§ 11.6 a.m.
§ Mr. Gwilym Roberts (Bedfordshire, South)
I beg to move,
That this House believes that the removal of poverty should continue to be a first priority for the Government; and calls upon the Government to investigate the possibility of the replacement of the existing over-complex social security provisions by a system of negative income tax which would provide financial help to all those whose income falls below nationally set figures.I did not put into the Motion the phrasethe removal of poverty should continue to be a first priority for the Government".merely out of courtesy, because my right hon. and hon. Friends and I believe that the Government have already taken considerable steps in this direction. I shall not bore the House by going into these at great length. I will content myself with quoting one or two instances of the enormous strides which have been made. In 1961–62 the total gross cash expenditure on all social security payments was only £1,626 million. By 1967–68 it will be about £2,286 million an increase of nearly 75 per cent. In April, 1964, the National Insurance pension for a single person was only 67s. 6d. In October, 1967, it was 90s. This is a nominal increase of 33 per cent. Even allowing for cost of living changes which have taken place in the intervening period, the effective increase is undoubtedly about 20 per cent. Probably following the appeal made in October, 1966, about 400,000 additional people asked for supplementary social security benefits.
My hon. Friend the Joint Parliamentary Secretary may well argue that we already have something akin to a minimum national income based on the social security benefits poverty line, which, from November, 1967, will be as follows. A single householder will draw £5 6s. A married couple gets £8 15s. A married couple with one child gets £9 14s. A married couple with two children gets £11 15s., with four children £15 Is. and with six children £18 13s. In these figures I am allowing for the average rent payment which is the customary basis of calculation.
These sums are obviously inadequate if we look at the present pattern of consumption of the average family. I have 1637 here some figures from the report on family expenditure dealing with families whose income—I am not referring to the peak incomes—is between £10 and £20 a week. These figures are for a family consisting of a man, woman and two children, receiving between £10 and £20 a week. We find that they spend something like 32s. a week on housing alone; on fuel, light and power another 26s.; on food 120s.; on alcoholic drink 10s.; tobacco 23s.; clothing and footwear 28s.; durable household goods 18s. other goods—jewellery, books, toys and so on—22s.; services 19s.; transport 24s.; postage, entertainments, holiday expenses 19s.; miscellaneous expenses 2s.
From this family survey, therefore, we find that the total weekly expenditure of this average family consisting of a man, woman and two children comes to something like £16 a week as compared with the poverty line receipt which would be £11 15s. To start with, therefore, the present minimum wage level is inadequate.
However, there are also wide gaps through which individuals can fall below the poverty line. Looking at the older section of our community, we find that apart from the large numbers who applied for supplementary benefits in October, 1966, there are still something like half a million people who could qualify for supplementary benefits but who are not receiving them. It is difficult to make an accurate estimate, but it is suggested that something like 250,000 people in this country are living on their own without a son or a daughter immediately available to them. Therefore, it is difficult for people of this sort to apply for supplementary benefit.
Besides this elderly section of the population who are undoubtedly below the poverty line, there is also poverty among the younger and working elements of the community. We find that this arises among people who are in full-time employment, those who are suffering from sickness, who are unemployed or are suffering from the wage stop. In the report on family expenditure to which I have referred it was found that 125,000 families in which the husband was working, and with two or more children, fell below the supplementary benefit level, and 20,000 more were wage stopped. If we 1638 look at the grand total we find that about 160,000 families and probably 500,000 children were below the poverty line. It is estimated that even after the family allowance increases in April of the coming year there will be 300,000 children in Britain below this poverty line. It is clear that, in view of the numbers of working men who are falling short of the minimum supplementary benefit, a minimum wage has some part to play in combating the problem of poverty.
Again the report on family expenditure tells us that in three-quarters of those families in poverty, the father's income was below £12 a week. If a minimum wage were established at £13—I am allowing here for changes which may take place following the recent devaluation—it would solve the problem or would bring families with up to three children up to the poverty line. Therefore, there is a strong argument for this type of minimum wage. It is estimated that in Britain today—this is perhaps an almost incredible figure—1½ million men at work are earning below £13 a week.
Of course, there are enormous problems associated with the introduction of any concept of minimum wage. There is, first of all, the very real problem of differentials. Even at this low level, other groups who had previously been earning more than the people who are boosted up to this poverty figure would feel that their differential had been reduced. The problem is much less acute than if we talk in terms of a £15 minimum wage. If we are talking in terms of a figure of this sort the differential problem becomes much more acute. However, even at £13 there is a differential problem concerned with the bottom end of the scale.
Then there is the problem of overtime. If we are to have a minimum wage around the £13 level, we should somehow or other have to tie this to something like a fixed working week. Otherwise, there would be an incentive for the more unscrupulous employer—I am not suggesting there are many—to work his men longer and longer hours at this £13 level. Therefore, there is the problem of tying such a minimum wage concept to a certain length of working week.
In addition, there is the problem of working women. It is clear that, however much we may believe in sex equality, it would be quite impracticable in the 1639 present salary and wage structure in industry to establish the same minimum wage level for men and women. Unfortunately, today the average take-home pay of men is about twice that of women and it would obviously be impracticable to bring women's pay up to something like this £13 minimum wage, at least in the short term. There could be a case, which the "sex equalisers" among us would further, that over a period, by steps, women could be brought up to parity with the minimum wage applicable to men.
Finally, there is the problem of cost. As we have heard so often, particularly during the past few days, the great need at the moment is to keep industrial costs down. Even a minimum wage of £13 applied to men would cost a great deal. It is difficult to obtain an accurate figure, because of the complex questions involved, wage claims associated with a minimum and other such complications, but, taking the problem at its simplest, a minimum wage of £13 or so would cost industry about £300 million. Extending the principle to women as well would bring in a cost of well over £1,000 million, which is another reason why sex equality in these matters at the moment would be extremely difficult.
A minimum wage would meet only a small part of the problem of poverty as we see it today. To start with, it would meet only a small part of the problem because it would not cater for particular burdens confronting an individual. For example, a man might have a large rent increase which took him once more below the poverty level even at the minimum wage of £13. Moreover, it would not meet the problem of the woman worker responsible for a family. Thus, it would not meet even the problem of everyone who is industrially employed. Moreover, beyond that group there is a large nonworking section of the community, and a minimum wage would not go anywhere at all to answer their problems.
Therefore, in considering the whole concept of a minimum income and trying to bring more parity throughout the community, we must look beyond a minimum wage. I am most inclined to some concept of negative income tax. One great advantage of the negative income tax system is its universality. A form would 1640 be sent out to the public at large, going to each individual whether he is paying positive Income Tax or is receiving negative Income Tax. Again, there are obvious difficulties. For example, the very elderly would probably need special help from welfare departments to enable them to fill in the forms. Some of the forms which we send out nowadays are difficult enough to understand. Even I do not understand them. Obviously, it would be necessary to help many elderly people, and perhaps younger ones as well, to fill in the forms.
A form of this type, nevertheless, could be basically simple. It could cover all a man's sources of income and, at the same time, it could cover his commitments in terms of children, rent and so forth. Indeed, only if we had such a universal taxation system should we be able for the first time to get a measure of poverty in Britain today. For the first time, we might have accurate statistics about it.
Admittedly, the application of a scheme of negative Income Tax would be by no means easy. The industrial complications are beyond belief. Whatever Professor Galbraith may say, I believe that it is necessary to maintain two essentials—an incentive to work harder, and an incentive to work at all. Therefore, the concept of a 100 per cent. negative income tax is debarred, because, otherwise, all incentive would be destroyed. If we were to have a negative income tax system of this kind, there would have to be some rate of negative income tax just as we have a rate of positive Income Tax now.
Here are one or two elementary examples. I take, first, the position of a couple with no children. They receive about £8 15s. today on the minimum supplementary benefit level. In order to bridge the gap between them and the £13 a week minimum wage for people in work, a rate of, say, 4s. in the £ negative income tax would at least go part of the way to remove the problem of poverty in their case. At 4s. in the £, such a couple would receive an additional £1 1s., bringing their £8 15s. up to £9 16s. In the case of a single person, who today receives £5 6s., bridging the gap at the same rate of 4s. in the £ negative income tax would bring him up by £1 11s. to £6 17s.
1641 I pose the problem here at its simplest. Hon. Members will appreciate that the complexities are far greater than that because one has to allow positively for children which a man has and negatively for those which he has not. There are innumerable complexities the moment one sets out to tackle the problem. But, at least, with a fairly low rate of negative Income Tax of the kind I have suggested, the additional burden on the social security bill would not be enormous. I calculate, on my figures, that it would be about £200 million a year, using 4s. in the £ negative Income Tax to bridge the gap between the present poverty line and the £13 minimum industrial wage. In any negative Income Tax system, there would also have to be a 100 per cent. payment in certain cases. I refer here, for instance, to the worker who faces a £1 addition on his rent. In his case, there would have to be a 100 per cent. payment to meet that particular need.
However, without embarking further on the complexities of such a system, I emphasise that its effect is to give selectivity as well because it directs resources where they are most needed. If an individual's private means take him to £13 anyway, and he is retired, he will not receive any money at all because he is already at the minimum level. Thus, the first great advantage of the concept of combining the minimum wage with negative Income Tax is that it combines universality, on the one hand, and selectivity, on the other. It is universal in the sense that everyone receives an Income Tax form, and there is no stigma associated with receiving benefit or anything like that. It is selective, on the other hand, in the sense that money is directed only to those who really need it.
The second great advantage of negative Income Tax is its simplicity. Our social security and income tax systems are becoming unbelievably complex. On the social security side, people can qualify for rate rebates, school meals and a thousand and one other supplements to their incomes. All this over-complexity could be abolished with the concept of the minimum income. The system is basically simple.
If suitable forms could be designed and the information collected on punch cards, the system would be ideally suited to the 1642 use of a computer. In all complex processes of this type we are tending towards the use of computers; we are moving into a world where the computer has a greater and greater rôle. Information on the individual's financial requirements of all types, his dependants and everything else could be stored in the computer. It may even be argued that the machine could carry his date of birth, medical record, educational attainments and all other information associated with him. Some hon. Members might feel that we would then be in a kind of "1984" society. But I am not frightened of "big brother", so long as he is kindly—and I am thinking here of a kind big brother. After all, we on this side of the House are essentially in politics for the one reason that we believe that the community should look after each of its citizens.
I do not wish to delay the House by looking further into the future in this way. The immediate problem with which we must all be concerned is that in Britain today about 1 million people are on or near the poverty line. In the words of Samuel Johnson:Poverty is a great enemy to human happiness. It certainly destroys liberty, and it makes some virtues impractical and others extremely difficult.It is with that viewpoint on poverty that I move the Motion.
§ 11.34 a.m.
§ Mr. Michael Barnes (Brentford and Chiswick)
I congratulate my hon. Friend the Member for Bedfordshire, South (Mr. Gwilym Roberts) on moving his Motion today, because today's debate is a logical continuation of the debate about two weeks ago on the Second Reading of the Family Allowances and National Insurance Bill. It is particularly relevant since the Government and all of us are thinking very much at present about the need to protect low-income families from some of the ill effects of devaluation.
It is a pity that many more statistics about the incidence of poverty in this country are not available. The main work on which we rely is the Ministry of Social Security's survey, "Circumstances of Families", the field work for which was carried out in the summer of 1966. It is rapidly becoming a little out of date. The survey showed that there were 500,000 families, comprising about one and a quarter million children, who 1643 were living in poverty as defined in the Supplementary Benefits Scheme. Many of those families can be helped by extending National Insurance to cover groups and categories not covered at present, which the Government have said they intend to do.
But the survey drew particular attention to 160,000 families living in poverty, comprising about 500,000 children, in most of which the fathers were in full-time work. The remainder, totalling 20,000, were wage-stopped. The problem of those families is primarily one of low wages. It is clear that it would be wrong to try to help them by channelling more social security spending in their direction, which would really just be subsidising their present low wages. That is where the question of a national minimum wage is very relevant. If it could be linked with a more logical system of family allowances, as my hon. Friend suggested, not one of those 500,000 children need to be living in poverty in the future.
My hon. Friend was very right to link the question of a national minimum wage with the negative Income Tax proposal. The Government have told us on a number of occasions about its difficulties, but when one considers the problem one finds oneself coming back to the proposal time and time again, because it has so much to recommend it. It is a form of selectivity, but I believe that, provided we maintain what Professor Titmuss has described as a basic infrastructure of welfare services which are utilised and approved by the non-poor as well as the poor, it would be entirely acceptable. Its great' advantage is that it is very flexible and can take into full account the differences in circumstances and responsibilities that bring about poverty in individual families today.
My hon. Friend touched on this point, but I should like to say more about it. It could, for example, take into account things like rent. The Ministry's survey showed that one in five of the very poor families lives in private rented accommodation, and we must imagine that many of these are concentrated in the big ciies. Any hon. Member representing a constituency in the London area will be aware of a large number of such families in his constituency. In many such families in private rented 1644 acommodation the father is earning quite good money—certainly above the kind of national minimum wage of which my hon. Friend spoke.
But, because of the size of the family as much as anything else, they cannot afford to buy their own homes, and they may not qualify for local authority housing for some years. The have several children and, therefore, must turn to the private landlord to find somewhere to live. London area M.P.s know how impossible it is for those with children to find suitable private rented accommodation at the sort of rent one can afford.
So these families are faced with two alternatives. On the one hand, they have the choice of taking a very bad standard of accommodation, probably a basement flat which is damp, or they may be forced in the other direction, to take a flat which is very nice and the rent may not be unfair but it may be a rent which they cannot afford to pay. But the rent, rates, gas and electricity costs have to be paid, and because money has to be saved for these purposes it is saved on food on clothing. Very often it is the mother who makes all the sacrifices that she can, but ultimately the children must suffer.
I think of a large family in my constituency which exactly fits that description. There are six children in it. Very often when they come home from school they do not get much more than a cup of tea and bread and margarine. They have school meals, but they are not getting them free because the parents feel that they do not want to subject the children to the embarrassment involved in getting the meals free.
So this is a situation in which the main factor causing poverty in the family is rent. The rent itself may not be unfair, but even fair rents are high, certainly in London. So rent is still a main factor in causing poverty.
With regard to the negative income tax proposal, my hon. Friend was right to draw attention to the fact that the positive and negative sides of the proposal could be worked out on the basis of a single form. I believe that such a form of selectivity would be acceptable. This is what makes it so different from the crude means test and from anything which the extension of the present system 1645 of supplementary benefits would resemble. This is a solution which is often advocated by hon. Gentlemen opposite, but it is one which hon. Members on this side are quite sure is wrong.
It is also unacceptable to a very large number of poor people in the country. The extent to which the selective services of one kind or another that we have at the moment arc under-used by the people who need them is evidence of the unacceptability of any such way of solving the problem. There was a figure in the survey which surprised me. It was that two-thirds of the children taking school meals and entitled to them free—this is children whose fathers are in full-time work—are paying for them.
