I must announce to the House that I have selected the amendment in the name of the Prime Minister. Furthermore, a very large number of hon. Members are seeking to participate in the debate. It would be possible for me to call them all if they were to limit their speeches to 10 minutes. I have no authority to do that in a half-day debate, but perhaps hon. Members will bear it in mind. If I may say to those on the Front Benches too, half-hour speeches would help the whole House.
I beg to move,
That this House, noting that the ten million people today living on or below the income support level of less than £40 a week for an adult represent the greatest numbers in poverty in Britain since the war, and that the Government has as a deliberate policy over twelve years further impoverished the poorest one third of the nation to make the rich richer, calls on the Government to reverse its policies of increasing poverty and unemployment and to give priority to the growing millions excluded from the rights and opportunities of real citizenship by increasing pensions by £5 per week for a single pensioner and by £8 a week for a married couple, by re-instituting the pension link with earnings which the Government broke twelve years ago, and by restoring to families the losses in child benefit from three years of government freeze.
There could be no clearer indicator of the indifference
and contempt in which the Government hold those on the lowest incomes than the Government's exclusive concern with our tax proposals, without even a glimmer of a mention of those who will benefit from them. There could be no more revealing insight into the Government's priorities than their obsessive concentration on the 8.7 per cent. richest taxpayers whom the independent Institute of Fiscal Studies estimated would lose under our proposals while at the same time completely ignoring the 46 per cent. of the population who, the same institute calculated, would gain under our proposals.
We should not, however, be surprised. This is the Government who have stopped pensioners getting an annual increase in line with Community living standards, a deliberate act of policy in 1980, which cumulatively so far—according to a parliamentary answer to me on 25 November last—has removed from pensioners £31.8 billion of improved pensions which they would otherwise have had.
The Government have cut unemployment benefit 11 times since 1979, making a cumulative "saving"—if I may use that word—at the expense of the unemployed, of £5 billion to £6 billion over the past decade. They have repeatedly cut benefits for the disabled by abolishing industrial injury benefit, by abolishing disablement benefit for seven out of eight disabled people and by abolishing the reduced earnings allowance for disabled people who cannot earn a full wage. They have frozen child benefit for three years so that mothers and families are nearly £1 billion worse off than they would otherwise have been.
About 18 months ago, the hon. Gentleman said that he had irrefutable evidence that the Government intended to abolish child benefit. After three increases, where is his evidence? Has he lost it, or did he make it up?
I did not say that I had irrefutable evidence. I certainly regarded the continuance of child benefit as very uncertain, and I still regard it as uncertain. If by some mischance the Government are returned for a fourth term, I should be surprised if child benefit survives to the end of their term.
With a record like that, no wonder Ministers want to keep the spotlight on the tax and national insurance costs of our proposals and away from the half of the nation who will gain. For that half of the nation, the Government have been the meanest, the most divisive and the most vindictive Government in modern times. It is all too clear why there has been such an unremitting broadside from Ministers against our tax and national insurance proposals. It is partly because they are desperate to divert attention from the recession—which they created, from which they cannot escape and which will lose them the election—and partly because they are desperate to conceal the enormity of what they have done in wilfully impoverishing the poorer half of the nation.
By contrast, I make it clear that Labour believes it is right and just and should be the first priority for pensioners to get an increase of £5 a week for a single pensioner and £8 a week for a married couple, given the mean and miserable way in which they have been treated over the past decade. We shall make no corresponding deductions from income support, housing benefit or poll tax benefit, which means that the poorest pensioners will gain the full £5 and £8 a week.
It is also right and just that mothers and children should be compensated for three years of Tory freeze by getting an increase in child benefit of more than £2 a week for second and subsequent children. We have been honest in making it clear that the extra cost of that will be confined to the richest 10 per cent. of taxpayers. It is fair that those on £70,000 a year should contribute. According to a parliamentary answer on 6 March last year, those people have gained an extra £700 a week in real terms from tax cuts in successive Budgets since 1979.
It is also fair that those on £60,000 a year who have gained an extra £192, those on £50,000 a year—a group which includes several Ministers—who have gained an extra £131 a week and those on £40,000 who have gained an extra £77 a week should also contribute. A small contribution should also be made by those on £30,000 a year who have gained an extra £45 a week. I make it clear that no contribution will be sought from anyone earning less than £21,000 a year, or £405 a week. We intend to take back a small fraction of the large windfall tax gains received by the 10 per cent. richest taxpayers over the past decade so that we may restore to nearly half the population a modest part of the cuts imposed by the Government on all the poorest groups in the country. We think that that is fair and we believe that the country will think it fair.
How can the hon. Gentleman explain the guarantee that he gave in the last few sentences, bearing in mind that national insurance contributions are levied weekly, not annually, and would be levied on anyone whose income, because of bonuses, overtime, commission and so on in any one week, went above the rate representing the annual level?
That issue has been raised during the past couple of weeks. It ill-behoves the Government to raise the issue of a few dozen, perhaps a few hundred, people who on one or two weeks of the year suddenly get a substantial increase in pay, given that the Government have doubled VAT even though they said they would never do that.
It is a guarantee that all those whose normal pay is at that level will not have to pay more. To speak about tiny discrepancies is an insult to the people when the Government have increased taxation from 34 to 37 per cent. for the average person.
I have spelt out our position and shall now look briefly at that of the Government. By breaking the pension link with earnings, the Secretary of State for Social Security and his predecessors have made the single pensioner about £14 a week worse off and the married couple £23 a week worse off than they would have been under the policies that existed in 1979. Having done that to the pensioners, the right hon. Gentleman proposes to continue to reduce even further their share of average living standards year by year.
It is not that the Secretary of State and the Government do not have a choice. There is persistent talk of 1p off income tax in the Budget, or perhaps an increase in personal allowances by double the rate of inflation. Clearly, there is leeway of about £2 billion in the Budget. That is enough to increase the pension for a single person by about £3.50 a week and for a married couple by about £5.50 a week, together with all the linked benefits. Why is not the right hon. Gentleman demanding that his colleagues should help the pensioners for once? Why is he such a pushover when it comes to defending the 17 million people who depend on benefits? The Secretary of State is silent. We have grown used to his silences, which sometimes last for months on end. They speak volumes. Even after slapping pensioners round the face year after year throughout the past decade, the right hon. Gentleman and his colleagues, even at this time, prefer tax cuts for their friends in the upper income groups rather than the tiniest measure of justice for pensioners.
Between the hon. Gentleman's flights of hyperbole, which make him sound more and more like a cold war warrior when the cold war has ended, will he remind the House that between 1979 and 1988 pensioners' incomes rose by 33 per cent. in real terms above inflation?
I shall be glad to put it on record, and perhaps the hon. Gentleman will take note of it, that the 2 million poorest pensioners, who do not have any other income, have had an increase in pension in real terms since 1979 of between 0 per cent. and 2 per cent. Under the last Labour Government, who were in office for five years, the increase was 20 per cent. The hon. Gentleman referred to a 33 per cent. increase. There is one major reason for that —the state-earnings related pension scheme which Labour introduced. In 1979 it was worth about 50p a week. For the average pensioner retiring this year on average earnings it is worth £40.80 per week. Pensioners have done better because of Labour's action on pensions, which the Secretary of State's predecessor tried to abolish.
What is the Prime Minister's position? He likes to proclaim the classless society—I think that he describes it as a nation at ease with itself—yet he has produced the most class-divided society since the war, a nation more riven by depression, anxiety and fear than at any time for a decade. It gives me no pride to say that for the first time since the war more than 10 million people, or more than one in six of the population, are living at or below the income support level. That is more even than when unemployment was last at its peak in 1986.
While the Prime Minister in his so-called classless society always travels first class, the 10 million at the bottom are deprived even—if I may coin a phrase—of the "cheap and cheerful" class. Not only are there more of them than before, but the poverty level standard on which they are forced to live is at a record low. It is less than £40 a week for an adult over 25. Perhaps the right hon. Gentleman, who gets more than £1,000 a week, should try living on £40 for a week. If Ministers had to experience that in practice, it would not stay at that level for long.
Faced with those figures by David Frost last Sunday, what was the Prime Minister's response? It was to wriggle and to fiddle. He said:
Now we have raised those income support levels far above the amount that one would need to raise them simply to keep pace with inflation, so in essence we have brought into the statistics people who otherwise would have been beyond those statistics. So there is an artificiality in the figures.
I have news for the Prime Minister. The only artificiality in the official figures is that they are lower than the reality because every year for the last eight years the Government have cut income support and supplementary benefit in relation to average earnings.
Since 1979, the Government have cut the relative value of the benefits by a quarter. That really matters when a person receives less than £40 a week. Because those on income support have now been deprived of single payments and have to pay 100 per cent. water rates and 20 per cent. poll tax, income support has not even kept up with inflation. If the Prime Minister would put only half the ingenuity that he devotes to misrepresenting the truth into dealing with the problem, we might make progress in reducing the poverty which he has played such a big part in creating.
The Prime Minister has a record as long as one's arm. He tells us about his humble origins about as often as the Chancellor tells us that the recession is ending. But that did not stop him—when he had the power as a Minister at the Department of Social Security—cutting in half the relief on mortgage interest payments for the first 16 weeks for newly unemployed, or virtually abolishing disability benefit, sharply cutting the number of free school meals, or punitively extending the unemployment benefit disqualification rules from 16 to 26 weeks and setting up the hated social fund; I might add to that his refusal now of 75 per cent. of the applications made under it.
This is the same man who in 1988, together with his right hon. Friend the Secretary of State, chopped £1 billion off the benefits for people on £40 a week, at the same time as the Chancellor handed £2 billion in tax cuts to higher rate taxpayers. Surely there cannot be a clearer demonstration of Tory contempt for those struggling on the lowest incomes.
Perhaps, if the Prime Minister were here, he would say that as a junior Minister he was acting under orders. I understand that point. In that case, why has he done nothing, since becoming Prime Minister, to reverse the harsh legislation for which he was responsible? Why has he not even revoked the iniquitous 16-week mortgage interest disqualification rule which he personally introduced in the House in December 1986 and which, of course, is the root cause of thousands of repossessions?
I suggest that the hon. Gentleman, who before the debate started was making a bogus point of order about disrupting proceedings, speaks to some of those whose houses have been repossessed about the effect that that has had on them.
Why has the Prime Minister left in place a Chancellor who has shown his personal contempt for the poor by saying that unemployment is a price well worth paying? Why has he done nothing to halt the human tide of despair among the 1 million people forced on to income support—not when the right hon. Member for Finchley (Mrs. Thatcher) was Prime Minister, but since he became Prime Minister? The Prime Minister inherited a wilderness and he has simply presided over its getting worse. He spends more time running away from elections than facing up to fundamental issues.
Our social security system is probably the worst in the EC, with the possible exception of those in Greece, Spain and Portugal. It is getting steadily worse by the year. [HON. MEMBERS: "Rubbish."] It is not rubbish; it is a fact. If hon. Members looked at the figures of comparative benefit, they would understand the point which I am making.
British pensions, British child benefit and British disability benefits are all lower, and in many cases substantially lower, than those of all our main competitors. We have a Secretary of State for Social Security who is distinguished only by his invisibility, and who has done nothing to arrest the steady disintegration of the benefits system, the growing demoralisation of his staff in social security offices and the major dissatisfaction and anger of so many clients.
At least I was assured that the right hon. Gentleman still existed when, a week ago, he issued a press release attacking the Labour party over its national insurance plans. The only problem was that he contradicted the figures which he had given only a month ago by exaggerating them by no less than 50 per cent. Perhaps he should return to his hibernation.
We have a Government where the last resort of the scoundrel is to lie.
I am not giving way again. Other hon. Members wish to speak. The hon. Gentleman can make his own speech.
We have a Government who are making wild and unthruthful allegations against us about tax as they have no other resort left. Let us consider briefly their record on tax. Under the Tories, taxation has gone up from 34 per cent. to 37 per cent. Theirs is not a tax-cutting party but a tax-raising party. The Government say that they will cut income tax and increase public expenditure. That means that they will have to put up VAT which, as the latest edition of "Social Trends" out yesterday shows, hits poorer families much harder than richer families. Of course, the Tories say that they have no plans to increase VAT. They said that in 1978 and in 1987. On both occasions, they promptly increased it directly after the elections. We cannot trust the Tories on VAT. It was the Tories who introduced VAT; it was the Tories who doubled it. Labour cut it from 10 per cent. to 8 per cent.in 1974.
