photo of Mr Tony Marlow Mr Tony Marlow , Northampton North

As my right hon. and learned Friend knows, the Labour party wishes to have a debate about alienation, division and deprivation in our society. Will he tell the House why it is that alienation, poverty, unemployment and deprivation are far worse in Labour-controlled local authority areas than they are in the rest of the country?

Photo of Kenneth Clarke Kenneth Clarke Paymaster General (HM Treasury), Secretary of State for Employment

It is partly because of the poverty in some of those areas, but in many of them it is due to the policies of Labour-controlled local authorities, not all of which are in London. They contribute to the problem and do nothing to try to eliminate it.

Photo of Kenneth Clarke Kenneth Clarke Paymaster General (HM Treasury), Secretary of State for Employment

I shall give way in a moment.

The Labour Government have nothing to contribute by way of an alternative to those schemes. We are giving training, work experience and opportunities to the young and the long-term unemployed. We are also tackling the inner-city problems. The right hon. Gentleman's solution to heal the divisions in our society is to tax the rich and to spend that money on the poor. That is a beguilingly straightforward solution.

In a speech last year the right hon. Gentleman announced for the first time that the Labour party would use the £3·6 billion that it claimed, slightly erroneously, had been given in tax cuts to the most highly paid 5 per cent. in our country, to raise the level of state benefits for various groups of voters. As the two are sitting side by side today, perhaps the right hon. Gentleman should check with the hon. Member for Oldham, West (Mr. Meacher) what is the Labour party's policy, because it seems from the speeches of the hon. Member for Oldham, West that he would use some of the same money for a domestic insulation programme and for winter premiums to help to pay fuel bills. They ought to sort out the divisions in their own ranks and stop spending the same money twice—except that that would reveal that, between them, the Labour shadow Cabinet has pledged to increase public spending by about £34 billion, which would bankrupt the national economy.

I was asked about pensioners. I am sure that everybody wants more money to be spent on pensioners. However. I am sure also that pensioners recognise that the country can spend money in this way only when it has earned it by creating more wealth. We have more than maintained the real value of the pension, although there are 1 million more pensioners and the country has been emerging from a recession.

When the Opposition refer to the divisions in our society, they always forget to mention that between 1979 and 1985 the average net income for pensioners rose by 18 per cent.—an average annual rate of just under 3 per cent. That means that those above retirement age have, as a group, done well under this Government and that they can expect to continue to do well. [Interruption.] Of course the world is changing. I want to see good occupational pensions. The Labour party wants people to have just the state pension and state benefit. According to the Labour party, if it is not state benefit it does not count.

As a group, pensioners have been growing more prosperous. A major reason for that is our pledge to keep inflation low. That is where the real weakness lies in the Opposition's policies. The ravages of inflation in the past and the havoc that it created for so many vulnerable members of our society have been too easily forgotten by some members of the public. The Opposition seem to regard as a matter of no consequence the inevitable rise in inflation that would result from their spending policies. Inflation is one of the most divisive and unfair influences that any society can inflict upon itself.

One key to an examination of inflation as a problem in any debate about the inequalities in our society is that inflation robs the weak and gives to the strong. It harms the saver; it does not harm the borrower. It harms the pensioner; it does not harm the high earner. It harms all those who are unable to adjust their incomes quickly to rising inflation. The yuppie with the big mortgage, the big overdraft and the high earnings will do well out of inflation, if he keeps his job.

If one talks to many pensioners who are now in their 70s or 80s, one discovers how they were made poorer than they need have been by the hyper-inflation of the Lib-Lab Government of the 1970s, which robbed them of their savings and destroyed the value of the fixed occupational pensions which they had expected to enjoy. The inflation caused by the last Labour Government was one of the most divisive influences in our society and created more poverty than all their spending policies helped to cure. I see no reason why that should change.

Photo of Jack Straw Jack Straw Shadow Spokesperson (Environment, Food and Rural Affairs)

I am glad that the Paymaster General has referred to inflation. Will he explain why Lloyds Bank Review, published this morning, considers that the Government's record on inflation, relative to other countries, is worse than that of the last Labour Government's? Will he also explain why, in his stupefyingly complacent speech, he has not once explained that the Government's unemployment record is the worst of all other major industrialised countries, bar one?

Photo of Kenneth Clarke Kenneth Clarke Paymaster General (HM Treasury), Secretary of State for Employment

The hon. Gentleman does not often drop his voice at the end of a sentence, so I assume that there is some magic in the little phrase "compared with other countries." If he is trying to claim that the Government's record on inflation vis-a-vis the previous Labour Government's record, and that of the Lib-Lab Government, is poorer it is totally incredible. It is relative to other countries, so it may be that during the 1970s, if one looks at some of the wilder countries — perhaps Italy, Argentina, Uraguay and Brazil had fantastic inflation — the double-figure inflation of the Labour party can by comparison, be made to appear respectable. The fact is that we now have low single-figure inflation.

Photo of Kenneth Clarke Kenneth Clarke Paymaster General (HM Treasury), Secretary of State for Employment

My point, which the hon. Gentleman does not like — hence he is trying to go back to weird international comparisons—is that if the Labour party's policies, as they would with £34 billion public expenditure, produce high inflation, that would impoverish pensioners, cause poverty and recreate divisions in society far beyond those that it is contriving to complain about today.

Photo of Simon Hughes Simon Hughes Shadow Spokesperson (Environment, Food and Rural Affairs)

How does the Paymaster General reconcile his statement of abhorrence of inflation with the fact that, since his Government came to office, we have seen the numbers of homeless inflated to 100,000, house prices in the inner city areas inflated out of reach of ordinary people—it is £2·5 million in my constituency for a penthouse flat — and unemployment in the so-called targeted inner cities inflated to 30 per cent., as it is in constituencies such as mine? How is that reconcilable with his great virtuous principles about inflation?

Photo of Kenneth Clarke Kenneth Clarke Paymaster General (HM Treasury), Secretary of State for Employment

We have had many debates about unemployment and the hon. Gentleman has attended many of them. We know that in 1979, 1980 and 1981 unemployment rose dreadfully under the impact of the oil price increase and world recession, and under the impact of the over-manning and inefficient state in which we inherited British industry, the level insupportable of subsidy that sustained that industry, and the fact that the country's economy was left at the end of the 1970s in a state in which it could not withstand international competition. He also knows that from 1981 we have steadily recovered, that since 1983 we have created over 1 million additional jobs and that unemployment is now coming down steadily. It came down by a record-breaking amount only last month. We are, as I explained earlier, seeking to extend that into the inner cities.

The fundamental belief underlying Labour's programme on poverty and on jobs and the Liberal's policy on jobs, remains the belief that more public spending is the best way to create jobs and solve what they see as the ills of our society. That fundamental belief is fundamentally nonsense. It does not mean that one should never increase public spending. We have increased public spending on our public services where they require it. The right hon. Member for Sparkbrook selected various services to try to disprove that.

Photo of Kenneth Clarke Kenneth Clarke Paymaster General (HM Treasury), Secretary of State for Employment

I shall give way shortly, but I have given way quite a lot.

At the weekend, in one of the Sunday newspapers, I saw a specimen of one of the advertisements that the Labour party will put out to try to show that somehow, in the recovery of our economy, public services have been cut back. It was an advertisement about health care, so it took me back to the days when I worked for my right hon. Friend the Secretary of State for Social Services. The Labour Health Service advertisement had a marvellous series of slogans stating that there were "Less beds", "Less staff" and "Less hospitals" and that the Tories could not care less. If the Labour party is to challenge educational standards, it should use the English language correctly. The word "fewer" would have been correct. Leaving that aside, I advise the right hon. Member for Sparkbrook, in the launch, to stop relying on the old stuff from the hon. Member for Oldham, West.

With the statement "Less beds", the hon. Member for Oldham, West is still relying on the furniture as a measure of how the Health Service is performing. Presumably he arrives at "Less staff- by not counting those working for private contractors because they are not on the Health Service payroll. He refers to "Less hospitals". He still thinks that if one closes two old Victorian buildings and replaces them with one big modern hospital one is reducing the service. I am sure that when my right hon. Friend the Secretary of State for Social Services replies to the debate he will point out that during the past seven years we have put more money into the Health Service, employed more doctors and nurses, and most important, treated many more patients. That is the result of well judged public spending. A key part of the Chancellor's Budget strategy this year was the great increase in public spending that we were able to announce, particularly on health and education. It was first announced in the autumn statement last year.

Photo of Mr Nigel Spearing Mr Nigel Spearing , Newham South

Will the right hon. and learned Gentleman give way? I did ask earlier.

Photo of Kenneth Clarke Kenneth Clarke Paymaster General (HM Treasury), Secretary of State for Employment

I am sorry. but I shall not give way.

The whole experience of the 1960s and 1970s should have taught us that public spending beyond what the economy can afford will not tackle the problems of either unemployment or low income. Indeed, the combination of higher interest rates due to more borrowing, and higher taxation and higher inflation, which will inevitably flow from the increase in public spending, will make people worse off and reduce jobs.

Photo of Nick Raynsford Nick Raynsford , Fulham

I grant that in one area of policy there has been a significant increase in spending recently. We have seen it in expenditure on bed-and-breakfast hotels. Will the Paymaster General tell the House why it is better to spend more money on bed-and-breakfast squalor for homeless families than it would require to build brand new homes that would put people back to work while building them and provide people with better housing?

Photo of Kenneth Clarke Kenneth Clarke Paymaster General (HM Treasury), Secretary of State for Employment

No one wants to see money spent on expensive bed-and-breakfast provision. If the Labour local authorities, particularly in London, could tackle the 110,000 empty houses in council ownership, we might make some progress in dealing with that problem as well.

I was referring to the higher taxation and higher inflation that are likely to make people worse off and reduce jobs. I accept that both the Opposition parties have an answer of sorts to the inflationary problems that their policies would create. The Labour party has a particular problem because of its relationship with the unions. That is made worse by its clear commitment to repeal all our industrial relations legislation. If Labour were in office it would be easier to strike, easier to take secondary action, there would be no need for strike ballots, no restrictions on picketing, and so on. That will make it difficult in inflationary times, as the Labour party is putting up public spending and increasing taxation.

That could make it impossible to achieve what David Currie and Maurice Peston said in their article in the New Statesman on "Labour's better way". As everybody knows, David Currie and Maurice Peston are the two professors of economics who are largely the authors of Labour's so-called jobs plan. They pointed out what they thought was essential. They said: We must keep the inflation rate under control. That means a planned policy for incomes, not least in the private sector. I am sure that the right hon. Member for Sparkbrook would agree with that, except when he is on a Labour party platform, because in a post-mortem of Labour's last election defeat he described in Tribune on 29 July 1983 what was wrong with Labour's policy. He said: our economic policy was deficient"— I do not see the difference between what it was then and what it is now and…was made literally incredible to the public…We flinched from saying what every sensible person knew that to run the economy in the way which we hoped, which was to have a measure of planning, which would give expansion and full employment without inflation, we had to come to an agreement with the trade unions about incomes. Presumably what happened was the great meeting last week, with terrific fanfares during the preliminaries of the relaunch. "The national economic assessment" was revealed by the Labour party and the Trades Union Congress as an anti-inflationary device. I have to read what it is called, because I remember it as the "social contracts" and I am sure that it is most familiar to members of the public by that name.

The Liberals and the Social Democrats are also clearly pledged to go back to another old favourite in order to cure inflation, which also failed when excessive public spending and wage explosions last caused trouble. They are firmly committed to a statutory incomes policy based on a Government dictated "norm", with penalties for deviation. The present Government do not need the old-fashioned quack remedies of the Opposition, because we have cured the disease of inflation. We have increased public spending-- as we have--only after we have first achieved the growth in the economy to pay for it. At the moment inflation is in low single figures. Our unit wage costs are not going up any faster, at long last, than those of our competitors. Therefore, the Opposition do not need the social contract or statutory incomes policies to deal with present problems. They are having to advocate these things to protect themselves against the inevitable consequences of the other policies which the Labour and Liberal parties are advocating, which would bring back inflation, higher taxation and so on.

To move on to what was most missing from the speech of the right hon. Member for Sparkbrook, I point out that the clearest symbol of the difference in outlook between us and the Opposition lies in our attitudes to ownership. That has not been mentioned so far. The concept of ownership no longer features in Opposition speeches, but most members of the public think of ownership as much as incomes when they consider class and other divisions in our society. Socialists used to major on state ownership as a key feature of their egalitarian aims. Now, they have lost confidence in that completely. Our aim has been to spread owernership of houses, of shares, and of pensions as widely as possible. I suspect that the Opposition hankers after a rigid class system in which the mass of people still vote Socialist because they have no stake in anything.

The way to reduce differences within our society and to widen the opportunities open to our citizens is to spread ownership as widely as possible—ownership in houses, shares and pensions. Some 2·5 million more households own their own homes than in 1979. The tenants' right to buy will ensure that this number continues to rise. Over 5 million more people own shares now than in 1979, with the increase in share ownership widely spread across social groups, and the most marked increase among the less well off. Now, about a fifth of the adult population own shares. Our continued programme of privatisation and the new personal equity plans will ensure that share ownership continues to increase. Personal pensions will add to this sense of ownership and opportunity. Personal pension plans will mean that individuals can have much more control over the way in which their own pension contributions are invested, and will widen their range of choice about both pensions and jobs.

The Government are committed to helping all our citizens share in improved prospects, both in personal incomes and in public services. This can be achieved only through the ability of our economy to create wealth. It is economic growth which can enable us to enjoy higher personal incomes which can both bear the weight of more spending on personal services and give us greater personal disposable income.

Within the opportunities created by the sound economic growth that we are now enjoying, we are committed to doing everything that we can to help the unemployed into jobs, by raising their work experience, skill and motivation. We shall continue to target income support and benefits on the most vulnerable groups in our society. Above all, we are committed to popular capitalism. Spreading wealth more widely in houses, in shares and in pensions will both give people more control over their own lives and give them more opportunity and incentive.

I believe that the strategy of faster economic growth, direct help to the unemployed, better public services, paid for by the wealth that our economy can create, and wider ownership are the best route to one nation. It is the greatest cynicism that the Opposition motion refers to "one nation" as though it is a concept suddenly discovered by them. I have always been a one-nation Tory, and I always will be. The Government, judged by any view of their record, are a one-nation Government. On that account, our amendment should be supported, and the motion rejected.

Photo of Dr David Owen Dr David Owen , Plymouth, Devonport 4:53 pm, 6th April 1987

The Paymaster General is asking that we should agree that the House notes the Government's commitment to seeing all citizens of the United Kingdom share in the increased prosperity and improved public services". The indictment of the Paymaster General and the Government is that all citizens have not shared equally in that increase in prosperity.

Photo of Mr Tony Marlow Mr Tony Marlow , Northampton North

It does not say "equally".

Photo of Dr David Owen Dr David Owen , Plymouth, Devonport

Exactly. The criticism is that they should have shared equally in it. The hon. Gentleman is open about the fact that his is not an egalitarian party. We are saying that people should have shared far more equally, and, in particular, those people in the direst poverty and those out of work should have been given a greater share of the nation's resources during that time.

That is a major political division across the Floor of the House. It is reflected in the fact that over 60 per cent. of the people do not support the policies of the Government. Therefore, I shall have to direct quite a lot of my attention to persuading those 60 per cent. that the SDP-Liberal alliance has the best policies for achieving that objective, which is to ensure a fairer and more just society. Before I do that, let us deal with a few of the facts.

Let us look at what has happened to incomes between 1976 and 1984. First, the poorest, the bottom 5 per cent. of households, have seen their share of total disposable income, after allowing for taxes and benefits, decline from 7 per cent. to just 6·7 per cent. At the other extreme, the richest one fifth improved their share from 38·1 per cent. to 39·7 per cent. Tax cuts, since the change of Government in 1979, have favoured the rich, and Conservative Members would say that that was deliberate. While income tax plus national insurance contributions as a proportion of gross income has increased for the vast majority of earners between 1978–79 and 1986–87, it has decreased significantly for higher earners, and it is that imbalance that I shall attack.

Let us deal, first, because the debate has not concentrated sufficiently on them, with those in poverty. Let us take those who, by any fair standard, are not well off—those living on supplementary benefit. Although it has increased and improved, any hon. Member who has tried living on supplementary benefit has come away saying that it is immensely hard to make ends meet.

Official figures show that the numbers living on or near the poverty line, as assessed by supplementary benefit level, increased from 11·5 million in 1979 to 16·6 million in 1985. That is a staggering increase by any standard. Nobody would wish to deny that that is a substantial increase in the number of people who have been forced, through many circumstances, not least unemployment, to live on insufficient levels of income.

With his customary courtesy, the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) has left the Chamber, so the view of inequality from Gayfere street, which we are used to hearing——

Photo of Dr David Owen Dr David Owen , Plymouth, Devonport

That may be so. First of all, the right hon. Member for Sparkbrook cannot recognise me sitting in the Chamber. He then makes a rather well prepared joke somewhat ineffectively. It is customary to listen to the speeches made immediately before and after one's own, but let us leave that subject. However, I will not allow his absence to prevent me from examining in some detail the Labour party's proposals for dealing with poverty, and those of the alliance.

It appears, from everything that the Paymaster General said, that he does not wish to defend the Government's record on poverty. The Secretary of State for Social Services, who will be replying to the debate, I believe, wanted to grapple with the problems of poverty and of the tax and benefits system in a much more imaginative way that he was allowed to do. He must know, looking and dealing with the anomalies of the system day by day, that the need is to integrate the tax and benefits systems. That was the judgment of a former Tory Chancellor of the Exchequer, Mr. Anthony Barber, now in the other place. That has been the judgment of most who have ever looked at the system. Everyone knows that if one is to integrate the two systems, there has to be an injection of new money to overcome the anomalies.

The alliance believes that its policies for attacking poverty and the strategy that it has developed are far more effective in concentrating resources on those who most need them than anything that has been proposed by the Labour party. By going for selectivity rather than for universal benefits, we shall be able to target far more resources on the poor, yet cost the Exchequer less. Therefore, it is far more likely that our plan will be introduced. Our proposal does not stem from a vindictive or envious view of society. It has been deliberately aimed so that it will not hit hard or punish those people on above average earnings. It is notable that, in our alternative Budget, the only tax that would be increased is the tax on those people claiming mortgage interest tax relief over and above the standard rate of tax.

There is only one way to deal with the present position, and that is to be selective and to consider the tax and benefit systems overall. First of all, let us consider the cost of the Labour party's programme for dealing with poverty.

Photo of Mr Tony Marlow Mr Tony Marlow , Northampton North

Will the right hon. Gentleman give way?

Photo of Dr David Owen Dr David Owen , Plymouth, Devonport

No. I want to develop my argument first.

The cost of the Labour party's programme is £4·7 billion. Some £3·6 billion comes from the Labour party's decision to raise child benefit, to introduce a one-parent family benefit and to raise the pension for everyone and the winter premium. The remaining £1·1 billion comes from a national minimum wage of £80 a week. I believe that that figure has been conservatively estimated. It does not take account of the extraordinary effect that increasing the minimum wage will have on differentials when negotiators strive to maintain the differentials. The cost of the minimum wage is far more extravagant than has currently been thought through. What is more, it will not deal with the serious problem of the person on low wages with many children in the family.

Let us consider the alliance strategy and compare it with Labour's. We thought that child benefit should go up by only £1 a week because that goes to everyone. We are also determined to make it available to unemployed families, thereby concentrating that addition on people who are already suffering. Therefore, as well as going to those in work, that benefit would go to unemployed families as a result of our new basic benefit reform. Therefore, unemployed families — the poorest in our society—under the alliance proposals will be £8·25 a week gross better off or £4·25 a week net with no change to free school meals or milk. That is far better than what the Labour party hopes to achieve.

When we consider basic benefit, we will add £5 a week to the new family credit, replacing family income supplement which the Secretary of State will introduce in 1988, and income support replacing supplementary benefit, thus helping those in work and the unemployed. Basic benefit is withdrawn as income rises, so targeting resources where they are needed most. The effect is that families in work will be £6 a week better off with one child —£5 plus £1 child benefit increase. Unemployed families will be £9·25 a week better off with one child—£5 plus £4·25 child benefit. Those benefits are substantially better than those produced by the Labour party.

The basic pension will increase under the alliance proposals by £2·30 a week for a single pensioner and by £3·65 a week for a couple. Again, pensioners with no other income, like others, will receive an extra £3·70 a week for a single person and £5·75 a week for a couple. That means in total that the poorer pensioners — I do not believe that we pay enough attention to those people living on the basic pension as we sometimes concentrate too much on those drawing supplementary benefit; the 2 million people between supplementary benefit and the basic pension have suffered the worst, in my view—will receive £6 a week under the alliance proposals for a single person and £9·40 a week for a married couple. Again, those proposals are far better than the Labour party's proposals.

Photo of Peter Lilley Peter Lilley , St Albans

Will the right hon. Gentleman give way?

Photo of Dr David Owen Dr David Owen , Plymouth, Devonport

No; I am trying to develop my argument.

The fourth item that must be addressed is the question of the long-term unemployed. We still intend to give long-term supplementary benefit rates to long-term childless couples and the unemployed. That will provide an extra £8·10 a week for a single person and £11·25 a week for a couple who have been out of work for 12 months or more. Most people have accepted that the long-term unemployed suffer seriously from poverty. We must have a mechanism to concentrate extra benefit on them.

Photo of Mr Tony Marlow Mr Tony Marlow , Northampton North

Will the right hon. Gentleman give way?

Photo of Dr David Owen Dr David Owen , Plymouth, Devonport

No.

The cost of those proposals is £2·2 billion over two years, less the saving for mortgage tax relief of £0·4 million. That is less than the cost of the Labour party's plan and it can be financed within the Budget strategy that the alliance identifies. That makes sense.

Photo of Dr David Owen Dr David Owen , Plymouth, Devonport

I believe that that makes sense, and it is far better in concrete and specific terms than anything that Labour has proposed.

Photo of Michael Meacher Michael Meacher Shadow Secretary of State, Member, Labour Party National Executive Committee

I am sure that the House will be grateful to the right hon. Gentleman for that exposition. That was the third or fourth statement of SDP plans and it is difficult to know which is being referred to or whether there is bound to be another when further anomalies have been found. On the first occasion, £600 million was added to the original plan to stop people——

Photo of Dr David Owen Dr David Owen , Plymouth, Devonport

I do not believe that the hon. Gentleman is asking a question, and consequently I shall continue my speech.

Photo of Mr Harold Walker Mr Harold Walker , Doncaster Central

Order. The right hon. Gentleman had given way. Mr. Michael Meacher.

Photo of Michael Meacher Michael Meacher Shadow Secretary of State, Member, Labour Party National Executive Committee

As the right hon. Gentleman raised five points, I shall ask him five questions.

Photo of Mr Harold Walker Mr Harold Walker , Doncaster Central

Order. Having given way, the right hon. Gentleman must allow the hon. Member for Oldham, West (Mr. Meacher) to intervene. Mr. Michael Meacher—briefly, please.