I commend my hon. Friend's proposal. I believe that a common minimum wage and the proposal for a negative income tax could be a thoroughly egalitarian way of solving many of our problems. We are very much concerned with the economic situation, but the curious thing about our economic situation is that to a very great extent it is the comparatively marginal imbalances that are causing us all this trouble. Surely this country is rich enough to enable us to bring about a situation in which every child can grow up in a family where a decent standard of living exists.
I hope that the Government will not continue to say that it will take nine or 10 years to put into practice such a proposal as that for negative Income Tax. I know that it involves the use of computers, and that it would be very complicated. But if all the speeches that Ministers have made could be fed into a computer, I am sure that we should find that the word "computer" occurred as about every fifteenth word in those speeches. If we have the will to do this, and I think we have, I am sure it can be done. We could make this a feasible solution in a much shorter period.
I congratulate my hon. Friend the Member for Bedfordshire, South on giving us the opportunity to discuss this very important subject.
§ 11.45 a.m.
§ Mr. Ron Ledger (Romford)
I support my hon. Friend the Member for Bedfordshire, South (Mr. Gwilym Roberts) be- 1646 cause not only is this an appropriate time to he considering the problems covered by the Motion but linking minimum incomes to social benefits is the right way to deal with them.
I did not agree entirely with my hon. Friend's arguments. For instance, he was a little concerned that if we had a minimum wage of £13 it would affect the differentials that existed and cause problems. One of the things that have bedevilled any real policy on wages and incomes and the sharing of the national wealth has been the insistence on differentials that existed in entirely different circumstances, such as before the war. I have been involved in wage negotiations in the Co-operative Movement, and there this matter has come up time and time again. It has nothing to do with justice or with getting a fair wage or a fair share of the wealth of the country, which we are supposed to believe in. It has to do only with systems that have been going on for years and years. I have not a great deal of sympathy with a case which is influenced too much by the need to maintain differentials which in my opinion no longer have any meaning.
However, one of the points made by my hon. Friend is of considerable importance. This concerns the incentive to go to work. It is taken for granted these days that there is always an incentive to go to work because of the wages that will be earned. But this is not true. Some fathers by going to work are depriving their families of income. A case was reported this morning in the Sun. The magistrate said—I think it was a wrong attitude, but I accept the basis for what she said—that a man who was refusing to do so would have to go to work. The man's argument was that if he went to work and did the job for which he had been trained he would earn £13 a week, but from social benefits he could get £14 a week. It is easy enough to moralise and say, "The lazy devil ought to be made to go to work", but under our present system it means that if that man goes to work his family will have £1 less for food, clothing and so on.
§ Mr. Ernest G. Perry (Battersea, South)
It must not be forgotten that if that man is in receipt of social benefits through being out of work he does not pay the stamp, which represents another £1 a week.
§ Mr. Ledger
Exactly. I am just taking the bare minimum benefits that the man gets by staying away from work.
To talk in terms of an incentive to work when one has an automatic encouragement not to work is a bit of a contradiction. Also, at the levels where many people talk about incentives to work there is no need for any incentive. Members of the Opposition are normally talking about people earning £4,000, £5,000 or £6,000 a year. As if one decision, more or less, by them every week would change the fortunes of this country! But we are concerned with people at the other end of the scale, the poverty end. It would be ridiculous if the country recognised to some degree this poverty by allowing a man to have an income of £14 if he were out of work and then denied him the opportunity to earn the same money if he did the job for which he was trained. Having said that, I do not take the view that there is an automatic and easy answer to this problem.
My hon. Friend spoke about the cost of introducing a £13 minimum wage. He said that the cost would be £300 million. We must be honest about this and face the fact that someone would have to pay. That means the rest of us. All those earning more than £13 a week would be making a contribution in one way or another by degree towards those earning under £13. I cannot see any other way.
If the Government's policy succeeds and we get expansion of productivity and increased wealth as a result, everyone will be better off anyway but, however we look at it, at this stage, if we are to introduce a minimum wage—which I wish we could—we must accept that the rest of the community must be prepared to sacrifice something of their income in order to pay for it. What would be disastrous would be to give the impression that we think that, somehow, by some miracle, one could find £300 million in order to give this basic wage. It would have to be paid for.
One of the things that must be accepted by those who believe in a minimum wage is that there must also be a wages policy. I have found it a little strange that some of those advocating a minimum wage of, for instance, £15 have also been opposed to the prices and in 1648 comes policy. It is plainly daft to talk about legislating for a minimum wage and then saying that one can do without an incomes policy. Many of those who oppose the incomes policy, on both sides of the House will have to change their minds if they want a minimum income.
I believe that the problem here is, once again, the whole question of the free-for-all in wages that we have, which is part and parcel of the capitalist system, for there is nothing Socialist or perfect about it. This is the idea that the stronger or the more influential one is, the more likely one is to get more money and to hell with the rest. If we are to ensure that people get extra wages not on the basis of extra work but because they are not earning enough on which to live properly, many changes will have to take place.
One of the greatest enemies of good wages and of the minimum wage is overtime. It presents a false picture of income to the family and I wish the unions would be even stronger in their attitude towards the 40 hour week. We should be insisting upon increased productivity but within the 40 hours so that there is pressure upon the employer to provide the new methods, the new systems and the new machinery to produce his goods in a shorter time and, therefore, more economically and increasing the wealth of the country. It is quite wrong that people have to work 46 or 50 hours a week in order to bring home a reasonable sum of money or even to finance a car or a holiday or a decent Christmas. Such a situation defeats the purpose of a minimum income.
One of the worst features of all is that, so long as we have the present system of wage negotiations and recognise the need for differentials, the poorer families fall further behind. Normally, they belong to groups of workers who are not very well organised or influential and by the nature of things tend to fall further and further behind.
I was interested in my hon. Friend's suggestions of how to deal with the situation but I cannot quite see how his proposals will work. Perhaps someone will explain. The difficulty in saying that a minimum wage shall be paid is that some firms and concerns simply could not finance a minimum wage for all their 1649 workers. My hon. Friend suggested that this might be done through the Income Tax form.
§ Mr. Gwilym Roberts
I did not suggest that people in employment draw money only to meet special payments out of the negative amount. I suggested that people in employment should get the money from their industrial concerns directly up to the £13 level. It would only be in view of special commitments beyond that that they would get negative Income Tax. The point is that, the distribution of people who are on very low incomes is very scattered and the burden on the individual firm would not be as high as one might suppose.
§ Mr. Ledger
I think I see what my hon. Friend is getting at but I know many small firms where an increase in wages of £2 or £3 for one or two workers could be a burden. Not all our firms are big or earn tremendous profits. My hon. Friend mentioned the figure of 1 million or 1½ million people earning less than £13. Is he talking of earnings or wages? I would have thought that the figure for workers whose basic wage is £13 or under would he much higher than 1½ million. If that is so, I do not entirely agree with my hon. Friend. What is required is something rather more substantial than a basic wage of £13. My hon. Friend is telling us that his proposal depends in many cases on people continuing to be able to do overtime and to get some sort of pension payment, which complicates the issue.
I support the Motion because so many families are below the level of existence that ought to be allowed, particularly under a Labour Government, and I support it because, as I said earlier, at present there is a disincentive to some people to work—a disincentive in that, if a worker takes full advantage of the system, his family income can be higher than if he goes out to work. I hope that the Government will take note of the Motion and that the House will wholeheartedly support it.
§ 11.58 a.m.
§ Dr. John Dunwoody (Falmouth and Camborne)
I congratulate my hon. Friend the Member for Bedfordshire, South (Mr. Gwilym Roberts) not only on having his name drawn first out of the hat for Private Members' Motions, 1650 but on selecting this subject. I want to concentrate on that part of the Motion which says that…this House believes that the removal of poverty should continue to be a first priority for the Government…and follows with his suggestion for a national minimum wage.
There is still very real poverty in our community. We have a submerged, neglected and deprived minority in our midst and far too many people shut their eyes to that minority. The problem exists in a particularly sharp form among certain groups and it is by taking some of these groups individually that we can highlight some of the difficulties.
Perhaps the largest section where very real poverty exists is the pensioners, the old folk. For example, many of them who are fully entitled to draw additional benefits to basic pension are still too proud to do so, and who are we to say that they are wrong? Many of them exist, week in, week out, as I know from many personal experiences, on a diet which consists of little more than bread and jam and tea. It is among these old folk that there is the largest single block of poverty in the community.
We also have the problem of the large families, which are nearly always associated with low incomes. Much thought has been given to this group of the community in recent times. The very real poverty which exists in this group has resulted in recent years in our seeing for the first time for nearly a generation a recurrence of some of the nutritional diseases which previously we doctors had only read about in our textbooks. Reports of conditions such as rickets have come from some of our industrial areas from the hard core of near-problem families, very large families, often on low incomes.
Another group among whom there is poverty is that of widows. There are probably not a large number of women in this position, but a significant proportion of widows, particularly those with young children, are unable to find employment which gives them an opportunity to maintain their family at a reasonable standard of living. Another small group which is neglected in some respects, but with which we ought to be concerning ourselves today when talking about 1651 poverty, is that of those in chronic ill health, who find either very great difficulty in ever working or, if they work, find that they must work in some form of sheltered employment and cannot compete fairly on the open market.
Among all these groups the problem of poverty is exaggerated in certain parts of the country. I do not want to go into the general economic problems which we face in the regions, but in many of the groups which I have already mentioned the most difficult problems of poverty are experienced in those parts of the country which socially and economically are already lagging behind the remainder of the country. Those are the areas where higher rates of unemployment are common or where average rates of pay are lower than elsewhere or where the standard of social services is also lower than elsewhere. This I know very well from my experience in my constituency in Cornwall, the county where rates of pay are lower than in any other county in England.
Despite the increasing affluence in our community, many of the problems of poverty have become more marked in recent years, partly because of population changes—we are an ageing community and we have more and more old folk among us and fewer and fewer of working age—but partly because as a community—and successive Governments must share some of the blame—we have not been prepared to devote a sufficiently high proportion of our national resources to solving the problem.
That is not to suggest that the record of the present Government is not good. Despite the extreme economic difficulties which we have faced almost continuously over the last three years, we have introduced policies which have made quite dramatic differences to some of the groups which I have mentioned. I need only instance the very considerable increase in old-age pensions, the increase in various social security benefits and the ending of prescription charges to remind the House of some of these measures.
There has also been a welcome simplification in the methods of giving social security benefits. I agree that it is still complex but I do not entirely agree with my hon. Friend's comment that it is over- 1652 complex. There has been considerable simplification. In particular, I welcome the ending of the National Assistance Board concept, because undoubtedly it attached a stigma to certain of our social security benefits.
It is perhaps apt that we should be discussing the subject today at the end of a week in which we have been concerning ourselves with national and international economic problems—still less than a week from the announcement of devaluation. One of the consequences of devaluation with which we should be concerning ourselves is the effect of that measure on precisely these groups in the community about whom we are talking, because inevitably some short-term, immediate effects of devaluation will be more marked on these groups.
If there is an increase in the cost of living and in the prices of certain basic foodstuffs, it will fall much more heavily on those in chronic ill-health and on large families with low incomes, and I am pleased to hear that the Government are concerning themselves with that fact. We are right to seek to shield these groups in our community from the harsher, inevitable effects which many of us in the community will have to bear, notwithstanding the advantages which I believe the policy of devaluation will produce.
There is a degree of urgency about this matter, and we should be looking to the months before us when we are talking and thinking in terms of shielding these groups in the community. The concept of a national minimum wage is attractive and it has flitted in and out of Labour Party policy over recent years. But I must be frank and say that there are also difficulties and arguments both for and against the principle. I find it an attractive principle, because it would have a real part to play in the battle against poverty. If we are to introduce the concept of a national minimum wage, I should like us to link it with other social security benefits such as pensions and widows' pensions, so that as, one hopes, the national minimum wage increased over the years, there would be comparable increases in other benefits.
One of the main criticisms which I have had of, and the main argument about, the prices and incomes policy is that we have failed clearly to define what 1653 we mean by lower-paid workers. If we could introduce the concept of a national minimum wage we should solve some of the difficult problems of defining exactly what we mean by a lower-paid worker.
The introduction of a national minimum wage would go some way to solve some social inequalities which we have in the community and it would go a significant way towards solving some of the regional inequalities, helping those areas which are deprived and are left behind socially and economically. But one has to accept that the introduction of this concept would possibly have some inflationary results which have to be considered. The problem of differentials is important. I agree that perhaps we ought to be seeking to close differentials, particularly some of those which originated many years ago and which are maintained more for traditional than for practical reasons. But one has to accept that the introduction of a national minimum wage, particularly in those areas where it would help a significant proportion of workers, would produce strong pressures for increasing rates of pay by those people who were earning just above the national minimum, and there is always the risk of leapfrogging wage demands and consequent economic damage.
May I turn to some other subjects about which we ought to be thinking to combat poverty in our community, because that is a part of the Motion which I find particularly important, I do not want to go in great detail into the question of introducing more selectivity into our social security services, and I will concentrate on the difficulty faced by the hard core of the community who experience grinding poverty today. They are to be found in some of the groups which I have already mentioned.
First, I would mention the old folk. Frankly, as a working community we must be prepared to devote more of our national resources to the old folk. We have to be prepared to see that the basic pension approximates to the amount of money for which a decent standard of living is attainable. We should he prepared to pay more, because it is the men and women who are in receipt of retirement pensions today who built up the community from which we of working age are benefiting. In so far as we have 1654 an affluent society, it is due to the men and women who have given a lifetime of work, many of them having fought in one or other of the world wars, and we as a community should be prepared to devote a higher proportion of our resources to providing adequate pensions.
But we have to do a great deal more to help the old folk. We must provide more support from the welfare and social services. This is particularly true of our local authority services, where there are woeful inadequacies in some parts of the country. Some local authorities have admirably high standards of service, but others lag far behind. I am thinking of the home help service, health visitors and local authority services, such as the laundry service, which are providing an enormous amount of help, not only in a practical form, for old folk, but in the long run by providing economic benefits to the community.
Far too often it is purely the absence of these services that drives old folk into hospitals, residential accommodation and institutional care of one sort or another. It is ludicrous that because we are not prepared to spend £3, £4, or £5 a week in providing local authority services to maintain an old person we have to send him to hospital, where it costs four, six or even eight times as much to maintain. I feel very strongly that for the majority of retired people the right place is in their own homes rather than in some institution or hospital.
I now turn to the question of large families. I welcome the announcement that by using changes in the family allowance system the Government are now paying particular attention to the problem of the very large family, consisting of five or more children. This is one way in which we can help to solve the problem, but it is another case where social, health and welfare services could do a great deal more if we were prepared to devote sufficient attention to the question. Health visitors, people in the welfare services, and children's officers, often do not have the time—because we are desperately short of manpower in these services—to devote sufficient attention to these large families, not merely in helping to alleviate their poverty by simple economic means but in educating the parents of these large families most effectively to use their limited incomes.
1655 Often the difficulty is not purely a question of a small income but the fact that it is frittered away in an ineffective manner, especially in the purchase of food. This sort of basic education can be carried out effectively by social workers and health visitors, but in far too many parts of the country these workers do not have the time to devote sufficient attention to this essential work. A great deal can be done to help large families by education.