The Labour party believes in fair taxation, justice and the right of participation for all our citizens, including the poorest. Because the Tories have shown by their record that they manifestly believe in neither, the issue which we are debating today will play a major part in removing them soon from power.
I beg to move, to leave out from "House" to the end of the Question and to add instead thereof:
'warmly endorses the Government's policies for focusing considerable extra help on the most vulnerable in society; welcomes the further real increases in benefits shortly to take place for many older less well off pensioners and hundreds of thousands of disabled people; notes the Social Security Select Committee's conclusion that real disposable incomes grew by 30 per cent. between 1979 and 1988 with increases in real income being seen at all levels of the income scale; believes that policies which provide more choice and greater opportunities are the best way of helping people to create a better life for themselves and their families; and recognises that, if implemented, Her Majesty's Opposition's confused tax and spending plans would impoverish the whole nation, increase unemployment and destroy opportunities.'.
In the light of one or two observations that the hon.
Member for Oldham, West (Mr. Meacher) made about my right hon. Friend the Prime Minister, I shall begin with an observation that I had not intended to make: that I have not the slightest doubt that my right hon. Friend the Prime Minister would not make the remark about orders that the hon. Member for Oldham, West suggested. What I do know is that, when challenged on his record when he was a Social Security Minister, the hon. Gentleman was heard to mutter that of course he was a junior Minister and had to do what he was told.
Since the right hon. Gentleman has made that allegation, I totally and absolutely refute it and ask him to provide the evidence, or else to withdraw it.
I heard the hon. Gentleman mutter that when I made the point across the Dispatch Box in the last debate that we had on this subject. If the hon. Gentleman assures me that my recollection or my hearing was wrong, then of course I accept that unequivocally. I simply say that he had no business to make that suggestion about the Prime Minister. I remind him that he was a Minister in the old Department of Health and Social Security when the Christmas bonus was not paid for two years running—so much for his concern for the pensioners—and when Labour failed to carry out its own obligation—
—in respect of the uprating of benefits. The hon. Gentleman's approach to these matters can best be illustrated by looking at a number of his recent texts. When I saw the figure of 10 million people living in poverty in the motion that he tabled, I found that I could not reconcile it with a number of other figures that the hon. Gentleman had used. I did some research and found that in "Meet the Challenge, Make the Change: A new Agenda for Britain" of June 1989 we were told that the numbers living in poverty had grown from 11 million to over 15 million. Later, in September 1991, we were told that over 11 people were living in poverty. When the hon. Gentleman wrote to the Prime Minister in November 1991 the figure had come down to just over 9.5 million. In a press release that he issued on 17 December, less than a month later, the figure rose again to nearly 15 million. Today it has come down to 10 million.
It is tempting for me to draw from that wild variation the conclusion that, on Labour's own figures, the Government have reduced poverty by a third in a month. I shall refrain from doing so, however, and will simply wonder—no doubt in common with several of his right hon. and hon. Friends—just what it is that the hon. Gentleman thinks he is doing.
If one takes account of the extra passported benefits associated with income support, one comes to a substantially higher figure than if one simply counts the heads of household claiming income support. If one takes into account only heads of household, which is what I did, the number stands at over 8.3 million. If one then takes into account what the National Audit Office said in its House of Commons paper 451—that 1.8 million who are living below the threshold are not claiming income support—one finds that the figure comes to just over 10 million. That is a shocking figure. It is the highest figure that we have ever had.
It is lower than the figure that the document I first quoted gave for 1979, which was 11 million. The hon. Gentleman appears to use whatever figures he thinks will have most impact in whatever press release he decides to issue in a particular week. Only one thing is absolutely clear: that, whatever else these figures do, they do not provide a sensible measure of poverty. They are constructed, apparently, in two different ways, both of which lead the hon. Gentleman, in the conclusions that he then seeks to draw, into manifest and palpable absurdity.
The first of these methods, upon which the hon. Gentleman touched earlier, is to take as the number in poverty the number of people at or below the income support rate and, as he said, sometimes to add in those who are a little above it. I leave aside the fact that the last Labour Government—I believe at the time when the hon. Gentleman was a Minister—declined to accept that sort of definition of a poverty line, just as much as the present Government have declined to accept it. I would simply make the point that, according to this "Alice in Wonderland" approach to measuring poverty, every real increase in the income support rates, which by definition makes people better off, produces in the hon. Gentleman's world an increase in the amount of poverty.
In April, when the 7 per cent. rise in income support generally and the further real increase in the higher pensioners' premium will give new income support entitlement to about 500,000 people, most of them pensioners, making them better off, the hon. Gentleman will presumably be running round the country saying that poverty has increased from 10 million to 10.5 million. Incidentally, the converse is true—that a reduction in income support rates, which makes all those involved worse off, would show up in his kind of figuring as a reduction in poverty. It is utterly and totally ridiculous.
If anything, it gets worse. The second of the hon. Gentleman's methods for measuring what he calls poverty—I suspect that this is the real reason for some of the confused figures to which I referred a few moments ago—is to make reference to average incomes and then to say that everybody with less than half the average is to be designated a pauper.
The result, especially when average incomes are rising, as they have been under this Government, is once again to pretend that people who are getting better off are becoming poor, simply because the increase in their incomes is less than the average. Once again it is absurd, although here, too, there is an obvious converse: that we could make everyone in the country worse off, and, so long as we reduced the average by hitting the better-off hardest, a lot of people further down the scale would allegedly cease to be poor, even as their incomes fell.
One can see the relevance of that. This is a very attractive proposition for a Labour Government. At one and the same time, they could reduce the standard of living of everybody in the country and claim that they were reducing poverty. No doubt that is what the hon. Gentleman has in mind. There could be no clearer indication from the way in which the hon. Gentleman uses these figures that what he is really talking about—and, frankly, what he is really interested in—is not poverty but equality, an entirely separate matter.
So much for the hon. Gentleman's figures. I am interested in helping people to become better off. Therefore, I prefer to rest on the simple, clear and accurate conclusion of the Social Security Select Committee in its report on low-income statistics. I am happy to see that its Chairman, the hon. Member for Birkenhead (Mr. Field), is in the Chamber today. The report said:
Real disposable incomes grew by more than 30 per cent. between 1979 and 1988, with increases in real income being seen at all levels of the income scale.
Will the right hon. Gentleman also quote the distribution figures for those at the bottom, those on average and those on higher incomes, which may be disguised by just putting across that average figure?
I implied that there have been changes in the distribution of income and the speed with which incomes have changed. That is not the same as the systematic attempt by the hon. Member for Oldham, West to pretend that large numbers of people have been getting better off, which the Select Committee rightly refuted.
What I shall certainly endorse is that, in recent years, and certainly in the period since I have been Secretary of State, we have steadily—uprating by uprating—steered additional resources to poorer pensions and to others whom we had identified, as a result of our research, as among those who were not doing as well as we should have wished.
I accept that there are variations in the way in which incomes have grown—[HON. MEMBERS: "Answer."]—at different levels of the income distribution. I am going no further than that—[HON. MEMBERS: "Oh."]—because, apart from anything else, the hon. Member for Birkenhead, to whom I give credit for taking a genuine and serious interest in such matters—
He will recognise that, apart from anything else, the composition of different deciles and quartiles in those distribution figures is not necessarily the same at the end of the period as it was at the beginning. A whole range of extremely complicated factors are involved. If the hon. Gentleman will accept that, I shall move on.
I accept that fully, but some of those in the lowest decile remained in the lowest decile throughout the Government's entire period in office. Will the right hon. Gentleman now come to the Dispatch Box to say that, under the stewardship of this Government, the poorest people in this country have had the smallest increase?
I do not think that there is any basis in the hon. Gentleman's report for that suggestion—[Interruption.] What I am saying—I think that he will accept this, because his own report makes the point—is that, at all levels of the income distribution, people have been getting better off during the lifetime of this Government.
The Select Committee has, of course, produced its own account, but does the right hon. Gentleman accept that one of his written answers last July showed that, after housing costs, all those in the bottom 10 per cent. of the income distribution—the poorest tenth—were worse off by an average of 6 per cent., and that, according to the Government's own figures, those in the lowest percentile—more than half a million people—were worse off by more than 22 per cent.?
The hon. Gentleman is taking us into an area which, as I think he knows, is the point at which the Select Committee and, perhaps even more importantly, the Institute of Fiscal Studies has accepted that the samples from which those figures are drawn do not allow that sort of conclusion to be drawn with the certainty with which the hon. Gentleman is pretending that it can.
In addition—this is the point that the hon. Gentleman so often misses when talking about benefit rates—calculations that consider people's incomes after housing costs are artificial when compared with the way in which almost everybody regards their income. Furthermore, when he talks about people living on £40 a week, he is entirely overlooking the fact that, if they are householders, their housing costs will be met 100 per cent. either through rent or through the payment of their mortgage interest. When compared with the rest of the population, we are talking about significantly greater sums being represented by the benefit rates, as the hon. Gentleman knows perfectly well.
I prefer also to look at the clear practical evidence of the improvement that has been taking place for the groups that all hon. Members would regard as the people we particularly wish to help—the pensioners, disabled people and low-income families with children. An important point has already been made by my hon. Friend the Member for Chelmsford (Mr. Burns)—
Pensioners' average net incomes grew by more than a third between 1979 and 1988. That income growth is certainly not less than was enjoyed by the rest of the population: indeed, it is probably marginally greater. Furthermore, it is not wholly or largely because of the state earnings-related pension scheme; it is due even more to the growth in savings incomes, which have more than doubled during the lifetime of this Government, but which fell in real terms under the last Labour Government. That increase in pensioners' average net incomes is also due to the increase in incomes from occupational pensions.
The most notable massive tax that Labour Governments have traditionally imposed on savings incomes is the one that caused the problems under the last Labour Government and led to a fall in the real value of savings incomes. It is the tax that is imposed by the rampant inflation with which Labour Governments have always been associated.
I turn now to disabled people. The hon. Member for Oldham, West made some narrow references to the industrial injuries scheme, which is a very limited part of the benefits for disabled people. When the hon. Gentleman studies what he actually said—I am not sure whether it was what he meant—I am sure that he will agree that his remarks were totally and utterly misleading.
The fact is that expenditure on benefits for disabled people has increased by more than 150 per cent. in real terms under the present Government. The number of people receiving mobility allowance has risen from fewer than 100,000 to more than 600,000. The number of people receiving attendance allowance has risen from about 250,000 to well over 750,000. In addition, the number of people receiving invalid care allowance has risen from 5,000 to 150,000—[HON. MEMBERS: "Those are just numbers."] It is all very well to say that those are just numbers but, as I said at the outset, I am interested in trying to help people who need help to be better off.
Even allowing for a measure of overlap of people receiving both attendance allowance and mobility allowance, in my judgment there is no way in which those figures could mean less than the fact that 1 million disabled people, who were not getting those benefits when the present Government took office, now have a significantly higher standard of living as a result of what has transpired while this Government have been in office.
How can the Secretary of State say that he is interested in helping people when his Government have increased VAT from 8 per cent. to 17.5 per cent. while they have been in office? What has been the effect of that? Will he tell us the real problems that that increase and imposition have presented to elderly and sick people? Tell us its impact on people in poverty.
The rates of taxation—whether indirect or direct—are taken into account when calculating the figures about which I had exchanges with the hon. Member for Birkenhead a few moments ago. The plain fact remains that the Select Committee concluded that real incomes have been rising right across the income band—
No, I shall not give way again for a moment.
Apart from what has already been achieved in respect of the incomes of pensioners generally and in terms of directing additional help towards the less-well-off pensioners, which we have been doing consistently now for several years, and quite apart from the consistent improvements in the range and coverage of benefits for disabled people, we are now building on all that with the steps that we took at the time of the uprating in April.