Photo of Michael Meacher Michael Meacher Shadow Secretary of State, Member, Labour Party National Executive Committee

Will the right hon. Gentleman tell us how he reaches his figure of £4·7 billion when there has been no negotiated figure for the national minimum wage? Secondly——

Photo of Mr Harold Walker Mr Harold Walker , Doncaster Central

Order. The right hon. Gentleman should have heard what I said. He must not persist. There is only one occupant of the Chair at a time in this place. The right hon. Gentleman must not persist. Mr. Michael Meacher—briefly, please.

Photo of Michael Meacher Michael Meacher Shadow Secretary of State, Member, Labour Party National Executive Committee

Secondly, does the right hon. Gentleman realise that child benefit already goes to the unemployed? He does not appear to understand that basic point. Thirdly, if he proposes a basic benefit for combined supplementary benefit and family income supplement, how does he explain the fact that that will greatly worsen the poverty trap?

Photo of Dr David Owen Dr David Owen , Plymouth, Devonport

On a point of order, Mr. Deputy Speaker. Can we have a ruling from the Chair as to the length of time an intervention can be made in——

Photo of Mr Harold Walker Mr Harold Walker , Doncaster Central

Order. I have already given a ruling. I hope that the right hon. Gentleman will not persist. He is only delaying his own speech and the proceedings. Mr. Michael Meacher, very briefly please.

Photo of Michael Meacher Michael Meacher Shadow Secretary of State, Member, Labour Party National Executive Committee

Is the right hon. Gentleman aware that under his proposal the long-term unemployed would receive £8 and £11 while under our proposal there would be a 25 per cent. increase of £12 a week?

Fifthly how does the right hon. Gentleman explain that the cost will be as low as £2 billion when we believe it will be nearer to £3 billion or £4 billion?

Photo of Dr David Owen Dr David Owen , Plymouth, Devonport

I hope that Mr. Speaker, when he looks at Hansard, will give some thought as to—[Interruption.]

Photo of Mr Harold Walker Mr Harold Walker , Doncaster Central

The right hon. Member for Plymouth, Devonport (Dr. Owen) has been a Member of this House and has held senior positions over a long period. I very much hope that he will respect the Chair and the rulings of the Chair. Mr. Winnick, on a point of order.

Photo of David Winnick David Winnick , Walsall North

Is it not the long-established custom of the House that when a right hon. or hon. Member gives way, if the hon. Member making the intervention carries on for too long it is the Chair's responsibility? It has happened time and again and the Chair has ruled accordingly. Is not the right hon. Gentleman's behaviour arrogant and totally unacceptable in this House?

Photo of Mr Harold Walker Mr Harold Walker , Doncaster Central

I am not ungrateful for the support that appears to be given to the Chair. However, I remind the right hon. Member for Devonport that I hope he is not reflecting on the conduct or rulings of the Chair. He has been a Member of the House long enough to know that he must not do that.

Photo of Dr David Owen Dr David Owen , Plymouth, Devonport

I am certainly not reflecting on the conduct of the Chair.

Photo of Stuart Bell Stuart Bell , Middlesbrough

On a point of order, Mr. Deputy Speaker. I have no intention of attempting to wreck the right hon. Gentleman's speech; he is doing that on his own. However, when a challenge has clearly been made to your ruling, is not a withdrawal called for and should not an apology be given?

Photo of Mr Harold Walker Mr Harold Walker , Doncaster Central

I am not quite sure that I should be grateful for the apparent help that is being offered to the Chair.

Photo of Dr David Owen Dr David Owen , Plymouth, Devonport

I shall answer one of the questions asked by the hon. Member for Oldham, West (Mr. Meacher). He asked about the costing of the programme. The costings of child benefit, one-parent benefit, pensions and the winter premium—£3·6 billion—were made by the right hon. Member for Sparkbrook in a speech to the British Institute of Management. The £4·7 billion is achieved by adding the £1·1 billion figure for the minimum wage which was given in Hansard on 6 November and which I said was a conservative estimate which slightly underestimates the charge. I hope that that deals with the hon. Gentleman's question.

I return to other areas of inequality. I shall know not to give way to the hon. Member for Oldham, West in future.

Photo of Peter Lilley Peter Lilley , St Albans

Will the right hon. Gentleman give way?

Photo of Dr David Owen Dr David Owen , Plymouth, Devonport

No. I shall get on with my speech.

The other question that needs to be raised is the burden of tax. The Paymaster General ingeniously argued that because wages had increased, it was not valid to examine the share of the tax burden of an increased wage. However, it is legitimate to raise that question when we constantly hear from the Prime Minister about how the Government are cutting taxes. In fact, that is not the case. A single nurse on £170 per week is paying £7 more in tax than in 1979 and her tax burden is up by 8 per cent. The average family man on £227 per week, with two children, is paying £20 per week more in tax—at constant prices—than in 1979 and his tax burden is up by 6 per cent.

The family on half average earnings—£115 per week —has suffered a 33 per cent. increase in its direct tax burden alone since 1979. All these are Treasury figures set out in Hansard on 27 March this year. [Interruption.] No. The Government have produced these figures.

The Prime Minister said on "Panorama" : I feel we owe quite a debt to the people in the bottom half. We have taken in my view too high a proportion of their income in tax". With a large amount of money available to be given back in the Budget, one would have expected the Government to repay that debt, at least in part; but the debt is still unpaid. After this year's budget, a family of four on half of average earnings — £115 per week — will pay proportionately more than twice as much direct tax as it would have paid in 1978–79. Those are the facts.

Photo of Peter Lilley Peter Lilley , St Albans

Will the right hon. Gentleman give way?

Photo of Dr David Owen Dr David Owen , Plymouth, Devonport

No. I have given way quite enough, and after my recent experience I shall not give way again.

Photo of Dr David Owen Dr David Owen , Plymouth, Devonport

I have given the facts. If the Paymaster General wishes to question the Treasury figures that have been given in Hansard, he may do so.

Photo of Dr David Owen Dr David Owen , Plymouth, Devonport

No. The right hon. and learned Gentleman spoke for a long time and enjoyed himself, as it was perfectly legitimate for him to do.

My next question——

Photo of Dr David Owen Dr David Owen , Plymouth, Devonport

No. I am not giving way.

Photo of Mr Harold Walker Mr Harold Walker , Doncaster Central

Order. It is clear that the right hon. Gentleman is not giving way.

Photo of Dr David Owen Dr David Owen , Plymouth, Devonport

There are also inequalities in health, and again there is no thin ice, because the figures have largely been produced by the Government at the taxpayers' expense.

The Government have a rather depressing record. The present Secretary of State was not involved, but when faced with statistics and facts in the report produced by Sir Douglas Black, the Government tried to avoid publishing them because they exposed inequalities in the NHS. There was no reason to do that in 1980. The previous Government could have been blamed for some of the inequalities.

The Government now seem to be upset about another report and are trying to avoid a wider public debate. We all ought to be worried about inequalities in the NHS and the evidence that there is a link between health and social class. There is always a time lag in statistics, but we have up-to-date figures showing that all-cause mortality between 1979 and 1983 fell for men and women and for manual and non-manual groups. However, mortality has declined more rapidly among non-manual groups.

There is also a strong social class bias in education. Among all 16 to 19-year-olds, a total of 37 per cent.—[interruption.] These are the statistics produced by social class. The Government produced them and we must deal with them as we do as part of polling evidence. There is no point in backing away from them. The statistical office——

Photo of Peter Lilley Peter Lilley , St Albans

On a point of order, Mr. Deputy Speaker. As the right hon. Gentleman has now started answering questions from a sedentary position, could you persuade him to answer those from hon. Members who have been seeking to intervene in a formal manner?

Photo of Mr Harold Walker Mr Harold Walker , Doncaster Central

Order. I hope that the right hon. Gentleman will recognise the Chair. A point of order has been addressed to me.

I thought that the right hon. Gentleman was standing when he was dealing with these matters.

Photo of Dr David Owen Dr David Owen , Plymouth, Devonport

A total of 37 per cent. of 16 to 19-year-olds were in full-time education in 1984, but the proportion was as high as 72 per cent. among those with fathers in the professions and as low as 27 per cent. for the sons and daughters of semi-skilled or unskilled workers. The salutary fact is that in 1984 just 1 per cent. of those accepted into British universities came from the unskilled social class, 6 per cent. were from the semi-skilled class and 70 per cent. were from the top two social classes. Those class figures in education and some of the figures in health are worse in this country than in many comparable nations. Conservative Members may not want to face the facts, but we have to ask how we can overcome some of these difficulties.

We need to be able to direct resources to the areas most in need. The problem will not be dealt with by global increases to the NHS, though it is fair to point out that the Government, having had a reasonably good year in 1986–87, plan real-terms increases of only 1·5 per cent. in 1987–88, 1 per cent. in 1988–89 and 0·5 per cent. in 1989–90. It will be mighty difficult within those figures to continue the resource allocation working party's recommendation of concentrating aid within the overall NHS budget.

We believe that it is extremely important to have an innovation fund for the NHS, building up over two to three years to £250 million. It would be specifically earmarked to deal with inequalities within the NHS.

In education, we must encourage 16 to 19-year-olds to stay on for higher technical education. Too many leave because of financial pressures on their family budgets. These are facts. Conservative Members may not wish to face them, but if we are to grapple with the inequalities we must develop a targeted strategy in which overall public expenditure is geared, as far as possible, to areas where the need is greatest.

The same principle applies to unemployment, where there are considerable divisions. A total of 94 per cent. of the reduction of 1·6 million employees since 1974 has been in the northern half of the United Kingdom—the north, the north-west, Yorkshire and Humberside, the west midlands, the east midlands, Scotland, Wales and Northern Ireland. We must try to deal with such problems.

The development agency policies that have been pursued by successive Governments have been rather successful. The agencies have a good record in Scotland and Wales and many of us find it difficult to understand why the Government will not extend that concept to the hardest hit regions. The Government should be selective and obviously choose the north-east and the north-west, but there is also a strong case for concentrating on the problems in Cornwall and parts of Devon.

What else could be done in giving selective help to those regions? Again, the alliance budget proposals came up with a policy proposal—welcomed by The Economist on 4 April—to create regional pay differentials and to give employers an incentive to curb the growth of unit costs and so boost employment. The alliance budget proposed a 25 per cent. cut in employers' national insurance contributions, which would apply only to assisted areas and unemployment black spots in the north and south. This cut in the tax on jobs will help companies to meet the cost of employing skilled employees and thus boost job mobility. There are those who would say that this would cause problems with the European Community, as the regional unemployment premium did, but, as part of the strategy, I envisage removing the national insurance contribution completely. If there is a phasing-in period, it will be within the rules.

There are new policy initiatives in all these areas, which the Government can and should take. First, they should integrate the tax and benefit system and concentrate aid selectively on the area which is probably the most troubling of all—poverty among those on supplementary benefit, those on basic pensions, and on those people in the community—

Photo of Dr David Owen Dr David Owen , Plymouth, Devonport

I shall not give way to the hon. Gentleman.

— who need some extra help and who have not participated in the overall rise in average earnings which has taken place over this period. All they have done has been held to take account of the rise in the cost of living. That means that a substantial number of people, who were either widowed in the war or who made considerable sacrifices in the war years, a re not benefiting from the overall improvement in prosperity in Britain. In our judgment, that is wrong. It can and should be put right, not by a global increase in pensions to everyone—rich and poor—but by concentrating on those who need it and would benefit most.

Photo of Clare Short Clare Short , Birmingham, Ladywood

Will the right hon. Gentleman give way?

Photo of Dr David Owen Dr David Owen , Plymouth, Devonport

We believe that in the National Health Service and the education budget there is a need to concentrate and target resources. That we shall do.

Photo of Clare Short Clare Short , Birmingham, Ladywood

Will the right hon. Gentleman give way?

Photo of Dr David Owen Dr David Owen , Plymouth, Devonport

If the hon. Lady will forgive me, I should like to finish.

Photo of Dr David Owen Dr David Owen , Plymouth, Devonport

As to unemployment, there is a strong case for selectively gearing resources, by geography through special development agencies and reducing the national insurance contribution in regional areas. This has all been costed in the alliance budget proposals and it is all eminently fundable. It would not require a lot of extra civil servants to make these changes. They have been done before in other policy areas and they need to be done again. The Government are being complacent in thinking that the divisions in our society—the dissensions and considerable feelings of depression and demoralisation that exists in many parts of our inner cities, particularly, although not exclusively, in the north — can be left alone. There must be more detailed and specific policies in this sector. The total inability of Conservative Members even to contemplate new ideas is depressing and that inability is sadly also found on the Labour Benches.

Photo of Dr David Owen Dr David Owen , Plymouth, Devonport

We are not arguing with the intentions of the Labour party. The hon. Member for Oldham, West, with whom I had some difficulty in his intervention, has a longstanding and genuine commitment to reducing inequality. I know that from my work with him in the Department of Health and Social Security. But, with respect to him, he still believes that we can afford to do this by universally applying benefits or by generalised increases in public expenditure. That cannot be done. Our experience with that expenditure is that it has not reduced inequalities. The intention can be there and the heart can be in the right place, but the hard-headed practical decisions have not matched the needs, and inequalities have increased. We believe that it is the task of any Government in this country to redress those inequalities and to ensure that the improved prosperity, which many of us hope will be sustained over the next few years, can be more fairly and evenly spread across the nation and heal some of the considerable divisions which exist in the United Kingdom.

Photo of Sir Ray Whitney Sir Ray Whitney , Wycombe 5:25 pm, 6th April 1987

The right hon. Member for Plymouth, Devonport (Dr. Owen) has made a characteristic speech—characteristic in his contempt for the conventions of the House in refusing to give way on a number of occasions, characteristic in the largesse of his promises, which apparently are unclearly funded without any clear understanding of where the money would come from, and characteristic in the mutual incompatibility of some of the things that he was saying. For example, he made an allegation, which was also made by the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley), that the Government have increased taxes, yet we shall have to wait and see what will be added to the tax bill by these promises. We must listen very carefully to what the right hon. Member for Devonport said, this being the alliance social service policy mark 3 or 4 — I forget where we have got to. Mr. Dick Taverne could no doubt tell us.

Photo of Mr Roy Galley Mr Roy Galley , Halifax

Does my hon. Friend recall that the last time a Government were elected on promises of increasing benefits across the scale and increasing public expenditure in every direction, the result was bankruptcy for the country, the decimation of pensioners' savings and the cutting of the health programme, particularly hospital building, by the biggest margin ever? Does my hon. Friend consider that the right hon. Member for Plymouth, Devonport should take that factor into account?

Photo of Sir Ray Whitney Sir Ray Whitney , Wycombe

I hope that that record, like Calais on Queen Mary's heart, is engraved on the heart of the right hon. Member for Devonport.

The right hon. Member for Devonport, like the right hon. Member for Sparkbrook, based much of his speech on the findings of the report of Sir Douglas Black and his colleagues, "Inequalities In Health", and the more recent report, "The Health Divide", which was published by the Health Education Council as its last act before it became the Health Education Authority.

We should concentrate on the contents of those document. Those documents have been seized upon gleefully, not only by Opposition parties, as one would expect, but by the more unthinking parts of the press— which, sadly, is much of the press — and by assorted bishops and others who were anxious to cry wolf and havoc and suggest that this country is going downhill, that matters are getting worse and that the divides between north and south and between the classes are worsening.

We must look at these studies more carefully than did the right hon. Members for Devonport and for Sparkbrook. We must look at what the studies have found, at those who wrote them and their motivations. It is clear that a common thread runs through them. One of those common threads is Professor Peter Townsend, who is a well-known visiting professor of sociology at Essex university and also a professor of Socialism. In social science, if a particular target is pursued, it is notoriously easy to find the data to reach it. The Black working group was forced to confess in paragraph 10 of its conclusions that it was conscious of the difficulties in collecting and reporting occupational characteristics". In paragraph 8, it said : We do not believe there to be any single and simple explanation of the complex data we have assembled." Those qualifications did not stop the authors happily leaping to broad, collectivist and Socialist conclusions, which are precisely the sorts of conclusions that they wanted to reach.

Photo of Mr Allan Rogers Mr Allan Rogers , Rhondda

I am interested in the hon. Gentleman's argument, which he has prefaced by saying that the conclusions reached in that report are a result of the bigotry or political attitudes of its compiler. Aside from all these statistics, will he accept that there is genuine poverty and a genuine divide in this country? Will the hon. Gentleman come to south Wales, to a constituency such as mine, and see there people who are genuinely socially deprived?

Photo of Sir Ray Whitney Sir Ray Whitney , Wycombe

I am coming to precisely that point. I am glad to rejoice, as I hope is the hon. Gentleman, that in the employment statistics Wales is now leading the country in finding new jobs. I hope that the hon. Gentleman takes as much comfort from that as do Conservative Members.

These issues can be approached from a class bias, a fascination with a class division of society, which is basically a Marxist approach. I am not suggesting that the right hon. Member for Devonport suffers any longer from that infantile disorder, but perhaps the right hon. Member for Sparkbrook has not entirely shed those spots. Marxism is entirely based on this class approach and is carefully reflected in the Black report, in "The Health Divide" and, sadly, in the fixation on equality which we heard in the speeches of the right hon. Members for Sparkbrook and for Devonport.

The preface to "The Health Divide" by Dr. David Player fell into the same trap. I am particularly sad about that because during my brief time as a Health Minister I worked with Dr. David Player, for whom I have a high regard. He is deeply committed to solving health problems, but, sadly, he has been led to the inequality pitfall. He suggested that there must be a public debate on health inequality and said: Such inequity is inexcusable in a democratic society". As my right hon. and learned Friend the Paymaster General has pointed out, we live in a world of inequalities. We may all be equal before God, and I hope that it is true to say that in this country we are equal before the law. In every other individual respect, however, we are unequal. These inequalities are found everywhere in the world.

That is borne out by the evidence inherent in the Black report and "The Health Divide", as people would see if they looked carefully at them. In paragraphs 5.65 and 5.66 the authors of the Black report, perhaps against their natural instincts, say : The second question, then, is whether the inequalities in health between social classes and regions, found in Britain, also exist elsewhere.Briefly, the evidence of section II—although disparate and not permitting comprehensive comparison — suggests that they do. The same point is made in "The Health Divide". In paragraph 5.5 in its conclusions the report states: Certainly the U.K. is not alone in experiencing inequalities in health. Every country to a greater or lesser extent experiences differences in health between regional, social or income groups. It is clear that all societies have this problem and that it is by no means unique to this country, and certainly not under this Conservative Government.

There is no doubt that the equality of health care in a country is relevant to this problem. Paragraph 1.2 of "The Health Divide" refers to the comments on social justice expressed at a World Health Organisation meeting and states: In health care the principle of social justice 'leads to equal access to available care, equal treatment for equal cases and equal quality of care.' Although certain problems in our Health Service remain to be solved—that could not be gainsaid—incontrovertibly there is greater equality of health care in this country than in any other. Fortunately, the additional resources which the Government, under my right hon. Friend the Secretary of State for Social Services, have devoted to our Health Service have produced a level of care of which we continue to be proud.

Inequality exists all over the world. The real concern should be with absolute levels. I am not interested in the gap between the best and the worst. Let us say that 20 per cent. of our population found some elixir that enabled them to live fit, healthy and disease-free to 100 and then they suddenly died peacefully and quickly in their sleep. Such a phenomenon would increase the gap which in statistical terms is bothering the right hon. Members for Sparkbrook and for Devonport. It does not bother me. I should be delighted about that but should be concerned with those at the lower end of the scale.

"The Health Divide", giving another example of inequalities, says in paragraph 6.4.1 on smoking habits that 17 per cent. of professional men were smokers whereas 49 per cent. of men in the unskilled manual category were smokers. That is a gap about which we might well be concerned. We might wish that the 17 per cent. of professional men was reduced to 15 per cent. or 10 per cent., but that is not the issue. It is that 49 per cent. of manual workers smoked. That is a legitimate scientific policy concern, but it is nothing to do with the sort of class warfare that the Opposition seek to wage.

The right hon. Member for Devonport referred to differences in education. "The Health Divide" confirmed earlier findings in Britain that death rates decline with increased years of education, How do the Opposition egalitarians answer that? Do they wish to deny education to those who benefit? Of course not. They want to increase education.

There are problems for Britain on an international scale. National statistics on coronary heart disease are much more worrying than they should be. The rate of improvement is not nearly as good as it should be—on that we can agree.

So in absolute terms—and I return to the point that worries me — there are issues that concern us. Not surprisingly, The Guardian picked one up. On 26 March 1987, commenting on the Health Education Council's document, it said that a decline in overall death rates from heart disease was accompanied by a one per cent. increase for less privileged classes. That is worrying. We can perhaps be complacent about those at the top end of the income scale. So long as the rate improves for those at the lower end, that is all right. but if it deteriorates we must worry.

"The Health Divide" gives the explanation on page 2 in paragraph 3: death rates among women from coronary heart disease and lung cancer …rose in manual groups over the 10 year period". My right hon. and hon. Friends in the Department of Health and Social Security must address their minds to that. Those rates do not mean that those diseases are a function of poverty. Other reasons and issues are deliberately neglected by those who write these reports and those who pounce on them and seek to benefit politically from them.

The Opposition will answer these points as they always do, saying, "It is all a matter of money, income levels and poverty." That does not bear one moment's examination. Statistics have been bandied about by both sides of the House. The right hon. Member for Devonport talked about the change in incomes for the bottom 20 per cent. of the population, but, between 1979 and 1985, expenditure by those households, excluding the cost of housing increased in real terms by 12 per cent. No one would say that this is high, but by no stretch of the imagination does a 12 per cent. increase in expenditure mean an increase in poverty, as the right hon. Members for Sparkbrook and for Devonport would have us believe

In real terms the income of the average man with two children who is on supplementary benefit and housing benefit, is higher than the income of the average man in manual work in 1948. No-one will say that that is a high level, but as someone with personal family knowledge of the income of a manual labourer in 1948, I can say that that was not a subsistence level. Therefore, we have to look for other answers. These political, class answers are bogus. As soon as they are examined, they are seen to be false.

In the raw material of these two reports that have excited the attention of the two right hon. Gentlemen, we can find pointers to where the answers lie. For example, paragraph 6.4.2. of "The Health Divide" says: At a regional level the highest proportion of heavy drinkers was found in the North … and the lowest in East Anglia and the Outer South East of England". That finding is confirmed by the family expenditure survey which shows that the weekly expenditure on alcohol in the north is £8.08 and in the south-east it is £7.94. There is not a great difference there, but there is more spending in the famously under-privileged north than there is in the south.

Alcohol is one factor in the health differences and exercise is another. Not much information is available about exercise but such as there is blows out of the water the thesis of the Opposition. Paragraph 6.4.4 of "The Health Divide" is headed: "Exercise in Leisure-time". It says that while there has been an increase in participation for all groups — I am glad to note that — nevertheless "the social gradient remained." It says that in walking and swimming: the professional group had the highest participation rates and the unskilled manual the lowest. The same is true of tobacco. I have said that 17 per cent. of men in the professional classes smoke, while the figure for manual workers is 49 per cent. That, too, could be called a class division.