I underline what my hon. Friend the Member for Brentford and Chiswick (Mr. Barnes) said about the failure fully to take up school meals, because the provision of school meals helps the large families particularly. I welcome wholeheartedly the indication of the Government's particular concern about large families, as shown in the changed proposals for school meals and the provision of free milk, in respect of every third and later child of a family at school. This will be a great help.
The continuation of school meals and the school milk service is very important for these large families. However, I question whether we should not think of doing more for them during the school holidays. In many areas at this time this sort of help is not available, and it is possible to see a definite change occurring, in some of these families, especially during the long summer holiday.
The other group about which I feel strongly is that which includes the chronic sick. These people face continued or recurrent ill-health. The National Health Service is an enormous boon to them, and for this group more than any other in our society it is essential that the National Health Service should be free at the time of use. These people also depend on the social services that I have mentioned. They need more help from the health and welfare services in general.
We should be considering one or two special groups who face real problems of poverty—groups which we have consistently neglected over the years. For instance, there are the very severely disabled people who, often from a very young age, have been either fully or partly bedridden. It is a disgrace to our society that many of these people will spend 30 or 40 years in hospital wards, surrounded by patients who are 40, 50 or 1656 even 60 years older than they are. We must do more in providing special care for this group of the young chronic sick.
Provisions should be spread evenly throughout the country. It is necessary that people should not have to face the problem of travelling 100 miles or more to find a unit which will cater for their needs. I am glad that my hon. Friend the Joint Parliamentary Secretary to the Ministry of Social Security will be contributing to the debate, because I know that in a previous position he took a great deal of interest in the problem.
Another group which needs help consists of disabled people who require invalid cars of some sort or another. I know that there is continuing agitation to abandon invalid tricycles and to introduce small cars, with adequate changes and conversions in order to make them suitable for disabled people to drive. We should be doing this at a much more rapid rate. I know that it will cost money, but I have worked it out that we could probably buy and convert between 2,000 and 3,000 minicars for disabled persons for the cost of one F111 fighter. Our sense of proportion in this matter is a little bit adrift. I regard the present invalid tricycles as little better than sardine tins. They are potentially dangerous if involved in an accident.
Another somewhat similar group consists of disabled workers who are in full-time employment, or nearly so, and who all too often receive rates of pay and work in conditions which are unfair. They have to accept it because, through no fault of their own, they are disabled physically or mentally. Many are employed in Government-owned factories—in Remploy, in particular. I have a factory in my constituency. It is wrong that many of these men who are prepared to go out to work in many cases have to travel many miles to get to work, because in rural areas it may often be necessary to travel 15, 20 or more miles to reach the nearest Remploy factory.
It is wrong that these men, having devoted themselves to doing useful work which helps the community, should receive only about £10 a week in their pay packets. I ask my hon. Friend to consider the special problem in rural areas, as it affects those who have to travel long distances, which means that a high proportion of their low wage has 1657 to be devoted to the payment of bus tares and other travelling expenses. I know that travelling allowances are paid in Remploy factories, but they are not sufficient.
I do not want to follow the attractive but complex suggestion of my hon. Friend in connection with a negative income tax, but it ought to be examined. Another possibility is taxing social security benefits in a rather different way from the way in which we tax ordinary income. I suggest that there should be a more rapidly graduated form of taxation for this income. It is by means like this that we can get over the problem of selectivity. If we reintroduce anything like the traditional means test it will not work, because it will not be thought to be fair by those to whom it applies. In theory it may be all very well, but in practice it does not work.
The greatest social problem that we face is the problem of the deprived minority in our midst—the problem of the submerged and neglected groups which all too often we continue to neglect so that they become demoralised. It is these people who are responsible for the origination of many of our social problems, because by neglecting them we enhance the chances of delinquency and crime and other damaging features in our present society. There is an increasing appreciation of this problem, which is indicated by the actions that the Government have taken in the last few years.
I ask the Government to devote even more attention, time and resources to solving this problem, because not until we do can we claim to live in a socially just and civilised society.
§ 12.20 p.m.
§ Mr. Ernest G. Perry (Battersea, South)
I want to thank my hon. Friend the Member for Bedfordshire, South (Mr. Gwilym Roberts) for raising this subject this morning. By bringing it into the light of day, he has shown the difference in the ways of approach to it. Two kinds of people are covered by the Motion, those who are covered by social security benefits and those who are in receipt of wages.
My hon. Friend the Member for Falmouth and Camborne (Dr. John Dun-woody) spoke about the chronic sick. 1658 Some people in this category are penalised because their families take the trouble to look after them. A person who is chronically sick may be in hospital and have a wife in some form of gainful employment, but if he is not happy in the hospital his wife may bring him home and stay at home to look after him. This sometimes means that the State is saved £25 a week because he is no longer occupying a hospital bed, but if the wife looks after him at home, she has to give up her job and then live on a measly amount of money, like £8 10s. a week, from the State. It is people like this who are the poverty-stricken among the chronic sick.
The Minister of Social Security should look carefully into the cases where people take relatives out of hospital and look after them at home, thereby saving the State an enormous amount of money. The State should ensure that if they go home, they have adequate incomes not only to pay the rent, but to live fairly decently. That kind of example can be multiplied many times among other people receiving social security benefits.
Today we are discussing a national minimum income. Board of Trade returns show that more than 1 million workers receive less than £11 a week. They are often in industries supplying materials and finished products to other industries where wages range between £15 and £35 a week. It is clear that there are many workers, men and women, earning well below £13 a week.
I am sorry to have to say that the greatest offenders in this respect are the Government and local authorities. If we want to put our own house in order, we have to start by ensuring that Government and local government employees receive adequate wages. A negative Income Tax could lead to inefficient industries becoming more inefficient through being subsidised by the State. The way to go about this problem is to ensure that these industries are made more efficient, that the management is tackled and that where management is inefficient, the industries are reorganised so that the workers can receive a fair wage.
Some of the minimum rates in industries today are 185s. to 200s. a week in retail furnishing, 195s. in the linoleum industry, 193s. in roofing felt and 168s. 1659 for sack and bag workers. Those examples can be multiplied a dozen times and an examination of the complete list would show that the number of people receiving less than £13 a week is colossal.
This is why, during the last few years, trade unions have agitated for major increases for these workers, but during the last few weeks one of the unions concerned obtained increases of only about 6s. to 8s. a week, and when unions can negotiate only to bring up a minimum wage to about £11 a week, there is something wrong with the industry. The unions have also agitated for a reduction in hours at the same rate of pay, so that if there is any overtime it operates after 40 hours a week and not 42.
In many occupations the take-home pay is often less than £10 a week and for a woman doing the same work £8 a week. These are mainly unpleasant occupations where the work is dirty and the surroundings unpleasant and where staff canteen and toilet facilities are very poor. This is why I support the view that we have to do something about minimum incomes and minimum wages.
People can become poverty stricken over-night because of something which happens to them. For example, in my constituency when previously requistioned property was derequisitioned and passed out of control the landlord had the right to appeal to the local rent assessment committee for a revision of the rent. In one example the family concerned was paying £2 1s. a week net and the assessment committee awarded the landlord £5 14s. a week net, an amount which was verified by the London Assessment Committee. This meant that overnight the family had to suffer a rent increase of £3 a week and for a man on a fixed income that meant being brought to the poverty line. I was glad to hear my hon. Friend the Member for Brentford and Chiswick (Mr. Barnes) stress the importance of rent in poverty. People living in poor accommodation in Battersea are often paying £4 or £5 a week rent and getting hardly any facilities and they are on the poverty line because of that enormous rent.
The debate this morning has focussed attention on what is now going on. Devaluation will bring perhaps more poverty and hardship to a number of people, some of them in receipt of these low wages and 1660 some receiving social security benefits. They must think bitterly of those who, by manipulation over the telephone because of devaluation, were able to make tens of thousands of pounds profit overnight without creating any real wealth. It must make ordinary workers extremely bitter to realise that some people, by picking up a phone and transferring money from this country to countries abroad, and then transferring it back again after devaluation, can make hundreds of thousands of pounds, while they themselves have to work 40 hours a week for £11.
I am glad that I have had the opportunity to take part in this debate, because I think that my hon. Friend has done a good job in raising this matter.
§ 12.30 p.m.
§ Mr. Raphael Tuck (Watford)
I congratulate my hon. Friend the Member for Bedfordshire, South (Mr. Gwilyn Roberts) on raising this matter today. It is always a great pleasure, whatever the subject of the debate, to listen to his musical voice which stamps him as coming from a country where people are almost born singing.
Although I agree with my hon. Friend's sentiments, I do not agree with the method by which he seeks to implement them. Here, I must agree with my hon. Friend the Member for Battersea. South (Mr. Ernest G. Perry), who drew attention to the fact that if we were to put into practice a method of negative taxation it would not only encourage the less efficient firms, but would encourage those firms who want to get out of paying their employees a living wage to pay them less because they would say to themselves, "If we do not pay the standard wage, the Government will make up the difference".
§ Mr. Gwilym Roberts
In spite of my singing voice, I seem to have been a bit obscure on this point. The main plank of my argument is a minimum wage for industrial workers. A negative income tax would apply only to meet additional commitments of the type mentioned by my hon. Friend the Member for Battersea, South (Mr. Ernest G. Perry).
§ Mr. Tuck
I apologise to my hon. Friend. I agree that the minimum wage should be met industrially, and that it should be greater than the amount a man can receive by way of social security, or a minimum income guarantee, if he 1661 is not employed. I agree with my hon. Friend the Member for Romford (Mr. Ledger). We have a bad state of affairs if a man says, "I am not going to work, because I can make more money by being idle than I can by being gainfully employed". This kind of thing is a disgrace to our society, and should be eradicated as soon as possible.
The problem can be overcome if we institute a minimum wage which is higher than that which a man can obtain if he is not gainfully employed. If firms cannot pay this wage—and my hon. Friend the Member for Battersea, South has instanced some disgraceful rates of pay—they should go out of business. The Labour Party made it clear in its manifesto before the last General Election, and, I think, the previous one, that if private industry could not do the job the Government would step in and do it for them. If private firms cannot do the job, the Government should step in and establish those industries.
§ Mr. Nicholas Scott (Paddington, South)
There is another possibility, namely, that the firms will not go out of business, but will sack their workers. It must he remembered, too, that the biggest offenders are the nationalised industries, local government, and the central Government.
§ Mr. Tuck
If the nationalised industries are involved, let them pull up their socks.
With regard to the possibility of workers being sacked, this is what I had in mind when I said that the Government should step in and establish these industries. A Minister recently said, and it was courageous of her to do so, that the Government pledged themselves to do this, and that it was about time the pledge was honoured.
I need no such courage, because I am not on the Front Bench, but I ask the Government to consider the investment of capital in nationalised industries so that we can man the factories which we are establishing in the development areas. This is a first priority for consideration by the Government, and I urge them to undertake it and to establish industries where Ovate industry has failed.
§ 12.35 p.m.
§ Dr. David Owen (Plymouth, Sutton)
I join my hon. Friends in congratulating 1662 my hon. Friend the Member for Bedfordshire, South (Mr. Gwilym Roberts) on introducing this topic for debate. It is in many ways a pity that it has come on a Friday because I know that on this side of the House there is considerable concern about the whole issue of the minimum wage, and particularly the anomalies in a social security system which leaves some people on an income which is totally inadequate to meet their basic needs.
I should like, for a few moments, to draw attention to the necessity, which I believe is beginning to build up with the introduction of a prices and incomes policy, for the establishment of a minimum wage. I realise that this subject is fraught with difficulties. When the Chancellor of the Exchequer spoke at the Labour Party conference at Scarborough, he asked the conference what it meant by a minimum wage—did it mean take-home pay, did it mean hourly wage rates, did it include bonuses and incentive schemes, and so on? No one expects the Government to be able to introduce a minimum wage structure overnight, but I believe that the time is ripe for the Government to set up an inter-departmental inquiry into the possibilities of establishing a minimum wage, and for them to start negotiations with the C.B.I. and the T.U.C., because if the prices and incomes policy is to hold, particularly during the next year, the unions will require some definite evidence from the Government that they intend to establish a minimum wage structure.
This debate would have been apt at any time, but coming as it does after devaluation it is of vital importance. We all know in our hearts that possibly there has been too much euphoria over the subject of devaluation. I have for long advocated it, and done so publicly but I have done so in the certain knowledge that a necessary accompaniment of it is a considerable measure of wage restraint. This has to be said, and said firmly to the country.
If we had been able to devalue a little earlier, things would have been easier. If we had devalued when we had legislation for a prices and incomes policy, no doubt it would have been easier to prevent an inflationary wage spiral. I 1663 join my hon. Friends who have said that in the present situation the Government are right not to introduce legislation. However, if we are not to rely on legislation, but are to use the T.U.C. and the voluntary vetting system, we are putting an immense burden on our trade union colleagues in asking them to exercise restraint, and I cannot see this lasting unless the union leaders can tell their members that the element of social justice which was promised in the prices and incomes policy will be maintained. They can do this only if there is a firm pledge from the Government that they will introduce minimum wage legislation.
We must be clear what this means. There is a lot of loose talk about the minimum wage. There has been talk of establishing a minimum wage of £15. No one in the House would not wish to see that, but we have to make a realistic assessment of the cost. It has been estimated that it might amount to £750 million in a year, and anyone who appreciates our present economic situation, when we are desperately trying to improve our exports and our competitiveness, must realise that the country cannot sustain such a burden, with the risk of increasing our unit costs.
It must be clear to everyone that a minimum wage of £15 is unrealistic, but I suggest that the Government should aim at the introduction of a minimum wage of £12 10s., and the phased introduction of a minimum of up to £15 or £16 over a period of years. I choose this figure because the Ministry of Social Security uses it as its base line for all other assessments. This is the major issue at present facing the country. We can no longer have a system in which people working full time get less than they would if they were on social security benefits. Such a situation is totally unjustifiable.
No one on these benches likes the wage-stop, and there is at present a campaign for it to be abolished. It should be abolished for the sick and the disabled—it is quite indefensible in those cases—but much though I sympathise, in present circumstances I cannot support abolition right across the board. Wages in my city are desperately low—Plymouth is renowned for low wages. The main reason is that the Government, through Her Majesty's Dockyard, are the chief em- 1664 ployer. I could not seek to justify a system by which someone going out of work could get more than the man doing a full week's work in the dockyard. That is the main problem in any campaign against the wage-stop.
The real answer is to campaign for a minimum wage, and I believe that we have to accept as realistic a minimum wage structure of about £12 10s. That would be a substantial advance. There is often a danger of pitching our claim so high that the Government can knock it down. By pitching it at a realistic level we can bring very considerable pressure on the Government to introduce legislation of this kind.
If this debate does nothing else, I hope that it gets us an assurance from the Front Bench that an inter-departmental committee will be set up on minimum wage legislation; that we may expect a report within the year, and legislation in the lifetime of this Parliament, with a phased introduction of a £15 a week minimum wage. If this is done we shall be introducing into the prices and incomes policy an element of social justice which will allow us to call for the wage restraint that will be vitally necessary over the next year or two years.