The further real increase in income support premiums for older and more disabled pensioners, the introduction of new disability benefits—I stress that they are new disability benefits—which will give real extra help of at least £11.55 per week to about 300,000 disabled people over and above the numbers that I have given previously for what has happened in the past 10 to 12 years, and the changes in family credit to which, in the interests of keeping my speech brief, I have not referred will all enhance both the opportunities and the incomes of several tens of thousands of low-income families with children.
Even if the allegations that the hon. Member for Oldham, West has made about the scale of poverty could be made to run, and even if his proposed remedies were thought to be the right ones—on at least one occasion his hon. Friend the Member for Birkenhead has suggested that he has some doubts about that—the plainly observable fact is that the policies of the hon. Gentleman and his party simply do not add up. A glaring gap in our debate so far has been that the hon. Gentleman has not sought to deal with that point, although this is the second time that it has happened within a year.
Last March, we had the mini-shambles of the so-called "shadow Budget" which, if I remember rightly, did not even mention the so-called "priority" of retirement pensions. It contained what the hon. Gentleman described as a "carefully costed" proposal on child benefit which would have given money to every family except the least well-off—[Interruption.]—despite the fact that the document claimed that Labour's plans would give most help to low-income households. Just as that embarrassment might have been thought to be behind them, we have had the macro-shambles of what has happened in the past month.
First of all, there were the newspaper reports that other members of the shadow Cabinet were deeply frustrated with the way in which, true to form, the hon. Member for Oldham, West hijacked any extra cash that might be squeezed out of the taxpayer—to put it as the press reported it.
I am not giving way for the moment.
Those newspaper reports left me with a sense of deja vu. They reminded me of a report in The Guardian of 19 July 1986 under the heading "Labour clash on Meacher 'shopping list'". It said that the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley), now the deputy leader of the Labour party, and the hon. Member for Oldham, West were
in serious dispute last night about election promises on public expenditure".
There were some interesting bits in the report, which could have been re-run by The Guardian in the past week or two.
The self-same deputy leader of the Labour party said in the article:
Committing the party to doing specific things, at a specific cost, at specific times, will not improve our electoral prospects.
The article also said:
In particular, the failure to spell out in detail new tax and insurance rates for higher earners is thought by Mr. Hattersley and some other colleagues to be a propaganda gift to the Government.
All that I can say is that the attempt to spell them out has been an even bigger propaganda gift to the Government in the past few weeks.
Then, after that little flurry, we had the leader of the Labour party himself, no less, writing his new year letter to tens of thousands of households—I am not even sure that the figure given was not a million. I have the letter here. In it he promised, as indeed the hon. Member for Oldham, West attempted to do this afternoon:
anyone earning less than £21,000 annually … will not pay a penny extra in income tax or in national insurance".
That is simply not true, and I think that the hon. Member
for Oldham, West knows it—and even acknowledged it in his speech. He chose to wave it away by saying that it would be only a few tens or hundreds.
A great many more people than that will pay more. Anyone who receives regular payments for commission or bonuses or who does substantial amounts of overtime will be significantly hit by the plans that the hon. Gentleman espouses and reiterated this afternoon. If he intends to continue espousing those plans, he had better drop that guarantee, because it is simply not true.
On specific costs and promises, I wonder whether the Secretary of State could tell us what are his Government's specific promises—should they ever win the next election—in respect of pensions, child benefit and disability benefits? Is the right hon. Gentleman still holding to the position that those will all be increased in line with inflation?
The hon. Gentleman knows that, at this very moment, our commitments are those which we will implement in the April uprating. Of course, our general policies for the future will be set out when the time comes in a manifesto for the electorate. But I can tell the hon. Gentleman now, because we have made it clear on each and every front in recent weeks. We have made it clear that child benefit will be uprated in line with inflation. We have made it clear, despite repeated attempts by the hon. Member for Oldham, West to suggest otherwise, that we remain absolutely committed to the retirement pension and to protecting it against increases in prices. The hon. Gentleman need not doubt our continued commitment to protecting the value of disability benefits such as those I have talked about this afternoon, at a time when, far from cutting support to disabled people, we are extending those benefits.
I thank the Secretary of State for giving way again. I am pleased to hear his assurances that increases in all those benefits will be related to the rise in inflation. He will have read the survey published by, not the Labour party—our costings do not have a party political basis, unlike those of the Secretary of State—but Midland Montagu, a respected and one could hardly say pro-Labour organisation. It concluded that, if they were kept, the Secretary of State's promises would cost another £25 billion in public expenditure. How does the right hon. Gentleman intend to pay for it, if he is elected?
That is a nonsense point. The Government's commitments on price protection or other uprating conventions for social security benefits are allowed for in the Government's public expenditure plans.
Published, well known, well set out and beautifully presented plans.
The point about the commitments that the hon. Gentleman and his hon. Friend make is that they are over and above the Government's carefully costed commitments. The hon. Gentleman cannot get out of the cost of his proposals unless he is prepared to tell me that he will go back on the commitments that we have made. He will not, will he?
I am happy to continue the dialogue with the Secretary of State. The Midland Montagu survey—not a party political survey and not one with which I would necessarily agree in every detail—says that the Secretary of State's proposals, as outlined today, would cost an additional £25 billion. Those are the words of an independent survey. Apparently, the whole Conservative package comes to an extra £35 billion.
Again, these are not statements which go on the hoardings. They are not party political propaganda. They are part of an independent survey. I give the Secretary of State the chance again, as my hon. Friend the Member for Birkenhead (Mr. Field) gave him the chance on four occasions, to answer the question directly—how will a new Conservative Government pay for it?
As I have already said, the point is a complete nonsense point. Our commitments are part of carefully costed plans published in the ordinary way. It does not alter the fact that the Opposition's promises would not reduce the commitments that have already been entered into and planned for. The Opposition would pile another £37 billion on top of them.
That point brings me to the dog which astonishingly has not barked during the debate. It is the answer to the questions which everyone in the House and outside has asked in the light of the incredible confusion of recent weeks, when the whole package that Labour had said was carefully worked out and costed crashed into splinters on a dinner table in Luigi's in Covent Garden.
It may be that this afternoon the hon. Member for Oldham, West has answered one of the questions—whether the priority pledges are still priority pledges. I think that it could be read into his remarks that they are. But there were only two priority pledges in everything that we have heard until now. There is another in the motion, and the hon. Gentleman referred to it in his speech. It is the restoration of the earnings link.
If that is a priority pledge, is it also for immediate implementation? If so, that is another substantial increase in the Labour party's "immediate bill"—to use its words—which it does not know how to meet. Is the hon. Member for Oldham, West going to answer these questions? They are the questions to which everyone wants to know the answer. Indeed, we need to know the answer to have any chance whatever of judging just what Opposition Members think they are saying. If the hon. Gentleman does not want to answer—
The Secretary of State is getting very nervous in his fabrication of bogus questions. We have made it absolutely clear that the pensions link with earnings will be restored. [HON. MEMBERS: "When?"] Perhaps Conservative Members who want to know the exact date when all these changes will be made will answer the question that my hon. Friend the Member for Nottingham, North (Mr. Allen) just asked. The Government propose to cut income tax by 5p, from 25p to 20p. At what rate will it be phased in? All in the first year? Or 1p a year? How will it be paid for? That is not in the Government's public expenditure plans.
The hon. Gentleman knows perfectly well that any reduction in income tax will be subject to all the usual considerations at a particular point in time and that no commitment has been made about specific timing.
No, I shall not give way, as this is important.
We are faced with something quite different from any aim that the Government might have to reduce income tax further. As I understand it—the hon. Member for Oldham, West can tell me if I am wrong—we are confronting firm commitments, which have frequently been reiterated, to implement promises on child benefit and the retirement pension immediately. The hon. Gentleman does not dispute that.
In the motion, the hon. Member for Oldham, West has linked a third ingredient—the earnings link—which had never been put in those terms before. That implies that it should be seen in those terms. I can only read into what the hon. Member for Nottingham, North (Mr. Allen) has just said the fact that restoration of the earnings link is not a priority for immediate implementation but what the hon.
Member for Derby, South (Mrs. Beckett) would describe as a "desirable aim"—this year, next year, some time or never.
Could my right hon. Friend help me in my confusion? I thought that I heard the hon. Member for Nottingham, North (Mr. Allen) say that he felt that our social security programme was too expensive and that Midland Montagu had quoted a price of about £25 billion. Did my right hon. Friend gather from that that the Labour party was thinking of cutting our social security expenditure programme? If expenditure were to increase above that, how is the money to be found?
Would my right hon. Friend kindly help me, because I am increasingly confused by the fact that the hon. Member for Oldham, West (Mr. Meacher) has said that the Labour party programme will include a link with earnings for retirement pensions. Government may have some control over inflation, but it is absolute pie in the sky for any party to say that a link could be attached to average earnings, over which there is no control.
My hon. Friend underlines the argument I was seeking to make in response to the hon. Member for Nottingham, North. Of course, the Government have clearly set out, in a variety of documents, their forward commitments on public expenditure. Nothing suggested by the Labour party would reduce those commitments, but it has put forward a wide range of proposals—including the proposal that my hon. Friend adverts to—which would increase those commitments by about £37 billion, and we do not yet know how that will be paid for. We do not even know how the so-called immediate priority commitments would be paid for.
From widely reported events involving the Leader of the Opposition, we understand that the critical ingredient—the removal of the upper earnings limit—is likely to be phased in. Will it be phased in? If so, how? Will those closer to the earnings limit—the less well-off—get the first bash, or will all those involved pay 5 per cent. in the first year, 7 per cent. in the second and reach 9 per cent. in the third? In that case, phasing in simply means that the same group of people will be clobbered not once but year in, year out, for as long as it takes to get the money.
Crucially, since we were told that the package was carefully costed and balanced, if revenue is to be phased in, will commitments be phased in too? Do they cease to be immediate priorities?
I sense that I shall get no further answers, and I conclude by saying that the hon. Gentleman's statistics do not add up and his financial calculations and policies do not stand up. Both the House and the country will rightly conclude that they should vote his motion down.
I do not intend to continue the conversation about statistics as the Secretary of State has largely conceded that argument. I merely put on record that his quotations from the report of the Select Committee on Social Security were highly selective, especially the crucial quotation about average living standards having increased. Under the Government's stewardship, the poorest people have received the smallest increase. I hope that before the end of the debate someone will have read the report for the Secretary of State and passed him a note so that his junior colleague can put that on record.
I wish to mention some of my constituents who are now without hope because of the policies pursued by the Government. I do not say that everyone in Birkenhead is in that position, nor that some people have not managed to improve their lot during the Government's stewardship, but I wish to register the fact that destroying people's hope destroys something important for their status as citizens and I shall devote the four minutes of my contribution to that.
I hope that if I introduce some of my constituents to the House and to the Secretary of State, the right hon. Gentleman will instruct the junior Minister to provide in his reply the message that he wishes me to take home to them.
Apart from the Whip's general comment, for the first group we want immediate hope rather than waiting until April or May. The first group comprises those who have left school and have no work and are not on a training course. The Government made a promise about the courses that would be available, but they have shifted on that. I refer not to the Department of Social Security but to the Department of Employment. There was a specific promise that people not at school and not in work would be guaranteed a training place. That has been relegated to a general promise, but my young constituents are not covered by a general promise—they are individuals, and a small army of them do not have the training places that they want and have great difficulty in drawing benefit. What message does the Secretary of State want me to take home to them?
The second group are those who have left school with no hope of finding work. As the unemployment figures rise, more people's heads are pushed below the sea of unemployment and remain below it for some considerable time. A group of people in Birkenhead, after leaving school and trying and failing to get work, are now bringing up families but have never known what it is like to work. What hope has the Secretary of State to offer them? They are not terribly interested in the figures that he is bandying across the Dispatch Box. They want the chance to work. What concrete hope does he hold out for them?