If the Opposition looked seriously at the published data they could find a reasonable division. The family expenditure survey of 1985 shows that expenditure on tobacco by households in the north is £4·98 a week, while in the south-east it is £4 a week. That is a difference of nearly 20 per cent. I make no moral judgment on this. I am merely saying that these are the issues that sensible, responsible politicians should look at. The Health Education Council should be active on those issues. The council should he ashamed of such issues and these are the issues upon which we must work.

As my right hon. and learned Friend the Paymaster General and Minister for Employment said, the answer is not to impose on society the Socialism that everyone else has rejected, and seemingly only the few authors of these reports and a few left-behind diehards on the Opposition Benches still believe in. Socialism is now being rejected in China, in the Soviet Union and in Socialist Spain, and has been rejected in France. Only the little rump of Socialism in this House believes that the answer to Britain's problems lies in something called Socialism. The answer lies in making Britain more and more prosperous, and the way of prosperity is the way of greater health.

Photo of Mr Allan Roberts Mr Allan Roberts , Bootle 5:44 pm, 6th April 1987

If Socialism has been abolished in China, in the Soviet Union and in other countries the hon. Member for Wycombe (Mr. Whitney) must be in favour of keeping the bomb in order to deter the Labour party, because there seems to be no other justification for keeping it. My constituents will be pleased to hear that the reason why they suffer, as the statistical evidence shows, greater ill health than people living in the south is that they do not swim enough. The Tory council closed the swimming baths and my constituents cannot swim in the Mersey because it is an open sewer full of sewage, and the Government refused funds to clean it up. That is a political point as well.

There is an elixir of life for many people. It is called money. The idea that a rich person cannot buy a better health service, a better environment, a better house that is not damp and alleviates suffering from overcrowding, and cannot avoid the other things that are injurious to health, is nonsense. The hon. Gentleman wants us to believe that the rich do not enjoy better health because of their money. In saying that he is rejecting not just the evidence from the Labour party, but the evidence of Government Departments and academics and all the research that has been done. The only difference between Karl Marx and Government Departments is that Government Departments recognise more degrees of class than Karl Marx recognised.

Photo of Bill Cash Bill Cash , Stafford

Does the hon. Gentleman agree that the real problem, especially in the north, is the difference between the suburban areas and the areas in the depths of the inner cities? Does he agree that that is not reflected in this generic, general message of a north-south divide, but is a much more subtle problem?

Photo of Mr Allan Roberts Mr Allan Roberts , Bootle

The poor are poor in the south and the rich are rich in the north. I accept that. However, there are more rich people in the south and more poor people in the north. I accept that one cannot totally generalise, but that is the situation. There are higher levels of unemployment in the north, higher deprivation and, while many problems in the north also exist in the south, they do not exist to the same extent or in the same concentrations.

This debate is about the growing social and economic inequalities in Britain, and nowhere are those inequalities more manifest than in Merseyside and in my constituency, part of which is almost identical to inner-city Liverpool. I warn Conservative Members that they cannot write off areas like Merseyside without consequences for the whole nation. In the end, the poverty, the high levels of unemployment, the deprivation and the crime, which is often a consequence of deprivation and of the high levels of unemployment, and the breakdown of law and order in inner cities on Merseyside and elsewhere will eventually affect the whole of our society.

The whole nation, including the people in the prosperous south, will face the consequences of ghettoisation—I use that word advisedly—of areas like Merseyside. Ministers have said that there are not many votes for the Tories in those areas anyway. Therefore, they have decided to write them off, but not without a fanfare of policies that cost little in the run-up to a general election in order to pretend that they are worried about the inner cities.

I want to deal with unemployment, job losses, low pay, crime and drugs, housing — especially in relation to house prices—and with whether the nation can afford to do anything about those problems, given the divide that exists between the north and the south. I shall deal briefly with each of those issues. The first issue is unemployment. I said : My constituency has many problems. Their resolution will not be helped by the speech of the Chancellor of the Exchequer". I said that, not in this year's Budget debate, but in my maiden speech on 12 June 1979 after the general election. I said then, and it seems that very little has changed : Nationally, there are about 1½ million people unemployed. The facts in Bootle and Merseyside are far more serious than the national figure indicates …There is a weak manufacturing sector in Bootle and on Merseyside. Unemployment among active males in the constituency is…12 per cent.". —[Official Report, 12 June 1979; Vol. 968, c. 280.] I thought that the problems were bad in 1979, and I said that the Chancellor's speech would not help to deal with those problems and that nothing had changed, but things have changed dramatically. That figure of 12 per cent. unemployment in 1979 has increased to over 20 per cent. in 1987. In the Merseyside travel-to-work area, which includes Knowsley, Liverpool, St. Helens, Sefton and Wirral — parts of the last two areas are prosperous—registered male unemployment is 26 per cent. Registered female unemployment is 12·5 per cent. Many women do not bother to register because they receive no benefit if their husbands are in work. In Bootle the average unemployment level is 24 per cent., and male unemployment is a massive 30 per cent.

Moreover, women are often the breadwinners —perhaps in the majority of households — with clerical jobs at Giro, which was created by a Labour Government, in the Civil Service and in mail order enterprises such as Vernon and Littlewood. If the women did not go out to earn pin money, as the Conservatives describe it, many families in my constituency could not manage to live on or just above the poverty line. In February 1987 the official Department of Employment list showed 10,579 unemployed in Bootle—an increase of 1 per cent. at a time when the Tories were claiming that the unemployment figures had begun to fall. The adjusted, indexed figure showed 12,066 or 24·6 per cent., unemployed in Bootle, representing an annual cost to the nation of £69 million or £724 per working person in unemployment and social security payments.

The Government talk about the restart programme as their major initiative, but only 1 per cent. of those interviewed have been found jobs. When I pointed that out in an intervention, the Minister said that they were just the ones who were actually placed after interview, but that there must be others who had found jobs of their own accord as a result of the training schemes. Let the Minister come and tell that to the people of Bootle, who have only to look around to see how many young people are unemployed. The statistics also give the lie to the Minister's claims. Youth unemployment has never been so high, nor has the resulting sense of futility and hopelessness among young people and their parents.

One of the causes has been the massive number of job losses under the last two Tory Governments. Between June 1978 and 1984 nearly 30 per cent. of employees in Knowsley and 22 per cent. in St. Helens are estimated to have lost their jobs. Even in Sefton, the district least affected by the recession, more than 10 per cent. of employees lost their jobs in that period. In numerical terms the loss was greatest in the city of Liverpool, where 46,700, or 15·8 per cent., of employees lost their jobs. The Conservatives try to make out that that is all to do with Derek Hatton, but it is to do with the way in which factories have closed and industry has deserted Merseyside, even Conservative-controlled areas such as Sefton.

Many of those jobs will never be recovered unless the Government intervene in the workings of the economy. Large factories have closed down permanently and the manufacturing base that remained has been gradually but finally destroyed by the Government. We have lost 4,600 jobs at British Leyland, 2,000 at United Biscuits, and 1,500 at Courtaulds — a profitable, strike-free factory which could not compete with cheap American imports of synthetic fibres and carpets because of high energy costs and interest rates. A further 900 jobs have been lost at Lucas Girling and 800 at Rockware Glass. The list goes on and on. I could refer also to GEC, Littlewood and Cammell Laird. The Mersey Docks and Harbour Board has had to get rid of registered dock workers because of the decline in manufacturing industry over which the Government have presided.

Photo of Mr Philip Oppenheim Mr Philip Oppenheim , Amber Valley

The hon. Gentleman blames the Conservative Government for the decline in manufacturing employment, but whom does he blame for the decline of 750,000 manufacturing jobs -— three quarters of them in the north—during the period of the Labour Government?

Photo of Mr Philip Oppenheim Mr Philip Oppenheim , Amber Valley

I thank the hon. Gentleman very much.

Photo of Mr Allan Roberts Mr Allan Roberts , Bootle

If the Labour Government failed to prevent a decline in manufacturing, the Labour Government were to blame, but I wish that in the past seven years we had had the rates of decline that we had under the Labour Government rather than those that the Conservatives have brought about. I wish, too, that we had had the same level of public expenditure on housing and employment in the construction industry. I wish, too, that we had the levels of unemployment and of unemployment benefit and social security that we had under the Labour Government.

No one is suggesting that the Labour Government were perfect, but compared with the present Government the Labour Ministers were angels, white as snow, in terms of their record on jobs and industry for Britain. It was not the Labour Government who abolished exchange controls. Since the Conservatives came to power, more than £96 billion has gone abroad, about £60 billion in portfolio investment and about £35 billion in direct investment. That would not have happened if exchange controls had remained.

The growing social and economic inequalities on Merseyside are not illustrated only by unemployment. There is also a great deal of poverty among people who are in work. This is where the right hon. Member for Plymouth, Devonport (Dr. Owen) got it wrong when he called for selective rather than universal measures to deal with the problems. One cannot deal selectively with the problem of low pay, which affects 8 million people. On Merseyside, about 250,000 people are earning poverty wages and form a substantial proportion of the large number of Merseysiders living in poverty or on the margins of poverty. The Low Pay Unit figures suggest that some 346,000 people, or almost 23 per cent. of the population of Merseyside, are living on the official poverty line.

My right hon. Friend the Member for Birmingham, Sparkbrook (Mr. Hattersley) was vilified by the right hon. Member for Devonport for leaving the Chamber during the course of the second speech following his own, but I note that the right hon. Member for Devonport has done exactly the same thing. He complained that such behavious was discourteous, but as soon as I started to refer to him he walked out. However, I do not particularly like drawing attention to such double standards, so I shall return to the figures.

The 346,000 people on Merseyside estimated by the Low Pay Unit to be living on the poverty line include only those dependent on supplementary benefit. That figure takes no account of those ineligible for supplementary benefit, perhaps because they are in full-time work, although their total earnings may be equal to or often below the level of supplementary benefit. There is massive poverty in Bootle and on Merseyside among those in work as well as those out of work. Low pay is a major problem. The next Labour Government will deal with that problem. One of the instruments that will be used will be a statutory minimum wage. The extent of poverty and unemployment, especially youth unemployment, is no figment of a Socialist imagination. It is a statistical reality and shows how many people are seriously suffering and crying out for help.

A major consequence of that situation in the past seven or eight years on Merseyside has been a massive increase in crime — in violence, burglary, fraud, theft and criminal damage. It is no accident that, since 1978, violence against the person has increased by 30 per cent. on Merseyside; that burglary has increased by 66 per cent.; that theft and the handling of stolen goods have increased by 20 per cent.; that fraud and forgery have risen by 98 per cent.; and criminal damage by 70 per cent. Crime on Merseyside has risen by 41 per cent., presided over by the so-called party of law and order. One crime is committed on Merseyside every 3·5 minutes.

Photo of Mr Tony Marlow Mr Tony Marlow , Northampton North

The hon. Gentleman is a good constituency Member and Socialist. Can he tell the House why levels of crime — particularly of violence — have increased by a far greater proportion in Labour-controlled areas than elsewhere in the country?

Photo of Mr Allan Roberts Mr Allan Roberts , Bootle

I do not know whether I am allowed to say that the man is mad. Somehow, the hon. Gentleman thinks that the reason why people are poor, badly housed and suffering deprivation is that they have Labour councils. I assure the hon. Gentleman that they have Labour councils because they are badly housed, are poor and are suffering deprivation, so they vote Labour. They recognise that that is the only way to change their circumstances. That is why Labour councillors represent people who are deprived, in difficulties, badly housed and unemployed in our community. The hon. Gentleman's tautology is nonsensical and he knows it.

One crime is committed every 3·5 minutes on Merseyside. I know that Conservative Members—the Prime Minister is very good at it—say that, of course, crime has nothing to do with social conditions, bad housing, unemployment and deprivation. They make it seem a consequence of original sin, and they ignore the statistical correlation between increases in youth unemployment and increases in crime.

Unlike Conservative Members, I know for a fact that severity of punishment is not the greatest deterrent to committing crime. The greatest deterrent is the certainty of detection, and, when one has been caught, the loss of one's self-respect, the respect of one's family and friends, and one's job. If there is no job to lose there is no self-respect, because there is no hope for the future. People become easy prey for the hard drug pushers and have no logical reason not to go on and commit a crime. That is the sort of environment and society that the Conservative Government have created.

Six years ago there was no heroin addiction on Merseyside. The pushers did not have a field day, because drug addiction did not exist there, but it has arrived under this Government, and there is a new generation of unemployed young people who are hooked on it in my constituency—the Thatcher generation.

Photo of Mr Allan Roberts Mr Allan Roberts , Bootle

Conservative Members can say "Ridiculous" as much as they like, but that is the heritage of young people in my constituency under this so-called Government of law and order.

If that is not true, let the Government explain the 41 per cent. increase in crime that has taken place during the past seven years under the so-called Government of law and order. No doubt they will use law and order to whip up feelings again during the election campaign to get grubby, filthy votes, while they preside over the social consequences and unemployment that create the very crimes they claim to oppose.

I am against crime. I want some hope for the young people of my constituency. I want hope through public expenditure, some Government intervention in the workings of the country's economy, some investment in Merseyside and the return of some jobs. I want a Government who care and will spend money, not on tax cuts for the rich, but on building decent council housing. That would deal with the homeless in my area and put unemployed building workers back to work.

If ever we needed a classic example of the divide between the two nations—the rich in the south, in parts of London and elsewhere, and the poor in the north and in Merseyside — we have only to look at what is happening to house prices. Earlier, the hon. Member for Southwark and Bermondsey (Mr. Hughes) said that house prices had been inflated, that they had quadrupled, or even gone up sixfold, in London. The flat that I bought in London doubled in price in three years, and I benefited from that. It was in the east end of London, an area in which house prices are rocketing because of the activities of the London Docklands Development Corporation.

Photo of Peter Lilley Peter Lilley , St Albans

That shows the success of our inner-city policies.

Photo of Mr Allan Roberts Mr Allan Roberts , Bootle

The people who are in the deprived area of Tower Hamlets canot afford to buy houses there. No council houses are being built for them. That is the extent of the success of the policies of the hon. Gentleman's party.

I have just come back from America, where I saw letting advertisements in the Herald Tribune. Those advertisements, which are aimed at the Americans, say that now is the time to buy in docklands. Rich Americans are investing in the Canary wharf development, but ordinary people cannot afford to buy houses there, and no houses are being built for rent. A Member of Parliament comes from Bootle and buys a flat because he needs one to do his job in the House and finds that it quadruples in price during a five-year period. That is the position in London and the south, but it is not the position on Merseyside.

House prices are falling on Merseyside. The Park lane estate of 140 dwellings was built in my constituency by Wimpey. The houses were for sale, some on the basis of equity sharing. The estate was built on land that was donated by the local authority, or sold cheaply. Thirty houses now stand empty, not because the people who owned them were made redundant and defaulted on their mortgages — although that was true of some of them, because of unemployment—but because they decided to jack it in and take the keys to the estate agents or building society because house prices were falling. Such people were not gaining any equity. The mortgage repayments were not worth repaying any more, because prices were falling and they could get somewhere cheaper by renting. Those houses were originally sold for £21,000 to £22,000. They are now selling for £18,000. Efforts are being made to sell the abandoned ones for £10,000 because they have been vandalised. The whole estate is in decline.

The area that I am describing could not even be called an inner-city area. It is the kind of area which the Conservatives describe as one of hope. It was a partnership, build-for-sale scheme, which is declining because of unemployment and poverty in Merseyside. What a picture that presents, compared with that of the prosperous south, whose economy, they tell us, is overheated. If that is so, we have a nuclear winter in Merseyside.

Photo of Sir Ray Whitney Sir Ray Whitney , Wycombe

Is the hon. Gentleman trying to tell us that he objects to the fact that people in the north, on Merseyside and in Bootle, have to devote a smaller proportion of their income to housing costs than do people in the south? That leaves them with a greater percentage of disposable income for other necessities and the pleasures of life. Docklands was laid waste largely because of the impact of trade unions, which were supported by his party. That area has now been brilliantly revitalised as an exciting, international area for investment from all over the world, which is creating jobs and prosperity. Does the hon. Gentleman object to that, too?

Photo of Mr Allan Roberts Mr Allan Roberts , Bootle

Only 8 per cent. of the jobs in docklands have gone to local people. That figure is, perhaps, an exaggeration. The people who work there do not live there. Most of them are rich people who have come from outside. With regard to housing policies, there is a market in fake rent books, which are being sold by caretakers in the area. In this way the rich can buy a rent book and pretend that they are tenants of the local authority to get a house for £44,000, which they can sell two months later for £100,000. The rich are corrupt, too. There have been examples of that in the Chamber. It is not only the poor who fiddle their social security. The rich become involved as well. If that is the kind of housing and job policy that the hon. Member for Wycombe advocates, I am happy to oppose it.

I am also aware that we must provide houses everywhere for sale and for rent at a price that ordinary people can afford. That is not happening on Merseyside, because of poverty and unemployment, and it is not happening in the south, because people on average incomes cannot afford to buy houses, whose prices are escalating dramatically and are being bought by people who do not even reside in Britain. Capitalism is losing its patriotism.

Photo of Peter Lilley Peter Lilley , St Albans

As I understand it, the hon. Gentleman objects to rising house prices in the east end and to falling house prices on Merseyside. He also believes that crime is caused by poverty and by riches. Does he believe in Socialism, or in nihilism?

Photo of Mr Allan Roberts Mr Allan Roberts , Bootle

I do not object to the fact that house prices on Merseyside have fallen. I object to the cause of that fall in house prices—unemployment and poverty. If Merseyside was prospering, if there was high employment and no poverty and if house prices were steady or falling slightly, I would rejoice, but that is not the position. I object to the fact that houses are left empty because of poverty and unemployment. The Conservative party is supposed to be the party of owner-occupation, but people cannot buy houses in London and the south because prices are escalating so quickly. That shows our two-nation society. That shows the contrast that has been created by the Government.

We will have a Labour Government, who will do something about unemployment——

Photo of Mr Allan Roberts Mr Allan Roberts , Bootle

We will get a Labour Government, whether on 7 May or not. The more you speak, the more likely we are to get one.

Photo of Mr Tony Marlow Mr Tony Marlow , Northampton North

On a point of order, Mr. Deputy Speaker. I do not think you said anything, did you?

Photo of Mr Harold Walker Mr Harold Walker , Doncaster Central

I am sure that the hon. Member for Bootle (Mr. Roberts) realises that he made a slip of the tongue.

Photo of Mr Allan Roberts Mr Allan Roberts , Bootle

I apologise, Mr. Deputy Speaker. Sometimes it is difficult to resist the provocation.

There will be a Labour Government, who will deal with the problems of unemployment by reflating the economy in a way that does not suck in imported goods. We shall enable areas such as Merseyside to benefit from private and public expenditure—the latter on hospitals, schools, social services, increasing the number of people in the caring professions and building council houses to solve the housing crisis in Bootle and Merseyside and to nut construction workers back to work.

Of course, if we have a Labour Government, with a decisive overall majority, we must answer the question, "Can we afford it?" British people say, "We agree with the Labour party's policies, but can we afford them?" Let no Conservative Member tell us that we cannot afford our policies of providing jobs, homes, a decent environment and decent health services for our people, when £96 billion has gone abroad to be invested in jobs overseas since the Tories came to power. That is our money. We should not forget the £25 billion that has been invested overseas in portfolio investments.

During their period of office the Tories have received £53 billion in North sea oil revenue, which has certainly not gone towards re-equipping and modernising British industry or investing in the British economy. Last year the Government received £11·5 billion from the North sea, yet they have cut public spending and denied the consequences. They pretend to have both policies at the same time — increasing expenditure on the Health Service and cutting public expenditure. They have cut housing, education and science research. Public spending on housing has been cut by about 60 per cent. The social security budget has increased by 33·7 per cent. as unemployment has increased. The Government plan to raise £4·7 billion from selling public assets during the next 12 months, if there is no general election. Unemployment costs the Government £20 billion a year in higher benefits and lost taxes, yet they say that we cannot put the unemployed back to work because we cannot afford it. The increase in unemployment since 1979 has cost the Government £12·5 billion each year.

We cannot afford not to put people back to work. We cannot afford not to have people creating goods and services and paying tax. We cannot afford to have so many people consuming without creating or producing. That is the Labour party's policy, which is sensible, logical and sound. The Government say that, to provide all those services, a Labour Government would have to borrow more. The average owner-occupied household knows the benefit of borrowing to provide capital assets. One borrows to buy or build a house, and as long as the money owed on the capital asset is less than the value of the asset, one is quids in.

The Government are not borrowing to build capital assets in manufacturing industry, housing or hospitals. They are borrowing to pay the weekly food bills—the unemployment and social security bills. They have had a large public sector borrowing requirement since they came to power. Labour would borrow to implement its job creation and social policies, to create capital assets, to put Britain back to work and to get rid of the scourge of unemployment, crime and deprivation that exists in areas such as Merseyside.

Photo of Mr Philip Oppenheim Mr Philip Oppenheim , Amber Valley 6:15 pm, 6th April 1987

The motion in the name of the Leader of the Opposition is an insult because it is out of touch, because of the Labour party's record when it was in office and because it offers no realistic solutions to Britain's genuine problems. The motion is out of touch because, by any reckoning, the vast majority of people in Great Britain today are far better off than they were in 1979.

The right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) quoted some figures, trying to show that the wealthiest 5 per cent. of the population had increased their share of the nation's wealth at the expense of the poorest 5 per cent. He failed to say that the figures also show that, including the effects of tax and benefits, there has been almost no change in the share of wealth of the top earners as against the share of the low earners. The right hon. Gentleman also quoted a recent health report, which said that inequalities in health had increased under the Government. He did not say that similar reports were issued under the Labour Government, saying that inequalities in health were increasing under the Labour Government.

We could quote statistics until we were blue in the face, but the simple fact is that more people are better off under this Government than ever before. Even poorer people are substantially better off, as has been proved by the fact that last year there were far more live births than in the last year of the Labour Government.

Many Labour Members are sincere in their opposition to the Government and in their anxiety about what they see as the inequalities and problems of our society. But if they are genuinely sincere, they should also examine the record of the Labour party. In the 1960s, the Labour Government made 10,000 miners redundant in Amber Valley. Their redundancy pay and pension provision was a pittance. When miners are made redundant in Amber Valley today, they receive substantially better redundancy, pension and benefits provisions than was the case under the Labour Government. Is that divisive? What is divisive is the action of the Labour regime on Derbyshire county council——

Photo of Mr Edward Leadbitter Mr Edward Leadbitter , Hartlepool

The hon. Gentleman has put forward his general thesis and one respects it, and he has mentioned his consituency. But in fairness, and considering the matter objectively, does he agree that there is a problem in Hartlepool, where 13,900 people in that small constituency are in receipt of supplementary benefit, and consistently since 1983 10,000 people have been out of work? That alone costs £59 million. Does he agree that there must be a divide between the position in Hartlepool and the affluence in other parts of the country?