This is not all. Many hon. Members have spoken about those who fall victim to our present social security system. I am particularly concerned with a campaign to get a disablement income. It is a wholly unjust anomaly that no provision whatsoever is made for the housewife rendered sick and incapable of looking after her home, though everyone knows that, in effect, she is a wage earner in any family. When a housewife can no longer do her duties, a very heavy burden is imposed on the family. We all know this to be true.
I know that the cost of introducing an overall disablement income would be very great, but I urge the Government to look at the matter most seriously, and to try to get better research into the number of civilian disabled. We make good provision for the industrially disabled and those disabled in war, but the civilian disabled comprise a wholly unrecognised category. That state of things cannot continue. Other countries recognise the position and make adequate provision, and this major gap in our social security system must be filled.
1665 Attention has been drawn to the chronically sick. I know that the Minister, when at the Ministry of Health, was considerably concerned about this aspect. I want to draw attention to the plight of the young chronic sick in hospital. These people are another deprived section. They are forced into hospital largely because of inadequate financial provision, in the form of constant attendance allowance, to keep them at home, and because there is no integration of the health and welfare services.
These young people, often in their twenties and thirties, are so often committed to geriatric wards. They are only a small percentage of the community—there are only just over a thousand of them—but that they should be allowed to end their days in a geriatric ward, often miles from their family and so unable to be visited at all frequently, is a scar on the conscience of us all. Something must be done for them.
To advocate any increase in public expenditure at the moment is difficult, hut the Prime Minister gave a firm pledge that the Government were committed to shielding those sections of the population on fixed incomes, and the sick and disabled, from the effects of rising prices which will inevitably follow devaluation. I believe that devaluation is a major economic change which offers a real hope of sustained economic recovery and growth rate, but we as Socialists will be judged during this very difficult period when prices rise as a direct result of a Government decision on how we cushion the effect of those rises. It will be a very heavy load and, particularly at this period, we must look again realistically at some of our attitudes to the payment of benefits.
My hon. Friends will know that I have campaigned as vigorously as anyone against the means test as applied to family allowances. It was indefensible in that case, but there are other areas where we must adopt a selective approach. Let us examine each and every one of them carefully and without prejudice, looking at the issue sector by sector to see if we can honestly ensure that aid is channelled to those in need, which is the way we must choose in times of economic stringency.
1666 My hon. Friend the Member for Battersea, South (Mr. Ernest G. Perry) spoke of the very heavy burden of high rents. I have advocated in the House before today the introduction of a means-tested rent rebate for private tenants. I am sure that this must come. I know that it rouses hostility, and that people feel that the drive to greater council house building might in some way be checked. No one wishes to subsidise the private tenant, particularly the bad one, but there is a way in which that can be avoided.
We must use the present machinery of the Rent Act. It would be absurd to give a rebate on any rent that had not been assessed by a rent tribunal as fair, but the burden of private rents of £5, £6 and £7 a week paid by some people living in poverty in our big cities can no longer be allowed to continue. A rent assessment is made for people on social security, but there is no escape for a person on a low wage. In many cases, the council house waiting list is long—five, six or seven years—and often the people are immigrants who have not been able to put their names on the council house list. A heavy rent burden pushes a family into stark poverty. This very difficult problem raises other problems, particularly the problem of abuse, but it can be dealt with.
I believe that in this time of economic stringency there is on these benches a readiness to look at every issue objectively. If we can ensure that the aid is given, and the take up—which is so often the crucial factor in any means test in benefit or allowance—is increased or improved, we can accept such a situation. We all want benefits to be universal, but there is now a greater readiness to look at the payment and receipt of selective benefit. I urge the Ministry to look at this aspect most carefully, because during the next two or three years limited resources must be used to the full. But the backbone of it all—and the greatest attack on poverty—is the introduction of minimum wage legislation. All we ask for is an inter-departmental Government inquiry on such legislation, a request which the Government Front Bench must not reject today.
§ 12.50 p.m.
§ Mr. Alfred Morris (Manchester, Wythenshawe)
I too congratulate my hon. Friend the Member for Bedfordshire, 1667 South (Mr. Gwilym Roberts), both on his success in the Ballot and on his choice of the profoundly important subject which we are debating today. I congratulate him also on the manner in which he introduced the debate.
If I may express one reservation about my hon. Friend's speech, it would be that a negative Income Tax is a long-term solution to a short-term problem. There is no doubt that those who are deprived in our community require short-term solutions for their immediate help. While we must seek generally to improve our methods of social provision, there are some problems which are so urgent that they require the immediate attention of the Government. I am pleased that my hon. Friend emphasised in his Motion:…that the removal of poverty should continue to be a first priority for the Government.Certainly, no one will call into question the enormous concern the Government has shown for those in need, notwithstanding the economic difficulties they have faced.
I wish to refer to the great importance in my constituency, and, I believe throughout the country of the Government's action in ending the widows' earnings rule and of the introduction of concessionary fares for elderly people. The ending of prescription charges was another great gain for those in need. The increase in the number of council houses and in council house subsidies brought relief to many of the poorer people in my constituency and, I believe, in the country generally. Rate rebates, redundancy payments and many other measures have emphasised the deep concern of the present Government with the whole field of social provision.
I am sorry to say that the Government's concern for improving the social services is not shared by some of the local authorities. It caused a great deal of distress to my hon. Friends who represent the City of Manchester that the name and reputation of that city should have been besmirched by some of the proposals for cutting social services which have recently been approved by the Manchester City Council. Indeed, my hon. Friends and I took the unusual step as Members of Parliament of making a personal approach to the city council 1668 through the Lord Mayor. With extreme regret we said that:From being a city which has led the way in welfare and other services, Manchester is being asked to approve policies which seem coldly calculated to hurt the elderly, the very young and others in special need.Poverty in the City of Manchester will be made much worse this winter because of some of the cuts which are being imposed by those who now control the city. I should like to inform the House and my hon. Friend the Joint Parliamentary Secretary to the Ministry of Social Security, who is to reply to the debate, of some of the cuts which are being imposed by the Conservative majority in Manchester. They intend to increase charges for welfare foods and to save £260 by so doing. They are introducing a charge of 2s. 6d. for chiropody for elderly people at a "saving" of £1,120. They intend to save £1,500 on recuperative holidays for those who are in special need. They are even abolishing concessionary sweets and tobacco for elderly people in our welfare homes.
Elderly men's pavilions in the parks of the City of Manchester are to be closed. The winter sessions of the City's play centres, which are so important to the children of working-class families, are to be shortened. They are also reducing cleaning standards in schools and the price of meals on wheels has already been increased. I could read a long catalogue of miserly savings which the Conservative majority in the city council intend to impose during the coming winter.
While, as my hon. Friend the Member for Bedfordshire, South has emphasised, the Government have been giving first priority to removing poverty, we have local authorities which seem dedicated to reducing the quality of life for many of those who are in the greatest need. I have no doubt that the people of Manchester who respect the city's high reputation will have something very strong to say about the cuts which are now being imposed.
There has been reference during the debate to the clash between those who believe in the principle of universality in the social services and those who believe in selectivity. I am pleased that my right hon. Friend the Member for Llanelly (Mr. James Griffiths) is present for this debate. 1669 I hope that we shall hear from him before the debate is concluded, because he is renowned throughout the country as a man who, embracing the principle of universality, removed a wider area of poverty than any of his Ministerial predecessors.
It sounds attractive to suggest—it sounded attractive when my hon. Friend the Member for Plymouth, Sutton (Dr. David Owen) said it—that we must introduce more selectivity into our social services. I understand the aim of trying to give more help where it is particularly needed, even if I do not admire some of the language in which it is expressed. They speak about the need for "a selective superstructure on a universal base". All I can say is that I wish that some of them, instead of using fancy language about important social problems, would study the conditions of life of the people they are seeking to help.
To the man who speaks about a selective superstructure on a universal base, my answer is that I was recently with a teacher of a young boy who was called out of his class at a quarter past two in the afternoon by the headmaster, because it had been discovered that the child had had no lunch.
Instead of going to the school canteen, the child had been walking about during the lunch hour. The headmaster asked him why he had not had his school dinner and the boy was reluctant to explain. Finally he said, "My mother could not afford it today. I did not want to tell anyone. I was just playing in the playground". The boy was given a school meal, but there must be many children who are entitled to free school meals but who go without.
As I understand it, the Department of Education and Science has recently been conducting inquiries, with the help of local education welfare officers, into the reasons why parents who could apply for free school meals for their children, do not apply. I understand that one of the answers given by many parents is that, although they know that they are entitled to free school meals for their children they do not apply because they simply do not want others to know their business. Nor do they want to embarrass 1670 their children. Hon. Members on both sides will mistake the working people of this country if they forget the element of family pride. This is the answer to those that say that the principle of universality must go and that selectivity must everywhere take its place.
I speak as one who had free school meals in the 1930s and I sometimes think that there are people who discuss universality and selectivity with little personal experience of their effects. My mother, a war widow, was not particularly happy for everyone to know that I was receiving help and that she was receiving help from public assistance. Some of those whose problems we are discussing today are people of considerable pride. If asked why they do not apply for benefits which are available, they are likely to give the answer I have mentioned.
Some of those who do not believe in universality say that the rate rebate scheme is a good example of selectivity in practice. I admire this scheme. It has brought considerable relief to thousands of Manchester people. If I were making a longer speech, I should compare it very favourably with the Rating (Interim Relief) Act, 1964, which was a most unsatisfactory attempt to help those in need of rate relief. But there are thousands in Manchester who are still entitled to rate rebates who have not applied. I suggest that the reason why people do not apply for benefits made available by Parliament and to which they are selectively entitled, is that they do not like selectivity. They like the principle of universality. They will claim benefits which are universally available and which allow them to mind their own business. They resent a system which puts them in the position of being pointed to by others.
§ Mr. William Molloy (Ealing, North)
My hon. Friend is making a very interesting point, about which I feel keenly. Ought not the State to ensure that, if it is Parliament's desire to give help to those who need it, the apparatus is organised in such a way that the help is available to those who require it without their having to apply and without their having to study advertisements in newspapers telling them how they can get the help? Should it not be automatic?
§ Mr. Morris
This would be a very good system. My fear is that it may be a long-term solution to a short-term problem. I was very impressed by an article by Professor Titmuss in the New Statesman in which he wrote of the difficulties of introducing such a system in the immediate future. I am sure that my right hon. Friends are urgently addressing themselves to the problem of finding a completely new system. But in the short term, problems face us which require immediate Government action, particularly at a time of devaluation. Hon. Members opposite have repeatedly said this week that there has been more than one devaluation by a Labour Government. For my part, I am thankful that it is not a Conservative Government who are at present carrying through the social implications of devaluation. I am satisfied that the present Government will have regard to the effects of devaluation on those most in need. Indeed, I hope that my right hon. Friend the Minister of Social Security will even today be able to say something about the urgency with which the Government are studying these problems.
Hon. Members will know that I have been very concerned to help the Chelsea Labour Party's campaign for the young chronic sick. Many Parliamentary Questions have been recently tabled by my hon. Friends and I who are concerned to ensure that help is given quickly to the young chronic sick who are in hospital. I understand that my hon. Friend the Parliamentary Secretary to the Ministry of Health had a meeting recently with the Chelsea Labour Party's campaign and I hope that there will be an early announcement of what the Government intend to do to meet the campaign's legitimate claims.
One of the problems of those who are deprived is that our community is denied the abilities of many able children. It is sometimes overlooked when child poverty is discussed that child poverty leads to children leaving school early who could continue at school. Our sixth forms are too representative of the middle class, with only a very small representation of the working class.
Anyone who knows anything about sampling educational ability knows that, if children are tested in sufficient num 1672 bers, whether from the middle class, the working class or any other class, there will be a normal distribution of ability, And if we want to modernise our country and expand our industry we need to avoid wastage of abilities among working-class children.
It is suggested by some people—indeed, the independent schools in some parts of the country are already doing this—that we should dispense with free school milk and that those who want school milk should pay for it. I agree-with a former Leader of the party opposite, Sir Winston Churchill, who said that school milk was the best bargain ever struck by our community. I hope that we shall have an assurance at the end of this debate that there is no question whatever of considering selectivity in the matter of providing school milk.
I received a letter recently by Professor John Yudkin of Queen Mary's College in the University of London, an expert in nutrition, who had just completed an interim study of the importance of providing school milk. His study was not of children in the poorest schools in London—far from it. But he found that there were many children who had had nothing to eat between afternoon tea one day and their school meal the following lunch time, except for school milk. We save a great deal from the money that we spend on school milk, and I hope that wherever else the selectivists try to penetrate, they will not be allowed to penetrate into that field.
I end as I began, by congratulating my hon. Friend the Member for Bedfordshire, South for selecting this important topic, and I hope that the many important points which have been raised in this debate will be fully answered by the Parliamentary Secretary.
§ 1.12 p.m.
§ Mr. Derek Page (King's Lynn)
May I add my voice to those who have congratulated my hon. Friend the Member for Bedfordshire, South (Mr. Gwilym Roberts) for having raised this topic today. I wish to express my appreciation of the attitude shown by the right hon. Lady the Minister of Social Security and the Joint Parliamentary Secretary, who has been present most of the morning, on the way in which they handle the great volume of case work which we send to them. I have certainly found, in their 1673 replies, the most careful attention to detail and the most humane attitude.
I have been quick enough to criticise Ministers when I thought they needed it, and I thought it only right to pay tribute to the Department on this occasion. There are great differences between the letter of the law and the way in which it is carried out sometimes, and the Department has been a great cause of pride to Members on this side of the House.
During the last week or so the House has been giving considerable attention to the nation paying its way, the problem of the balance of payments and increasing productivity. This is, of course, an imperative topic. It is impossible for any Government to give any increases or even a guarantee of social security if the country is not stable and is not increasing production. I am one of those who think that the measures taken a week ago at least give us some light at the end of the tunnel, some possibility of fighting our way out of our difficulties on to a permanently stable basis. I am not one of those who think that the Government expenditure on social services has to be cut as a necessary condition of stability in our economy. This is an absolute red herring and needs refuting most forcibly.
The difficulty with the country has been inadequate fixed investment in industry and infrastructure, and this is quite irrelevant to the question of the social services. Cuts in the social services would cut demand, and when industry is running below its maximum level further cuts would be utterly useless and, in fact, damaging. Therefore, I hope that the Government will set their face completely, firmly and resolutely against any cuts in social benefits as a means of trying to improve the economy, because this would be completely irrelevant.
It is very relevant at this time to turn our minds not only to the stability and size of the national cake, but also to the division of the cake which we are essentially considering in this debate. I wish to draw attention, in particular, to one medium term measure which can be of considerable assistance in combating poverty. It has been suggested this morning that we should have a negative income tax system. This plainly merits great and detailed attention, but I agree with those who say that this is likely 1674 to be a long-term answer. As Lord Keynes said, in the long term we are all dead. The problems we are facing are short term as well as long term.