Thirdly, what hope does the Secretary of State hold out for the young mother who came to my surgery and matter of factly described the difference between sleeping on the floor of her parents-in-law's home, which is carpeted, and sleeping on her own floor with no carpet? What hope does he hold out for my constitutents who find themselves in that position? What hope does the Secretary of State hold out for other young constituents who, after years without work, have managed to find it? One constituent, because he had to get to work before public transport started running in the morning, had to buy a bicycle to get through the Mersey tunnel to work. Because he wanted to work, he snatched at that opportunity. The employer, knowing his power because many other young people wanted the job, played the field and sacked him. Now he has to meet the debt caused by the bicycle. He searched again for a job and found one in Chester. The employer, aware of his powerful position, would not pay in advance but told my constituent that he would have to exist in some way or other until the normal pay day came round. Given the rules that the Department operates, what hope does the right hon. Gentleman hold out for such young constituents who are struggling for work?
The debate is about showing that, whereas some people are not at the bottom of the pile, many are just a few wage packets or salary cheques from being pushed to the bottom.
A constituent of mine, who worked at Cammell Laird, had a heart attack. The first correspondence that he received from the company after the heart attack was to tell him that he had been made redundant. He has two young sons; one is working and the other is not. The working son earns a low wage and the other is on benefit and therefore should be making a contribution toward the costs of the household. As the Minister knows, the benefit for those in that son's age group is desperately low. But the son in work earns even less than the son on benefit and finds it even more difficult to make a contribution to the household.
That former worker at Laird's told me with great pride that the one great thing that he has done is to bring up a loving family. That is his great treasure, but he now realises that if he and his wife are to survive and get the extra help that they need, he will have to put his sons out. More help would then be available because the sons would not be considered as part of the household. That is the way the Government have been destroying hope over a long period.
The next election will not be fought on the finer points of the Select Committee report or what consultants say will be the costs of the next programmes: it will be fought, I hope, on the fact that the Labour party appreciates what the difficulties are and is determined in the next Parliament to give back hope to those people at the bottom of society who have had their hope destroyed by the Conservative Government.
It is always a privilege to follow the hon. Member for Birkenhead (Mr. Field). I have been lucky enough to do so on a number of occasions in social security debates. I hope that he will forgive me if I do not follow the comments that he so movingly made about his constituents.
I think that it was Abraham Lincoln who said 140 years ago:
You can fool all the people some of the time, and some of the people all the time, but you cannot fool all the people all of the time.
In the past few months, and certainly in the past three weeks, the Labour party has been trying to defy that norm and to fool all the people all of the time. The hon. Members for Nottingham, North (Mr. Allen) and for Oldham, West (Mr. Meacher) have been trawling up and down the country trying to outbid each other in the promises and commitments that they have made to special interest groups in the sole desire to win votes for the Labour party at the next general election.
I shall give way when I finish the point. The hon. Members for Nottingham, North and for Oldham, West have visited groups of young mothers, the elderly, pregnant mothers, young people, and the long-term unemployed and promised them all more money. What is happening is a cruel deception. Those hon. Members are speaking to audiences and telling them what they think those people want to hear in the hope that they will vote for the Labour party when polling day comes. I am happy to give way to the hon. Member for Nottingham, North now.
I am grateful to have silenced the hon. Gentleman. That does not happen often.
What groups have not been singled out by the Tweedledum and Tweedledee of British politics in their grubby pursuit of votes for the Labour party? It is like a magic roundabout—and when the roundabout comes full circle they are not lost for time, but start again outbidding each other with further promises to all those special interest groups to try to secure their votes.
We have a further problem, although it does not seem to matter to the hon. Member for Oldham, West, when it comes to what has become known in British political history as "Beckett's law". The Labour party is spreading pledges of spending money like confetti, but Beckett's law states that only child benefit and pensions will be the priority. However, we learned last night in the debate on the autumn statement that a third priority is to be added to Beckett's law, relating to industrial policy.
The shadow Department of Social Security team has pledged £15 billion of spending commitments. That is no more than a cynical attempt to win votes. The Opposition are building up hopes and expectations, but if we were ever unfortunate enough to have a Labour Government, those aspirations would be cruelly destroyed by the reality of office because the Labour party has no ability to honour so many of the pledges that it has made.
For party political reasons, the Labour party refuses to recognise what has been done by the Government to help the genuinely less well off, the disabled, the unemployed, the elderly and the sick. In the past 12 years, a great deal has been done. It ill befits any politician to criticise the efforts of my right hon. Friend the Secretary of State. As a junior Minister, and as a Cabinet Minister with responsibility for social security, he has fought his corner decisively to ensure that more money is made available by the mandarins at the Treasury to help the less well off in our society.
No one listening to the doom and gloom of the hon. Member for Oldham, West would fully appreciate the exact size of our social security budget. From April this year, the social security budget will be more than £70 billion per year. Those hon. Members who do not appreciate the sheer size of that budget should bear in mind that it is equivalent to £1.35 billion per week, £192 million per day or £8 million for every hour of every day of every week of the year. That is all being spent to provide for the less well off in society. It is a pity that the Opposition do not have the decency and integrity to acknowledge that fact and to mention it once or twice.
One would think that there was not a penny in the social security budget if one listened to the hon. Members for Nottingham, North and for Oldham, West day after day in the Chamber and in the country. They complain about and cry down every Government addition to the social security budget. As my right hon. Friend the Secretary of State said in his speech, and as I said in an intervention on the hon. Member for Oldham, West, they fail to do justice to the fact that pensions have increased in real terms and money for the sick and the disabled has increased in the past 12 years. I honestly believe that a little more credit should be given for the money that has gone in particular to the sick and disabled to help them in their times of crisis and to make their lives better. In 1988, eight out of 10 pensioners had extra income from savings, compared with six out of 10 under the previous Labour Government, and 73 per cent. have additional occupational pensions compared with 52 per cent. in 1979. We have heard no mention of family credit, which helps a record 356,000 families—four times as many as those helped under the old family income supplement in 1979.
We have heard little today from the Opposition about the substantial extra help given to pensioners over 75 and to those below that age who are disabled. Apart from their hollow spending promises, Labour's only answer is a minimum wage. Imagine the fatuous reality of implementing that proposal in this country. A minimum wage would do more to put people out of work than any help it was designed to give. Experience in France and the United States shows that a minimum wage is a con. It would be a con on the British people, for while it sounds simplistically attractive in principle, in practice it would cause more misery by causing more job losses.
Labour also proposes the introduction of a pickpocket tax that would have made Fagin proud to be associated with it. It would mean more money being taken from the people—[Interruption.] I refer, of course, to the proposal to abolish the ceiling on national insurance contributions. Many more people would be hit by that than Labour Members dare to mention. That has become obvious in the past two weeks in the shambles and infighting among members of the shadow Cabinet, who fear that Labour has been rumbled in terms of its tax and national insurance plans.
The Opposition motion is a sham and should be seen as such. The country at large should accept that dogs bark, cats miaow, and Labour taxes and spends.
I hope that the hon. Member for Chelmsford (Mr. Burns) will forgive me if I do not adopt his approach to the debate. I would prefer—if I had to choose—the approach of the hon. Member for Birkenhead (Mr. Field).
I hope that we shall take the opportunity of the public discussions that will take place in the period leading up to the general election to try as best we can—I appreciate the party political pressures—to transform the debate to enable ordinary people to understand what is going on. When we come to the fine detail of issues, it is easy to lose people, especially when we refer to large sums of money. For example, £35 billion does not mean a lot to people in Hawick high street. We forget that in the heat of political jousting. I make no complaint about that, because I shall be doing my fair share of dishing it out when the time comes. Let us bear that in mind as we near the election.
There are two ways of considering social security provision and the system as a whole. The Conservatives are more in favour—I put it no higher than that—of a low tax, low benefit system. They have been moving over the years in the direction of the American system—[Interruption.] I think I see the Minister of State dissenting from that view. I do not say that our system is anything like as freewheeling and inadequate as the American, but that is the direction in which we have been going. If there had to be a choice between two systems, it is fair to say that the continuing trend that we have experienced under Conservative rule in the last 12 years has been to make provision, but to try to constrain the benefits system while maintaining a low-tax economy.
The alternative system—this is common ground, certainly bearing in mind the remarks of the hon. Member for Oldham, West (Mr. Meacher)—represents a trend in the opposite direction. We on the Opposition Benches would be prepared to carry a higher burden of taxation and to redeploy or redistribute the money in as sensible a way as possible. While there may be substantial differences between my party and Labour about how that money would be redeployed, I have basically described the divide between the two sides of the House.
In other words, the electorate have a clear choice. I am happy to go to the voters on the basic principle that they have a straight alternative between the Government position and the proposals of the Opposition parties. That is almost as far as one need go to enable people to make a sensible choice.
Even so, important subsidiary arguments can be brought to bear. The Government must defend their record. Like the hon. Member for Chelmsford, I dissent from the official Opposition view that everything that the Government have done has been a disaster. The Minister of State can take credit, along with the Secretary of State, who has fought his corner well—the Treasury has been the problem in many respects—for many of the changes for the good affecting the disabled.
The Government must defend their record in terms of the amount that the social security budget consumes because of the level of unemployment in Britain. In other words, part of the social security argument must be about the way in which the Conservatives have managed the economy. Indeed, if they continue to make the sort of mess that they have been making—particularly recalling the 1987–88 period, when they made substantial blunders as a result of deregulating the economy, with the explosion of credit and so on—we shall find ourselves in an even worse situation.
I fear that high levels of unemployment will be with us for much longer than we would like to see. If that turns out to be the case, our plans for long-term social security planning will have to be revised, even if the Conservatives are returned to power. After all, £35 billion will not go far in the next five to 10 years if chronically high levels of unemployment persist. So we must decide which side of the argument we are on. Do we want a transatlantic model of social security provision, or more of a European, collective scheme of the type that my hon. Friends and I favour?
We can have a meaningful debate about the way in which benefits are deployed. Having served on the Standing Committee which considered the Social Security Act 1986, certain areas of provision are causing me concern. I accept that recent increases in provision for the over-75s have helped, but the present generation of pensioners do not receive a basic level of support as a result of the changes that were made in the 1986 Act. Some of the changes resulting from that legislation have been welcome, but major problems must be addressed because of the structure that was created by that Act.
The provision made for those in the 16-to-17 and, generally, the under-25 age groups must be reconsidered, because there have been some unforeseen consequences of that legislation. Some of those changes are being seen in the streets now. I feel sure that that was not the Government's intention, and that they are as concerned as anyone else to remedy matters. Whatever the complexion of the next Government, they will have to deal with those issues.
I am concerned about the way in which the social fund changes have been made. I have constituents with what I consider to be bona fide claims which the social fund cannot meet, and the next Administration, whatever their complexion, will have to deal with those. I have not seen the Secretary of State lose many arguments in exchanges across the Floor of the House, but he lost substantially when he took on the hon. Member for Birkenhead after having foolishly quoted selectively from the Select Committee report.
While I am willing to hear the Government's answer, it seems incontrovertible that the bottom one fifth, particularly pensioners, have lost in the total income increase of 31 per cent. between 1979 and 1987. That poorest fifth receives a 19 per cent. increase. If that is allowed to continue year in, year out, the next Government will have to deal with it one way or another. It may be expensive, and they may have to be ingenious in how they target the money. I do not care how it is done, but something must be done in the medium to long term to cope with the problem.
We have spent precious little time debating the levels of benefit. We must look much more carefully at how the demographic structure is changing. The "Social Trends" report published recently makes an important contribution to that. It has become difficult to describe family structure, which has become a meaningless concept, because there is such a diverse and wide range of combinations, and it is becoming ever more complicated. That may be good or bad—I make no judgment—but, in trying to deal with income problems from the social security bunker, we can easily forget that some of the overlapping changes in the population's social structure have a severe and dramatic impact.
I am particularly concerned about the impact of long-term unemployment on the hope in people's hearts, to which the hon. Member for Birkenhead referred. The social security system may not be adequate to deal with that, and the voluntary sector may have a role to play. I do not suggest that the voluntary sector in terms of charity should replace the money provided, but it could play a greater role. Finally, I am very worried about rural poverty. My constituency is a rural area and it looks idyllic, as Ministers who have visited it will confirm. Of my 103,000 constituents, 5,000 pensioners and 6,000 non-pensioners are on income support. If dependants' families are counted, some 17,000 people are dependent on income support in the borders and south-east Scotland. The poor are getting poorer, and rural poverty is beginning to be an issue for the first time since I came to the House in 1983. I hope that the Government will do something about that.