Photo of Mr Philip Oppenheim Mr Philip Oppenheim , Amber Valley

I thank the hon. Gentleman for his intervention. I do not deny that we have problems in our society. The hon. Gentleman mentioned that the number of social security claimants is higher in his constituency now than it was in 1979. Part of the reason for that is that the levels at which social security benefits are attained now are more generous than they were in 1979, so, on the hon. Gentleman's own figures, it is arguable that people are better off as a result of the change.

I also do not deny that unemployment is a severe problem in our society, but to claim that it is a problem unique to Great Britain or that it has been caused by the Government is false. There are many reasons for unemployment. One is that we have had substantial over manning in industry for many years. Another reason, which is often conveniently forgotten by Opposition Members, is that over the past five years there has been a net increase of well over 1 million people in the size of the work force. That is a substantial cause for unemployment. I wish that Opposition Members would not always try to blame every problem in society on the Government and remember that many of our problems, which are common to many developed countries, were inherited from the previous Labour Government.

I should like to continue my thesis. What I consider to be genuinely divisive is the Left-wing regime that now rules in Derbyshire county council. Since 1981, when the current regime took over, Derbyshire has gone from being one of the lowest-rated counties in England and Wales to one of the highest-rated. It means that a pensioner in Amber Valley now pays about £3 a week more in rates than a pensioner living in a similar house in neighbouring Staffordshire, which is Labour-controlled, but is controlled by a relatively moderate Labour council, or neighbouring Leicestershire, which is Conservative-controlled. That extra £3 precept on the pensioner in Derbyshire, which is the equivalent of a £3 a week cut in pension, is due solely to the profligacy and overspending of Derbyshire county council. That is what I call divisive.

The Opposition motion is also insulting because they offer no solution to the problems in our society. Making the rich poorer does not make the poor richer. Opposition Members should remember that. The only way for everyone in our society to become better off is to ensure that our economy is successful. It is an unfortunate but proven fact that Labour policies are inimical to making our economy successful. One does not create wealth by making an enemy of enterprise, by blasting business men, or by pillorying profit, which is one of the favourite games of Opposition Members.

One does not make a successful economy by savaging top industrial managers' high earnings. What is wrong with paying a high salary to a manager in a successful industry, whose success and hard work have ensured not only that British goods are sold at home and abroad, but the employment of people in that company? What is wrong with him keeping a reasonable proportion of his salary? One does not make a successful economy by taxing people, be they managers or scientists, at a top rate of 90 per cent., which happened under the previous Labour Government.

I venture to suggest that that may have been one of the reasons why, under that Labour Government, there was a loss of 750,000 jobs in manufacturing. Perhaps that is also why 75 per cent. of those jobs were lost in the north. That was also divisive. Perhaps that is also the reason why manufacturing output in 1979 was lower than in 1974, which is something for which Opposition Members like to blame the Government. It might also be why, under that Labour Government, the ratio of imported goods to domestic goods tripled.

Opposition Members have to learn that saying that one cares is not the same as creating the wealth to pay for that caring. Self-righteousness comes cheap. That is why the Labour party went into the 1974 general election promising the earth. That is why, in the subsequent two years, the Labour Government did their utmost to deliver the earth. That is why their overspending forced them, by 1977, to impose the most severe public spending cuts ever seen in this country, which cut into every area of public spending. including the Health Service, which is so dear to many of their hearts. That is when the most severe round of cuts since the founding of the NHS took place in the hospital building programme. That was divisive. It will not happen again.

Photo of Mr Allan Rogers Mr Allan Rogers , Rhondda 6:25 pm, 6th April 1987

From speeches by Conservative Members, particularly the hon. Member for Wycombe (Mr. Whitney), one got the impression that all was well, and that there were no divisions and no poverty. Conservative Members said that, simply because there were the same problems in the Third world, not only should they exist in this country but they should be acceptable.

There is no doubt about the poverty and the divide in this country. Any reasonable person will accept that the case is proven, whatever parameters or socio-economic indicators one uses. The case that there is a division in society and that there are great gaps between those who have and those who have not can be easily proven. I accept that it is not necessarily a north-south divide. In fact, it is not. When last year I sat on the Select Committee on the Channel Tunnel Bill, I was appalled to see the statistics for areas such as Margate and Ramsgate, which have extremely high unemployment. I was interested to hear the arguments put to the Committee.

The divide is there. It is not geographical—it is not necessarily a north-south divide, but it is certainly between those who have and those who have not. In many inner cities in the south there are problems, but they exist to a greater extent in the peripheral areas of this country and of the European Community. The phenomenon has been exacerbated since we became a member of the EEC. The problem is not peculiar to this country; it also manifests itself in other European countries, such as Italy, Greece and the southern parts of France, which are away from the centre of the EEC. That is why I should like to draw to the attention of Conservative Members the severe problems faced by those who represent constituencies in the west and the north. There are problems with facilities and infrastructure.

The erosion of our economic base has continued at a great pace since we have been in the EEC, but whereas in the other EEC countries Governments are doing something about it, this Government are not. In fact, they are not prepared to interfere with the market forces. They are prepared to let them be rampant.

In many areas of Britain, the position has been aggravated by the rundown of old industries. Not only the old heavy industries but the smokestack industries have declined and added to unemployment. For example. in Wales there has been a severe decline in the coal industry, which has become much worse since the end of the miners' strike. Some 13,000 jobs have been lost in the coal industry since 1979. However, at the same time over, 100,000 jobs have been lost in Wales, so one cannot just say that the decline in industry and the increase in unemployment are due simply to the decline in the coal industry.

We have also lost a tremendous number of other jobs. In manufacturing, for example, we have lost 113,000 jobs. In metal goods engineering, we have lost 52,000 jobs. So it is not just an industry that is in decline; it is a region that is in decline while the Government sit back and do nothing.

The problem is multi-faceted. Unemployment is not the only problem in the poor areas. It is compounded by poor housing, or lack of housing, and it is added to by the inadequate health facilities. It is self-evident that greater demands are placed on the health services because of the multiple deprivations to which I have referred.

Photo of Peter Lilley Peter Lilley , St Albans

Is the hon. Gentleman aware that not only is unemployment falling faster in this country than in any other industrialised country in the world, but, within this country, it is falling fastest in Wales?

Photo of Mr Allan Rogers Mr Allan Rogers , Rhondda

It is bound to fall fastest in Wales, because we are starting off with the worst possible conditions. If there is to be any improvement, it will be in areas such as Wales. Perhaps that is a tribute to our resourcefulness, and to the way in which people are prepared to overcome the problems with which they exist. However, it is not because of, but in spite of, the Government that people in Wales are fighting back.

Photo of Sir Ray Whitney Sir Ray Whitney , Wycombe

Before we leave the subject of Wales, will the hon. Gentleman tell the House whether he, too, rejoices in the success of Heartbeat Wales, which has been acknowledged all over the world?

Photo of Mr Allan Rogers Mr Allan Rogers , Rhondda

I do indeed applaud the success of Heartbeat Wales. Again, that success is despite the lack of health resources in Wales. The hon. Member for Wycombe (Mr. Whitney) earlier tried to analyse, in a rather ridiculous way, the reasons for poor health in this country. For example, he said that there was a lack of education, leading to an earlier death rate. That may well be true. He also talked about the greater incidence of heart disease being correlated with deprivation. That is true; I do not dispute it. But what he is really arguing, or would if he were honest in his argument, is that health is a function of wealth and privilege, because health can be bought in this country. That is why there are divisions between the rich and the poor, and that is why unemployed people are dying.

The hon. Member for Wycombe talked about the higher incidence of heart disease among the working classes. That is because they cannot buy health, as his hon. Friends can in this part of the country. The hon. Gentleman came out with spurious arguments about participation levels. He said that the working class did not walk and swim as much as the middle class, who had a higher participation level. I wish that the hon. Gentleman would come to south Wales and talk to the miner who comes up from the pit, has a shower, goes home and says to the wife, "Excuse me, darling. I am going out for my daily jog." He has only walked six miles from the coal face back to pit bottom. He has only been flogging himself with 3 ft of headroom. No wonder he does not want to run up the mountain.

The man who has been humping bricks all day —building private houses, of course; there are not many council houses being built now—will not say to his wife, "Excuse me, darling. I must go for a swim and get some exercise," when he has been flogging himself for six hours in physical exercise. What a daft parameter to use.

The hon. Gentleman's analysis was worthy of Mickey Mouse. No wonder he was superseded by the hon. Member for Derbyshire, South (Mrs. Currie). At least we know the hon. Lady's prescription for the health of the country, which is honestly based on prejudice and bigotry, whereas the hon. Gentleman's prescription was based on intellectual poverty and ignorance.

In a recent debate the right hon. and learned Member for Richmond, Yorks (Mr. Brittan) came up with a reason for the economic divide. He said that the people in the regions were pricing themselves out of work, and that one prescription that could be adopted by the Government was regional pay bargaining. He said that we should move away from national pay bargaining. If that is the answer to the regional disparities in this country, why is Wales not on a sweep of increased wealth and prosperity? Our average wage is about —42·32 below that in the south-east. The average wages in such areas as Wales and the north differ from the average wage in the south-east by about —40. However, according to the right hon. and learned Gentleman and other Conservative Members, we are pricing ourselves out of jobs.

The Secretary of State for Wales and the Postmaster General—I mean the Paymaster General, but, of course, the right hon. and learned Gentleman is only a postboy for his right hon. Friend the Secretary of State for Employment—have talked about the success of the Government's economic policies, and have said that under the present Government there is balanced economic growth throughout the country. I feel that Labour Members are entitled to ask where that economic growth is. It is certainly not in my constituency, or in the region that contains it. Nor is it in the constituencies of my hon. Friends who represent the north-east, the north-west and Wales.

My area has severe problems. We have the highest number of houses with no inside toilet facilities, and the highest number with no bath or shower. We also have the highest number of pensioners who lack those facilities. The perinatal mortality rate is the highest in Wales, and the unemployment rate is more than 20 per cent., with an extraordinarily high level of youth unemployment. There is a greater likelihood of children suffering from measles and whooping cough, and, not surprisingly, the area contains the highest percentage of permanently sick people in the United Kingdom. I am not proud of that record. It is not just a list, but a catalogue of deprivations.

In a recent debate, I drew attention to the eternal wrangling about statistics. Figures are shouted back and forth, and arguments are based on them. Labour Members especially know that statistics do not adequately demonstrate the misery and poverty in many parts of the country. They do not adequately illustrate the struggles, difficulties and despair of pensioners, or the tragedy and pain of the young mother who loses a baby in the early days of its life because of the lack of facilities. They do not adequately show the disillusionment and despair of the young man who has never had a job and sees no likelihood of getting one.

We see that deprivation in our constituencies; we do not need statistics to prove it to us. If Conservative Members scoff, it shows their ignorance and it shows the uncaring attitude of them and of the Government generally.

Photo of Mr Roy Galley Mr Roy Galley , Halifax 6:39 pm, 6th April 1987

This afternoon we have been subjected to a series of tirades that have suggested that the inequalties and problems that we face have arisen during the last eight years. It has been suggested that there is a simple solution to these problems. A constant theme that has run through the speeches of Opposition Members is that public spending is the solution to every conceivable problem.

Photo of Mr Roy Galley Mr Roy Galley , Halifax

Yes; how it is shared out is central to the debate.

History has shown that on every occasion when public spending has been increased in line with the policies advocated by the Opposition parties, it has led to those at the lower end of the social and income scales suffering the most.

There has been a Gadarene rush towards the suggestion that poverty and unemployment are the root causes of ill health and of the inequalities between one region and another, but that is not the whole story. We have to examine the evidence that has been advanced. Social groupings are based primarily on occupation. Some occupations, not surprisingly, are more dangerous and difficult than others. When statistics are based on those occupations, that becomes an almost self-fulfilling definition. It is also true that those who suffer from ill health will probably have difficulty in obtaining higher paid employment. That is also a self-fulfilling definition, because it leads to more people entering the lower income social groupings. However, there are other much more important factors.

There is far more cigarette smoking among the unskilled manual groups and the unemployed. Their consumption of alcohol is also much higher. The consumption of unhealthy foods is also higher and they do not take part in exercise to the same extent as do those in the higher income groups. All those factors have to be taken into account. Death from lung cancer is much greater among manual workers. Social groups 4 and 5 suffer far more from obesity and related health problems. Preventive health services, such as ante-natal and child health clinics, are used less by social groups 4 and 5. Therefore it is not just poverty and unemployment that cause those problems. It is a question of life-style, education and personal responsibility.

There are also genetic factors that nobody can quantify, despite all the health data that have been published. Women live longer than men. Why that should be so has not yet been satisfactorily explained. Certain families have a history of longevity that is not shared by other families. Certain racial groups suffer from complaints that are endemic to them but not to other racial groups.

Photo of Mr Edward Leadbitter Mr Edward Leadbitter , Hartlepool

The hon. Gentleman has referred to a number of interesting factors, one of which is the genetic factor. Will he try to explain to the House what genetic factors cause unemployment? Will he try to define the merit of the avoidable cost of unemployment and the merit of the acceptable cost of unemployment? What does he think will he needed in terms of a shift of resources and political will to achieve that end?

Photo of Mr Roy Galley Mr Roy Galley , Halifax

I regret that the hon. Gentleman has not been listening carefully to my speech. I said that genetic factors and the other matters that I mentioned are all part of the story. I do not deny that unemployment and poverty are part of the picture. I shall deal with that point in due course.

The provision of health services — clinics, nursing provision and the network of social and health services — is concentrated upon the socially and economically deprived areas. That is certainly true in my constituency. The figures suggest that the manual and unskilled groups consult their general practitioners more than the higher income groups. The manual and unskilled groups also use hospital services more than the higher income groups.

Whatever the economic background of the area, general practitioner list sizes have been reduced throughout the country. There are more general practitioners to cope with patients. Furthermore, more people are being treated as in-patients, out-patients and day cases. That applies throughout the country; the picture does not vary either socially or regionally. The further north one goes, the higher are the mortality and morbidity rates. It is the Government's policy to transfer resources from London and the south-east to the midlands and the northern regions. [HON. MEMBERS: "When?"] It is happening now. In my health authority area, we are nearer to our Health Service resource allocation targets now than we were eight years ago. Although we are part of the so-called deprived north, our resources have been increased. Our policy of transferring resources to the north is constantly being knocked by both Opposition parties. That policy was devised by the leader of the Social Democratic party and it was implemented by the last Labour Government, yet the Opposition parties constantly knock that policy.

Photo of Simon Hughes Simon Hughes Shadow Spokesperson (Environment, Food and Rural Affairs)

The hon. Gentleman would be fairer to the House if he remembered that the concept of transferring resources within the National Health Service was implemented at a time of real growth in the funds that were provided for the NHS. They kept pace with need and they exceeded that need. When there is insufficient growth in the NHS to meet increasing need, is it surprising that there is a diminution in the services that are provided and that those who suffer from the cuts in the inner cities, both in London and elsewhere, complain that the system is no longer fair? It was fair when it began, but in the context of today's economic policies it is no longer fair.

Photo of Mr Roy Galley Mr Roy Galley , Halifax

That is an attempt to divert us from the truth. During the last eight years, NHS resources have grown by 25 per cent. The amount spent per head of population, at constant prices, has grown by 25 per cent. Operations are being performed now, such as hip replacements and coronary bypasses, that were hardly thought of 10 years ago. I accept that the resource demands are absolutely enormous, but we have consistently devoted more resources to the NHS to keep pace with the growing demands. I defy the hon. Gentleman to commit his party to providing additional resources and keeping the poorest sections of the population on an even keel in terms of income alone. The last time that there was irresponsible growth in social security, health and other expenditure, this country became bankrupt, our health services were cut dramatically, particularly the hospital building programme, and pensioners with small savings and low incomes were the worst hit.

Photo of Mr Tony Marlow Mr Tony Marlow , Northampton North

Does my hon. Friend agree that it is appropriate to point out that during the period of the last Labour Government waiting lists in the northern region increased, whereas under this Government they have been reduced, that in the north-western region waiting lists increased under the Labour Government, whereas since we have been in government they have been reduced, and that the same has happened in the Mersey district, the Yorkshire region, the Trent region, the west midlands region and elsewhere? One could go on. Waiting lists have been reduced under this Conservative Government, whereas under the last Labour Government they increased horrifically.

Photo of Mr Roy Galley Mr Roy Galley , Halifax

My hon. Friend is quite right. By any measure of the quality of our NHS provision — the number of staff and the conditions under which they are working — there have been consistent improvements during the last eight years.

It is also of critical importance that the health of our community is improving all the time. If we look at the morbidity and mortality rates for the whole population and for each group within the population, we see that they are improving—even even for social groups 4 and 5. The Opposition will try to suggest that that is not so, but the mortality and morbidity rates in social groups 4 and 5 are significantly better than they were.

Let me deal in particular with a very important indicator of the health of the nation—the perinatal and the neonatal mortality figures. That indicator has improved since 1980. It has improved to 10 perinatal deaths per 1,000 births and that improvement has affected every group. We can look at the figures in more detail. In social groups 1 and 2 there has been an improvement in the number of still births from 5·7 per 1,000 to 4·2. In social groups 4 and 5 there has been an improvement from 8·4 per 1,000 to 7·2. The improvement has gone across every group. In social groups 1 and 2 perinatal deaths have reduced from 10·7 per 1,000 to 7·8. In social groups 4 and 5 perinatal deaths have reduced from 15·5 per 1,000 to 12·3. Neonatal deaths in social groups I and 2 have reduced from 6·2 per 1,000 to 4·3 and from 8·9 per 1,000 to 6·5 in social groups 4 and 5. Every social group within our community has benefited from improved health. Some have improve more than others, but there has been consistent improvement throughout society.

We have to accept that in some measure there may be effects from poverty and unemployment in certain parts of the country. We can look at that in the context of our health and regional policies. If we accept that argument as being a part, only a part, of the story we have to ask ourselves whose policies are best at coping with those problems. My hon. Friend the Member for Northampton, North (Mr. Marlow) made a valid point. The areas of deprivation and difficulty in Britain are areas such as Merseyside, Tyneside, Teesside, south Yorkshire, Greater Manchester and parts of the west midlands. What are the characteristics of those areas? They are run and controlled by Labour authorities. I do not wish to be simplistic about that, but I know a little bit about Sheffield. All those areas have had rate increases over a good number of years that have been substantially greater that in other parts of the country. The result has been that industry has fled. It has certainly fled from Sheffield.

Photo of Mr Roy Galley Mr Roy Galley , Halifax

I must get on.

Not only has industry fled but people, particularly when they are mobile, have said, "I am not going to continue to pay these rates. I shall live a few miles outside this city in a more pleasant environment. I will not give my rates to that city, which is taking far too much of my income." Therefore, there has been an inevitable concentration of deprived groups. Some authorities have said that they will do all sorts of things for particular ethnic groups, gays and lesbians. Therefore, people such as that will concentrate in those areas, and the deprivation becomes great. Many people have realised that business is moving out because of high rate increases.

One might say, "It is not fair. In our area we have suffered greatly from unemployment because we worked in the great manufacturing industries. That was the basis of our economy and we have now suffered a major decline." Those industries are coal, shipbuilding, steel and vehicle manufacturing. Do those industries ring a bell? Is it not the case that they are all nationalised? Is it not the case that they have been heavily subsidised over a long period of time in order to ingrain their lack of competitiveness? Those are all important factors which underline the problems of unemployment and deprivation in those parts of the country.

Who will be able to solve the problems of unemployment? Are we to return to nationalisation and subsidisation, which have been a disaster for Sheffield, Merseyside, Tyneside and Teesside?

Photo of Mr Roy Galley Mr Roy Galley , Halifax

It seems a creditable record, if not one of which we should be proud, that 1 million jobs have been created since 1983. That is an excellent response, given the background of the growth of our labour force, the technological change and all the other international problems with which we have had to cope. It is sterile for the Opposition to say that we must subsidise manufacturing industry in order to achieve economic regeneration in my constituency and other parts of the north.

When I visit manufacturing firms in my constituency, I am told that their orders are better. On the latest survey, they are saying that orders are at their best level for 10 years. They say, "We may be taking on a few more employees but primarily we will be buying a better and more up-to-date computerised machine." The subsidy of manufacturing industry will not create additional employment. We have to create wealth by exports and use that wealth to create a whole range of jobs within our economy.

It is sterile to say that we shall increase public expenditure and raise the numbers of those employed by local authorities. That will increase rates and taxes, which is precisely the reason for the decline of areas such as south Yorkshire, Merseyside and Manchester. It will reduce personal consumption and enterprise and it will make industry less competitive.

The 1·1 million jobs that the Labour party says it will create are a mirage. There will simply be a transfer of jobs from the private sector to the public sector. It will strangle enterprise and at this point enterprise must not be strangled because the enterprise upon which the great economy of west Yorkshire and many other areas was based 100 years ago is beginning to revive and rejuvenate. That is happening in Halifax and other parts of west Yorkshire, and I am sure that it is happening in other parts of the country.

As a Government we have reduced barriers to the expansion of business. We have increased the number of small businesses and the number of self-employed, and business is booming in many areas. The Halifax area has received £2 million in enterprise allowances and £3 million in small business improvement schemes and projects. Our record of creating new businesses and self-employment is second to none. The policies of high public spending, high rates and high borrowing that the Labour party wishes to introduce again in the north will stop all that revival in its tracks.

Photo of Mr Roy Galley Mr Roy Galley , Halifax

It is not true that the aid given to the north has reduced significantly. It has been better targeted. So often we hear figures trotted out saying that the amount of aid has been reduced. If one looks at the total available from a variety of sources, certainly in my constituency, it has increased significantly. There is aid for research and development, environmental aid, regional aid and specific schemes. All that has increased during the period of this Government.

The problems of the north stem from a lack of enterprise stifled by high rates and subsidised uncom- petitive industries. Regeneration by enterprise is now working through local economies. Not only is it the case that that enterprise will be stifled and that the 1·1 million jobs are a mirage, but the policies of the Labour party — I should say the policies of the Opposition parties, because it will apply to the Liberal party—will increase unemployment throughout Britain. They will increase unemployment in Halifax and the north of England. They will make 50,000 people unemployed as a result of their policies on defence. They will make 150,000 people unemployed as a result of their policies on nuclear energy. They will make 100,000 people unemployed as a result of their policies on sanctions against South Africa. The policy of a minimum wage, espoused not by the SDP but by the Labour party, and increasing differentials in line with that, will make another 600,000 people unemployed. The reality is that the policies set out by the Labour party will increase unemployment by 1 million not reduce it.

From the detail of what was said by the right hon. Member for Plymouth, Devonport (Dr. Owen) it seems that the alliance will follow on roughly the same lines. There may not be quite so much inflation, taxation, borrowing or unemployment, but we will see very much the same sort of policy.

We have seen here today. from both parties and particularly from the right hon. Member for Sparkbrook, a cry for higher taxation, higher spending, higher borrowing and—I noted carefully at the top of his list—higher immigration. They will not solve the inequalities of this nation but will bankrupt it. It is only by the growing prosperity and enterprise that is now gradually being shared by more and more communities that we shall succeed, and succeed we shall.