I should like to draw attention to the work of the Hunt Committee, which is closely related to the problem we are considering. The development areas receive substantial economic assistance, and a number of my hon. Friends and I have constantly criticised the narrow basis on which this assistance is given. It is based on unemployment. Yet the average incomes of workers in the development areas are frequently higher than the average incomes of workers in areas which do not receive this assistance. Certainly, in Norfolk, the position is most striking. The exact figures are very difficult to come by and there is a real need from the standpoint both of the Board of Trade and of the Ministry of Social Security for better statistics.
The statistics for Norfolk are included in the Eastern and Southern Region of the country where average earnings, according to the latest available figures, are £21 17s. 7d. a week. To quote these figures in Norfolk results in a hollow laugh from the workers there who average £14 to £15 a week, which is only a little above the social security level. No wonder the wage-stop impact in Norfolk is appreciably above the national level.
There are many agricultural workers in that part of the country who, for four or five extra hours of work a week, receive average earnings of £14 11s. a week and whose basic rate is considerably below that and below social security level. Apart from the agricultural workers, those in other industries and services are abysmally badly paid. It is for this reason that we have in the area a very high level of free school meals. The last time I looked at the figure it was about 40 per cent. above the national average.
Improvements to social security are desirable and will no doubt be very welcome when we get them, but the problem will be rendered very much less if the Hunt Committee comes through with the results that we all hope for. The Committee is looking into the problem of the so-called grey or intermediate areas. One question that it is asking is: "what are the criteria for these areas?" I think that it must be said again and again that the main criterion that needs to be considered 1675 is low earnings. It is scandalous that the average earnings in areas such as Norfolk should be only a little above the social security level and that taxation from the same areas should be used to help the development areas where the average earnings are several pounds a week more. It is a Robin Hood act in reverse and quite unacceptable to feeling on this side of the House and, I am sure, in the House in general.
In its work the Hunt Committee must have impressed on it the need to take earnings as the main criterion. If it can achieve a better balance of earnings over the country by the recommendations that it makes it will have done a wonderful job not only for the economy but in relation to social services because it will have made social security benefits less necessary in many areas which are over-reliant on them at the moment. I do not know how many times constituents have said to me "Look at so-and-so down the street. He does not work. Why should he? He can get more from social security benefits than he can get in employment".
There is a measure of truth in this in certain cases, although the overwhelming majority of workers prefer to work as long as they can get a job. But the answer, most emphatically, is not to push down social security—the wage-stop is a running sore in this respect—but to even up earnings as between the regions. The Hunt Committee's work is very relevant to the subject that we are discussing. I hope that my right hon. Friend will point out to Sir Joseph Hunt the impact of that work on her Department's responsibilities.
Conditions of life in many villages in East Anglia are well below what anybody in the House would desire. I am strongly in favour of the suggestion that an interdepartmental committee should consider the implications of a minimum wage and the related problems of a negative income tax, but I would press again that in looking at the problem we should realise that most people want to be able to get a decent week's wage for a decent week's work and that giving them the opportunity is the greatest thing that we can do for them. Again, I press my right hon. Friend to approach Sir Joseph Hunt and make clear the implications of his work in regard to social security questions.
1676 I believe that the debate has been extremely valuable. I am, however, depressed by the fact that all of the speakers so far have been from this side of the House. I am certain that if we had been discussing company taxation we should have seen a great deal of interest on the other side. Surely this is a subject which should concern the whole House and not be left simply to those on the Government side.
§ 1.25 p.m.
§ Mr. William Molloy (Ealing, North)
I am sure that not only the House but all those who are suffering from some form of poverty will be grateful to my hon. Friend the Member for Bedfordshire, South (Mr. Gwilym Roberts) for giving us the opportunity to discuss his Motion. All of us must acknowledge that it is an appalling situation that a wealthy major industrial nation like ours should have in its midst a not inconsiderable proportion of its population who are still poverty stricken. The reason these people are still poverty stricken is that they never had an opportunity during their working lives to put money away for the evening of their lives. One of the grimmer aspects is that there are people at work, and making a contribution, but the result of their labours makes it impossible for them to enjoy the average standard of life. If that is so, there is something very seriously wrong.
I acknowledge that we have had an enormously increasing problem over the years. It is a terrible paradox. Since the war, irrespective of which party has been in power, the general standard of life for the majority of our people has continued to rise, but at the same time for a minority the standard of life has been depressed, primarily because of lack of cash, although there are many other ramifications than mere lack of money. To carry the paradox further, one of the problems that we must acknowledge is that generally speaking from the moment a person is born until he is 15 or 16 years old he is a non-contributor. From 16 to about 55 he makes his contribution. After 55 it tails off and he becomes a non-contributor again.
I feel that I ought to mention particularly the great measures introduced by people like my right hon. Friend the 1677 Member for Llanelly (Mr. James Griffiths). In a debate like this it would be a grievous error not to mention the massive contribution made to our standard of life by Aneurin Bevan and the National Health Service. But what has happened as a result of these measures is that not so many children have been dying before they are 9 or 10 and many more people have been living longer after they have retired. Therefore, at the two ends of the scale, in cold economic terms, the number of non-contributors has been increasing. These numbers have been increasing because of the extension of the welfare services. This is the tough problem that we must examine.
Whether hon. Gentlemen opposite like it or not, and whether people like Sir Paul Chambers like it or not, the answer to their brutal cry to cut Government spending is to reduce the numbers of those who receive help in old age and those who are non-producing. One of the reasons why we have so many healthy people today is the single factor that they could get orange juice in their very early youth. That simple little measure, allied to the provision of milk, has produced a problem. We must have the courage to face that problem. The answer does not lie, as Sir Paul Chambers and his like would have it, in condemning those who are young today and in trying to forget those who are old by reducing Government expenditure. If the Government want to reduce their expenditure, I would advise them to see how many more millions they can knock off the ludicrous and ridiculous defence burden that we carry.
I think that the point I have just made was worth making. Although it might seem remote from the subject of poverty, it is ultimately related to it, as we are talking about saving money to increase welfare aid to people who need it. I have already said that we are a rich nation, but we have those who cannot earn and those who are not earning enough, even though they are working. We can lot go on like this. A man who is working and has a large family may know that through the social insurance and welfare services he can receive the same amount of money as he earns at work. Of course, it happens that now and then a few people take advantage of this. 1678 But there are cheats all along the line, from the poverty-stricken to the multimillionaires. The House would make a grievous error if it fell into the trap sometimes urged upon us by non-thinking people of shaping our legislation only to prevent the cheats from cheating, at the same time preventing millions of others from receiving their rights and desserts.
We must have the courage to point out that the House has a responsibility to legislate for the good people, and not the tiny minority who cheat at all levels. We should say this loud and clear, and no party should join the clamour of those who wish to erase welfare services because of the cheats or to cut back standards of life because of the frenetic outbursts of people like Sir Paul Chambers. These things annoy and hurt me because I know, from my background, that in conditions of grim poverty there is not merely a lack of money but a lack of many other things as well.
The very fact that my right hon. Friend the Member for Llanelly is here this morning brings vividly to my mind one of the most grievous things that scored my soul. I can remember my mother bringing up a family of six, and she had to do it on a provident cheque. She got a cheque for £2, and every week for 50 weeks—rates of interest were very high for poverty-stricken people—she had to pay 1s., until she had paid 50s, for the 40s. Sometimes, when the dole had run out and there was nothing more on the parish, what was more serious than the poverty was for my mother on a Saturday morning to have to train me to tell a lie. When the insurance man knocked on the door she would say, "Go and tell him, son, your Mama is not in." I can understand the agony of soul for her, as she was a religious woman. That is the thing that was savage, and I did it. These things are still going on in some parts of the country today, and that is wrong.
Those of us who believe in the principle of "feed my lambs" should attack those with their millions who are still afraid that perhaps the welfare services and the medical help we provide for the sick are the cause of our trouble, and that the grave economic disaster we are supposed to have had was really brought 1679 about by all those who have been taken ill and have been wasting the national health and welfare services. The truth is the reverse. Facts and figures show beyond a scintilla of a doubt that not only have people been more healthy over the years, because of the National Health Service, and therefore enjoyed a better life, but that the hours and days lost through sickness, particularly in the heavy industries, have been drastically reduced. That is because when something ailed working men they could have it arrested immediately in its early stages, thanks to the National Health Service, and did not try to carry on until they were struck down, sometimes for weeks at a time. Because of this, the national wealth has been increased.
If there is something in which we have led the world in terms of humanity, decency and even harsh but intelligent economics it is the introduction of the National Health Service. What we should have been doing and, perhaps, might have done, if the electorate had not in 1951 deserted the party which introduced these measures, was to go on building on them and making ourselves richer. But we failed to do it because the electorate failed to return those who had had them as the cornerstone and fundamental of their Socialist principles.
§ Mr. Ernest G. Perry
I think that my hon. Friend rather misjudged the situation when he said that the people deserted the Government of 1951. In 1951, the Labour Party polled the highest vote of any political party—250,000 more than the then Opposition, which became the Government.
§ Mr. Molloy
The grim fact is that owing to the political arrangements in this country the Labour Party lost the election, and the country lost something very valuable—the continuing building up of welfare services and the National Health Service.
I do not mind hon. Gentlemen opposite——
§ Mr. Molloy
—smiling at the mention of the National Health Service. They should talk to constituents of mine who have told me about times when they have 1680 been on holiday abroad and their child has suffered an accident or sickness and been taken to hospital. They did not think of what it would cost them, for all their concern was for their child. It was only later that they had the bill which causes more distress and which would not have been incurred if the accident or illness had been in this country.
In this connection, I should like to mention that we hear a great deal nowadays about nationalisation. It has always been built up as if it were some form of ogre and oppression. Yet it is remarkable that when there is an accident in the street and a person is lying on the the road we run to a wickedly nationalised telephone to 'phone for a wickedly nationalised ambulance to take the stricken person to a wickedly nationalised hospital where wickedly nationalised doctors, nurses and surgeons will do their best to repair the damage and save the person's life. The tragedy is that far too often we do not arrive at the real frontiers of understanding of what is meant by national welfare services and the National Health Service until we are confronted with personal grief and anguish, when suddenly we acknowledge how wonderful they are. I hope that people in this country will reach those frontiers without first having to endure personal grief.
I return to the main gravamen of the Motion. We know full well that there are people in this country who exist at below the subsistence level. All of us in the House feel ashamed of this, and want something to be done about it. It annoys me sometimes that, when we have a debate on the principle of some social measure, there is no Division and we are united in the House, but later, when we have to decide how it is to be paid for, we divide.
§ Mr. Gwilym Roberts
As a further comment on the nature of the debate, has my hon. Friend in mind that, when we have a debate on taxation, that is, positive taxation, the benches on the other side are full, whereas, when we are considering negative taxation, no hon. Members opposite seem to be interested.
§ Mr. Molloy
I am grateful to my hon. Friend for making that point. I do not 1681 charge hon. Members opposite with hypocrisy, but I feel that they should examine their consciences. As I say, when the House votes on Second Reading for increased pensions to old-age pensioners, for example, the Opposition agree in principle, but, when the measures to pay for it come before the House. they go into the Lobby against them. I do not say that they are being hypocritical, but I cannot think of the word to fit that sort of behaviour.
We must look at the whole range of our social services as a whole. It is not just a question of money. We must consider the problem of loneliness and what it really means, among old people and, sometimes, among young people as well. Several problems are involved in this question of our welfare services and a standard minimum income. They are all related, and we cannot escape them.
For example, although we have a grievous housing problem and although the present Government are spending more than £500 million over what their predecessors spent on slum clearance and house building, I sometimes wonder what the situation would be if we did not have the system under which local authorities build houses. Our state would be serious indeed. This is very much the concern of people who own their own houses, too. I regard it as laudable to own one's own house, to persevere and to work to buy one's home. I am all in favour of it. I support Nye Bevan's dictum that everyone in this country should own his own home, and no one else's.
§ Mr. Molloy
And have one to let, perhaps. What Aneurin Bevan used to argue might be thought idealistic, but we should still try to achieve it. He said that, during their lifetime, a man and woman needed three homes, one when they got married, with just one or two bedrooms, then a larger home when their children came along, and later, after the children had left, a smaller home again. This should not be impossible. Many people in the top strata have it. Their worry is not so much to get one home but where to spend their holidays. If the fog is bad in London, should they pop off to the South of France? Those are 1682 their problems. What we should do is to concentrate on the problems of people who cannot even afford a bus fare; and there are many such people today.
This question cannot be looked at only in terms of money and a national minimum wage. In order to determine what national minimum income a man should be entitled to, one has to relate many other factors. I mentioned the laudable object which many people have in owning their own homes for this reason. If the 40 per cent, or so of people in this country who are now housed by local authorities came on the market to try to buy homes of their own, the cost of housing would go sky-rocketing and the situation would be chaotic. It should be recognised that, when we help people in need through the provision of council houses, we are at the same time helping other folk who wish to buy homes of their own. Perhaps, when people realise and acknowledge this, they will see that the effect of the State helping one group is to help them, too.
There are so many aspects to this problem that one is tempted to go off into other matters.
§ Mr. James Johnson (Kingston upon Hull, West)
I am greatly enjoying my hon. Friend's speech. Will he turn his mind to a parellel question and appeal to the Government for a concerted policy in these matters, in other words, a combined fiscal, economic and social policy for the lower-paid workers? I am sure that my hon. Friend can easily turn his mind to that aspect of the matter, and we shall be delighted to hear him a little longer if he does.
§ Mr. Molloy
That is very kind of my hon. Friend. I wish that I could go a little further and outline what I might do if I had a couple of months on the Front Bench. I should need only one or two months to set things going in such a way that those who followed me would be worn out in a couple of weeks trying to maintain them. However, for the present, I hope that my hon. Friend the Member for Kingston upon Hull, West (Mr. James Johnson) will catch the eye of the Chair and expound further on the point that there is far more than the mere question of money to be taken into account when we consider a national minimum wage.
1683 I intervened in the speech of my hon. Friend the Member for Manchester, Wythenshawe (Mr. Alfred Morris) to remind the House of one irritating feature of our welfare services. So much good intention expressed in the House gets wasted because people do not know how to apply for what is rightly offered to them. The State makes sure that it has the apparatus to take resources from people in the form of taxes. It should be equally determined when it is dishing help out. Those who need help ought not to be left on their own to try to find out how to set about getting it. I hope that the Government will look into this matter very closely.
Perhaps the day will come when, having assessed what the minimum wage should be, we have the courage to tie it permanently to the rising cost of living. We hear a good deal about the rising cost of living, but I have never known a time when it did not rise. It is essential that, having assessed what a minimum wage should be for those who need it, we pin it to the rising cost of living. In that way, we shall solve the problem.
I know the argument about how we are to pay for it. We shall pay for it by our investment in other social services. Our education service will turn out more scientists, more doctors, more technologists, more engineers and the rest. Our young people in the schools, the colleges of advanced technology and the universities, the ones we are wickedly subsidising, will give us the benefit in years to come. This is one reason why I am appalled by the naivety of some of our so-called captains of industry who do not recognise the simple truth that the education of our young people is one of our most valuable national services. It is one of the most worthwhile investments that the nation can ever make. The repayments will be enormous. From these sources will flow all that is required to build up our welfare services and establish the minimum wage.