If the Minister of State wants to do something immediately, will he talk to the Benefits Agency about the relocation of the cold weather payment temperature station? I have just checked the figures, and I have found that the Eskdalemuir station has been triggered 11 times in the past six years. The newly selected Boulmer station, which serves a large chunk of my constituency since the recent changes, has been triggered only once in that period. The system may have been unfair before, but it is now extremely unfair. I shall take the Minister to Eskdalemuir and Boulmer if he would like to come. He had better bring his kilt and his thermal underwear, because the point will be made to him graphically. If some of those points were made to the DSS, a better system could be introduced.
I rise to oppose the Opposition motion and to support the Prime Minister's amendment because real freedom is economic, and the freedom to earn and spend one's own money as one wishes, untrammelled by state control, is the truest freedom of all.
When I consider how the Government have managed to increase the economic freedom of the British people, I see a good track record. That is why, despite my lifetime's work for those in need in the United Kingdom and overseas, in common with the work of so many colleagues in the House, I do not believe that the Opposition's vision of the United Kingdom is realistic. Indeed, were the Opposition to reach the status of Government for which they fight so hard, growth in the United Kingdom would be badly hindered because we would have lost our product champion. The Conservative party can champion the United Kingdom, but the Opposition cannot do so because their vision of this country growing ever poorer is ever further from reality.
Since 1979, the net disposable income of the average family has risen by 37 per cent.—a truly massive increase. I am sorry that there is a recession, but it is, after all, world wide and not unique to Britain. Despite the recession, Britain has achieved 800,000 new jobs since 1979. In addition, 3 million new firms have been created, which is nearly a two thirds increase in the number of businesses. Despite the depressing figures pumped out by the Opposition on firms going bankrupt and companies going into liquidation, in the past 12 months for which figures are available there were only 30,000 insolvencies—just 3 per cent. of the total number of firms in the United Kingdom.
The authoritative low income statistics produced by the Select Committee on Social Security in May 1991 and commissioned by the independent Institute for Fiscal Studies show that real disposable incomes grew by more than 30 per cent. between 1979 and 1988, with increases in real income at all levels of the income scale. I mentioned earlier that the net disposable income of the average family had risen by 37 per cent. Although averages are difficult to grasp when one is feeling the pinch, which is an uncomfortable position to be in, real disposable incomes in the United Kingdom as a whole rose by nearly a third. Indeed, households at the very bottom income decile saw their incomes rise by 9.5 per cent. during that period. Less well-off families with children also saw large increases.
The incomes of non-pensioner couples in the bottom half of the income bracket with children rose by 19 per cent. in real terms, and even the poorest fifth of full-time workers were 21 per cent. better off in 1988 than in 1981. According to the Select Committee report, the number of people on less than half the average income in 1979—when that is held constant in real terms—fell from 3.7 million to 2.5 million. Those who were pensioners in the bottom half of the income decile fell from 29 per cent. to 23 per cent., with a consequent fall also in the number of pensioners.
Statisticians know how difficult it is to make meaningful comparisons. The Library managed to give me an index showing wages and salaries in 48 major cities. On this basis, London is 24th in terms of gross salary and 22nd in terms of net salary. That means that people here get a higher net salary than people in Stockholm or in Paris. On top of that, believe it or not, house prices in the United Kingdom are relatively cheap, especially in comparison with Germany, one of our largest and most influential competitors.
Far from being able to support the Opposition motion, I put it to the House that this country and western Europe have had a long and perhaps unique period of growth over the past 12 years. The Opposition cannot pretend that that is due to their policies. It is due to good, solid, Conservative free market policies. I know that the Labour party says that it is no longer socialist, despite its continued return to centralism. But if socialist policies were able to achieve those much higher levels of income for the human race, why is it that the World bank and the International Monetary Fund, with their new conditionalities for helping the poorer countries of the world to improve their incomes, do not follow socialist policies? The new conditionalities that govern the lending proposals of the World bank and the IMF, the lending proposals that have helped poorer countries get upstairs in terms of income and share western European and British prosperity, are free market conditionalities. They are the free market with a heart—in other words, the true Conservative philosophy.
That is why I suggest that the Labour party is misleading the public grotesquely, sadly, disgracefully, abominably. I do not think that the public are willing to be misled. I honour the Labour party for trying to be the modern Robin Hood, but its facade of a modern Robin Hood will not work. I give one small example: despite the Labour party's social security promises to raise child benefit and payments to pensioners, an Opposition spokesman has already managed to account for nearly half that spending wish-list, £15 billion out of £35 billion, by talking about other commitments which are supposedly equally high priorities.
The truth is that the Labour party will not mislead the public sufficiently to be elected, because the public are too hard-headed. The country has grown wealthier and happier under our management and will continue to thrive.
I must say to the hon. Member for Torridge and Devon, West (Miss Nicholson) that "Social Trends", published yesterday, shows that the incomes of the top 5 per cent. of the population have increased, whereas the incomes of the bottom 5 per cent. have fallen. That is the answer to many of her points.
I represent one of the poorest constituencies in the country, a constituency in Tower Hamlets. I can cite, from experience at my surgery, hundreds of cases of poverty and people living in hardship that would wring the hearts of even Conservative Members. I shall deal with statistics that draw together different sections of the population and show what is happening and how poverty is increasing. I shall mostly use official Government statistics on households with below average incomes.
The Government have tried repeatedly to change the definition of poverty. They accept that, if a person is dying of starvation, he or she is living in poverty. But they will not accept what most people believe, that if one cannot keep up with the community in which one is living, if one cannot send one's children properly clothed and shod to school and give them enough money to take part in extra-curricular activities, if one cannot give them a decent meal and some presents at Christmas—in other words, keep within the society on a decent level—one is poor and living in poverty.
The attempt to redefine poverty has gone on for a long time. In May 1989, the right hon. Member for Croydon, Central (Mr. Moore), the then Secretary of State for Social Security, made a speech under the heading, "The end of the line for poverty", in which he had the cheek to claim that poverty no longer existed in Britain. Other Conservative Members have also tried to make that point. The storm that that speech provoked proved to be the end of the line for the right hon. Gentleman. He should have known better, because he told me at one time that he grew up in the east end of London. But he did not know better—he had forgotten what poverty was.
The Government continually try to fiddle figures. Unfortunately, despite their attempt to appear to abolish poverty, it has continued to increase. They try to abolish the word from their official reports instead of trying to abolish poverty itself.
In 1989, the Government's own manicured figures showed that the number of people at or below supplementary benefit level had grown by more than 50 per cent. Their response was merely to abolish the low-income family statistical series and replace it with the households below average income series, which they hoped would disguise the trend of increasing poverty. Unfortunately, the trend was so stark that no amount of statistical manipulation could make it vanish.
The Government's statistics show that the number of people in families earning below 50 per cent. of average income did not just double between 1979 and 1988, but increased by more than two and a half times from 4,930,000 to 11,750,000. The figure of 10 million has been quoted, but the Government's statistics show that it was 11,750,000. Those statistics have been confirmed by independent researchers, such as the Breadline British team, who carry out scientific studies of poverty and deprivation in Britain today. The figures also show that more than 11 million people live in direst poverty—that means that 20 per cent. of the population and more than 25 per cent. of our children live on or below the breadline. That is a dreadful picture, but it is true.
Margaret Thatcher repeatedly claimed—
I am sorry. The previous Prime Minister—[Interruption.]—repeatedly claimed that everyone had become better off under the Conservatives. What a terrible slip: I am sure that hon. Gentlemen are very worried that I used the name instead of the constituency, but I doubt that the unemployed will worry unduly.
The Government's statistics state that in 1979 there were 1 million unemployed people in Britain, but in 1988 there were more than 2.5 million unemployed people living in poverty. I believe that there are many more than 2.5 million unemployed people living in poverty, but let us take that figure, which is awful enough. The families of these unemployed people have not done better under the Conservatives.
Then there are the pensioners. In 1979, there were just over 1 million pensioners living in poverty. By 1988, there were more than 3.5 million. Those people have not done better under the Conservatives. In 1979, there were just over 1 million low-paid full-time workers living in poverty. In 1988 the number had risen to 2.5 million. Low-paid workers have not done better under the Conservatives either. In 1979, there were 500,000 single parents living in poverty. In 1988, there were 1.5 million.
By 1988, 1.5 million single parents, three quarters of all single-parent families, lived in poverty. They have not done better under the Conservatives.
The last group I want to mention was dealt with at length by the Minister—the sick and the disabled. The increases in benefits for the sick and the disabled have not been sufficient to shield even them from the overall effects of Government policies. Yesterday's "Social Trends" showed that, whereas the top 5 per cent. of the population spent 12.4 per cent. of their income on indirect taxation, indirect taxation took up 24 per cent. of the income of those in the bottom 5 per cent., which includes the sick and disabled. That is just one example. By 1988, three quarters of a million sick and disabled people were living on low incomes. Clearly, they are not better off under the Conservatives.
The increase in poverty has taken a terrible toll. Its effects can be seen by everyone in the number of youngsters begging in the streets. I remember going to Paris with my school the year before the war, when I was 15, and seeing beggars outside Notre Dame. I was shocked because it was the first time that I had ever seen beggars. One did not see beggars even during the depression but now one can see them everywhere on our streets. While we sit in the warm and dry, thousands of old people sit huddled over one-bar fires in cold, damp houses. Those are the terrible effects of poverty.
Poverty has also had an effect on health. Look at the statistics. For 150 years, the death rate for young males between the ages of one and 44 had been falling—the only interruption in that decline being the slaughter of young men during two world wars. Now doctors save more and more lives but, since 1985, the death rate for males in that age group has started to increase. The Government have managed to achieve what previously only the German armies achieved. Why are young men dying? [HON. MEMBERS: "Oh, come on."] Okay. Of the richer countries in the world, only Britain and America, which pursues the same voodoo economics as we do, have an increasing death rate among young males. The Registrar-General's report and the report of the Office of Population, Censuses and Surveys—the House will admit that that is not a biased Labour report—stated that the main causes of the decline were poor diet and suicide. In the past 12 years, the suicide rate of young men has risen dramatically—by 50 per cent.
The desperation caused by poverty is increasing and making more and more young men suicidal, but it is women who are bearing the brunt of that increasing poverty. They have to absorb and handle the whole family's emotional turmoil, trauma and despair caused by unemployment. They also make up the majority in all the disadvantaged groups whom I have mentioned. They are the majority of pensioners and, therefore, of the sick and disabled. They are the majority of low-paid part-time workers. They are the majority of single parents. They are also the widows of those who have died prematurely. Women are certainly not better off under the Conservatives.
I wish to address the issue of poverty in my constituency and as it affects many of my constituents, and to focus specifically on the related issues of ill health, unemployment, old age and inequality.
I represent a diverse constituency made up of deeply rural, scattered, ex-mining villages—geographically isolated and suffering from heavy structural unemployment—and large so-called peripheral housing estates, housing people from the conurbations of Middlesbrough and Stockton. Those areas too suffer from high and continuing unemployment—its effects made worse by the comparative isolation from the facilities of central Middlesbrough and from families and friends still living in the town.
I do not intend to be emotional on these subjects—although emotions certainly run high when local people discuss the Government's wicked and callous neglect of areas such as Langbaurgh. I intend to make the figures speak for themselves.
Experts have long recognised that there is a causal relationship between unemployment and ill health. Much of the pioneering work on the subject was carried out on Teesside—in particular in Stockton-on-Tees—in the early 1930s, when empirical and sustainable evidence was first produced to suggest that the links between health, nutrition, disposable income and work patterns were strong, lifelong and of the community and—perhaps most important in today's terms—that the problems were solvable.
It is perhaps a mark of how similar the 1930s and the present day have been on Teesside that the work has been taken up again. In the late 1980s, Cleveland county council, together with representatives of the community health councils in the county and the then family practitioner committee, issued a report on the health divide which appeared to characterise the Cleveland community. The report—called "The Health Legacy"—showed comprehensively and conclusively that, in terms of physical health, there was a clear link between poverty and unemployment and ill health. The study showed that, according to the figures available, above-average death rates resulted in more than 800 extra deaths per year. Deaths from diseases of the lung were running at 25 per cent. above average. People in Cleveland die almost two years younger than other members of the wider community.