7 pm

Photo of David Clelland David Clelland , Tyne Bridge

When I listen to Conservative Members talking about these issues, I often wonder whether we are living in the same country. Whenever we speak about the problems of the National Health Service, unemployment or industry, we are showered with statistics that are supposed to demonstrate the opposite to what everybody knows to be the truth. I am driven to the simple, if not original, question, "If things are so good, how come things are so bad?" Everyone in the country knows what the situation is, regardless of any statistics that Conservative Members might mouth. They will not convince people of something that they know not to be true.

I come hotfoot from the north of England and having lived there all my life, I know something about the region. Today, I was at the launch of the eighth state of the region report — for the first time, produced by the Northern Region Councils Association. The report covers recent changes in six key sectors —- the region's economy, labour supply and unemployment, social change, transport and communications, environment and housing and public sector investment.

The report concludes that the north's economic position has worsened in the past year and that the north-south divide is becoming a matter of serious concern. Job losses from the region's traditional industries are still not being counter-balanced by the attraction of new industry, and the north continues to have the highest regional unemployment rate in Great Britain. Average weekly household incomes in the north are well below the national level, and the relative position is worsening. The region is becoming increasingly dependent on social security payments. The share of regionally relevant public expenditure in the north is declining and not enough public investment is taking place to match the scale of the region's problems.

Despite all these problems, during 1986 the region has again demonstrated its willingness and ability to help itself by the creation of the Northern Region Councils Association and the Northern Development Company. However, the problems are immense, and they are getting worse. Employment has continued to decline, with a further net loss of 3,000 jobs during the year. The north's traditional manufacturing industries continue to be the hardest hit. Major redundancies totalled more than 15,000 in the past year, of which 6,000 have been in coal mining. Growth in employment has been limited to the service sector, although this has been insufficient to replace employment losses elsewhere.

The latest employment projections for the region suggest that the current trend of employment decline will continue over the next four years. Gross domestic product in the north declined sharply during 1984 relevant to the United Kingdom, and Government support for regional industrial policy has continued to deteriorate in 1985–86, despite the decline of the region's economy.

One in five of the region's unemployed have now been out of work for more than three years. Youth unemployment has increased faster than the expansion of the youth training scheme. There is still a higher chance of becoming unemployed in the north than in any other region and one of the lowest chances of ceasing to be unemployed. The north has the lowest average weekly household income of all regions in Great Britain, and its relative position is worsening.

The region's perinatal mortality rate, to which the hon. Member for Halifax (Mr. Galley) referred, increased in 1984, contrary to past trends, and the standardised mortality ratio continues to be the highest in England and Wales. A joint report by Bristol university and the Northern regional health authority, which has also been referred to, refers to inequalities of health in the northern region. I remind those hon. Gentlemen who are interested in this report that the Northern regional health authority, like others, is dominated by members appointed by the Government, so it could hardly be called a Socialist enclave. The main findings of the report demonstrate the strong link between the distribution of ill health and low income.

The north's share of national expenditure on roads has been falling, particularly compared with the south-east. The deregulation of bus services, which came into operation in October 1986, has led to a service that has been described as being in a "shocking state" and "unreliable and irregular" by the Conservative Member for Newcastle upon Tyne, Central (Mr. Merchant).

Photo of Bill Cash Bill Cash , Stafford

The hon. Gentleman is talking about the Northern Development Company. Could he clarify what he and the company mean by the word "north", having regard to the fact that a Labour party briefing note refers to the north as all areas outside the Southern triangle of the South East, the South West and East Anglia"? Is the hon. Gentleman referring to the north in those terms or in some other terms?

Photo of David Clelland David Clelland , Tyne Bridge

I am referring to the northern region as defined by the Department of the Environment, which we all understand as the northern region — not the north that some people seem to believe starts north of the Watford Gap. These statistics refer to those counties that comprise the northern region of England.

That was a brief summary of the 1986 state of the region report, published this morning, which revealed that the north-south divide is still with us, and getting worse. As the report points out, the northern region has the highest unemployment rate in Britain at 17 per cent., which is 5 percentage points above the average for Great Britain. People in the area have the greatest likelihood of losing their jobs of any region in Great Britain, and it is the only region where the working population was actually smaller in 1984 than it was in 1974. Even worse, the number of people unemployed for over three years has doubled since 1983, to 43,000.

Those are the facts. The statistics are drawn up not by the Northern Region Councils Association but by the Government. They are the statistics of decline and decay. However, none of them can convey the real total of human misery. One cannot convey the despair and disillusion of a 50-year-old who has been told that his useful working life is finished as a result of a series of graphs on an economist's wall.

I have seen the reality of unemployment for myself. In the factory in which I worked for 22 years, I have seen grown men cry more tears than the Prime Minister could blink up in a lifetime. The frustration of a 19-year-old who has never worked and possibly never will cannot be conveyed by some fancy figures in the Gazette. Unemployment is not just a matter of economic statistics. It is a social condition and a state of mind. It is an individual blight and a family burden, as well as an economic loss to the whole community. Mass unemployment divides families and destroys lives. It brings bitterness as surely as it deepens despair. It is not only an economic catastrophe, but a human tragedy of immense proportions. We in the north are suffering the stark results of eight years of Conservative policy and prejudice.

Photo of Mr Edward Leadbitter Mr Edward Leadbitter , Hartlepool

My hon. Friend is addressing the points set out in the motion. A specific example of the divisions might be helpful. This is one example of many. In my constituency, only three or four weeks ago, I met a young girl, who has a baby. She was living in an overcrowded house, and her only entitlement resulted in a benefit of £15 for herself and £8 for her child. This evening some of us will be sitting down in the Dining Room and spending that much on a meal.

Photo of David Clelland David Clelland , Tyne Bridge

I note my hon. Friend's comments. There are many examples like the one that he underlined. Those examples counter earlier comments that people are now better off and that even those in the worst poverty are better off now then they have ever been. Hon. Members who believe that should face the problems and talk to people, like the girl my hon. Friend described, and try to convince them that they are better off now than they have ever been. Instead of the hope and harmony that the Prime Minister and her Government promised us back in 1979, they have delivered nothing but disillusionment and despair.

Our young people are steeped in hopelessness, our old are left feeling neglected and uncared for, the unemployed feel abandoned, the employed feel insecure, minorities are discriminated against and the majority live under the shadow of a nuclear holocaust. If Conservative Members do not believe that people on the street are not worried about those things, they are out of touch with reality.

What answers do the Government offer to tackle the root causes of those problems and divisions? They offer none. Even on law and order, the Government's central plank in the past two general election campaigns, the divisions are evident. Recent statistics show that in the Northumbria police force area, total crimes have risen by 68 per cent. since 1978, compared with the national average of 50 per cent. Violence against the person is up 57 per cent., compared with a national average of 44 per cent. Burglaries are up 83 per cent., compared with the national average of 66 per cent. Theft and the handling of stolen goods have risen 57 per cent., compared with the national average of 39 per cent. Criminal damage, including vandalism, is up 102 per cent., compared with the national average of 91 per cent.

That last statistic is most revealing. It is the sort of crime generally committed by young people. It shows the deprivation and desperation into which young people have been driven by the Government. The only statistic that is out of line with the pattern is that for fraud and forgery. In the northern region that is down 7 per cent. compared with a 9 per cent. increase nationally. That may reveal that in the northern region most people do not have the finances to buy a single share in their own name, let alone multiple shares in the names of one or two other people.

To resolve the problems, the Government have said that we need heavier penalties, weapons for the police and more spending. If that is so, why do those countries with the most heavily armed police forces suffer the highest crime rates? For every 1 per cent. increase in expenditure on the police force in this country over the past six years, why has there been a corresponding increase in crime? Why are the incidents of burglary on the poorest council estates four times higher than in middle class suburbia?

The answer is that crime is not directly related to the strengths or weaknesses of the forces of law and order. It is not sufficiently deterred by short, sharp shock treatment or long, hard prison sentences. Crime is related to the social conditions in which we live. It is fed by poverty and jealousy. It is fostered by discrimination and frustration. It is fuelled by hopelessness and idleness. That is why in the north Labour councils have been tackling both the causes and the effects of social disorder.

More police have been put back on the beat and even more have been requested. Our living environment has been improved, housing has been modernised, and there has been an increase of 66 per cent. in public housing renovation in the northern region compared with 12 per cent. nationally. There has also been a fall in the region of 60 per cent. in renovations in the private sector. Businesses have been helped by local authorities. Training and education have been provided for our young people. Much more needs be to done, remains to be done and certainly could be done if we had a Government who worked with the people instead of riding roughshod over them.

However, our achievements are being made in the face of a Government who withdraw finance from those local authorities that they cannot convince, rate-cap those that they cannot financially blackmail and abolish those with which they politically disagree. Because they have no answers, the Government brand all those who try to find solution as "Left-wing" —whatever that means in the Government's blinkered mind—or "soft on crime". That is not and never been true. Certainly, for my part, I abhor robbery of the homes of ordinary working people who have spent years and worked hard to build a home for their families, only to have it abused and vandalised and their possessions stolen. I detest violence, racism and hooliganism — and of course the perpetrators must be caught and punished. However, I have also always believed that rehabilitation is better than revenge and that prevention is better than cure. I have always believed that it is better to try to find answers to questions than to pretend that the questions do not exist.

Those problems can be tackled and answers can be found. A Labour Government will quickly begin to resolve the problem that is central to current social conditions —unemployment. For example, councils will be allowed to build and modernise homes. New systems of exchange controls will be introduced so that the billions of pounds currently flowing overseas, more than £60 billion in the past six years, can be diverted into British industry. Billions of pounds currently planned to be spent on American nuclear weapons systems will be saved. Instead, the money will be spent on conventional weapons for the defence of our country. Those earning the highest salaries will have to pay more to help the poorest.

All that, and more, will create work for our people. As more people find work and spending power increases, even more jobs will he created as demand for goods and services grows. That is not a dream or a false or impractical promise. It can be achieved if the Government have the will to do it. By that means, the frustration and hopelessness present in our country will begin to diminish. People will once more begin to have confidence and will be able to plan for the future.

However, the Government have no answer to unemployment or law and order. The Tories have nothing to offer; nor do their new partners in the new Tory party, the SDP. We discovered that during my by-election campaign just over a year ago. Before that there was more chance of spotting Lord Lucan in Gateshead high street than a member of the SDP. However, during the campaign they came flocking in almost as if their ringmaster had discovered that there was a stop called Tyne Bridge on their new circus route. We even spotted some familiar faces among the visitors. We saw John Horam, the former hon. Member for Gateshead, West who, like so many others in the SDP, was merely pausing on his way to the Tory party, and William Rodgers, a former Member of Parliament for Stockton.

Photo of Mr Tony Marlow Mr Tony Marlow , Northampton North

I see the point that the hon. Gentleman is making. I believe that the Liberals and the SDP—I am afraid that there is only one of them present so the point is somewhat missed — are hoping for what they call a balanced Parliament. That means that the balance of power, as I understand it, would be held by the Liberals and the SDP in the next Parliament. I think that the hon. Member for Tyne Bridge (Mr. Clelland) probably realises, as I realise, that if that were to happen, the right hon. Member for Plymouth, Devonport (Dr. Owen) and his party would actually coalesce with the Conservative party and the right hon. Member for Tweeddale, Ettrick and Lauderdale (Mr. Steel) and his party would coalesce with the Labour party. What price an alliance in those circumstances?

Photo of David Clelland David Clelland , Tyne Bridge

I shall develop that point later in my argument. However, the hon. Gentleman has agreed that the SDP is much closer to the Conservative party than to the Labour party.

Mr. Horam and Mr. Rodgers, to whom I have referred, and others in the SDP first won their seats in Parliament by standing as Labour candidates. They won easily because of the loyalty and, in many cases, the lifetime support for the Labour party of the experiences of people in the north of England. Hundreds of members and supporters tramped the streets for them in order to win for Labour. Having won their seats because they were Labour candidates, they decided to switch their allegiance and to betray their voters and supporters. They continued to collect their parliamentary salaries, and at no stage did they give any consideration to the fact that they had no support for their betrayal of their constituents. They were shown the way at the general election.

People in the north have no time for treachery. That is why the flood of visitors to Tyneside to support their candidate in the Tyne Bridge by-election did not help them. They swarmed in across the north-south divide, from Maidstone and Margate, from Bromley and Basingstoke, from Portsmouth and Poole, with street maps and copies of the Geordie good food guide tucked under their arms. Of course, we did not mind them coming to Tyneside and spending their money in the wine bars and restaurants; any assistance to our local economy is welcome. However, we do not need to take lectures on politics from people whose life experience and interest is confined within the few weeks of a by-election campaign. They share neither our values nor our background, so how can they understand our problems or our hopes? They are not of us, so how can they hope to represent us?

We need in power a party that broadly represents the views and aspirations of ordinary families. Only the Labour party offers the prospect of real hope, real harmony and real chances to the people of Britain—all of Britain.

My right hon. Friend the Member for Islwyn ( Mr. Kinnock), in his capacity as leader of the Labour party, in his speech to the Labour party conference in 1985, spoke of the "life opportunities" that had been extended to him by the Labour party and previous Labour Governments, and last year he appealed to the moral majority in our country. He spoke with a passion. a conviction and an understanding that can come only from the son of an ordinary working family. He expressed the feelings of the vast majority of people in this country, because, like him, wherever we live, we all owe everything to two groups of people—our parents, who struggled to ensure that we would have a better life than they had, and the Labour movement, which provided the opportunities to build that better life for ourselves and our children : the opportunity of education, the opportunity to have a decent home and, perhaps, one day even, yes, to own our own home, the chance of a decent job, a fair wage when in work, dignity when out of work and a secure retirement when the working life is over. For all of that we owe a debt of honour to those who fought and sacrificed before our time. They did not fight and they did not make sacrifices in order to build a society that could be so easily divided between north and south and between rich and poor. and we who follow them will not be diverted or subdued by temporary statistics.

The people of the north know, as, in their hearts, do the vast majority of our people, that the divisions in our country can be healed and that such a process is essential to the development of a civilised society. They also know that the Conservative party has neither the desire nor the philosophy to do it. The Government have surely demonstrated that fact, in crystal clarity, over the past eight years of conflict and division. The people also know that the alliance cannot do it. An alliance which is divided into two distinct political parties with two distinct political philosophies cannot hope to convince the nation that it will be a uniting force. In addition, the alliance does not possess a single policy for healing the divisions that it would not be willing to bargain away to win a seat in a coalition Cabinet.

If our people genuinely want something effective done about unemployment, poverty, insecurity, conflict and divisions—as I believe they do—there is only one way to achieve it, and that is to elect a Labour Government. The people know it, and they will do it.

Photo of Mr Roger King Mr Roger King , Birmingham, Northfield 7:23 pm, 6th April 1987

I came down from the midlands this morning because I was confident that the debate would be controversial and far-ranging and that there would be a highly charged atmosphere in the House.

I am disappointed, because although this is an Opposition day and they have devoted all of it to one debate, and they are obviously sincere about their motion, that sincerity is not shared by all Labour Members. As we look out across the empty Opposition Benches, we must wonder how determined the Opposition are to solve what they believe is a serious problem of a north-south divide.

The right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley), the deputy Leader of the Opposition, moved the motion in a way that made Rambling Sid Rumpole look positively specific, stayed to hear the speech of my right hon. and learned Friend the Paymaster General and then left the Chamber and has not been seen since. Again, we must wonder how sincere the Opposition are about the motion.

This is an important time in our political history. The memoirs of the right hon. Member for Cardiff, South and Penarth (Mr. Callaghan), the former Prime Minister, are being published in the.Sunday Times. If we needed reminding of the divisions in our society, we see them line by line as the right hon. Gentleman recounts the story of that last Labour Government.

Photo of Mr Tony Marlow Mr Tony Marlow , Northampton North

Not "that" last Labour Government; "the" last Labour Government.

Photo of Mr Roger King Mr Roger King , Birmingham, Northfield

Yes, the last Labour Government and the winter of discontent. We can see what discontent and division really meant; the trade union movement argued with the elected Government, people could not agree and the whole nation suffered.

That time is history now and about 6 million new voters will barely remember it, though they have history books and the Sunday Times to tell them what happened. I hope that they will read those memoirs carefully and learn from them. They show what happened when we had a Labour Government who were bent on creating one nation but ended up causing divisions throughout society. Given Labour's record, we cannot take the motion seriously.

I am also sorry that the right hon. Member for Sparkbrook is absent, because I wish to refer to something that is being exported from London to Birmingham tomorrow. Two of Labour's prospective parliamentary candidates are coming to Birmingham to talk about black separatism in politics. We do not want that in Birmingham. We stand 100 per cent. behind the Labour party and its deputy leader in saying that we do not want that sort of thing exported from London to Birmingham. It is a sort of political apartheid and is racist in many ways. It must be, because that is what those prospective candidates stand for. How can we debate the motion before us when that sort of thing is being condoned by the Labour party because it does not have the guts to tell those people to desist from such goings on? I am convinced that the people of Birmingham, who will soon be voting in local elections, will inwardly digest what happens tomorrow and will learn from it.

The nation has gone through a traumatic time as a result of the legacy of poor industrial relations, outmoded production equipment and the ravages of overseas competition. There was an easy solution. The Government could have kept open all the mines and the steelworks and said, "We shall go on making cars for which there are no buyers because the quality is no good and we shall keep all businesses open because we do not want any unemployment." But if we had had that sort of Socialist, planned society we should now be in a disastrous mess.

It took guts and courage for the Government to say that they would not featherbed the future and take the easy option. The only way in which this country can survive post-Empire, post-Commonwealth, and standing alone as an island nation — admittedly, within the European Community, but, nevertheless, with a separate economic identity — is to make the right products of the right quality, with the highest productivity and efficiency, and to sell them on a discerning world market. In many industries we are at long last seeing the rewards of having embarked on that policy.

Nobody seriously considers, as has been suggested by some Opposition Members, that we can take back all the people who have been shed from the coal mines, the steel industry, the railways and the other state undertakings and give them gainful employment. My constituency of Northfield includes Austin Rover's Longbridge factory, which used to employ 23,000 people, but now employs 12,500 people. Nobody is seriously suggesting that it should be committed to taking back another 10,000 people to provide them with work. Although the company is taking on about 1,000 people, our problem is that, in the next era of technology, machinery will be even more robotised and even more productively efficient and will require fewer people to make an ever greater quantity of manufactured goods. That is the challenge that we face. No one political creed will get us off that hook. We must tackle the problem bravely and take up the challenge that it offers in creating investment in our infrastructure, which will create wealth.

Time and time again Opposition Members have been telling us how they will spend the country's wealth. They say that they will provide more schools, give higher pensions and higher this and that, but they do not say a word about how the wealth will be created. Conservative members have been trying to explain for the last seven years or so that we must create the wealth before we spend it. The miracle is that we have managed to do both. We are now creating real wealth, by seven years of uninterrupted economic growth and many more to come. We have maintained the level of public investment within our public facilities, the National Health Service, education, pensions and so on and we have increased the benefits all round. That has come about because of our fiscal policies, which have given us good value for money.

Photo of Mr Edward Leadbitter Mr Edward Leadbitter , Hartlepool

It is important that, in a debate such as this, we follow each other and at least try to be objective. I find some difficulty in that. The hon. Gentleman gave us a list of how much more has been spent on pensions, and so on. I was rather puzzled when he was talking about the Labour programme to take certain measures in these sectors. He said that we were going to have some difficulty in finding the necessary resources and that, if we undertook those measures, we would be acting irresponsibly. To clear the matter up, and so that I may know whether I should follow my Labour party colleagues in the next few months, will the hon. Gentleman help me in my dilemma?

Photo of Mr Roger King Mr Roger King , Birmingham, Northfield

I should be delighted to do so. No one has ever had such a wonderful opportunity to drum into people exactly what the Government have done. The Labour party has presented today, as in the past, its shopping list of what it wants to spend. At the last count, it simply said that it intended to spend £30 billion. I do not quote that figure to my constituents, because they do not believe that anybody could come up with such a figure, so I halve it to £15 billion to get it down to a credible level, but they are still amazed that any political party can commit itself to such expenditure before it has established how it will create it.

Photo of Mr Edward Leadbitter Mr Edward Leadbitter , Hartlepool

The figure of £30 billion was not mentioned by the Labour party. The figure was increased by the Conservative party from £28 billion. Even that is chickenfeed in terms of the £21 billion that it costs to keep people out of work.

Photo of Mr Roger King Mr Roger King , Birmingham, Northfield

Taken over 10 years that might be a realistic figure, hut, taking it from year to year, the Labour party is not prepared for, and cannot commit itself to, the creation of all these extra jobs without a great deal of expenditure first in the hope that it can create them. If it sets out to pump £6 billion into the economy in the hope that it will save the same by a reduction in unemployment levels, it must still pay those on the unemployment queue while the jobs are theoretically being created. It is having to maintain its expenditure on unemployment at the same time as it is stepping up its expenditure on investment. That does not make economic sense, and I think that most people will accept that.

Photo of Mr Edward Leadbitter Mr Edward Leadbitter , Hartlepool

Only a few weeks ago, in the Budget, we found that billions of pounds were sloshing about in the Treasury and £6 billion was given away. If the £21 billion to keep nearly 3·5 million people out of work could be reduced to about £10 billion, and the remaining people brought into work, that would mean only a shift of resources. It would not involve spending an extra penny.

Photo of Mr Roger King Mr Roger King , Birmingham, Northfield

I am not sure whether the hon. Gentleman has the level of money that was given away in the Budget —£6 billion—exactly right. I understand that a good portion of that money was spent on the reduction of borrowing, which was immediately reflected by a reduction in interest charges and a reduction in mortgage costs, thus bringing down the cost of living for most people. The costs of production in industry were also brought down, as was inflation, thereby creating more jobs, which is welcome.

We are poised before an era of substantial expansion in the motor industry, which will create many new opportunities. Ford, Vauxhall, and Peugeot Talbot are committed to making more cars in this country, and the cars that they make will use components sourced largely from this country.

We do not hear too much about investment in the north-east, because it is difficult to reconcile that with some trade union thinking and the thinking of some of the other mainstream members of the Labour party. The introduction of Nissan into this country is one section of a substantial Japanese investment in manufacturing that is gaining pace over the length and breadth of this country. Telford has almost become a little Japan as a result of attracting thousands of job opportunities with Japanese companies. I have been to Nissan in Sunderland and it is gratifying to see people gainfully employed in producing products that will ensure the future of that area and give the workers job security. I accept that many Opposition Members deplore such investment coming from Japan because they believe that that is at the expense of our goods and products. I am from a Brummy car-making constituency, and we will build a better car than a Geordie ever will.

Photo of David Clelland David Clelland , Tyne Bridge

I am interested in what the hon. Gentleman is saying about investment in the north-east by Nissan. Another Japanese company, Komatsu, has also invested in the north-east. However, that is not necessarily solely because of the Government's activities. Before the Tyne and Wear county council was abolished, it was principally responsible for Nissan coming to the area. It was certainly responsible for Komatsu coming to Tyne and Wear. Although this is welcome, there are problems. We have seen the example of Caterpillar in Glasgow. We need an indigenous industry in the area. These industries have created only 800 jobs, yet we have lost 15,000 through redundancies.