After a time, the number of people entitled to a minimum wage will run down. There will be those who are unemployable, and they will have to be looked after, but the real problem, as I see it, is the problem of those who can and do work but who still do not receive 1684 enough. The modernisation of industry and the development of our economy will put this right in time. The Government have made a start. Of course, the country is impatient. We have not performed the miracle in two or three years. People say that Britain is not yet on its feet, and I suppose that, to an extent, they are justified. They expected that, in three years, a Socialist Government would bring about changes which a Tory Government would never do in 13 years, so there is, perhaps, some justification for what they say. I hope that there will be patience. There is so much on the way in modernisation and regional plans which will make a great contribution to welfare services and in establishing a basic minimum wage.
§ Mr. James Johnson
I have listened for the last half hour and have enjoyed it. Will my hon. Friend turn his mind not so much to the question of the minimum wage per se but rather to the question of the equalisation of wages and to whether, if the minimum wage is established, we should not prescribe a ceiling? Otherwise, if we keep lifting the differentials we shall get the better paid workers always trying to keep their differentials up.
§ Mr. Molloy
I have great sympathy with that argument and, although I do not go along with it 100 per cent., generally speaking I am with it. I am always a little hurt if a point is made that we could not have a minimum wage because someone just above it would be upset. I do not believe that people would be as mean as that. We have the retirement pension at 65 and sometimes one has constituents complaining that they are 64½ and should have the pension then. But, of course, someone six months younger than that could say the same thing. Indeed, one could continue the process until one would be giving the pension at the age of 21.
We shall not find the panacea in one piece of legislation but we must move towards it. I hope that the Government will have the courage to create a problem through their own legislation in establishing a minimum wage because the immediate effect would be to help those in immediate need. With other measures, we could move to the situation where no one would require statutory enforcement of a minimum wage. That is the 1685 quintessence of the problem which I hope the Government will tackle.
I believe that, if the Government did something like this and set a standard which could be of such wonderful value to the nation, and which was recognised by the nation, then, even if the tragedy should happen of our not being returned at the next election, the people would acknowledge that this must not be done away with. We have all heard in the past about what a terrible burden the welfare services and the National Health Service were supposed to be and how the party opposite would try to destroy them. It tried, but could only do so in a surreptitious manner. It did not dare do so openly.
§ Mr. David Winnick (Croydon, South)
This is a serious subject which should be debated at length, but is it not rather strange that the party opposite has not seen fit to come into the debate at all? Not one speech has been made from the opposite benches. Would hon. Members opposite not do far better to deal with the problem of family poverty instead of carrying on smear attacks against the Prime Minister?
§ Mr. Molloy
I wonder whether my hon. Friend the Member for Croydon, South (Mr. Winnick) is being fair. Does he really expect hon. Members opposite to have any knowledge of or any concern about the poor? My Socialist spirit would not allow me to lay such a heavy burden on hon. Members opposite. This sort of subject is our responsibility and that is why we are here today.
However, I believe that some hon. Members opposite as well as hon. Members on this side are concerned about the fact that, in a reasonably rich country, we still have poverty-stricken people, people who are lonely and poor, and that we somehow cannot do anything about it or are at least not enough. I should like to see—in the lifetime of this Parliament, I would hope—the principle of the National Health Service being applied to National Insurance so that there would be overall coverage without the business of cards and stamps and so forth. We should set this as an ideal.
One of the beautiful things about the National Health Service is that one is 1686 entitled to it, although we have heard from fifth rate, overpaid comedians on the B.B.C. and the I.T.A. old jokes like the one about the surgeon stopping in the middle of an operation because the patient has not enough stamps on his card. We know what repulsive nonsense that is. Under the wonderful legislation of the National Health Service, we not only have no discrimination amongst ourselves but we even say to a stranger in our midst, "If you are in need of medical services, if you require alleviation of pain, we will do our best to help you."
§ The Joint Parliamentary Secretary to the Ministry of Social Security (Mr. Charles Loughlin)
I should not like my hon. Friend to convey a wrong impression. It is not competent for strangers to come to Britain for medical services. If people are resident in this country on a temporary basis, we give what we term, "Good Samaritan" service. That is our policy, but that does not mean that anyone can come here and expect as a right any medical services which they cannot get in their own country.
§ Mr. Molloy
I take the point. Indeed, I was almost getting to the point of my remarks when my hon. Friend interrupted me. Earlier, I used the expression, "Feed my lambs". I, too, was about to use the expression, "Good Samaritan". I do not think that any other country in the world can approach our National Health Service and its Good Samaritan principle. One certainly hopes that, with the passing of the years, the principle of reciprocity will spread wider throughout the world.
I would much rather see a world in which reciprocity of medical services was gaining ground rather than military alliances. That is what ordinary people want more than anything else. But before we can arrive at that wonderful and same situation, we have so much to do in curing poverty and helping the poor in our own midst that I believe that the proposition outlined in the Motion is a challenge not only to the Government but to the people, because if we set about really tackling these problems and really want to help the aged and sick and those who, even in work, cannot earn enough to sustain their families, then someone has to give something.
1687 The worst situation of all is saying that one wishes to help and that one agrees with such a principle but only on condition that someone else makes a contribution to pay for it. That is what I hope the nation will acknowledge, otherwise it would be a situation of almost supreme hypocrisy. However, if that acknowledgement could be achieved, then the terms of the Motion could be fitted in to Government legislation and we could have an onslaught on the problems of poverty, of the poor, of the ill-housed and of the lonely. All these categories are extant in our nation and we should not and cannot ignore them.
If the terms of the Motion are taken seriously by the Government and cognisance is taken of the speeches today, I believe that this could be a good day not only for the poor, the wretched and the ill-housed but for every soul in the country, for the consciences of those who have plenty, and that it would be an encouragement to those in need to know that they were entitled to help from their fellow men. If we do this, we will have made another stride forward towards putting sanity back on the agenda of human affairs.
§ 2.0 p.m.
§ Miss Joan Lestor (Eton and Slough)
One of the reasons why we should be grateful to my hon. Friend the Member for Bedfordshire, South (Mr. Gwilym Roberts) is that he has given the House an opportunity to identify the various areas of poverty which have been discussed in general for so long, although it is only comparatively recently that any attempt has been made to say what they are and where they are.
In these attempts to identify them we have been supported by organisations like the Child Poverty Action Group and the Disablement Income Group and recently by the Plowden Report which identified areas of poverty which militated against educational success among groups of children. We also have the report by the Ministry of Social Security, "The Circumstances of Families", and much of the material which has been mentioned by my hon. Friends today.
I support the campaign for a minimum income as far as it goes, but it must also be borne in mind, now that the 1688 campaign has been taken up by the trade union movement which has fixed that minimum at £15 a week, that it must be waged in conjunction with the groups, particularly the Child Poverty Action Group, which have emphasised the different aspects of the attack on poverty. Although the efforts of these various groups to find a solution are different, they are complementary and must be seen as such, and those various aspects have been highlighted today. Although a minimum wage would deal with only part of the problem, it is not unreasonable to suggest that it should be equal to the amount which many people receive in social benefits when unemployed.
My hon. Friend the Member for Ealing, North (Mr. Molloy) made a very important point when he dealt with the miscalculations which had been made over the last 10 or 15 years so that as standards of living have risen and accumulations of material goods have increased, it has been assumed that it has been happening all over the country among all groups. Of course, that has not been the case, and to some extent the gap has become larger as these small but identifiable groups of people have become relatively worse off and, in some instances, absolutely worse off. This has also occurred in America where a similar sort of problem has developed, partly from the same but partly from different causes.
When we discuss selectivity, one has to talk in terms not so much of the phrase "means test", which rightly conjures up all sorts of discomforts, but in terms of the maldistribution of resources in the last few years. We have to set about putting that maldistribution right and redistributing social benefits and the access to social benefits more in accord with need. I was, naturally, pleased to hear that reform which we take so much for granted now, the introduction of the National Health Service, mentioned several times today, because it did so much to relieve pockets of poverty among vast sections of the community who required medical services.
It established an important principle which members of the Socialist Party cannot underline too much: for the first time in social history it established access in accord with need and not in accord 1689 with the amount of money in one's pocket. This is a basic principle of the Labour movement and these are the terms in which we have to think when we discuss pockets of poverty and what we would like to do about them and how we would like them to be alleviated.
From various Ministerial replies and speeches from time to time it is perfectly obvious that the Government themselves are very anxious to do all they can in social security generally to redistribute resources along the lines which many hon. Members have already suggested. One of the fallacies in the argument of those who say that the country has been impoverished, as they have wrongly said, has been to say that the country has paid out social security benefits to those not necessarily in need of them.
This is the basic argument of those who want to introduce some form of means test or some particular type of selectivity, although not all types, instead of having universal benefits. The argument is that we should limit universal benefits and concentrate on those people who need them. It is said that we spend far too much in terms of benefits compared with what we earn and what we can afford.
But one of the interesting things about this is that the proportion which other countries spend in terms of sheer cash benefits and insurance and public assistance and family allowances is such that over the last few years Britain has slipped. At one time we were proud of leading many other countries in our attitude to social benefits and the welfare schemes which we wanted to introduce.
§ Miss Lestor
The hon. Gentleman says that it is misdirected, but it depends what one means by redistribution. I am in favour of taking more from those who need it least and giving it to those who need it most by having some form of wealth tax. That is one way in which I would redistribute the wealth of the country. Others would have different methods. Others would want to concen- 1690 trate on giving benefits to those in need. [Interruption.] However, as the hon. Gentleman cannot do me the courtesy of listening to the reply for which he asked, presumably he does not want my answer.
§ Miss Lestor
The hon. Gentleman is amazing in that he can talk and listen at the same time.
I do not want to go over the various categories which have been highlighted and the differences between the various aspects of the disabled and the chronic sick. However, I want to highlight much more that what one receives for disablement is very much a matter of how one got disabled rather than the amount of disablement. With all the knowledge now available from the Disablement Income Group and others, it is time that we assessed the need of the disabled in terms of the disablement and not in terms of whether it occurred while in Services, or at work, or whether one was born disabled. Much more attention must be given to that. Hon. Members have already referred to young widows struggling to bring up children and their difficulties compared with those of their friends who have husbands earning a reasonable wage to support them. These are the groups that we have to look after, especially in relation to what is to happen to them in the next few months.
§ Miss Lestor
I include the chronic sick. I did not want to go back to arguments which have already been adduced.
I turn now to the question of family allowances. We have been discussing the relevant Bill, and will again do so next week. The Government have increased family allowances—not before time. I do not think that they have given enough, but that is another argument. The question is whether, by our resources, we are meeting the needs of these groups in terms of family allowances.
Reference has been made to the question of school meals and the difficulties experienced by many parents who qualify because of their limited resources, but do not apply for free school meals 1691 because of the embarrassment involved. They wish to safeguard their children from embarrassment at school. The pamphlet issued by the Ministry of Social Security, dealing with free school meals, points out that one of the alarming facts is that among the very group of families whose resources are below requirements the proportion of children who should be receiving free school meals, but do not is very worrying.
What worries me is that if the price of school meals rises, a person who has two children at school will presumably pay 5s. a week more for their meals, and if he receives an extra 7s. in family allowances there will be precious little left if he has to pay tax on that allowance.
Peter Townsend, the sociologist, has worked this out in some detail. In my opinion, we ought to pay much closer attention to the question of the application and availability of free school meals and the need to make sure that the system operates in such a way that the humiliation referred to by my hon. Friend, and the difficulties involved, are removed.
I want to refer to the burden which is placed upon people who have handicapped children, and the poverty that this necessarily brings to a family. If we study the information available we find that among the disabled the handicapped and the chronic sick there is a need for reassessing our resources. My hon. Friend also referred to Mr. Simon Yudkin, talking about malnutrition and school milk. I want to refer to him in another context. Yesterday, the Government said that they would amend the Nurseries and Child-Minders Regulation Act, to try to deal with the question of unregistered child minding and the problems involved, because many tragedies and inadequacies have been discovered.
A recent report of a panel headed by Mr. Simon Yudkin, engaged on child welfare, highlighted one fact that at another time I hope to press the Minister of Health about very strongly, namely, that in our deprived areas, and in the twilight areas in particular, women are being forced to go out to work because their husbands are not earning enough to keep them and their children.
1692 In many of these areas the opportunities for looking after young children of these people are very few and this has given rise to the whole structure of unregistered child minding and inadequate services. For reasons which I have not time to go into now, we have not kept pace with the increasing need, through local authorities, to looking after the children of women who have to go out to work. The Motion refers to the establishment of a minimum income, and to some extent this would alleviate the dangers and difficulties. Many women will always go out to work because they want to, and they will leave their children to be looked after, but I am sure that many others are forced to go to work—simply because their husbands are not earning enough—and leave young children in inadequate surroundings, perhaps with people who are not as responsible as they should be and who are not known to the local authority as registered child minders. From that point of view, a discussion of a minimum wage is very desirable.
The momentum of poverty among these groups of people increased in the 1950s and 1960s. We are now beginning to realise this, and much further research is needed. This momentum must be halted and our social security arrangements and resources must be rearranged and redistributed to meet the needs of these groups. One difficulty that my hon. Friend highlighted in respect of education should not be forgotten. We talk in terms of education costing the country much more, and that is right, but we must look at the other side of the picture. Very often our discussions miss out the children that we intend to help. When we talk in terms of an overall figure for educational expenditure, we miss out areas such as the Plowden twilight areas and the areas that Shelter has talked about.
It is quite obvious that while we are waiting for devaluation to have its full effect there will be increases in the cost of some of the things we use in our lives. The important thing is that those people whose difficulties have been highlighted by hon. Members this morning shall not suffer, and that their already low and inadequate standard of living shall not be depressed further. We must also remember that it is often these groups 1693 of people who are least articulate, and if this debate has done anything it has shown that there are many people here who want to speak on their behalf.
§ 2.19 p.m.
§ Mr. James Johnson (Kingston upon Hull, West)
I am very pleased to be able to speak in this debate—in view of "packed benches" opposite—since I can honestly say, for the first time, that it is possible for me to begin with the time honoured, hackneyed cliché that I had no intention of speaking when I entered the Chamber. It has never happened before. Usually, one enters the Chamber and sits down—I must not refer to the old custom of attempting to be called—one sits down in expectation, perhaps until two minutes to 9 o'clock, when the Minister says, "If you will take only two minutes and sit down at 9 o'clock we will let you speak", and then the Whips come on. That has not happened today, and it is unusual.
I am like a member of an England XI playing a test match at the Oval, when Her Majesty's Government are playing out time. My colleagues have batted stalwartly and solidly, and, in particular, I refer to the delightful and informative speech of my hon. Friend the Member for Ealing, North (Mr. Molloy), who, with his eloquence, kept us spellbound for at least 35 minutes. This enables those of us who are way down the batting list to take much less time than we had expected to take.