The links between poverty and ill health were graphically depicted. In parts of the borough of Langbaurgh where, as a result of the Government's policies, unemployment and poverty are part of the social landscape, the mortality rate rises to as much as 50 per cent. above the national rate and can be twice as high as in the more fortunate parts of the county of Cleveland. Put simply, the gulf in health and mortality between the rich and the poor in Cleveland is among the most extreme in the whole of the United Kingdom and some local people in areas of high disadvantage can expect to live 10 years less than those in the more affluent suburbs.
I represent parts of the county where the picture is bleakest. The study to which I referred earlier—"The Health Legacy"—showed that the east Cleveland villages of Skinningrove and Brotton and the south Middlesbrough overspill estate of Hemlington have 'standardised mortality ratios'—the official measure of the death rate—running between 15 and 50 per cent. above the national average. To put it quite simply, there are communities in my constituency where, because of the high incidence of unemployment and low income, people have a lower expectation of life and a more unhealthy existence than anyone living in the comparative comfort of southern England—and certainly of anyone here tonight.
It is not just a question of unemployment. Ageing, ill health and poverty are all linked. The elderly are the largest single group living on low incomes in my constituency—25 per cent. The majority are widowed, live alone and are utterly vulnerable to the effects of poverty, many having no occupational pension. Labour Members know—and Conservative Members know privately, even if they have to deny it publicly—that basic state pensions have had the little purchasing power that they once possessed cut drastically. It is a simple fact—but one that needs to be uttered time and again—that, if earnings indexation had not been ended in 1980, the basic pension would now be £17.50 higher than it is. Nationally, one third of the elderly are below what we consider to be the poverty line—three times the rate for the population as a whole.
Elderly people also suffer in terms of access to what many people regard as normal parts of daily life. The mushroom growth of out-of-town retailing—shopping designed to meet the needs of the high-spending car owner—has forced many elderly people to use expensive estate stores, or even dearer mobile shops. The value of an already depleted pension is thus eroded even further.
The outline of poverty in Cleveland is sharply focused. The areas where poverty is at its worst are bleakly obvious. Unemployment and ill health are the most obvious features, but low wages, the loss of assured, continued employment, the break-up of marriages, the loss of stable family relationships, and eroded—indeed, almost valueless—benefits are all part of a deadly spiral that absorbs all too many of my constituents.
The dimensions of poverty are self-evident. The situation has worsened. The yawning gap between low incomes and high incomes has widened. Wealth generates wealth. Only last week, the Inland Revenue published figures showing that the richest 1 per cent. of the population own 18 per cent. of the nation's marketable wealth—the wealth contained in homes, household durables, savings and investments—whereas the poorest 50 per cent., or half of the population, own less than 6 per cent. of that marketable wealth.
The decline in mortality nationally has been more marked among manual workers and the unemployed than among the nation's white-collar workers, and there is evidence that this trend is accelerating. The Tory think tanks, which argued that wealth would trickle down, that increased prosperity for the rich would have an impact on the lives of the poor, have been shown to have been telling fairy stories. Instead of wealth trickling down, we have seen wealth streaming upwards.
The legacy of Lloyd George, Beveridge and Aneurin Bevan—a decent health and national insurance scheme—has been squandered in 13 short years. Benefits are dismal and have been eroded in value. In 1979, the state pension was 20 per cent. of average earnings. I believed then, and I still believe, that that figure was too low, but even it has been cut and now stands at 16 per cent.
I intended to speak about various other aspects of this matter——
I have been told from the Front Bench to wrap it up.
In conclusion, I have to say that, as a Member of Parliament representing an area where poverty is an inescapable fact of daily life and not merely a subject for a college lecture theatre, I am deeply and utterly angered by the conditions in which far too many of my constituents have to live. I am deeply angered too by the disinterested and offhand treatment meted out to the poor by the present Government. I have seen too much silent suffering, too many families faced with disintegration, to treat this matter as an idle debating foil.
The poorest in our society need a Labour Government. They need a Labour Government who recognise the importance of ordinary human needs; they need a Labour Government who have the insight, the ability and the muscle to change things for the better and to aid their own community in its task of mapping out its destiny. They need, above everything else, the knowledge that they can come out from the shadows to which they have been consigned by 13 years of Tory heartlessness and indifference.
My hon. Friends the Members for Bow and Poplar (Ms. Gordon) and for Langbaurgh (Dr. Kumar) have told the House how so many of their constituents are suffering as a result of Government policy. I wish to do likewise, and to do so by briefly making three points.
Undoubtedly, many pensioners live in great poverty. I understand that the Government do not deny this, but they say that most pensioners have improved their lot— something that we question. None the less, they do accept that many pensioners suffer hardship. Indeed, they could hardly deny it.
This week, I received from the Under-Secretary of State, the hon. Member for Maidstone (Miss Widdecombe), an interesting answer to a question that I had tabled. It illustrates only too well what we are concerned about and what we want to see changed. The junior Minister informed me that, according to the latest information, 22 per cent. of pensioners have an income of less than £60 per week.
Can hon. Members imagine what it is like to live on less than £60 a week? If there are Conservative Members who believe that it is easy, that no great hardship is involved, let them try it for just a short period. That is something that I have suggested before. According to the answer to which I have just referred, 38 per cent. of pensioners have an income of less than £70 a week. As the pension is increased only with price increases, any change that has occurred since those figures were provided cannot have made a great difference.
That is the background to this debate so far as a very large group of people—the pensioners—are concerned, leaving aside people of working age who are unemployed. When so many retired people in this country have to live on such incomes, it is clear that there is something wrong. It is understandable that so many pensioners should take the view that they are considerably worse off than pensioners in many other European Community countries.
I want to mention also the changes that occurred in 1980, when the link with earnings was broken. My hon. Friend the Member for Oldham, West (Mr. Meacher) said that pensioners had lost, I think, £23 a week. In fact, he was being too generous to the Government. A note that I have received from the Library shows that, if the pension had been increased in line with earnings since 1980, married couples would be better off, by April of this year, by £28 a week, and single people by £17.65. That is how much pensioners have lost. Had the link not been broken, pensioners would be that much better off.
The second matter concerns housing benefit and the changes made in 1988. Other figures in the answer to which I have referred are also interesting. I asked how much of the income was spent on rent and poll tax. The percentage is considerable. Those on less than £60 a week pay 20 per cent. of that in rent and poll tax, and someone with less than £70 a week pays 24 per cent., or nearly a quarter. That increases the poverty and the hardship, and it is something that must be changed when a Labour Government come to office.
The final point that I want to make is one that I have made repeatedly. It concerns the additional difficulties that those on low incomes experience during the winter months. In my view, the cold weather payment is inadequate. There ought to be a far more generous scheme. The payment is made only when the temperature falls to zero or below for seven consecutive days, and the amount is £5 a week.
But it is often very cold even when the temperature does not reach zero—as it is today. People on low incomes find it even more difficult to make ends meet when they have to try to keep their accommodation warm. It is very warm in this Chamber, and Members of Parliament, when they go home, do not have any difficulties about heating, but how on earth is it possible for anyone on less than £60 or £70 a week to keep a home adequately heated? I am, of course, taking into account any heating additions to income support. How do such people, during the winter months, pay electricity bills and gas bills? It is understandable that pensioners, fearful of receiving heating bills that they could not possibly meet, ensure that they economise. Unfortunately, many of them put themselves in danger of hypothermia and other health risks.
Figures and accusations have been bandied about today. I must be perfectly frank and say that I do not know whether a Labour Government could do everything that I should like done to relieve poverty. I shall not say that much of what I should like to see done could be done within the first few months, or even the first few years, of a Labour Government's term. However, my party is genuinely committed to trying to relieve the poverty that far too many people in this country are living in.
We are not talking about a few thousand or even a few hundred thousand. That would be bad enough—indeed, with any of our fellow citizens in such a plight we should be concerned—but we are talking about literally millions of people. I do not believe that there is genuine commitment on the part of Conservatives to end poverty. They have none of the commitment that we have.
If, when in office, a Labour Government are not doing as much as they should be, although I believe that they will take the right steps, there will be immense pressure from Labour Back Benchers—[HON. MEMBERS: "Ah!"] I do not apologise for saying that. I notice no such pressure from Tory Back Benchers on the Government, because, as I have said, they have no genuine commitment to ending the hardship and destitution which so many of our fellow citizens suffer. That is why we need a change of Government; we need a Labour Government, whenever the election is called, to try to sort out the difficulties that we have described tonight.
I welcome this debate because poverty can be a difficult issue to discuss. It is a great tribute to the Conservative party propaganda machine that poverty is not on the daily agenda and is not a matter of public outrage in every daily newspaper. I know that my right hon. Friend the Member for Birmingham, Sparkbrook (Mr. Hattersley) has some measures in mind to help free up the press in this country, which in turn will facilitate an open debate so that more and more people are made aware of the real causes of poverty.
Poverty is not given the importance that it deserves. There are some disabling popular prejudices about it. For instance, it is always something that affects other people. It is barely talked about even by many of those whom it affects. A tremendous stigma attaches to it. People feel a sense of personal failing, of unworthiness and of isolation—even of resignation. They feel that there is nothing that they can do about it. All of that must change if this nation is to get the best from people and if people are to make the best of themselves.
As though all of that were not enough, there is also the crushing weight of deliberate Government policy to contend with. For the first time in modern British history we have had a Government who, as a central plank of policy, have actively encouraged a fundamental redistribution of wealth from those who do not have to those who have plenty. There are many pretty ways to express that, but the Conservative vision of society, even at its one-nation softest, always demands a broad class of the poor for its philosophy to work. In the past 13 years it has been clear that greater poverty would always accompany the experiment of monetarism, and that the fate of people at the bottom would always be a price well worth paying—provided that it was paid by someone else. We can only guess at the social costs—he personality deformities, the distrust, the desperation, the promotion of criminality, the personal and family stress and the results of that in terms of broken marriages, broken homes and broken lives. Although it is obvious even to advocates of monetarism that the experiment has failed, its consequences will be with many of our people for a long time and perhaps for the whole of their lives.
In many ways the physical costs of poverty are easier to measure and thus easier to combat. We all know the problems of low pay. We know from statistics produced by the Low Pay Unit that the difference between people on the lowest and highest incomes is bigger now than it was in 1886. Many pensioners know that they cannot buy enough for their own needs. People on the state pension alone immediately fall below the poverty line and are eligible for income support, assuming that they claim it. Mothers know that child benefit was frozen, that the Government left it to wither on the vine for three years before they saw the election coming up. The list is a long one. My hon. Friend the Member for Oldham, West (Mr. Meacher) described it earlier: maternity grant abolished, earnings-related additions phased out, special needs payments abolished, unemployment benefit cut in real terms, benefit withdrawn from 16 and 17-year-olds, benefit cut for 17 to 25-year-olds.
Under the Conservative Government, the steady and deliberate creation of poverty has been endless—to the point at which one person in six lives below the official poverty line. That is the society that the Government have created and the situation that we shall need to terminate after we come before the electorate in the next few weeks. The electors will decide whether the society created by the Government, who did not even believe in society, must be changed. We certainly intend to change it.
The redistribution of wealth has not been accidental. It has been calculated and callous, it has been paid for by people on or below average incomes, and it represents the most massive attempt at social engineering in this country this century.
In the brief time that remains to me I shall outline one or two measures that we intend to take after 7 May. We shall have plenty of chances in the months and years ahead to right the wrongs of the Conservative Government. We shall start by implementing Labour's two pre-funded commitments. We shall immediately increase the pension for the single person by £5 and for the married couple by £8. Thereafter, we shall link increases in pensions to increases in earnings—the link that was so callously broken by the Conservatives in 1980. Ten million pensioners—[Interruption.] This is the bit that the Conservatives do not like. Ten million pensioners—not the top I per cent., not the people on£70,000 per year—will benefit from Labour's proposals.