Photo of Mr Roger King Mr Roger King , Birmingham, Northfield

The hon. Gentleman has overlooked the fact that Nissan and other Japanese companies have come to this country only because, after seven or eight years, we have created the right industrial climate in which they can invest. There is no getting away from that argument.

Much of our education leaves much to be desired, which is why the Government have embarked on a major programme of educational reform, appraisal of the role of teachers and a decent pay scale for teachers, which I hope they will be ready to accept in the not too distant future. In Birmingham we have something that is dear to everyone who lives there—our King Edward foundation schools. Those schools fly in the face of Labour policy. There is a degree of selectivity about those who attend the four or five schools in the city. The local Labour party is dedicated to doing away with them, as is the national Labour party. Despite that, many Labour people who occupy positions of authority, and many people throughout industry, attended these schools, to the betterment of themselves, the city and the country.

Some selectivity is involved in those city schools, but they provide an opportunity for everyone. If a child is capable enough, he or she can go to one of these schools and receive special attention. Is it right to deny that opportunity to everyone because of a Socialistic ideal to eliminate all choice? I am sure that it is not, but the Labour party is keen to introduce that policy. In its misguided belief in eliminating choice, and therefore doing away with the so-called social divides, it will increase those divides. Those who want their children to have a special education will have to buy it in the market place, either in this country or abroad, as the Leader of the Opposition said, "when we have finished."

Photo of Bill Cash Bill Cash , Stafford

Taking my hon. Friend's point a bit further, does he agree that if people are given the opportunity to have the highest quality education that is available through the system that he has described it will be possible for them to help others to get work? Their management skills will be much better. Therefore, everyone will benefit. My hon. Friend's point applies not only to the present generation but to future generations. Real leadership, management and skills are developed through the education system.

Photo of Mr Roger King Mr Roger King , Birmingham, Northfield

That is right. My hon. Friend has put it succinctly.

Throughout Birmingham and the midlands the position of the Health Service is encouraging. New hospitals are coming into commission at Telford and Redditch and many new projects are on the books or have been started, including the £27 million new hospital being built just outside my constituency. We welcome those developments. We should not necessarily look at the Health Service through waiting lists, although it is gratifying to note that they went up and up under Labour and have gone down and down under the Conservative Government. The benchmark for deciding how effective the NHS is must be the number of patients for whom it cares. There cannot be any other way of deciding how good a health service is. The efficiency of a factory is measured by what it produces. A great big factory can produce nothing. A poor factory can have incredibly high production. We should look at the Health Service in terms of the numbers treated in it. The numbers of in-patients and out-patients are at record high levels.

Birmingham shares the housing problems which are manifest throughout Britain and which are largely the problems of local Labour authorities. We often wonder how the money is spent on housing repairs and home improvements. Substantial sums go into Birmingham's coffers, and almost all the money is spent, although usually the authority underspends by £2 million or £3 million. The authority keeps saying that it wants to build more houses, but, if we ever had the opportunity to do so, where would they be built? The city is hemmed in by greenbelt land and it will not be easy to find a satisfactory solution to that difficult problem.

The housing problem is exacerbated by quite a big divide in terms of what personal conduct is socially responsible. I do not want to condemn anyone, but it seems to me—some of my colleagues have mentioned this recently—that too great a strain is placed on society by the one-parent family and that the right and expectation of a one-parent family to have a home have been extended too far. The right of a young girl, as soon as she has left school, to become pregnant, put her name on the housing list and be given accommodation as soon as the council can provide it is causing untold problems throughout the housing structure of Birmingham and elsewhere. [AN HON. MEMBER: "It is the law."] It is indeed the law, but I wonder whether there should be a change in our social outlook so that society says that our young people have certain responsibilities within the community.

Single parents are an accepted fact. This is becoming a way of life in our cities, with all the social problems that it causes. I do not want laws that prevent or ban single-parent families or deprive them of their rights, but society should point out that those people have responsibilities to society generally to provide for their families as much as they can. Individuals should not just seek a commitment from the state and community from the moment they seek to become a family.

Birmingham has suffered substantially from a lack of industrial expansion throughout the west midlands because of the rates levy inflicted by the local authority on industry and domestic householders. During the past two years there has been a rates increase of more than 60 per cent., which has played a major part in slowing the growth of industrial expansion. This expansion has been much lower that it would have been had the local authority adopted more prudent fiscal policies. The crippling local rate has had a dramatic effect on the retailing sector. More than anything else, this is reflected in vacant shop units throughout the city and the difficulties of regenerating much of the inner city. I am happy that some expansion is taking place. A convention centre, which includes a hotel complex, is being built for £120 million. This will guarantee a strong future over the next few years for Birmingham.

We are confident that Birmingham can solve its problems satisfactorily. There is not necessarily a problem of Left versus Right. We have tried to maintain a consensus in politics, although that is not to say that we cannot and do not substantially criticise the present local Labour administration. We object to and strongly deplore any imported sectarianism. We want to be left to get on with our own thing and to be free from as much restriction as possible. Given the true Brummy values of thrift and efficiency, our city will prosper. Indeed, it is prospering. This will lead the city and the nation into a very prosperous next few years.

Photo of Stuart Bell Stuart Bell , Middlesbrough 7:47 pm, 6th April 1987

I congratulate the hon. Member for Birmingham, Northfield (Mr. King) on the manner in which he delivered his copious speech without copious notes. He seemed to make his speech with his eye on the 7 May local election, and possibly a general election. I am sure that a young lady of 16 who is in some difficulty and is looking for some type of accommodation would not be especially impressed by the hon. Gentleman's unfeeling attitude. Although I fully accept that he believes in the Conservative values which he carefully articulated, a certain unfeeling and uncaring attitude came through, and the hon. Gentleman might wish to reflect on that between now and the general election. I am sure that the good workers in the Nissan factory on Tyneside would not agree with his remarks that the car manufacturers in Birmingham are as equal as the car manufacturers in the north-east.

I should like briefly to state the Labour party's attitude to Nissan and companies like it. Of course we accept Japanese investment in Britain. It is better that the Japanese should invest their capital here than export their unemployment. But their Nissan investment on Tyneside will not even touch the unemployment in Cleveland. About 4,000 jobs at Nissan have been created over four years, but about 50,000 people have lost their jobs since 1979.

The hon. Member for Northfield was good enough to accept that the Government were responsible for unemployment. He said that no one could imagine that the work lost in the steel industry or in the coal mines could be made up. He said that the workers affected could not be taken back. It was significant that the hon. Gentleman accepted that in 1979 the Government had no confidence in the British people or British workers and were not prepared to defend our steel industry or coal mines. We have felt the consequences on Teesside where the work force in the steel industry has dropped from about 27,000 in 1979 to about 6,500 and it is still dropping. That has had serious consequences for the vitality of the commercial and industrial structure of our area. It is right to say that those jobs cannot he recreated immediately.

Smith's dock is next door to my constituency, and when I made my maiden speech in 1983 I committed myself to preserving jobs there. Unfortunately, the Government continued their monetarist policy and their theorising on industrial policy and Smith's dock eventually closed. We hope that it will not be lost entirely.

Many areas of Teesside have been converted into green field sites as a result of the Government's policies. As I said earlier, those policies show no confidence in the British work force, and certainly no confidence in Teesside. Nothing that we have heard in this debate shows that that attitude will change in the next few years.

I detect a certain arrogance and overweening confidence on the Government Back Benches. I have always taken the view that pride comes before a fall, and it may well be that the fall will come earlier for the Government than they imagine.

Photo of Mr Richard Holt Mr Richard Holt , Langbaurgh

Will the hon. Gentleman give way?

Photo of Stuart Bell Stuart Bell , Middlesbrough

No, I shall not give way to the hon. Member for Langbaurgh (Mr. Holt). I know that he represents a neighbouring constituency, but he has not followed the entire debate and it would be unfair of me to allow him to intervene. He may certainly try to catch your eye, Mr. Deputy Speaker. [Interruption.] I will not take any insults from the hon. Gentleman. He has just come into the Chamber. The hon. Gentleman is never in the Chamber when we deal with important matters. He was not here on Wednesday when we had an important debate. I will not accept sedentary interventions from the hon. Gentleman.

The motion says : this House notes with concern the increasing divisions within British society No Conservative Member has said that he is opposed to that part of the motion. No Conservative Member has said that Government policies are not creating divisions in our society. The motion condemns the Government for the constant pursuit of policies which have widened these divisions". No Conservative Member has said that that is not the case. The Government's case is not that their policies widen the divisions, but that the divisions will be widened and that we will have to live with them.

The motion also says that the House looks forward to the time when a Government is elected which is committed to the creation of one nation. The Paymaster General and Minister for Employment said that he is a one-nation Tory. How can he create a one-nation state by following the divisive two-nation policies of the Right wing of the Conservative party and the Prime Minister? He was not able to tell us that; he simply used the phrase as his peroration. Nothing in the policies of the Government is likely to bring about one nation.

My hon. Friend the Member for Tyne Bridge (Mr. Clelland) spoke about the state of the region report. His speech clearly showed the divide that exists between north and south, a divide that is being reinforced.

On Saturday I was in Finchley, in the constituency of the Prime Minister. I met many people there who are concerned about unemployment. It is wrong to believe that those who are working are not concerned about the fate of those who are not. They have a genuine concern for the unemployed. It is ironic that in Finchley about 1,000 jobs will be lost between now and next May as a result of a factory closure. The seepage of job losses from the north to the south is continuing right up to the Prime Minister's constituency.

I should like to speak about the inequalities that have been created in Middlesbrough by Government policies on housing. Notwithstanding that 80 per cent. of the proceeds of sales of council houses remain frozen in the bank, the district council has opened new housing developments in St. Hilda's and in the town centre. There have been major modernisation schemes at Netherfields and in Grove hill.

We are aware that of the cuts in my constituency the cuts in housing have been deepest and, most important, have put a serious strain on the community. Not enough improvement grants are available for town centre development, and that problem has been made particularly acute because expectations were raised in the early 1980s about the availability of grants. Middlesbrough now faces the prospect of future housing clearance if the council cannot maintain the repair and improvement of our old homes.

It is equally the case that not enough new houses are being built to meet the housing need. Not only is there a lengthy waiting list in Middlesbrough, but there is a net shortage of houses of all types to meet the projected housing need. The slow progress of improvement schemes also means that even in the 1980s some families are living in conditions more appropriate to the 1920s. We had hoped that those times were long past, but they are rapidly coming again for many of my constituents. Demand is increasing and homelessness is becoming a major problem. We need a rapid expansion of the housing programme to meet the needs facing us.

From the Government we have seen a fundamental and long-drawn-out attack upon the lives of those in local communities all over Britain. Certainly that has been the case for my constituents. There has been an unprecedented turnaround in the relationship between central and local government since the Conservatives took office in 1979. That has been even more heightened since 1983. I shall give some examples from my constituency.

The capital controls have reduced our housing capital budget by more than 60 per cent. Revenue controls have restricted our expenditure and at the same time the burden of meeting that expenditure has been pushed on to the backs of ratepayers by changes in the rate support grant. The inner area programme that was originally intended to revitalise the inner area has been subjected to more and more Government control and restriction of the finance available. A task force has been imposed upon the town by the Paymaster General. It is run by civil servants and has no democratic input.

We have also seen the emergence of an urban development corporation with what the Government would call significant resources of about £160 million. That has been announced well before a general election, but we will not see the colour of the money for many months—if we see the money at all. There will be no democratic accountability to local people and no genuine input from Teesside or from the Middlesbrough area. The county council and the district council have schemes similar to those that will be a part of the urban development corporation programme.

The council's expenditure limit and rate in the pound have been limited by the rate-capping procedure. The Government propose to enforce privatisation policies regardless of the views of locally elected representatives and the views of the people that they serve. The latest idea is a poll tax. That will significantly alter the burden of rates by increasing the burden on the least well off.

These major changes are not only an affront to local democracy and to the democratically expressed wishes of people in places such as Middlesbrough, but a dangerous trend towards centralising power in the hands of an authoritarian and inflexible Government. [Interruption.] They are also impracticable. This has been demonstrated by the complete shambles in which local financial arrangements have been placed by the Government's constant intervention. It is quite clear that it is impossible for central Government to run local communities, particularly when the Government are antagonistic to the views and needs of that community. [Interruption.] The hon. Member for Langbaurgh seems particularly agitated. That is possibly because there is an election coming. His majority will disappear into thin air and he will lose his seat. He ought to spend his time in the House enjoying the atmosphere and the debates rather than indulging in sedentary interventions.

Finally, I should like to speak about economic development and unemployment in my area and to deal briefly with the background to that unemployment.

The present unemployment crisis is no accident of history, as the hon. Member for Northfield confirmed when he said that it was not Government policy to keep coal mines open or to fortify and encourage the steel industry with investment and Government orders. The present crisis is the creation of Tory policies which have severely cut public investment and privatised many public services. The hon. Member for Halifax (Mr. Galley) made an interesting speech in which he condemned the Labour party for its support of subsidies but then listed a host of subsidies that his constituency had received from the Government and of which he was apparently proud.

The crisis of doom and gloom spread by the Government throughout the north of England and in many ways throughout the country is nowhere more severely felt than in Middlesbrough. The latest unemployment figures are 29 per cent. for men and 14·8 per cent. for women, after excluding people over the age of 60, the long-term unemployed, people on youth training schemes and other short-term Government schemes; and the figures are even higher for young people and ethnic minorities.

The Paymaster General and the hon. Member for Amber Valley (Mr. Oppenheim) touched on certain aspects of economic policy and the Labour retrenchment of 1977. The reason for that retrenchment was the oil price rise of 1974. The Paymaster General said that the retrenchment in the economy which led to job losses between 1979 and 1981 was also caused by oil prices and in a sense he was right. Oil prices had risen and unemployment went up as well. But he did not say that in 1979 we had the medium-term financial strategy devised by the then Chancellor and by the then Financial Secretary, who is now Chancellor. Here I render homage to the hon. Member for St. Albans (Mr. Lilley), who has sat through this debate as parliamentary private secretary to the present Chancellor.

If some blame for the increase in unemployment between 1979 and 1981 attaches to oil prices, the medium-term financial strategy, the setting of unrealistic monetary targets, the high value of $2·50 set for the pound by the then Chancellor, the very high interest rates of 21 per cent. then prevailing and the high inflation rate given to us by the then Chancellor were the direct cause of a million job losses in manufacturing industry which have not been made up since 1983. The hon. Member for Northfield, in a slip of the tongue, referred to seven years continuous growth, but even the Chancellor would not go back any further than 1981.

Photo of Peter Lilley Peter Lilley , St Albans

Will the hon. Gentleman give way?

Photo of Stuart Bell Stuart Bell , Middlesbrough

I have already said how pleased we are to see the hon. Gentleman here as parliamentary private secretary to the Chancellor. If he catches your eye, Mr. Deputy Speaker, he can make his own speech. It will be interesting to hear his master's voice from the Back Benches.

Photo of Peter Lilley Peter Lilley , St Albans

Will the hon. Gentleman give way?

Photo of Peter Lilley Peter Lilley , St Albans

On a point of order, Mr. Deputy Speaker. When an hon. Member repeatedly refers by name to another hon. Member who has been present throughout the debate but has not put in to speak, is it not customary to allow that hon. Member to intervene?

Photo of Mr Harold Walker Mr Harold Walker , Doncaster Central

That is entirely a matter for the hon. Member who has the Floor, but it is the convention.

Photo of Stuart Bell Stuart Bell , Middlesbrough

I give way to the hon. Gentleman.

Photo of Peter Lilley Peter Lilley , St Albans

I am grateful to the hon. Gentleman for acknowledging the convention. He has been kind enough to attribute near-miraculous powers to me, including events which occurred in the first Conservative Parliament when I was not even a Member of Parliament, let alone PPS to anyone. Since I have been a Member of the House, a million jobs have been created. I should like to be able to claim credit for that, but I think that the credit largely belongs to the Government.

Photo of Stuart Bell Stuart Bell , Middlesbrough

If the hon. Gentleman has been here all the time, he must have been asleep for some of it. I did not attribute to him the role of Chancellor or even Financial Secretary in 1979. His master's voice was Financial Secretary at the time and was responsible for the medium term financial strategy which has since been quietly jettisoned. If the Government had really created a million jobs since 1983, we should have applauded and welcomed that, but they have not created a million full-time jobs. They have created jobs which in the 1950s were part-time, pin-money, pirate jobs with low status and no security of tenure. If a million real jobs had been created, we should have welcomed that, but the Government's figure is not valid.

In Middlesbrough, 11,900 able-bodied men and women are unemployed. That is 29 per cent. of the work force. I have already described the conditions that I found in Finchley at the weekend. The cost of unemployment in direct and indirect taxes forgone, in lost national insurance contributions and in benefit payments, now exceeds £21 billion per year, as the hon. Member for Northfield has said. That is the proportion of our national wealth that is systematically and deliberately poured down the drain by the Government year in, year out. It is an average of £6,557 per unemployed person nationally, or an annual cost of £67 million in Middlesbrough. While the Government create urban development corporations and think tanks and put £1 million into inner-area development, the cost to our town is £67 million or £599 per working person per year.

That is the reality on Teesside of the divide that the Government have created in the past seven years and which will continue if the British people do not see through the Government's hard-faced attitude towards unemployed people. I do not believe for one moment that that will happen, because all the opinion polls show that the people of this country are most concerned about unemployment. For 70 per cent. of them it is the major issue. When the election comes, the British people in their wisdom and knowledge will take the first opportunity to turn the Government out and send them back to history where they belong.

Photo of Mr Tony Marlow Mr Tony Marlow , Northampton North 8:07 pm, 6th April 1987

I intend to be brief. I am sorry that the right hon. Member for Plymouth, Devonport (Dr. Owen) is no longer here as I must say how much I enjoyed his speech and how much we Conservatives look forward to his joining us after the election. It will not be in his present alliance with the boy David, as he affectionately describes his right hon. Friend, because the chance of their participating in political power in my political lifetime is certainly remote. We know that the right hon. Member for Devonport is very ambitious and he is not getting any younger, so there is only one way ahead for him—to join the Conservative party. It is my fervent hope, however—God willing, it will be granted —that when he does so he will not be drafted into an economic Department, as he got into a frightful mess in his speech today.

The right hon. Gentleman first suggested that the benefits to those out of work should be increased significantly. One may take a view about that. He also intended to give benefits to the low-paid who were in work, but the benefit to be given to the latter was to be significantly less than that to be given to the former. We are all aware of the great quandary, conundrum and problem of the "why work" syndrome.

I was once doing some work with a company in Nottingham in the north midlands. I had a long discussion with a person there who was responsible for recruiting the people that one might call hewers of wood and drawers of water—the less highly paid employees of that company. He said that if he had men between the ages of 20 and 45 with family commitments and had offered four of them jobs, one of them would have turned it down on the grounds that he was better off staying at home, not working and drawing benefit. The right hon. Member for Devonport suggested that, instead of one out of four declining to take available work, he would prefer two of the four to do so. For that reason I hope that the right hon. Gentleman never has anything to do with an economic Department.

Photo of Mr Tony Marlow Mr Tony Marlow , Northampton North

I shall give way to the hon. Gentleman later.

We know that the Liberals and the SDP are very much in favour of an inflation tax. That means that there will be a law, and every company in the land will he permitted to pay a certain level of wage increases each year. If they want to pay a higher increase, the state will claw it back in increased taxation. The way in which the economy works is that, if a company is successful, it may want to increase its labour force by recruiting more labour. To do that, a company may wish to pay more wages. The policy of the right hon. Member for Devonport would ensure that those companies that were doing well would be penalised by being charged higher rates of tax than any other company in the region.

If we want to increase the wealth of the community and the prosperity of the nation in order—as we all want to do — to care for those who are unfortunate in our society, that is not the way to do it.

Photo of Matthew Taylor Matthew Taylor Liberal-SDP Alliance Spokesperson (Youth)

I wonder whether the hon. Gentleman is a little confused about one aspect. The alliance is grasping the nettle of reforming our tax and benefit proposals so that those who work will gain more than those who are out of work, unlike what happens under the present system. Surely the hon. Gentleman welcomes the alliance proposals on that?

Photo of Mr Tony Marlow Mr Tony Marlow , Northampton North

I do not know whether the hon. Gentleman was in the Chamber to hear the speech made by the right hon. Member for Devonport. I know that there are frictions between the two parties. If he had listened carefully to the right hon. Gentleman he would have heard him say what I said that he said: that more should be given to those out of work and less to those in work.

Photo of Richard Caborn Richard Caborn , Sheffield Central

Will the hon. Gentleman inform the House a little further about one matter? He obviously has an insight into what the leader of the SDP will be doing after the election. How long after the election will the right hon. Member for Devonport join the Conservative ranks? That could be important, because when the Leader of the Opposition dishes out the portfolios after the election that, too, might coincide with the right hon. Gentleman receiving a portfolio.

Photo of Mr Tony Marlow Mr Tony Marlow , Northampton North

The hon. Gentleman is an old friend, and has a sense of humour. My hon. Friend the Member for Birmingham, Northfield (Mr King) was speaking of "that last Labour Government," and I corrected that to "the last Labour Government". I am sorry to disappoint the hon. Member for Sheffield, Central (Mr. Caborn), because I love him dearly. There will not be another Labour Government.

So much for the Liberals and the SDP. I intend to be very brief. The motion on the Order Paper states: That this House notes with concern the increasing divisions within British society". I understand that it was tabled by the Leader of the Opposition. That is a bit rich, is it not? It is a camouflage job. Here is the Labour party, complaining about divisions in society, and it is the self-same Labour party that is creating those divisions.

There have been discussions in the House about what has been known as the north-south divide. Sophisticates and people who have studied the issue recently say that it is not a north-south divide, but an east-west one because more trade is moving to the east and less to the west. But even that is not true. If one looks at the statistics for unemployment, one must look elsewhere. As Opposition Members have said, the picture is patchy. An examination of the statistics shows that five of the 12 constituencies in England and Wales with the highest levels of unemployment—with almost a third of the total male population unemployed and drawing benefit—are here in London in the wealthy south-east, where there are piles of jobs, and where anyone can get work. In the south-east, the economy is booming, yet five out of the 12 constituencies are here.

Where are those constituencies—Bow and Poplar, Hackney, North and Stoke Newington, Peckham, Southwark and Bermondsey and Vauxhall. What do those constituencies have in common apart from being in London? They all have Labour local authorities. If one takes the analysis further, one realises that it is not a north-south or east-west divide. The areas in which there are divisions, in which there is crime, unemployment and bad housing, are Labour areas

Photo of Mr Tony Banks Mr Tony Banks , Newham North West

Would the hon. Gentleman care to conjecture, for the benefit of the House, why the highest unemployment in the United Kingdom is in Belfast?