All I intend to do is to restrict myself to the very narrow point raised by the first 11 words on the Order Paper—To call attention to the need for a national minimum income".My hon. Friend the Member for Eton and Slough (Miss Lestor), like my Celtic colleague, spoke in eloquent terms. Moreover, as a woman she is able to give her speeches an emotional overtone with which we cannot compete. I thank her for her speech, and I am delighted to follow her in the most sympathetic atmosphere which she has created in the House.
My hon. Friends have spoken about a minimum wage. I am a member of the General and Municipal Workers' Union. There is no more loyal body of men than 1694 the low-paid workers in membership of that union—and I use the word "loyal" in its best sense and not in the more fashionable, popular sense. My hon. Friend the Member for Battersea, South (Mr. Ernest G. Perry) has given me a list showing the percentage of the total male labour force with average earnings of less than £15 a week. I have another list showing those with average earnings less than £14 a week and another list showing those with average earnings less than £13 a week. Indeed, I can quote workers in my union who are working in the cod liver oil works and in the fishing ancillary industry generally who are getting less than £10 a week take-home pay.
My union had its annual congress in the heady atmosphere near a certain date in July, 1966, at Torquy. This was at the time when the Government were faced with the enormous problems of the economy before they were forced to take certain steps in July, 1966. The conference was attended by 360 delegates. There was a motion on the agenda of the congress dealing with incomes and wages policy and supporting the Government, and there was an amendment, with a mover and seconder, criticising the Government. I will tell the House what happened because it illustrates the stuff of which the British working man is made and it shows that if he is told by his leaders exactly what the position is, as my union were told by its leader, Lord Cooper, and if the issues are explained to him, then he will respond. That is true of the British working man on the Humber, on the Thames or anywhere else in the country. When that motion was put, the mover and seconder voted against the platform but 358 of 360 delegates voted to support our Government. This shows that if the British working man knows what the alternatives are and if he is asked to help, he will do so for his own working people and his own Labour Government.
That is the context in which I begin this short speech. This is the context in which I live and work. My hon. Friend the Member for Ealing, North spoke about a minimum wage. Other hon. Members have given examples. One listens in the Chamber to many figures about lower-paid workers. Let me mention one or two industries in which wages are well below the £15 a week which is the target which the Transport and 1695 General Workers' Union and Mr. Frank Cousins have been putting before the country on behalf of its 1½ million members.
§ Mr. Deputy Speaker (Sir Eric Fletcher)
Order. The hon. Member should address his remarks to the Chair and not to his hon. Friend at the other end of the Chamber.
§ Mr. Molloy
I am sorry, Mr. Deputy Speaker. During the debate on the Government's prices and incomes policy I and a few colleagues put down an Amendment seeking to introduce a moral tone into the Measures being proposed by suggesting that there should be a minimum wage of £17 a week, and that while wages generally were being held down, those earning less than £17 a week should have an opportunity to have their wages increased.
§ Mr. Johnson
Whenever I am reinforced by my hon. Friend I feel 10 feet tall. He is a wonderful ally in these matters and I accept all that he said. But we all realise that people must not only hear what we say but must be prepared to go out and do these things. There are many people earning less than £10 a week, particularly on Humberside. In Hull we have a low cost of living. Along the Hessle road, in West Hull, the housewives can buy clothing and boots and shoes, for example, more cheaply than they could buy them in, say, Leeds. But the reason we have a lower cost of living is that we are mainly manual workers with low wages. We should like to raise our standard of living, and that can follow only if we can increase our wage packet. The Humberside needs a large shot in the arm.
I see one charming right hon. Lady on the Government Front Bench who was in Hull a few weeks ago and who made an admirable speech to the annual meeting of the Hull and East Yorkshire District Women. Indeed, there are two hon. Ladies who are on the Front Bench at the moment and who are members of the Government and I ask them to urge their colleagues to accept the need for an injection of capital for the Humberside. Yorkshire and the Humberside are in the middle grey belt—neither 1696 fish nor fowl, as it were—and we want to know what is to happen about our communications east of Goole and our bridge communication taking us over the Humber to the south bank and into Lincolnshire.
We are in an area of low wage packets. Even the low cost of living does not please us—not even the fact that we have shops where housewives can buy clothing and boots and shoes at lower prices than in Leeds, London or Leamington. The simple fact is that wages are too low to provide a decent standard of living.
Many of my union are working in the public sector. May I remind the House that nearly 55 per cent. of the workers in national Government get well below the minimum wage of £15 demanded by the Transport and General Workers' Union. I know all the old arguments on this subject. If we have to tax people to pay higher wages, they will not like the taxation, but if we do not tax them we shall not have the money to pay higher wages to workers in the public sector.
§ Mr. Gwilym Roberts
Does not my hon. Friend agree that while the problem in the nationalised industries and public corporations may be bad, it is generally even worse for local authority and municipal employees, and that part of the difficulty is the inadequate and unjust rating system, against the background of which local authorities are penny-conscious?
§ Mr. Johnson
My hon. Friend made an excellent speech earlier in the debate, but I promised that I would restrict myself to the first 12 words of the Motion and he must not tempt me to go beyond that.
The national average wage is well above £20 for 26½ million workers, but 43 per cent, of those in local government, in which a large number of members of my union are employed, get below £15 a week.
§ Mr. Ernest G. Perry
Do my hon. Friend's figures include overtime rates or are they basic minimum rates?
§ Mr. Johnson
These figures have been supplied by my union head office, but as I was asked to leave the public sector and to talk about other segments of our society, I propose to discuss the fishing 1697 industry. About 6,000 people in West Hull are employed in it. There is a lot of loose and glib talk, and a lot of loose and slipshod journalistic work, in the Yorkshire Post—a paper which has been bought by certain people in that area; I do not think that many of them belong to my party—about fishermen's wages. They point to Captain Bill Brettle who won the Silver Cod. I accept that he may get about £13,000 as the skipper of the "Somerset Maugham", but there are not many people in his position, and if one comes down the scale from the skippers of some 120 vessels to the engineers, to the "sparks", down to the cooks, the deckhands, and the deckie learners, one realises that the story is quite different.
It is an accepted practice in the fishing industry that while men are at sea, the firm employing them—and this is done by the best firms such as Boyd, Hamling, and Parks—pays their wives a basic £12 a week. The payment of any more money depends on the size of the catch, but the basic is below the minimum £15 for which Mr. Cousins and his union are asking, and very much below the £20-plus which is the national average. It is below the wage received by pieceworkers at the coal face.
If the catch is a good one, the men receive some money, but this summer has not been a good one for the deep sea fishing industry, and it can happen that boats return with insufficient catches to show a profit. When this happens, the wives have been given their £12, the men get nothing extra. In these circumstances, how does a man get his pocket money? How does he salvage his dignity after returning from a voyage?
I am talking not about the south of England, but about the North, on Humberside, and anyone who has any knowledge of family life there knows that the men matter much more up there than they do in the South vis-à-vis their consorts. I am not talking about "Andy Capp" or any other cartoons, or any other aspects of life in the coalfields, the textile, heavy woollen, and fishing industries. Normally, a man in the North gets his pay packet and gives his wife what he thinks is essential for her; but in the fishing industry the women get the basic wage packet, and if there is not a good catch the men are getting little 1698 extra. These are some of the facts which lie behind the bald statistics and the bare statements in the lists sent out by unions and by the Central Office of Statistics.
The Guardian of 14th September carried a most illuminating article under the banner headline:Ten million have incomes of less than £500.My arithmetic is probably as good as the next man's, and I reckon that that works out at little less than 40 per cent. of the 26 million employed people in this country. The article referred to the Central Office of Statistics giving details of national income and expenditure, and said:A table, in which the incomes of husband and wife are counted as one, shows that there were about 10 million incomes of less than £500 before tax during 1964."—Perhaps I might give the other side of the coin—After tax, there were 640,000 incomes of £2,000 or more and 100,000 incomes of £4,000 or more. In 1959, there were 300,000 incomes of £2,000 or more after tax, and about 30,000 of £4,000 or more.I am willing to wager that if these statistics were brought up to date there would be more people in the top £2,000, or £6,000 or £10,000 bracket, but we will, of course, have to wait until we receive the figures.
Only the Government can help to solve the problem. For the Government to carry out the policy asked for by my hon. Friend they need the co-operation of many other sections of the public, because if we were to act upon my hon. Friend's suggestion, it would immediately be devalued if other sections of workers were to adopt a snakes and ladders policy, and endeavour to leap-frog rises given to some people.
One firm in Hull, Marfleet, makes excellent cod liver oil. The factory conditions are first-class hygienically, and the product is excellent not least for one's hair. I advise my hon. Friends to buy this oil, because it gives a lustre and a gloss to one's hair. It has a delightful mint flavour, and is called "Seven Seas" Cod Liver Oil because it is exported all over the world via the seven seas.
§ Mr. George Wallace (Norwich, North)
On a point of order. Mr. Speaker, is it in order for my hon. Friend to introduce a commercial into the debate?
§ Mr. Johnson
My hon. Friend knows me of old, and he should not chide me like that. He knows that I am one of his sincerest colleagues, and would not indulge in that sort of thing, though it is not uncommon in the other part of the House.
§ Mr. Johnson
In this firm, some workers earn £10 5s. 6d. a week. This, of course, is not their take-home pay, and it must be remembered that many of them are married, and have families. If there is a basic pay of that sum, and it is decided to increase it, the danger is that other workers in the union will say, "If that man's basic wage of £10 5s. 6d. is to be increased to £10 15s. 6d., then my basic wage of £11 5s. 6d. should be increased to £11 15s. 6d." This is the danger, and if the Government propose to act on the Motion they must have the co-operation of the T.U.C. and the unions. There is today no incomes policy. Some people earn high wages, while others earn low ones. Despite all that the Government have done during the last three years, ours is still a laissez faire economy. Minimum wage legislation might be helpful in raising standards, but it would be useful only if the annual increase were more than the increase in the national average earnings; in other words, the basement must come up, but the ceiling must not go rising to the skies as the basement rises. That is the important thing.
As my hon. Friend the Member for Eton and Slough said so emotionally and so appealingly, the Government must not only have an economic policy and a fiscal policy but a social policy to go with them, because wages and pounds, shillings and pence are not sufficient. Let us lift up the minimum, but, along with that we must have the other social actions and fiscal measures which alone will make the money, whether it is £10 5s. 6d. or £15 or £20 worth what is printed on the face of the £ note.
§ 2.41 p.m.
§ Mr. Alexander W. Lyon (York)
We are discussing an issue that is becoming increasingly important in our affluent society. We are dealing with the major moral problem facing affluent developing 1700 societies in the second half of the twentieth century. The problem' has faced America, and it has not been solved there. The problem is that although the major industrial economies, devaluation or no, are now reaching a peak where productivity is possible on such a scale that the solution of many problems which 50 years ago seemed impossible is now attainable, it is undoubtedly the truth that the wealth that has been secured as the result of this enormous productivity is not fairly shared amongst all members of society.
We know that in the United States, in this country and in every other major Western European country there have over the last few years been a number of isolated pockets of poverty which have clearly shown that the affluent society has failed in providing properly for all its members. The prime ultimate object, I felt, of any realistic incomes policy was to try to share more equitably the proceeds of the affluent society amongst all its members. That is what we are now talking about.
The concept of a minimum wage is really social, not economic. The fixing of wage rates in the traditional laissez faire pattern is merely a question of the operation of the law of supply and demand. If too many people want a certain job, the wage rate is pushed down; if too few, it is pushed up. By all the normal rules of economic analysis this is bound to continue even within the affluent society. Therefore, when one says that there should be a limit below which no one should fall, one is really saying that one ought to apply to the economic pattern a social or moral pattern which transcends these rules of supply and demand.
That is the major success of the Government's incomes policy since they came to power in 1964. The very fact that we can have this debate and that it can appeal to so many hon. Members shows that there is a realisation that something must be done for the lower-paid worker to ensure that he will not fall below a generally accepted level.
The real question is not whether there should be a national minimum income, but how it should be attained. One suggestion is that statutorily no one should be paid less than a certain minimum, but I believe that to be so hopelessly 1701 unrealistic that it would never be accepted. If we were to say, as some have argued—as the T. & G.W.U. has argued, I believe, from time to time—that a minimum wage of £15 should be enforced by Statute, we would inevitably find, as the result of differentials for other workers which would be negotiated on top of the £15, the same disparity between those at the top and those at the bottom that exist today. The pressure of wage costs would inevitably force up prices, with the result that the same pools of poverty would continue.
The only way of achieving something socially just is by a shifting of the country's wealth from some pockets into others. Parties of different complexions have tried for fifty years to use the tax system to do this. We have had some success, but the figures quoted by my hon. Friend the Member for Kingston upon Hull, West (Mr. James Johnson), show, how very far from real success we have been that many people earn sums that are fortunes compared with the national average industrial wage, and that, as is well known—not least from the document, quoted on a number of occasions, on the circumstances of families in this country—some people cannot yet earn sufficient to keep their families above the social security level. Despite the progress in income redistribution by means of taxation, we are still very far from our target.
I believe that the only way to achieve this national minimum income is to have a viable incomes policy, and by the means outlined by my hon. Friend the Member for Bedfordshire, South (Mr. Gwilym Roberts) in a Motion which, if I may say so, is Labour Party policy on which we fought the last General Election, and which ought, therefore, to be part of the new concept of social security now being considered by the Ministry. I hope that when this long-awaited reconstruction of our social services is announced, its basic item will be the national guaranteed income that was part of our last manifesto.
Over the last 12 or 18 months we have had many arguments in the House about incomes policy, and stoutly and resolutely from time to time I have supported the Government in their aim of a viable incomes policy—much to the chagrin of some of my hon. Friends. I have done so principally because I believe 1702 that this is the major way in which redistribution of income can take place.
The long-term object of an incomes policy is that there shall be adequate redistribution within the economy. Because it takes place in terms of ordinary wage negotiations at every level of the economy, the adjustment can be much more flexible and the results can be seen so much more realistically in the wage packet than if we tried to achieve some overall readjustment by means of legislation.
There has been a movement towards that in the period when we have had an incomes policy. During the period of the freeze proper, there was little movement in wages, but such movement as took place occurred at the lower end of the scale. During the period of severe restraint, the contrast was even more marked. It was the lower end of the income brackets—one recollects the brave decision of my right hon. Friend the Minister of Labour to deal, for instance, with wages council agreements—who received increases, as well, of course, as those which were negotiated as part of a productivity deal.
Since July, however, when the statutory support for an incomes policy fell away, because the figures are not available no one is yet able to determine what has happened in the interim. I feel that we have taken several steps back towards the law of the jungle which prevailed before 20th July, 1966, and that what has happened in the interim is that those who had have already accumulated a great deal more and those who had not have not made any progress in bringing themselves up to the levels of their comrades.
Therefore, when we talk about the effects of devaluation and the way in which we must try to restrain the pressure upon earnings which will follow the increase in prices, it seems to me that we are doing little more than King Canute in trying to hold back the waves if we do not have statutory means of backing up the exhortation. I know that the powers of the Prices and Incomes Act are still with us, but it seems to me that they are nothing more than delaying powers in relation only to isolated wage settlements and only for a limited period.