We shall restore child benefit to the value that it had in 1987, making it £9.95 for every child, thereby ending the distinction between children in a family which means that some get more than others. That was a scandalous separation. This too will benefit not a handful of people on top tax rates but 7 million families.
After 7 May, those who have been abused by the Government will start to find just a little of what they have lost being returned to them. It says a great deal about our values that we place pensioners and mothers and children at the very top of our agenda—even above many other vital priorities. It says a great deal about our values and principles that for their sake we will endure the lies and misrepresentations about our tax policy which is necessary to pay for these people's security and peace of mind.
Before the hon. Gentleman goes too much further with his rhetoric, does he realise that about £1 billion of the money to which he has just referred will go to those in the top half of income distribution?
The Secretary of State should enjoy his last few weeks in office and not try to give us lectures—[HON. MEMBERS: "Answer."] We shall get there in good time. The right hon. Gentleman should not try to lecture us on redistribution. As the Treasury's man in the Department of Social Security, he has presided over the transfer of£31 billion from pensioners' pockets to causes that the Government believe in. We will take no lectures from him about that.
As resources permit, we shall introduce other measures to eliminate the list of poverty-creating Conservative measures. In addition to steps to alleviate direct poverty, we shall build pathways out of poverty across the whole range of Departments, including decent standards of training, better protection against discrimination, special attention to the needs of people with disabilities, improved statutory maternity protection, investment in child care facilities, and a vigorous campaign against the cheap "Arthur Daley" employers, spearheaded by the national minimum wage of £130 per week. It is clear from the reception of our plans by Members on the Government Benches that the policies are in place: in 14 weeks' time, so will be the people who will carry them out.
We have been treated for the past few minutes to what I can only describe as Labour's "dodgers' charter". The remarks of the hon. Member for Nottingham, North (Mr. Allen) contained not one reply to the questions that my right hon. Friend the Secretary of State put to the hon. Member for Oldham, West (Mr. Meacher) about Labour's pledges and Labour's financing of the false manifesto of ideas that they claim represents their policy on social security.
I shall come to those because we have a proud track record in social security. Anybody who can stand at this Dispatch Box and talk of a budget of more than £60,000 million as our expenditure pledges on social security can point to real policies, serving real people, with real benefit, and giving real hope to those who need our social security system. To hear the hon. Member for Nottingham, North talk about child benefit in a year when we have announced three increases in child benefit beggars description.
I remind the hon. Member that I said to him in Committee, when he led the charge by recommending that he and his hon. Friends vote against our regulations on income support, that it was his party which voted against the increase in child benefit in October reaching all children in the country; it was his party which voted against our proposals to enable family credit to reach up to 65,000 additional people; it was his party that voted against our proposals to extend the carer premium—all of that from the party that says it cares. It is on the record. Hon. Members know the people they voted against—yet they have the audacity to stand here today and tell us that their priority is the children.
Labour Members have tried to give us some lessons about our taxation policy. I will put one particular figure to the House.
It is in the pockets of Labour Members who will not pay.
Since we brought in our reductions in higher rate taxes which so disappoint the party opposite, the proportion of Inland Revenue income from that group has risen to more than a third of total tax take. The Opposition have not learnt the simple lesson—reduce the price and increase the tax revenue—that enables us to increase our income and our spending on social security. It is a very simple point.
My right hon. Friend the Secretary of State put a number of questions to the hon. Member for Oldham, West today. I should not like to be in the hon. Gentleman's shoes as he sits by his telephone in Oldham this weekend waiting for his hon. Friend the Member for Derby, South (Mrs. Beckett) to ring and ask about the latest list of so-called pledges. I will give him an opportunity, because I am a fair person. In his remarks, the hon. Gentleman attacked our proposals and our thoughts on income support levels, he attacked the social fund, and he attacked the payment of half mortgage interest for the first 16 weeks. I invite him now to rise and tell the House what he would do, where the money would come from and when he would implement it. I will give way to him now if he would like to do that.
There is an ominous silence—
I did not ask the hon. Member for Nottingham, North.
He had his opportunity, but he did not answer the questions. The hon. Member for Oldham, West failed to answer, so we know that, like all the other so-called pledges, his proposals are the confetti of persuasion, sprinkled with gay abandon around the meeting halls of the country in the hope of getting people to believe that Labour is the party of social security. The hon. Member for Oldham, West is playing fast and loose with the public's expectations and they will find him out.
My right hon. Friend the Secretary of State drew the attention of the hon. Member for Oldham, West to the fact that the hon. Gentleman does not understand the way the national insurance system works. The hon. Member for Oldham, West is still trying to persuade other hon. Members and the public that anyone earning less than £20,280 a year will not be touched by his pickpocket approach to financing. He asked us to provide some examples and I will try to assist him.
The first example is that of a computer salesman on basic pay of some £12,000 a year topped up by, say, £5,000 commission on his monthly salary during the year. He would pay an extra £4.45 per week under Labour's proposals. A process and production engineer, and there are some of those in Oldham, on a gross salary of £19,926, including—the hon. Member will not like this—£6,000 of profit-related pay, would pay an extra £8.55 per week in national insurance payments under Labour's proposals. As for good old overtime, the hon. Member may say that not much overtime is being worked at the moment, but for those who we know will be on overtime when the economic recovery comes a person on £17,492 with overtime payments of £3,734 in any one year would find himself £2.12 per week worse off. Can the hon. Member for Oldham, West stand up now and deny those are real-world examples of people who will be worse off under Labour? I invite him to repudiate that.
I will resist. The hon. Member for Bassetlaw (Mr. Ashton) has not taken part in the debate and I still have much information to give.
The hon. Member for Oldham, West tried to suggest, in his new-found enthusiasm for Europe, that everything across the channel was absolutely wonderful. He pointed out to us that other people were doing so much better. I suggest that he goes on a little trip and visits his Dutch colleagues in their Government. He will find that the Dutch are discovering that their budget deficit, directly related to their spending on social security, will require to be cut back. They are ending the earnings-related part of their social security just as the hon. Gentleman, as my hon. Friends will know, is introducing that feature into his social security plans. Belgium is worried. Germany is facing greater social security problems than Denmark and even France. If the hon. Gentleman will go and see for himself, he will find that other European countries are waking up to this problem.
If the hon. Gentleman does not believe me, let him go to the Library of the House and consult the Financial Times of 11 January, in which Mr. Harry Riley says:
Upgrading state pensions would be one of the immediate priorities of a Labour regime in the UK, but all over Europe other governments are searching for ways of reducing their pension commitments.
My right hon. Friend the Secretary of State and his right hon. Friend before him realised in 1986, as his predecessors had also realised, that there was a need in our social security system to direct money to those who most needed it and to make certain that our social security policies were affordable by the nation. We took that difficult decision, we introduced those reforms and we have modernised the delivery of our social security system
with one of the most modern computer systems in Europe, all to make certain that the right amount of help with benefits such as family credit, our improved premium in income support for the elderly, the 152 per cent. increase in real terms in spending on the disabled, could reach the people it needed to, and above all be afforded by the tax and national insurance payers who have to foot the bill.
It is absolutely clear now that the hon. Member for Oldham, West does not care a jot about those who have to pay and that he has learnt nothing from what has actually happened in Europe.
Perhaps the hon. Gentleman will allow me to finish my speech. He has had his say.
The hon. Member for Oldham, West made about 56 pledges on social security but he did not guarantee that they would be implemented on day one of an incoming Labour Government. He has engaged in mythology and has not said where the money will come from. The shambles of Labour's tax and national insurance proposals clearly shows that the two so-called firm pledges and the other 50-odd are not worth any of the reams of paper on which they are written.
Much has been said about pensioners. The Opposition do not like it when we proudly boast that pensioners' average total net incomes increased by 34 per cent. between 1979 and 1988. They do not like it when we say that average incomes for occupational pensioners virtually doubled in the same period. They certainly do not like it when they see that the wealth-creating society over which we have presided has ensured that 46 per cent. of pensioners have their own homes.
We know that some pensioners need less help from the social security system than others and we have taken steps to ensure that the money goes to those most in need. In outlining his four case studies, the hon. Member for Birkenhead (Mr. Field) asked whether we could offer some hope to his constituents. I offer a message of hope not only to his constituents but to the many thousands of people who, through family credit, enable the social security system to be a creative organ.
Since family credit was introduced we have made almost 2.5 million successful awards. Some 352,000 people currently benefit from an average payment of about £30 a week. From 1 April we plan to enable more than 65,000 more people to have family credit. That offers real hope and is an example of our innovative, affordable and honest approach to social security, and I commend it to the House.