Photo of Mr Tony Marlow Mr Tony Marlow , Northampton North

The hon. Gentleman is well aware of the fact. We know that the hon. Gentleman specialises in red herrings. His remarks have nothing to do with the issue. There are special circumstances in Belfast, one of which, as the hon. Gentleman knows, is the violence between the two communities in Northern Ireland. That is one of the regional problems of Belfast — problems that the hon. Gentleman and his party do not do a great deal to put right.

Where Socialism is rampant, business confidence is low. The right hon. Gentleman, the Leader of the Opposition, lives with his wife, Greenham Glenys, in Ealing. This year, the right hon. Gentleman's rates will go up by £21 a week. I dare say that in Ealing there are also small businesses trying to generate wealth and jobs to benefit the economy.

Photo of Mr Tony Marlow Mr Tony Marlow , Northampton North

There will not be, after the increase in rates. Where there is Socialism, jobs are destroyed. It is not just a matter of high rates; it is a matter of local authorities mismanaging housing. It is an issue of local——

Photo of Mr Tony Marlow Mr Tony Marlow , Northampton North

I shall not give way. On second thoughts, I shall.

Photo of Mr Richard Holt Mr Richard Holt , Langbaurgh

I am most grateful to my hon. Friend, who sat and heard the hon. Member for Middlesborough (Mr. Bell) refuse to give way to me, on the basis that I had not been here earlier. I notice that the hon. Member for Middlesbrough, having made his speech, has already gone. Does my hon. Friend agree that, however bad things are for the leader of the Labour party and his wife, they are not nearly as bad as for the people of Middlesbrough, who have the highest rates in the country?

Photo of Mr Tony Marlow Mr Tony Marlow , Northampton North

I sympathise with my hon. Friend, and I take it that he lives under a Labour-controlled authority?

Photo of Mr Tony Marlow Mr Tony Marlow , Northampton North

That is my thesis. Those five areas in London are run by Labour authorities, and have the highest levels of unemployment in the country. However, in London as a whole there are plenty of jobs. It is not only a matter of having destroyed jobs in those areas by high rates and socialist policies. Why do not the people in those constituencies move outside them—hop on a bus or a bicycle — to somewhere else in London? The jobs are available : why do not they take them? There are reasons for the fact that they will not take jobs outside the areas in which they live. They will not do so because of the slums in which they live, which have been mismanaged by Labour authorities——

Photo of Richard Caborn Richard Caborn , Sheffield Central

What a load of rubbish.

Photo of Mr Tony Marlow Mr Tony Marlow , Northampton North

The hon. Gentleman says that it is rubbish. One person in five in inner London does not pay his rent. There are arrears of one fifth of the rent roll in inner London. There are more empty houses in London because they are not properly managed. The housing situation in inner London is appalling. They are slums, run by Labour authorities.

The position is worse than that, however. The education that is provided in inner London is also appalling. I understand that it costs as much for the Inner London education authority to provide secondary education in the public sector as it costs to provide it in the private sector. Yet the exam results in the public sector are appalling, just as the attitude of the children in those schools is appalling. They live in bad housing and they come out of school ill-educated — those of them who stay in school, because one third of 15-year-olds in the Inner London education authority area are absconding from school and playing truant on a daily basis.

That is the attitude. That is how those children have been brought up. They do not look for work because they do not want work because the attitudes that they have been given under Socialism have turned them against work. They have been alienated. If one goes round setting up bent race relations industries and telling people that they are racially discriminated against, they will feel alienated and discriminated against. If one goes round setting up anti-police committees and telling people that the police are against them, they will be against the police.

If they are against the police, they will be more in favour of crime and they will be more violent. The children of Socialism are disrupting our inner city areas. Socialism is the problem.

Socialism sows the seeds of spite, and it is not surprising that we have a harvest of grudge and dependence and attitudes that are not conducive to work. There are two classes in society — not upper class, middle class and working class, but the dependent classes and the independent classes. The Socialists in the Labour party want to make us all into dependent classes—dependent on the Government and the local authority for housing; dependent on the Government and the local authority for education; and dependent on the Government and the local authority for pensions and jobs. Through this dependence, Socialism gets its support and its voters. It wants clients who will vote for Socialism.

If people get their own houses and if they have a choice over their own education, they will not vote Socialist any more. This is the problem for the Labour party. It is poised on the precipice of terminal decline, and the sooner it falls over, the better. Socialism preaches that we can have paradise without effort and that if we do not get paradise without effort, it is someone else's fault. As the song says in "Les Miserables", at the end of the day, you get nothing for nothing. It is a con trick of Socialism, which has destroyed many lives, that Socialists pretend to people that they can get something for nothing. They cannot. If one is looking round the country to where the deprivation is, where the unemployment is, where the problems of law and order are and where the bad education is, one sees that it is all in Socialist local authority areas. When it comes to the next election, the country will realise that if it wants deprivation, unemployment and degradation, it should vote Socialist.

Several Hon. Members:

rose——

Photo of Mr Harold Walker Mr Harold Walker , Doncaster Central

Order. I think that six hon. Members are seeking to catch my eye, and we have about an hour before the first Front Bench spokesman will seek to catch my eye. The arithmetic is obvious.

Photo of Richard Caborn Richard Caborn , Sheffield Central 8:23 pm, 6th April 1987

I am glad to follow the hon. Member for Northampton, North (Mr. Marlow), because I wish to make a few points about the terrible problems in south Yorkshire and in my city of Sheffield. Not only many hon. Members, but many independent boldies, have made clear the divide between north and south. Despite what the hon. Member for Northampton, North said, the realities shine through, and many people regard the problem as very serious. It is not just a matter of statistics. There is human misery in the north-south divide. I see that human misery in my constituency, which has the highest unemployment among under-25s in the United Kingdom. Underneath the effects that we can see in crime figures and muggings are serious problems of depression and of people looking inwards instead of helping society in other ways.

One of the Government's worst actions has been their attack on local democracy, which has hamstrung many authorities which are trying genuinely to resolve some of the problems of unemployment and deprivation and the social problems which follow in the wake of massive unemployment. Local authorities are a major safety valve in society. They have played a useful role, and the attack on them during the past seven years has been disgraceful. The con trick that the Government have tried to play—people are beginning to see through them—is to reduce local authority grants, with the result that authorities have had to decide whether to increase rates or to reduce the services that are needed by many people in their communities. In many areas, such as Sheffield, they have decided to increase rates, but it was not their choice. If they had the choice, they would still want a balance and a partnership between central and local government.

The Church of England report entitled "Faith in the City" outlined the problems clearly——

Photo of Richard Caborn Richard Caborn , Sheffield Central

The Paymaster General shakes his head, but that report was well researched and well founded. Unfortunately, he and his colleagues decided to go in the opposite direction. That has had extremely serious consequences for many deprived areas.

The press—there are not many of its representatives here this evening—and the Government have not given much praise to the report by Her Majesty's inspectors on the Sheffield local education authority. It says that it is in good shape. A press release from the Department of Education and Science dated 31 March states: Education in Sheffield's schools and colleges demonstrates a range of good quality and generally satisfactory work and provides a sound basis for future development, says a report by Her Majesty's Inspectors published today. The report states that much of the work in primary schools was of a good standard. Particularly encouraging was the attention given to science, health education, home studies and environmental education. Outstanding work occurred most often in nursery and infant schools where language and mathematics were characterised by lively teaching and the excellent use of practical activities. In the secondary schools there was a great deal of sound and conscientious work. Some aspects were particularly strong, including geography, personal and social development, residential work experience and links with industry. Provision for non-advanced further education was wide-ranging, generally economical and by and large effective. In addition adult education and youth and community work are of an impressive quality.HMI state that Sheffield takes education seriously and there is a belief in the responsibilities and importance of education in improving and enhancing individual and social life. The authority has developed a wide range of well thought out policies in response to educational needs arising from local circumstances, although these have varied in their effectiveness. The most effective translation of policies into practice came about because of clear organisation, efficient and effective support, regular evaluation, and the open-mindedness to change direction once evaluation revealed that intentions were not being achieved in practice.The report notes that Sheffield is a high spending authority but is by no means extravagant. While some aspects of its spending (pupil costs, adult education and the youth service) are high, others (unit costs in further education, spending on books) are below national norms. Meeting the demands faced by the Authority will require continuing identification of priorities and a focus on …cost-effectiveness. The press release did not say that the inspectors found no evidence of political education being used as a vehicle for indoctrination, but pointed out that it was approached "fairly and openmindedly."

The Government have decided to slash the expenditure levels by about £35 million, of which between £7 million and £8 million must be borne by the education service in Sheffield. HMI has produced a glowing report, which is probably one of the best by that inspectorate, not only about the type of education, but about the effectiveness of spending on that education. Now we must slash that by some £7 million to £8 million.

Let us compare that with the attacks by Conservative Members only a few weeks ago, when my local authority agreed to go into partnership with the private sector on building some 2,000 houses in Sheffield. It was called a novel method, but the private sector was involved, along with the municipal authorities. It was only at the 11th hour that we were able to sign the agreement. At 5 pm one evening we were told that because of the rent arrangements that the local authority had reached with the private financiers, the proposal would be valid only if signed before midnight. The dictatorial attitudes that prevail on the part of Conservative Members have to be seen to be believed. We were able to secure that financial agreement by 11·15 that night, however.

Conservative Members cry out for the capital receipts to be used. Local authorities such as Sheffield want partnerships with the private sector to build houses that are sorely needed, yet because that does not comply with their diktats, the Government even squash such arrangements as well.

Much has been said about the so-called loony Left councils, of which Sheffield is one. Independent reports and HMI reports say that it is the best authority. Even on the so-called misuse of rates, the most recent auditor said that if people look at Sheffield they will see the best use of public money there.

If the Government continue to attack local Government, they will rue the day. Sheffield was criticised by the Government when it proposed an employment plan, which was supported across the community, to produce 25,000 jobs. When such things happen, private Members' Bills are introduced to rubbish such proposals. Everything that local government has stood for in my area of Sheffield, and which has been independently assessed, has turned out extremely well in terms of cost efficiency and the service that is given.

The only thing that we have heard from the Government Benches is carping and moaning about local authorities and proposals that simply put more into the coffers of those who can well afford to provide the finance services themselves. They should be ashamed. We are talking about employment, education and social services in a major area of deprivation. If the Government can oppose such initiatives, it is nothing less than deplorable. It is they who are accelerating the north-south divide by the sectarian policies that they are putting into operation.

Photo of Mr Alan Howarth Mr Alan Howarth , Stratford-on-Avon 8:31 pm, 6th April 1987

The right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) said that the Government had been fomenting inequality. The leader of the Social Democratic party, the right hon. Member for Plymouth, Devonport (Dr. Owen), joined in that charge. One would have thought that both right hon. Members would have learnt from their unhappy experience in government in the 1970s that the quest for equality, certainly the equality of outcome, which the right hon. Member for Sparkbrook tells us his party believes in, is a process fraught with illusions and ironies.

The Southampton manifesto of the right hon. Member for Sparkbrook demonstrates that he has learnt nothing and forgotten nothing. Therefore, it will be instructive and cast some light on the choice that will have to be made at the general election, between a reversion to Socialism and a continuation of Conservatism, if we pause and recollect momentarily what happened during the last period in which the Labour party, in government, sought to create equality.

The prologue to that drama was spoken by the right hon. Member for Leeds, East (Mr. Healey) in his address to the Labour party conference in 1973, when he said that it was the purpose of his party to bring about a fundamental and irreversible shift in the balance of wealth and power in favour of working people and their families. But what then happened? Was that speech the launch of a crusade for social justice? Or was it a prelude to a period of government by a party that was inextricably beholden to class and sectional interests and could not resist the temptations of power and ideological self-gratification?

The background to that Labour Government was the oil price rise of 1973. As Chancellor, the right hon. Member for Leeds, East made one profoundly mistaken and fateful judgment. He decided to boost public spending to offset the deflationary effects of the oil price rise. In 1974–75, public expenditure rose by 12·5 per cent. while public sector borrowing rose to 9 per cent. of GDP, and more subsequently. Ineluctably, inflation also rose, so that by August 1975 inflation was running at 27 per cent. per annum. Then, in a vain and counter-productive attempt to dampen down the inflationary consequences of their financial policies, the Labour Government sought to buy trade union co-operation through the social contract.

Under the social contract, the Industrial Relations Act 1971 was abolished, legal immunities and privileges were heaped upon the trade unions, prices and rents were arbitrarily controlled, food prices were subsidised, vindictive levels of personal taxation were introduced and an expensive programme of nationalisation was embarked upon. The hope was to secure voluntary restraint in pay bargaining on the part of the trade union movement. But of course that restraint was not delivered. By August 1975 wage rises were at 30 per cent. year on year. Lord Barnett, who was Chief Secretary to the Treasury at the time, subsequently wrote: The only give and take in the contract was that the Government gave and the unions took. So it was that the Labour party, in its rhetoric and indeed in its tradition committed to equality and social justice, found itself practising policies of inflation and privilege. It would be the same if a Labour Government were returned to office in future. High inflation then led to injustice and widening inequality. The right hon. Member for Sparkbrook rightly said that inflation hits the lowest paid the hardest. At the height of his greatness, the right hon. Gentleman was Secretary of State for Prices and Consumer Protection in the previous Labour Government. The average rate of price increases in the lifetime of that Government was 15 per cent., so he should know.

Photo of Mr Alan Howarth Mr Alan Howarth , Stratford-on-Avon

No. We are short of time. I am sorry. Inflation, as it saps the profitability of companies, ineluctably also leads to that most offensive of inequalities, unemployment. Under the Labour Government, unemployment doubled. Other antagonisms and inequalities were sharpened, too. The great inequality was between those who were members of trade unions, the privileged members of the big battalions, and the rest. As people elbowed to get hold of the best share they could get of the resources of depreciating money, the toughest grabbed the most, the weakest became unemployed and the pensioners were trampled underfoot.

The rake's progress of our national economy was temporarily halted by the intervention of the International Monetary Fund. But as the Labour Government, for a while, sought to correct what had gone wrong, they found themselves creating inequalities in other ways. It was they, to use their own rhetoric, who embarked upon a "dismantling" of the welfare state. The truly "savage" cuts were those of 1977–78, when capital expenditure in the NHS was reduced by £100 million. Public spending on education fell in the three years after 1976£77, so that by 1979 less was being spent on education than in 1973.

As soon as the bailiffs departed, the rake's progress was resumed, as the Labour Government took the easy but deceptive path of trying to inflate their way out of trouble. Once again borrowing rose, from 3·6 per cent. of gross domestic product in 1977–78 to 5·3 per cent. of GDP in 1978–79. In the winter of 1978–79, which has gone into folk memory as the winter of discontent, the fabric of society was disintegrating fast. Flying pickets roamed the country, patients were denied supplies in hospitals at certain places, and in others the dead were not buried. Mr. Bill Dunn, leader of the striking ambulance men said: If it means lives lost, that is how it must be. It was at that moment that the moral credentials of the Labour movement ran out.

It is an irony too painful for the Labour party to contemplate that the pursuit of equality impoverishes, harshens and divides society. In truth, it merely displaces old inequalities and privileges with new ones. But the Labour party would do it all again. The policy manifesto now set forth by the right hon. Member for Sparkbook is littered with pledges to increase public spending —precise pledges where there is a possibility of buying the votes of a section of the population, otherwise vague pledges. At the same time we are asked to believe that the policies would reduce industrial costs. The right hon. Gentleman proposes a national minimum wage. I can think of no surer formula to increase unemployment. He also proposes a series of new institutions — a British investment bank and regional development agencies.

The right hon. Member for Devonport—who, I was disappointed to learn this afternoon, has not abandoned the politics of jealousy—also littered his speech with a spuriously precise parade of statistics and new institutional devices. Opposition Members would have us believe, and they are trying to persuade the electorate, that simple solutions are available to complex problems, and that quick solutions to social problems are available at no serious cost to the taxpayer, or in terms of borrowing and interest rates. That is the stale, discredited, contradictory litany of the 1970s.

The Conservative party believes in fairness, as opposed to the illusory equality of Socialism. We respect the individual. We believe that the role of the Government is to create a framework of fair opportunities, in which the individual, the family, the business and the community can realise their varied potentialities. We believe in a society in which excellence and effort are honoured, in the benign inequality of leadership, and of achievement which benefits everyone. We believe that success is a contribution, not an exploitation.

As the Government have set out to create that framework of opportunities, they have patiently and gradually stabilised our national finances. We know that one nation cannot be built on inflationary quicksands. Inflation hits the poor and the weak the hardest. It is now at its lowest level for 20 years, and, as a member of the Conservative party, I am proud of that.

We are removing the legal immunities and privileges of the trade unions to secure a fair balance between unions and their members, between unions and management and between unions and society. We are bringing down the punitive rates of personal taxation, which discriminated so inequitably and destructively against people who have a creative contribution to make. Because we abhor unemployment, we are realistically and systematically tackling unemployment at its roots — inflation, the labour market, taxation and deregulation.

Because we want improved public services for all. we are increasing spending on the Health Service, on education and training, on inner cities, on infrastructure, on law and order and on defence.

Our policies are based on realism and humane values. and they are bearing fruit. We are entering our seventh year of economic growth at 3 per cent. per annum. Some 500 additional new businesses have been created every week in the past five years. There are 1 million more jobs than in 1983. Moreover, 65 per cent. of the population who are of working age are in work here, compared with 57 per cent. in Europe. The real take-home pay of a married man on average earnings, with two children, has gone up by 18 per cent. What good does it do to foment resentment and jealousy in that family with the thought that others may have done even better?

The Government are enfranchising the people.

Photo of Mr Frank Haynes Mr Frank Haynes , Ashfield

Will the hon. Gentleman give way?

Photo of Mr Alan Howarth Mr Alan Howarth , Stratford-on-Avon

No, I will not.

We are bringing about trade union democracy, the sale of council homes, wider share ownership, wider pension ownership and extended opportunity for parents to influence education. We are building a culture of responsibility in which people are increasingly willing to take responsibility for their own lives and for each other. The Labour party should understand that they will not tolerate irresponsibility on the part of the Government.

In 1986 we experienced the lowest number of working days lost in 30 years, and the lowest number of strikes in 50 years. The old assumption that there must be a conflict between labour and capital is dead in this country. The modern electorate finds Labour's programme frankly reactionary. The rhetoric of division, sour comparison and jealous resentment is repellent to a people who have discovered a better equality in renewed national self-respect and a pride in independence and success.

The Government are intelligently, decently and bravely pursuing the complex task of advancing economic prosperity, improving social welfare, extending the freedom of our citizens and nurturing the integrity of our nation. When the general election comes, the voters will not wish it otherwise.

Photo of Matthew Taylor Matthew Taylor Liberal-SDP Alliance Spokesperson (Youth) 8:44 pm, 6th April 1987

The theme of tonight's debate has been that our society needs to be a fair one that gives everyone equal rights and rewards, and in which responsibility and power are shared out evenly and widely. I wish to take the opportunity to correct an error that I have heard constantly in the debate. There has not been much progression in the debate, but perhaps we can get at least one point across.

It is not simply a north-south divide. It is a divide between the rich and the poor, between the privileged and the under-privileged. The Government are doing nothing to tackle that divide. Only the alliance can make the bridge across every sector of the country, as can be seen by the wide distribution of our support.

We hear so much about the north-south divide. It is only a few months since it was front-page news that the Labour party's £6 billion reflationary package would be sent to the north. I am not from the north. I represent a rural constituency in the south-west, but our problems are much like those anywhere else. They are the problems of the inner city, but they are also those of rurally deprived areas and of many individuals in all sorts of areas. They are the problems of the poor, the old, the young and the long-term unemployed, almost wherever they live.

A feature of the south-west is that it combines a low wage area with a traditional seat of the rich and powerful. A recent report by the Child Poverty Action group, entitled "Poverty and Deprivation in the South West", makes the point very tellingly. On pay, it states that the south-west has The highest percentage of full-time male employees earning less than £100 per week in mainland Britain. At the same time, it has The highest percentage (except for the South East) of households with incomes over £350 per week. On housing, it states that the area has The lowest percentage of council houses. Yet it has The highest…average new dwelling price. That is in an area where many people are homeless. On health, the report states that the south-west has The lowest (female) age-adjusted mortality rates and the second lowest (male) age-adjusted mortality rates But it has The highest percentage of the population…insured for private medical treatment. On education, the report states that the area has The highest pupil-teacher ratio in both state primary and state secondary schools. Yet it has The lowest pupil-teaching ratio in private (non-maintained) schools. That is the record in the south-west. The poverty and deprivation about which we have heard are present with us too.

We have the problems of the inner cities — for instance, in the St. Paul's district of Bristol. We have the problems of industrial decline in such areas as Plymouth. and particularly the problems of a declining semi-industrialised area full or rural poverty. I see that in my area, Cornwall.

In the past few weeks, in my case work—I do not deny that I have not been doing it for long—I have seen a range of the problems that are brought to most Members of Parliament. One lady's council house is so damp that in the two weeks during which the council lent her a dehumidifier—it then had to take it to another house elsewhere—23 pints of water were extracted from the walls. Because of the Goverment spending cuts on housing and the rate capping of local authority expenditure on housing, homeless people are offered the choice between nothing at all and a damp, cold caravan in the middle of winter, from which many people had to be moved into church halls when it snowed.

Children are in portakabin classrooms that are so dangerous when the wind gets up that they have to stay at home. People in their 20s who have never had a job are coming to me in the last, desperate hope that I, as their new Member of Parliament, will be able to find work for them. Companies are pulling out of Truro and St. Austell. They were attracted there by grants a few years ago, but those grants are no longer available.

Rural poverty is marked, as is other poverty, by low pay and inadequate benefits. In 1985 average gross earnings for Cornish people in full-time employment were just under £160 for men and £110 for women—about 20 per cent. lower than the national average—making it the lowest paid county for men on the mainland and the second lowest paid county for women.

That is exacerbated by regional variations in educational provision, which might provide the means for people to overcome their difficulties. At its lowest level it would enable women to go to work, and it would also provide children with an early introduction to schooling. Yet Cornwall has only 1·5 day nursery places per 1,000 children under the age of five. It is the lowest county rate for England, Wales or Scotland.

Photo of Mr Allan Rogers Mr Allan Rogers , Rhondda

Will the hon. Gentleman tell the House which party controls the county council in Cornwall?

Photo of Matthew Taylor Matthew Taylor Liberal-SDP Alliance Spokesperson (Youth)

There is no overall control of the county of Cornwall, although that might change in the near future.

Despite the resource allocation working party, in 1984–85 the south-west was 4 per cent. below the Government's health target. Only Trent and Wessex were worse off. In Cornwall unskilled people will probably die before retirement age at twice the rate for professional people. This Government have spent more on health but they have consistently not provided the funds to meet the growing need. That is why the alliance has today launched a health package that guarantees that provision will be made to meet the growing calls on the NHS. It will also create a special innovation fund to tackle regional imbalances and difficulties.

If Conservative Members do not agree with what we say about health, they should read the Health Education Council's report "The Health Divide", particularly the introduction by its director general, who has now been sacked. He says: Such inequality is inexcusable in a democratic society which prides itself on being humane. To eliminate or even reduce it substantially would be a major contribution to the health of the people of this country. "The Health Divide" contains statistics that prove what the Opposition parties have been saying for years: that Britain is becoming increasingly a more unequal society under this Government.

The alliance has led the opposition in this Parliament to the abolition of the Health Education Council. The alliance— alone, so far as I am aware, at present—is pledged to reconstituting an independent health authority body, free from Government control. I am afraid that there must be substantial doubt about whether, in the absence of the recreation of that independent body, we can expect the new Health Education Authority to publish a follow-up document to "The Health Divide".

The hon. Member for Birmingham, Northfield (Mr. King) referred to the increasing number of patients who have been squeezed through National Health Service hospitals. He seemed to measure efficiency of treatment in the same way as factories are measured. It was one of the most inhumane statements that I have heard since I became a Member of Parliament. It means that patients are pushed out of beds before they are ready to leave hospital. This happens in hospitals in my constituency. We on this side of the House believe in a caring National Health Service. It should not be measured as though it were an inhumane machine—as a factory that spits out patients in the same way as matchsticks are spat out of a matchstick factory.

As for housing, between 1981 and 1986 the number of homeless households accepted by the Plymouth city council — a rapidly growing town in the south-west —increased by 29·3 per cent. In the same period there was a net loss of 2,083 council houses in the city because sales were exceeding new building. Furthermore, council house receipts have been tied up by this Government. An ever-increasing number of homeless people are now competing for an ever-dwindling council housing stock. Costs in Cornwall are forced up even more, because increasingly the limited housing stock is becoming the property of those who own second homes. The number of unoccupied second residencies has already reached 11 per cent. in certain parts of the county. In other parts of the county, one in six of the houses that are bought are being used as second homes.

Photo of Peter Lilley Peter Lilley , St Albans

Will the hon. Gentleman give way?

Photo of Matthew Taylor Matthew Taylor Liberal-SDP Alliance Spokesperson (Youth)

No, I must draw my speech to a close. I am afraid that I am running out of lime.

In his recent Budget the Chancellor of the Exchequer had £6 billion to spend or give away. Rather than invest that money in the policies that are contained in our policy documents, to which my right hon. Friend the Member for Plymouth, Devonport (Dr. Owen) referred, he chose to line the pockets of those who are already in better paid employment. But that tactic for gaining votes has not worked. The reason is simple. The people of this country —whether in Truro or St. Austell, whether in the southwest or in the north, whether they are rich or poor—can see that this Government are mortgaging the short-term revenues from privatisation and North sea oil for a quick votes grab.

Almost everybody in my area, and increasingly almost everybody in this nation, knows somebody who cannot find work. It may be that their children cannot find work, or that their parents cannot survive on an inadequate pension, or that they themselves cannot obtain hospital treatment inside a year and therefore are forced to pay for it privately, if they have the money with which to do so. All of them are finding that they are losing more than they have gained from this Government's policies.

By means of genuine decentralization—giving people money with which to take control over their own lives and giving local people the backing that they need, in partnership with the private sector to move forward—we can reinvest in this country's future. We are at a turning point. We can continue in our decline, continue to mortgage our future and allow the Health Service to crumble, and the sewerage system and roads to fall apart until we cannot afford to do anything about it, or we can act now, invest and take our country forward while we are able to do so. That is what the alliance is proposing to do.

Photo of Bill Cash Bill Cash , Stafford 9:02 pm, 6th April 1987

I should like to emphasise a point that has been made more often by Conservative Members than by others, which is that there is not really a north-south divide in the sense in which it is generally put over by the Opposition parties. It is patchy and it would be better described in the round as being between inner-city areas and the residential and suburban areas throughout the country. Having said that, it is important to draw attention to those areas where there is heavy industrial production. I particularly mention my constituency of Stafford.

In Stafford we have no grants to speak of and we have a relatively low unemployment rate of about 8·5 per cent. We are in the centre of the midlands between Telford, which is an enterprise zone, a prospective urban development agency to the south, and Stoke-on-Trent which receives a huge amount of Government rate support. Staffordshire as a whole receives the fourth highest amount of rate support of all the counties in England and Wales. We do not have many of the advantages of other industrial areas but Stafford is remarkably enterprising and successful in comparison with the rest of the country.

I should like to illustrate a point that has not been made clearly during the debate. Rather than people talking about going from the north or the midlands to the south, I suggest that they should think seriously about coming from the south to the midlands. Of course, I should like them to come to my constituency. I say that because recently GEC closed down a works on the south coast for good sound commercial reasons and came up to Stafford. It found it particularly attractive to come to Stafford not only because it is a marvellous place but because the cost of living was markedly lower than where it came from.

Reward Regional Surveys, situated in Stone on the borders of my constituency, is a nationally reputable body which produces surveys for the benefit of the Government and other statutory authorities. It has shown that it- one compared the amount spent by each income group, for example in the west midlands, and compared that with London commuters one would find that in the lowest group, group A, the London commuter requires £10,901 to achieve a standard of living that covers food, drink, tobacco, durable goods, other goods, services, fuel, transport, clothing, housing, savings, pensions and tax. In the west midlands the average requirement is £8,781 but in Stafford the average requirement is £7,630. My point is that with regard to the average within the regions, it is £1,000 cheaper a year to live in Stafford, which is a highly prosperous area, than it is to live in other parts of the west midlands and it is some £3,000 a year cheaper than it is to live in London.

We are moving into a new era of speed of communication, new industries and new enterprises. I have just helped to form, and have raised £23,500 for, an enterprise agency in Stafford. When one has such enterprise and initiative in an area and it is well based, traditionally and historically, on industries and good commerce, it is attractive for people to come to live there. Much of the moaning and groaning that we hear from other areas is based on a pessimistic approach to their local economy.

On 26 March, in The Times, there was an article by Mr. Rodney Lord, in which he made it clear that there is a patchwork of areas within the country as a whole. Furthermore, these areas are extremely localised and one gets the greatest differential between concentrations of unemployment between different housing estates, not necessarily regionally. It happens within towns and cities.

The west midlands area is getting better. The economy is improving. Stafford is a prime example of an area that is getting more and more prosperous and that recently was rated the 53rd most prosperous place in Britain—despite the fact that it has a significant amount of heavy engineering—with a strong and effective work force.

Photo of Mrs Virginia Bottomley Mrs Virginia Bottomley , South West Surrey 9:05 pm, 6th April 1987

I represent a constituency with the fifth lowest unemployment in the country, but I speak as somebody who spent 15 years working in Brixton, Southwark and Tower Hamlets. I shall refer to the inequalities and deprivation about which I learned during those 15 years.

There were inequalities between those who could and those who could not own their homes. There were inequalities that meant that anyone who had a rise in income had to leave, because he did not have the chance of buying his own house. There were those of parents who were unable to have any say or standing in their children's school and who were powerless and impotent while their children were taught meaningless racism and sexism rather than being prepared for the jobs of today and tomorrow. There were inequalities of pensioners without independent pensions and of individuals who had no stake in their own firm. Now I can speak after several years of Conservative Government, which have resulted in one in five of our adults being individual shareholders, of many nationalised industries being privatised and many employees being able to buy shares in their companies.

Of course we all deplore the difficulties and disadvantages faced by those who live in areas of high unemployment. The situation is different in London, where within a close distance there are firms with jobs and organisations such as Sight and Sound offering high quality training places but who are unable to fill their vacancies, while in the areas referred to by some hon. Members, the prospects of employment are clearly much more remote.

I also speak as a representative of a county that, through rate support grant and RAWP, is well aware of the many Government policies that may lead to less advantage to areas such as mine so that more resources can go to the north. The Manpower Services Commission spent £3 billion on special employment measures last year and is now regarded as the leader in European terms in providing training opportunities for the unemployed. It spent three times per head on individuals in the northern region what it spent on individuals in the south-east. That is right and proper, but to hear some hon. Members speaking this evening, one would have thought that the opposite was the case.

Above all, I speak for those young people who, for many years, have been leaving school at 16 because they were not academically minded, but for whom nothing has been provided. Now, we have a two-year youth training scheme, offering a real training opportunity ——

Photo of Mrs Virginia Bottomley Mrs Virginia Bottomley , South West Surrey

The hon. Gentleman is wrong to make that cheap jibe. Remarks such as his do great damage to many young people in inner-city areas. The denigration of opportunities through cynicism, apathy and lethargy has exacerbated their difficulties.

Photo of Mrs Virginia Bottomley Mrs Virginia Bottomley , South West Surrey

No, I shall follow the example of the right hon. Member for Plymouth, Devonport (Dr. Owen) of not taking any interruptions, but not for the same reason; I am sorry.

Too often, the education and job opportunity failures in inner cities are caused by low expectations. Remarks such as that by the hon. Member for Rhondda (Mr. Rogers) and others denigrating the opportunities that are available, do so much damage.

We now have job training schemes offering vocational training to prepare our young and older people for the jobs needed today and in the future. Last week, we had the White Paper on higher education showing that, by the end of the century, one in five of our school leavers should go on to higher education at 18. The young are our seedcorn. By the end of the century, about 70 per cent. of all jobs will require further qualifications and brainpower rather than muscle power. It is by realistic investment in the necessary training for the future that so much has been achieved.

The other great inequality faced in the past was that between the lower income person at work and the low income individual on benefit. The Government have done more than any other to redress that imbalance. The point about the maternity grant or the funeral grant is that they will now at last be available to low-income people in work. The family credit will be extended to more families and available at better rates giving greater acknowledgement to adolescent children. That will help to redress a very unfair inequality that has been present for far too long.

Populist gimmicks, such as free television licences for all pensioners, have no place in the policies that I believe should be used to redress inequalities. When it comes to proper investment in the Health Service and the education services and realistic training and employment measures, we have a great deal of which to be proud. The inequalities in this country are rather less than the regional inequalities in France and Germany. They are very much less than the regional inequalities in the Netherlands and Italy. I believe that the Government are rightly and properly addressing themselves to meeting the needs of regions that face disadvantage without resorting to the profligate indiscriminate policies that only result in higher inflation and, in the long run, to fewer opportunities and fewer real jobs.

Photo of Mr Tony Banks Mr Tony Banks , Newham North West 9:10 pm, 6th April 1987

It is always a pleasure to follow the Member for Surrey, South-West (Mrs. Bottomley). She is very much the——

Photo of Peter Lilley Peter Lilley , St Albans

On a point of order, Mr. Deputy Speaker. Some of us have been here throughout the debate. The hon. Member for Newham, North-West (Mr. Banks) has only just popped in.

Photo of Mr Tony Banks Mr Tony Banks , Newham North West

That was hardly a point of order. I have been sitting in the Chamber for some time. When I was not present, I was attending a Select Committee upstairs.

Photo of Mr Harold Walker Mr Harold Walker , Doncaster Central

Order. Hon. Members must not challenge in any way the absolute discretion of the Chair as to who should be called.

Photo of Mr Tony Banks Mr Tony Banks , Newham North West

I now have four minutes left.

Before I was very rudely interrupted, I was saying that it is a pleasure to follow the hon. Member for Surrey, South-West because she is very much the acceptable face of Tory extremism today. I agree with her in one respect —when she said that there is a low level of expectation in our inner cities. I have found that among the many poverties that we face in the borough that I have the privilege to represent—Newham in the east end of London — the greatest poverty is the poverty of expectation. They actually expect bugger-all and that is usually about what they receive.

Photo of Mr Harold Walker Mr Harold Walker , Doncaster Central

Order. I hope that the hon. Gentleman will not inflict such coarse expressions on the House again.

Photo of Mr Tony Banks Mr Tony Banks , Newham North West

I am frightfully sorry. I realise what a delicate lot we all are here.

The hon. Member for Stratford-on-Avon (Mr. Howarth) made the sort of hustings speech that no doubt his constituents and the electors in the area will hear interminably in the weeks to come. He spelt out what he said was a success story. I find it very difficult to understand how anyone in their right mind could claim that we have an economic success story on our hands. Unemployment is up 300 per cent. since 1979 and that costs £20 billion a year. We have the highest level of unemployment among the seven main industrial countries. Manufacturing output is 6 per cent. lower than in 1979. Manufacturing investment is 24 per cent. down on the 1979 figure. There was a deficit of £5·4 billion in the balance of payments in manufactured goods in 1986, and that contrasts with a surplus in 1980 of £5 billion. Last year, the overall balance of payments deficit was £1·1 billion. That must be contrasted with the receipts of about £50 billion in North sea oil over the same period.

Conservative members have said that we now have more money to spend. Yes, that may be so for some people. However, they are the richest people in society. The average family in this country is paying more tax now and will pay more tax than in 1979. We have the highest interest rates in Europe and the highest inflation rate among our major competitors.

Frankly, if that is a success story, then God save us from failure. A third-rate Government are reducing us to a second-rate country. We are fast becomong a banana monarchy without even having the benefits of bananas. That is the present position. I really do not know how some hon. Members can claim that that is a wonderful success story. Those hon. Members should come to Newham and tell the 18,000 people on the dole that this is a great success story. Let them come to Newham and tell the 33,000 people receiving supplementary benefit that this is a great success story. No doubt those people will tell Tory Members what it really is.

Conservative Members do not know what it is like to be at the bottom end of society. They do not have the faintest idea and they do not care. The Government are evil, wicked and divisive. The sooner we get rid of them, the better it will be for the country.

Photo of Michael Meacher Michael Meacher Shadow Secretary of State, Member, Labour Party National Executive Committee 9:15 pm, 6th April 1987

We have had, not least in the last few moments, a fascinating if somewhat tangential, debate. The Paymaster General in his usual rechauffé Cambridge Union knockabout which passes for a speech, talked about everything except poverty and inequality.

With, no doubt, an eye to the election, the Paymaster General made a great deal of what he called the Government's fine record of economic growth, which he claimed would overcome inequalities and promote one nation. If that growth is so good, why are class divisions deeper today than at any time in our recent history?

In fact, the Government's growth record is not so good It only started in 1982, and the Prime Minister sometimes talks as though she prefers to forget that she came to power in 1979. When the awful years of 1980 and 1981 are included, growth has been only 1·4 per cent. a year under this Government, which is well below the rate of our main competitors.

The right hon. Member for Plymouth, Devonport (Dr. Owen) used the debate to launch the fourth version of the SDP-Liberal social security plan. That was not surprising because the first three were successively sunk, as one anomaly after another was revealed.

The right hon. Gentleman has not faced up to the fact that the central flaw in the selectivity that he now favours is that it requires yet more means testing, which always produces low take-up, and that inefficient delivery defeats the whole purpose of the excerise.

The right hon. Gentleman has not answered some key questions. How are the 2 million pensioners who would receive a higher pension increase to be selected, when means testing always causes low take-up among the elderly? Is it not a £1 increase in child benefit rather minor? Is it only one third of what the Labour party proposes. Is it not astonishing that someone seeking to launch a political party's social security programme did not seem to understand that the key fact about child benefit is that it is paid to all families with children, whether those families are in or out of work, so that, uniquely, it does not worsen the poverty trap? That is why a mere £1 increase is so feeble.

Why is the SDP's basic benefit any better than the supplementary benefit and family income supplement which it would replace, if it is to be means tested and have a tapered withdrawal of benefit as income rises, which will still aggravate the poverty trap?

Is it not clear that the SDP proposal for an £8 or £11 per week benefit for the long-term childless unemployed is greatly inferior to the Labour party's initiative for a £12 increase in benefit for all long-term unemployed and not just the childless?

Instead of any serious integrated reform of tax and benefits, we heard nothing about tax, but simply a muddled melee of increased means testing, which, at a cost of £2 billion, offers some of the worst value for money of any scheme that I have seen recently.

Photo of Mr Norman Fowler Mr Norman Fowler Secretary of State for Health and Social Security

Would not the hon. Gentleman's condemnation of the SDP carry a little more weight if he had not promised as long as two years ago to produce his own plans on supplementary benefit and the reform of social security? He has made successive promises that he is about to publish those plans. When will he publish them?

Photo of Michael Meacher Michael Meacher Shadow Secretary of State, Member, Labour Party National Executive Committee

The Secretary of State has made a typically silly response. He knows perfectly well that the plan was reported publicly on 18 September. It is called "Social Security and Taxation" and is about both matters. It sets out a much better integration of the two than does the SDP plan, and if the Secretary of State does not have a copy I shall be glad to send him one. The right hon. Gentleman could learn a lot about social security from reading what we say.

This debate is about the other Britain. Over the last eight years Tory policy has repeatedly and obsessively emphasised the rolling back of the frontiers of the state and the untrammelled play of free market forces. It has done so at a price and in a manner which has laid waste large tracts of Britain and devastated large sections of the population. In the name of incentives the Government have not only tolerated inequalities but set about widening them with aggressive relish. The recent Budget was only the latest manifestation of those values.

The Bow Group ideal of one nation has vanished into history like a faded dream. Under this Prime Minister we have had, successively, three-nation Budgets — with nothing for the unemployed and pensioners, peanuts for the low-paid and a bonanza for the already prosperous and well-heeled. For the first time for half a century there is a swelling under-class of the dispossessed. Today there are 6 million people in the families of those who have been unemployed for more than half a year. There are a further 6 million who are low paid—they are paid below the minimum decency standard set by the Council of Europe. Another 5 million are pensioners living on supplementary benefit or have such exiguous incomes above the state subsistence line as to be permanently confined on the margins of poverty.

That is a total of 17 million people—one third of the population, an army of the impoverished, which has more than doubled since 1979. Under the lead of this Prime Minister the numbers of long-term unemployed have quadrupled. According to a consistent standard, the numbers of low-paid workers have nearly doubled, and for the first time pensioners have been hammered in large numbers by housing benefit cuts.

What is so harsh about this philosophy, and what is surely at the heart of the debate, is that under this Government success is all too often bought at the price of the disadvantage of others. Under this Prime Minister's scheme of things one man's incentive has become another's property trap. Large-scale tax relief measures in successive annual Budgets have concentrated on the richest in the population and been funded by equally large benefit cuts in successive social security Bills, which have been concentrated heavily on the poorest. Worse—we now know from the Health Education Council's report, "The Health Divide", which the Government did their best to suppress, that it is one thing to increase incentives for the successful, but it is quite another to penalise the victims of unemployment and poverty with higher morbidity and even premature death.

It is the morality of such a system which is so striking. How can the doubling of the numbers who live in poverty since 1979 to more than 10 million be justified while at the same time tax cuts are handed out to members of the Cabinet and those on £50,000 a year? Those tax cuts are now worth an extra £245 a week. How can it be justified, in the same year, to pay pensioners an extra 40p a week, while the Top Salaries Review Body awards top judges, civil servants and the military an extra £40 a week, and when the big bang is dishing out to young Tory acolytes in the City salaries which read more like telephone directory numbers?

How can it be justified to offer the Prime Minister, who is buying a £500,000 mansion in Dulwich, an extra £35 a week in mortgage tax relief, when two months ago the same Government cut by half the mortgage payments to those on supplementary benefit who were unfortunate enough to be struggling to buy a house at the time that they became unemployed? That is bound to lead to widespread evictions and homelessness.

How can it be justified to cut benefit for 80,000 young people through the iniquitous board-and-lodging regulations and to move them on from town to town every two, four or eight weeks in search of jobs that do not exist when, a week ago, Morgan Grenfell, the merchant bank disgraced by involvement in shady share dealings with Guinness, awarded the two top managers responsible £562,000 for walking through the door?

Underlying the Thatcherite market system is a particularly cynical piece of real politics, to which my right hon. Friend the Member for Birmingham, Sparkbrook (Mr. Hattersley) referred£the high paid will not work unless they are given incentives; the low paid will not work unless they are penalised. The new general managers in the National Health Service require a bonus of £60 a week on top of £30,000 a year before they will give of their best while the ancillaries—the hospital cleaners and laundry workers on £60 a week in total have to have their wages and hours cut by privatisation before they can be made efficient.

It is the sheer indifference towards what the Tory party no doubt in its heart despises as the helot class which to me is so ugly and harsh. One has to ask what right the Government have to force 10 million of our fellow citizens to live in poverty for years on end at a subsistence standard that one of them could not get by on even until the end of one week. One might ask also what right the Government have to keep forcing down even lower some of the lowest wages when Lord Gowrie resigned as Minister of State because he could not make ends meet on £33,000 a year — no doubt the most celebrated victim yet of the Government's low-pay policy.

Above all, the central lesson is that this degree of inequality, this magnitude in the rise of poverty, is not an accident. It is not an inevitable result of economic expansion or a by-product of technological change. It is deliberately engineered on a scale unprecedented since the 1930s.

Photo of Michael Meacher Michael Meacher Shadow Secretary of State, Member, Labour Party National Executive Committee

Even I was stunned when I learned, in answer to a question which I tabled two months ago, that top directors and executives in the biggest companies on more than £70,000 a year had each received tax handouts since 1979 worth an average £19,100 a year. At £370 a week extra in tax cuts, that is nearly three times the total weekly earnings after tax and national insurance of the average single man.

It is not only tax cuts. Even more significant has been the spread of share option schemes among top earners. Under such a scheme, approved two months ago at Burton, 80 senior executives could be eligible for options worth up to eight times their total remuneration. Given that Burton's recently notorious chairman and chief executive was paid, or rather paid himself, £1 million a year, the embarrassed board, under pressure from shareholders, thought that decency dictated that he should receive a modest £2·5 million extra.

Photo of Michael Meacher Michael Meacher Shadow Secretary of State, Member, Labour Party National Executive Committee

The hon. Gentleman will learn a lot more by listening than by intervening.

For the privileged few, the Thatcherite regime has been a Croesus-like licence to print money. For such persons, this is not the Government of Adam Smith and the "invisible hand". This is the Government of Ivan Boesky —one can be greedy and still feel good about oneself. Who is holding the nation to ransom now? Not for a long time has the politics of greed and selfishness been so triumphantly in the ascendant.

Photo of Michael Meacher Michael Meacher Shadow Secretary of State, Member, Labour Party National Executive Committee

I shall not give way.

Such things must be paid for. They are being paid for, largely by the pensioners. Each year the Government have increased the pension only in line with prices, not with earnings. Because of that, cumulatively over the last seven years they have done the pensioners out of more than £11 billion that they would have had under Labour's formula. In the course of the next year alone pensioners will lose £3·5 billion a year compared to what they would have had under Labour's formula.

Photo of Michael Meacher Michael Meacher Shadow Secretary of State, Member, Labour Party National Executive Committee

In order to assist the hon. Lady, who I am sure wants to know about this, I shall put it in terms of the individual pensioner. Over the years since 1979, a single pensioner has lost £9·90. Between 1974 and 1979, the pension increased by 20 per cent. in real terms. Those were five Labour years. In eight Tory years the pension has increased in real terms by only 2·5 per cent.—only one eighth as much. So much for the Chancellor's £2·5 billion give-away Budget of three weeks ago. It was some giveaway. It has been paid for, and more, by the pensioner. Every penny of those extra tax reliefs is money that morally at least belongs to the pensioners.

There is not only the pension cheat; there is the housing benefit fiddle. Just as the Government have not reduced tax for 95 per cent. of the population, because they put up insurance contrib