|Divison No. 53]||align="right">[7.01 pm|
|Adams, Mrs Irene (Paisley, N.)||Bellotti, David|
|Allen, Graham||Benn, Rt Hon Tony|
|Alton, David||Bennett, A. F. (D'nt'n & R'dish)|
|Archer, Rt Hon Peter||Bermingham, Gerald|
|Armstrong, Hilary||Blair, Tony|
|Ashdown, Rt Hon Paddy||Blunkett, David|
|Ashley, Rt Hon Jack||Boateng, Paul|
|Ashton, Joe||Bradley, Keith|
|Banks, Tony (Newham NW)||Bray, Dr Jeremy|
|Barnes, Harry (Derbyshire NE)||Brown, Gordon (D'mline E)|
|Barron, Kevin||Brown, Nicholas (Newcastle E)|
|Bell, Stuart||Brown, Ron (Edinburgh Leith)|
|Bruce, Malcolm (Gordon)||Ingram, Adam|
|Callaghan, Jim||Janner, Greville|
|Campbell, Menzies (Fife NE)||Kaufman, Rt Hon Gerald|
|Campbell, Ron (Blyth Valley)||Kilfoyle, Peter|
|Campbell-Savours, D. N.||Kinnock, Rt Hon Neil|
|Canavan, Dennis||Kirkwood, Archy|
|Carr, Michael||Kumar, Dr. Ashok|
|Cartwright, John||Lambie, David|
|Clark, Dr David (S Shields)||Lamond, James|
|Clarke, Tom (Monklands W)||Leadbitter, Ted|
|Clelland, David||Leighton, Ron|
|Clwyd, Mrs Ann||Lewis, Terry|
|Cohen, Harry||Litherland, Robert|
|Cook, Frank (Stockton N)||Livingstone, Ken|
|Cook, Robin (Livingston)||Livsey, Richard|
|Corbett, Robin||Lofthouse, Geoffrey|
|Corbyn, Jeremy||Loyden, Eddie|
|Cousins, Jim||McAllion, John|
|Cox, Tom||McAvoy, Thomas|
|Crowther, Stan||McCartney, Ian|
|Cryer, Bob||Macdonald, Calum A.|
|Cummings, John||McKay, Allen (Barnsley West)|
|Cunliffe, Lawrence||McKelvey, William|
|Dalyell, Tam||McLeish, Henry|
|Darling, Alistair||Maclennan, Robert|
|Davies, Rt Hon Denzil (Llanelli)||McMaster, Gordon|
|Davies, Ron (Caerphilly)||McNamara, Kevin|
|Davis, Terry (B'ham Hodge H'l)||McWilliam, John|
|Dewar, Donald||Madden, Max|
|Dixon, Don||Mahon, Mrs Alice|
|Dobson, Frank||Marek, Dr John|
|Doran, Frank||Marshall, Jim (Leicester S)|
|Dunnachie, Jimmy||Martin, Michael J. (Springburn)|
|Eadie, Alexander||Martlew, Eric|
|Enright, Derek||Maxton, John|
|Evans, John (St Helens N)||Meacher, Michael|
|Ewing, Harry (Falkirk E)||Meale, Alan|
|Ewing, Mrs Margaret (Moray)||Michael, Alun|
|Fatchett, Derek||Michie, Bill (Sheffield Heeley)|
|Field, Frank (Birkenhead)||Michie, Mrs Ray (Arg'l & Bute)|
|Fields, Terry (L'pool B G'n)||Mitchell, Austin (G't Grimsby)|
|Fisher, Mark||Moonie, Dr Lewis|
|Flannery, Martin||Morgan, Rhodri|
|Flynn, Paul||Morris, Rt Hon A. (W'shawe)|
|Foot, Rt Hon Michael||Morris, Rt Hon J. (Aberavon)|
|Foster, Derek||Mowlam, Marjorie|
|Foulkes, George||Mullin, Chris|
|Fraser, John||Murphy, Paul|
|Galbraith, Sam||Oakes, Rt Hon Gordon|
|Galloway, George||O'Brien, William|
|Garrett, John (Norwich South)||Parry, Robert|
|Garrett, Ted (Wallsend)||Patchett, Terry|
|George, Bruce||Pendry, Tom|
|Gilbert, Rt Hon Dr John||Powell, Ray (Ogmore)|
|Godman, Dr Norman A.||Prescott, John|
|Golding, Mrs Llin||Primarolo, Dawn|
|Gordon, Mildred||Quin, Ms Joyce|
|Gould, Bryan||Radice, Giles|
|Graham, Thomas||Randall, Stuart|
|Grant, Bernie (Tottenham)||Redmond, Martin|
|Griffiths, Nigel (Edinburgh S)||Rees, Rt Hon Merlyn|
|Griffiths, Win (Bridgend)||Reid, Dr John|
|Grocott, Bruce||Robertson, George|
|Hain, Peter||Robinson, Geoffrey|
|Harman, Ms Harriet||Rogers, Allan|
|Hattersley, Rt Hon Roy||Rooker, Jeff|
|Haynes, Frank||Rooney, Terence|
|Healey, Rt Hon Denis||Ross, Ernie (Dundee W)|
|Henderson, Doug||Rowlands, Ted|
|Hinchliffe, David||Ruddock, Joan|
|Hoey, Kate (Vauxhall)||Salmond, Alex|
|Hogg, N. (C'nauld & Kilsyth)||Sheerman, Barry|
|Home Robertson, John||Sheldon, Rt Hon Robert|
|Hood, Jimmy||Shore, Rt Hon Peter|
|Howarth, George (Knowsley N)||Short, Clare|
|Howell, Rt Hon D. (S'heath)||Skinner, Dennis|
|Howells, Geraint||Smith, Andrew (Oxford E)|
|Howells, Dr. Kim (Pontypridd)||Smith, C. (Isl'ton & F'bury)|
|Hughes, Robert (Aberdeen N)||Smith, J. P. (Vale of Glam)|
|Hughes, Roy (Newport E)||Snape, Peter|
|Soley, Clive||Watson, Mike (Glasgow, C)|
|Spearing, Nigel||Welsh, Michael (Doncaster N)|
|Steel, Rt Hon Sir David||Williams, Rt Hon Alan|
|Steinberg, Gerry||Williams, Alan W. (Carm'then)|
|Stephen, Nicol||Wilson, Brian|
|Stott, Roger||Winnick, David|
|Strang, Gavin||Wise, Mrs Audrey|
|Taylor, Mrs Ann (Dewsbury)||Worthington, Tony|
|Thompson, Jack (Wansbeck)||Wray, Jimmy|
|Turner, Dennis||Young, David (Bolton SE)|
|Walley, Joan||Tellers for the Ayes:|
|Warden, Gareth (Gower)||Mr. Eric Illsley and|
|Wareing, Robert N.||Mr. Ken Eastham.|
|Alison, Rt Hon Michael||Emery, Sir Peter|
|Allason, Rupert||Evans, David (Welwyn Hatf'd)|
|Amess, David||Evennett, David|
|Arbuthnot, James||Farr, Sir John|
|Arnold, Jacques (Gravesham)||Favell, Tony|
|Arnold, Sir Thomas||Fenner, Dame Peggy|
|Ashby, David||Fishburn, John Dudley|
|Atkins, Robert||Fookes, Dame Janet|
|Baker, Rt Hon K. (Mole Valley)||Forman, Nigel|
|Baker, Nicholas (Dorset N)||Forsyth, Michael (Stirling)|
|Baldry, Tony||Fowler, Rt Hon Sir Norman|
|Banks, Robert (Harrogate)||Freeman, Roger|
|Batiste, Spencer||French, Douglas|
|Bellingham, Henry||Fry, Peter|
|Bendall, Vivian||Gale, Roger|
|Bennett, Nicholas (Pembroke)||Gardiner, Sir George|
|Benyon, W.||Glyn, Dr Sir Alan|
|Biffen, Rt Hon John||Goodlad, Rt Hon Alastair|
|Blackburn, Dr John G.||Goodson-Wickes, Dr Charles|
|Body, Sir Richard||Gorman, Mrs Teresa|
|Bonsor, Sir Nicholas||Grant, Sir Anthony (CambsSW)|
|Boscawen, Hon Robert||Greenway, Harry (Ealing N)|
|Boswell, Tim||Greenway, John (Ryedale)|
|Bottomley, Peter||Gregory, Conal|
|Bowden, Gerald (Dulwich)||Griffiths, Peter (Portsmouth N)|
|Bowis, John||Grist, Ian|
|Boyson, Rt Hon Dr Sir Rhodes||Gummer, Rt Hon John Selwyn|
|Braine, Rt Hon Sir Bernard||Hague, William|
|Brooke, Rt Hon Peter||Hampson, Dr Keith|
|Brown, Michael (Brigg & Cl't's)||Hannam, Sir John|
|Browne, John (Winchester)||Hargreaves, A. (B'ham H'll Gr')|
|Bruce, Ian (Dorset South)||Hargreaves, Ken (Hyndburn)|
|Buck, Sir Antony||Harris, David|
|Budgen, Nicholas||Hawkins, Christopher|
|Burns, Simon||Hayes, Jerry|
|Burt, Alistair||Hayhoe, Rt Hon Sir Barney|
|Butler, Chris||Hayward, Robert|
|Butterfill, John||Heathcoat-Amory, David|
|Carrington, Matthew||Higgins, Rt Hon Terence L.|
|Carttiss, Michael||Hill, James|
|Channon, Rt Hon Paul||Hogg, Hon Douglas (Gr'th'm)|
|Chapman, Sydney||Hordern, Sir Peter|
|Chope, Christopher||Howard, Rt Hon Michael|
|Churchill, Mr||Howarth, Alan (Strat'd-on-A)|
|Clark, Rt Hon Alan (Plymouth)||Howell, Ralph (North Norfolk)|
|Clark, Dr Michael (Rochford)||Hughes, Robert G. (Harrow W)|
|Clark, Rt Hon Sir William||Hunt, Sir John (Ravensbourne)|
|Conway, Derek||Hunter, Andrew|
|Coombs, Anthony (Wyre F'rest)||Irvine, Michael|
|Coombs, Simon (Swindon)||Irving, Sir Charles|
|Cope, Rt Hon Sir John||Jack, Michael|
|Cormack, Patrick||Janman, Tim|
|Cran, James||Jessel, Toby|
|Currie, Mrs Edwina||Jones, Gwilym (Cardiff N)|
|Davis, David (Boothferry)||Jones, Robert B (Herts W)|
|Day, Stephen||Key, Robert|
|Devlin, Tim||Kilfedder, James|
|Dickens, Geoffrey||King, Roger (B'ham N'thfield)|
|Dorrell, Stephen||King, Rt Hon Tom (Bridgwater)|
|Douglas-Hamilton, Lord James||Kirkhope, Timothy|
|Dover, Den||Knapman, Roger|
|Dunn, Bob||Knight, Greg (Derby North)|
|Dykes, Hugh||Knight, Dame Jill (Edgbaston)|
|Eggar, Tim||Knox, David|
|Lamont, Rt Hon Norman||Nicholson, Emma (Devon West)|
|Lang, Rt Hon Ian||Norris, Steve|
|Latham, Michael||Onslow, Rt Hon Cranley|
|Lee, John (Pendle)||Oppenheim, Phillip|
|Leigh, Edward (Gainsbor'gh)||Page, Richard|
|Lightbown, David||Paice, James|
|Lloyd, Sir Ian (Havant)||Patnick, Irvine|
|Lord, Michael||Patten, Rt Hon Chris (Bath)|
|McCrindle, Sir Robert||Patten, Rt Hon John|
|MacGregor, Rt Hon John||Pawsey, James|
|MacKay, Andrew (E Berkshire)||Porter, Barry (Wirral S)|
|McLoughlin, Patrick||Porter, David (Waveney)|
|McNair-Wilson, Sir Michael||Portillo, Michael|
|McNair-Wilson, Sir Patrick||Powell, William (Corby)|
|Madel, David||Price, Sir David|
|Malins, Humfrey||Raffan, Keith|
|Mans, Keith||Rathbone, Tim|
|Maples, John||Redwood, John|
|Marland, Paul||Renton, Rt Hon Tim|
|Marshall, John (Hendon S)||Rhodes James, Sir Robert|
|Martin, David (Portsmouth S)||Riddick, Graham|
|Mates, Michael||Ridsdale, Sir Julian|
|Mawhinney, Dr Brian||Rifkind, Rt Hon Malcolm|
|Maxwell-Hyslop, Sir Robin||Roberts, Rt Hon Sir Wyn|
|Mayhew, Rt Hon Sir Patrick||Rossi, Sir Hugh|
|Mellor, Rt Hon David||Rost, Peter|
|Meyer, Sir Anthony||Rowe, Andrew|
|Miscampbell, Norman||Rumbold, Rt Hon Mrs Angela|
|Mitchell, Andrew (Gedling)||Ryder, Rt Hon Richard|
|Moate, Roger||Sackville, Hon Tom|
|Monro, Sir Hector||Sainsbury, Rt Hon Tim|
|Montgomery, Sir Fergus||Sayeed, Jonathan|
|Moore, Rt Hon John||Scott, Rt Hon Nicholas|
|Morris, M (N'hampton S)||Shaw, David (Dover)|
|Morrison, Sir Charles||Shaw, Sir Giles (Pudsey)|
|Moss, Malcolm||Shaw, Sir Michael (Scarb')|
|Moynihan, Hon Colin||Shepherd, Colin (Hereford)|
|Mudd, David||Shepherd, Richard (Aldridge)|
|Neale, Sir Gerrard||Shersby, Michael|
|Nelson, Anthony||Skeet, Sir Trevor|
|Neubert, Sir Michael||Smith, Sir Dudley (Warwick)|
|Newton, Rt Hon Tony||Smith, Tim (Beaconsfield)|
|Nicholson, David (Taunton)||Soames, Hon Nicholas|
|Speed, Keith||Temple-Morris, Peter|
|Speller, Tony||Thompson, Sir D. (Calder Vly)|
|Spicer, Sir Jim (Dorset W)||Thorne, Neil|
|Spicer, Michael (S Worcs)||Townsend, Cyril D. (B'heath)|
|Squire, Robin||Twinn, Dr Ian|
|Stanbrook, Ivor||Viggers, Peter|
|Steen, Anthony||Walker, Bill (T'side North)|
|Stern, Michael||Wheeler, Sir John|
|Stevens, Lewis||Widdecombe, Ann|
|Stewart, Allan (Eastwood)||Wilkinson, John|
|Stewart, Andy (Sherwood)||Wilshire, David|
|Stewart, Rt Hon Sir Ian||Winterton, Nicholas|
|Stokes, Sir John||Young, Sir George (Acton)|
|Sumberg, David||Younger, Rt Hon George|
|Tapsell, Sir Peter||Tellers for the Noes:|
|Taylor, Ian (Esher)||Mr. Timothy Wood and|
|Taylor, John M (Solihull)||Mr. Neil Hamilton.|
Mr. DEPUTY SPEAKER forthwith declared the main Question, as amended, to be agreed to.
That this House warmly endorses the Government's policies for focusing considerable extra help on the most vulnerable in society; welcomes the further real increases in benefits shortly to take place for many older less well off pensioners and hundreds of thousands of disabled people; notes the Social Security Select Committee's conclusion that real disposable incomes grew by 30 per cent between 1979 and 1988 with increases in real income being seen at all levels of the income scale; believes that policies which provide more choice and greater opportunities are the best way of helping people to create a better life for themselves and their families; and recognises that, if implemented,
Her Majesty's Opposition's confused tax and spending plans would impoverish the whole nation, increase unemployment and destroy opportunities.