1703 The object of many trade unions will be to submit their claims at an early stage so that the period of delay shall be taken into account and the claim will come into operation when it was intended to do so. Thus, the powers of the Prices and Incomes Act will be bypassed. I hope, therefore, that the Government might reconsider the whole of their incomes policy at this stage when pressure upon earnings as a result of devaluation will be intense. It may be that we shall have to reconsider the whole question of statutory support for an incomes policy.
With the other part of the argument contained in my hon. Friend's Motion, I wholeheartedly agree. I am a simple man and when I come to the jungle of the rules of National Insurance benefits and the contrasting claims for benefit upon which my constituents complain to me, I am bewildered by the enormous variety of rules and regulations which are laid down for the various claims which can be made upon the social security system. For example, a person has to pay a certain number of contributions to get a pension. The contributions have to be over a certain period of time, and that period must be within a certain number of years before the claim is made. Some people who contract industrial diseases which are scheduled can claim a higher rate than those who contract diseases, whether industrial or not, which are not scheduled and have to rely simply on sickness benefit.
It has always seemed to be a scandal that if a man has an accident at work and can show that either the employer or a fellow employee was in some way careless—and sometimes one has to stretch the imagination to show what the carelessness was—he can claim damages against his employer which often run into thousands of pounds, whereas if he fails to persuade the court that there is an element of carelessness in the cause of the accident, he has simply to rely upon either the industrial injury benefits or, sometimes, only the sickness benefits which are available under the National Insurance scheme.
It seems to me that in the reconstruction which we are making of the social security system we should reconsider the whole question of claims and negligence 1704 under the Factories Acts against employers. We should say that in so far as employers insure their employees against such claims and pay heavy premiums to private insurance companies to do so, employers should pay a higher premium towards the National Insurance Fund and that out of the fund there should be paid to anybody who is injured at work the proper level of remuneration.
Only recently, I settled a claim for a man who was made a paraplegic as a result of an industrial accident. As part of the special damages, I put in a claim for the cost of building him a bungalow and equipping it so that he could run his life successfully as a paraplegic in a wheel chair. The special damages for such a dwelling so equipped amounted to £8,500.
Somebody who becomes a paraplegic as a result of a natural illness or because of an accident for which he cannot claim anything is reduced to depending upon the sickness benefit that is available to him under the National Insurance scheme, yet his needs are precisely the same as those of a man who is injured as a result of the negligence of a workmate. Surely, it should be need which determines what the benefits are to be.
Then we come to the thorny, controversial political question of how to identify need. The Opposition claim that we should be more selective in the way in which we apportion benefits and that to be selective we have to introduce a form of means test. The logic seems to me to be unanswerable. It is the difficulty of applying it which sometimes appalls me. I have met elderly people who have had their means inquired into, often by a highly reputable inspector from the Ministry of Social Security, who with all humanitarian instincts he could summon, was only doing his best. However, the fact that he had to ask the elderly people about their means, the way in which it was done, offended their sense of dignity. I do not believe that we could put into practice such a means test in determining where benefits should be paid.
Therefore, the question arises of how need is to be determined in a way which will not offend the dignity of the ordinary citizen. It should not be thought that someone who has to rely upon State benefits is dependent on charity. We ought to have moved into an area of moral 1705 integrity where people can recognise that we are all part of one community. Members of the community who are not able to supply their own needs from their own resources should be able to turn to other members of the community.
I believe that the only method which will satisfy both requirements—first, that it should determine where need lies and, secondly, that it does not offend the dignity of the recipient—is that put forward in the Labour Party manifesto, namely, the negative income tax return. At the moment, those who pay tax fill in a return showing how much they earn. Then the tax official can take away from them what is required. I beieve that he should be able to determine whether people are earning enough; and, if they are not, it should be supplemented out of the national income.
If a practical method could be devised, it would overcome all the present difficulties of trying to find into which category a person in need shall be slotted before he can be paid any benefits from National Insurance. If it could be determined in the way I suggest, the mere fact that he was in need would be sufficient—not how much he had contributed; not for how many years he had contributed; not whether she is a widow; not whether she is a widow with children; not whether she is a widow under 50; not whether the person has applied for his benefits at the proper rate. The only criterion would be need.
This is the only criterion which is justified in a moral society. I therefore join in urging the Government to consider the practicability and expediency of this reform.
§ 3.2 p.m.
§ Mr. Nicholas Scott (Paddington, South)
Although at times during the debate I have been provoked to reply in a party political sense, it is not my intention to do so, because we have had a very interesting, although at times surprisingly wide-ranging debate. I congratulate the hon. Member for Bedfordshire, South (Mr. Gwilym Roberts) on his success in drawing first place in a Ballot and on bringing forward this topic for discussion. I sympathise with him in that the discussion has taken place at the end of such a week, a week in which the Government have taken steps to reduce the standard of living 1706 of the people. We look forward to hearing—next week, we hope—about the steps which the Government have promised to insulate the less fortunate members of the community against the steps the Government took last weekend.
Not only must the Government do that. If poverty is to be reduced, we must have a greater element of selectivity in our approach to the social services. The Government cannot simply, as the Motion asks, continue to give a first priority in the way they have in the past. They must give a new priority and attach a new urgency to tackling the problem of the pockets of poverty which exist. They must tackle the problem with much more urgency than they have so far.
When Lord Beveridge was drawing up his great blueprint for the social services and the Welfare State, he thought that want would be the easiest of the problems to solve. Successive Governments who have tried to eliminate poverty have found that want has been a very difficult problem to determine. Despite their efforts, there are still considerable elements of poverty. It has become clear to my right hon. and hon. Friends and I that the way in which the Government have tackled the problem in the past and in which it seems that they will continue to tackle it will mean that poverty will be with us for a long time.
In tackling this problem, there are several options open to us. One can have universality as such. One can have universality topped up with supplementary benefits. One could have a national minimum wage as was argued by some hon. Members this afternoon, in particular, the hon. Member for Brentford and Chiswick (Mr. Barnes). One could have a system, as is suggested in the Motion, whereby we link in some way, through the social security system and the pay-as-you-earn system, a method of reverse Income Tax.
Let me deal, first, with universality, which so far seems to have been the totem which the Government have worshipped in their approach to the social services. Indeed, many speeches from hon. Members opposite seemed to indicate that they would like a greater degree of universality, to do away even with the supplementary elements in our approach to the social services, and to move closer to a more universal system.
1707 The family allowances legislation which is currently going through the House has provided for flat-rate increases in family allowances. The point that I was trying to make earlier to the hon. Lady the Member for Eton and Slough (Miss Lestor) was that if there is a certain amount of money available for family allowances and we give it, fiat-rate across the board, accepting that it is taxed, to people earning £3,000 or £4,000 a year, there will be less money available for those at the bottom end of the scale who are really enduring family poverty. For as long as the Government are wedded to the principle of universality in this way, we shall continue to endure poverty.
The figures have been put to the House before. At a net cost of about £83 million we are only half solving the problem of child poverty. Despite this most recent measure, over 250,000 children will continue to live in poverty. Figures quoted from the other side of the House earlier were even higher. A figure of 300,000 was mentioned, though 250,000 seems to have been the accepted estimate drawn from the Ministry's own survey.
If universality is to be the principle, as the standard of living of people rises and as fewer people are below the poverty line, so more and more of the money which goes on universal benefits will be misdirected and wasted. We should, for a much smaller amount of money, be able to lift the remaining people who are below the poverty line above it. If we have 1 million people below the poverty line it might be possible to argue that we need universal benefits. If we reduce the number to half a million do we want universality? If we reduce it still further, surely it becomes absurd to continue to argue for universal benefits in order to solve that problem.
§ Mr. Alfred Morris
I am obliged to the hon. Gentleman for giving way. He has spoken in very general terms about selectivity. Could he say into which new fields he would extend selectivity? On the question of free school milk, for example, does the hon. Gentleman believe that we should impose a charge on those who can afford it?
§ Mr. Scott
I would rather continue to deal with the Motion and my attitude to it.
I come to the question of universality plus supplements, which is the second alternative and which is basically what we have at the moment. The real difficulty about this, as successive Governments have discovered, is the question of application. Even with the appeals and publicity that we have had recently to encourage more and more people to apply for the benefits to which they are entitled, still large numbers of people do not apply, for one reason or another, and are left outside the scope of the scheme which is designed to help them. The most staggering figure to me is the one relating to applications for free welfare foods for children under the age of 5. Only 4 per cent. of children entitled to these free welfare foods receive them. There are other only marginally less staggering figures for others of the social services which are available.
Many hon. Members spent a good deal of time today discussing proposals for a national minimum wage. Although there is no specific reference to it in his motion, the hon. Gentleman the Member for Bedfordshire, South included in his scheme the concept of a national minimum wage, to be topped up by the negative income tax system to which he referred. This question does not come directly within the purview of the Joint Parliamentary Secretary to the Ministry of Social Security, but there seems to have been a certain amount of confusion among Government spokesmen in recent months on whether they are in favour of the concept of a national minimum wage.
The hon. Lady the Member for Hitchin (Mrs. Shirley Williams), when she was Joint Parliamentary Secretary to the Ministry of Labour, said in winding up a debate on lower paid workers on 22nd July last year, that she was in favour of it:The first possibility is a national minimum wage. Speaking for myself, I am very attracted to this solution. … It is a view which I have always taken."—[OFFICIAL REPORT, 22nd July, 1966; Vol. 732 c. 1176.]The hon. Member for Birmingham, Sparkbrook (Mr. Hattersley), now Joint 1709 Parliamentary Secretary to the Ministry of Labour, said on 10th April this year:Certainly, the function of a minimum wage as it reflects standard of living is a matter for the social services …"—[OFFICIAL REPORT, 10th April, 1967, Vol. 744 c. 711.]Thus, there were two distinct views expressed by successive holders of that office. Then, at the Labour Party conference at Scarborough this year, we had, with only, 48 hours between them, first, the Chancellor of the Exchequer pouring cold water on composite motion No. 27, which called for a minimum wage and asking conference to remit it, and then the right hon. Gentleman the Leader of the House saying:We think that a national minimum wage has much more to do with the issue than social security.I do not know whether the Parliamentary Secretary to the Ministry of Social Security will wish to get involved in this dispute or prefer to leave it to those protagonists.
Although there are superficial attractions in the concept of a national minimum wage, and the case for it was argued very cogently today, I myself come down against it. In my view, the difficulties vastly outweigh the advantages which might accrue. First, there is the possibility that many people would lose their jobs if a national minimum wage were introduced by statute. Small firms would not be able to pay the minimum wage. People who, though not strictly handicapped, were not able to do a full or heavy day's work and were paid less on that account would find themselves out of employment.
Second, there is the question of differentials. Opinion opposite has varied considerably on how big a problem this would be, but I agree with the hon. Member for York (Mr. Alexander W. Lyon) in saying that, if we had a national minimum wage even at £12 a week, let alone at £15, the build-up of pressure on wages immediately above that level would be such as to create considerable inflation and much dispute about consequent differentials.
The hon. Member for Bedfordshire, South touched on the discrepancy between men's and women's earnings and the dangers that this would have, not least for the Government who, having 1710 pledged their voice to the principle of equal pay, would, presumably, have to enact for two separate national minimum wages if they were to introduce the concept at all. No one can envisage a situation in the near future in which we could have a single national minimum wage applying to both men and women.
The big complaint against a national minimum wage is that it would take no account of needs, means and responsibilities. The same minimum would have to apply to the head of a household, a bachelor boy or girl, or wife who was just earning pin money.
In an article on 18th February this year, the Economist said:The fixing of any statutory minimum would doubtless push out of employment a good many elderly or disabled people who make themselves useful at light jobs on low pay. It would be unkind. It would also he economically catastrophic.The case against a national minimum wage is overwhelming. The abolition of poverty, especially family poverty, is a social aim which should instead be tackled through social service policies.
I am sorry that the hon. Member rather tempered the Motion. Instead of going the whole hog for a negative Income Tax system he introduced in his speech the idea of a national minimum wage. If we had a negative income tax or a system linked to P.A.Y.E. to cope with the pockets of poverty it would fulfil the necessary criteria advanced earlier in the debate. It would involve no application by the individuals concerned. Anybody in employment would automatically be in the scheme, and would not have to apply for special help. The scheme could retain the incentive, which all hon. Members believe is important, and it would respond quickly to changing circumstances. It could be responsive to a sudden drop of earnings, which places sudden strains on the budget of a wage earner.
It seems to be possible to work out a system using P.A.Y.E. techniques to cope with family poverty, but it means the Government's turning their back firmly on the principle of universality and embracing the concept of selectivity. It also involves a means test or needs test. A person may not have to apply and have people visit him, but there must be acceptance that a test of needs and means shall be made.
1711 The great advantage of the P.A.Y.E. code is that, at least at the level of which we are talking, the code number is a test of the responsibilities or needs of the individual. Higher up the scale it becomes complicated by mortgage and interest payments, but at the level of which we are talking even it a person had a mortgage it would be under the option mortgage scheme, and the code should not be complicated by other than family responsibilities.
§ Mr. James Johnson
I understand that the hon. Gentleman is now on the question of selectivity. I shall not say that he dodged an earlier question about selectivity, particularly on payment for school milk, but he postponed it. Will he now tell us, if only in a few sentences, what he thinks on this matter?
§ Mr. Scott
We are debating whether or not we can tackle the problem of poverty through a negative income tax system. It is to that that I have turned my mind this afternoon, and I want to continue to do so, because I believe that at least two other hon. Members want to speak.
The question of incentive is important. We certainly want neither a nil incentive, in the sense that extra earnings are matched by a comparable reduction in benefit, nor a 100 per cent. incentive. I would put the incentive at 68 per cent., which is the incentive in respect of the standard rate taxpayer, so that the extra earnings would mean that the benefit being received from the reverse tax system would be reduced by 32 per cent. in the same way as there is a reduction for anybody paying the standard rate of tax. The system would be responsive because there would be tables on a weekly basis just as there are tax tables on a weekly basis. Thus one could immediately help the people mentioned by the hon. Member for Battersea, South (Mr. Ernest G. Perry)—those who run into particular difficulties very suddenly and need particular and urgent help.
Of course, there are objections to the scheme—for example, objections to the administrative burden placed on the Inland Revenue or the Ministry of Social Security, depending on which Ministry is involved, and on the employer. The employer would have to administer the scheme because, as I understand the 1712 system, he would pay the money over through the negative Income Tax. But the administrative burden would be no worse and no more complicated than that which the Government are creating by increasing family allowances and bringing more people into the tax bracket.
If, as we are threatened, they are to reduce children's tax allowances next year, that will bring a whole extra wedge of people into the tax bracket, too. The employer and the Inland Revenue will in any case be faced with extra work. It seems to me that a fundamentally new approach such as a negative Income Tax has considerable advantages.
Another difficulty arises from how a wife's earnings could be taken into account. I believe that they could easily be taken into account by a declaration being signed by anybody who drew the negative tax declaring that his wife's earnings were not above, say, £2. If they were above that level, some special test of means might have to be carried out. But a declaration would get over the problem in the case of the over-whelming majority of people.
All in all there are great advantages in the scheme outlined in the Motion but it needs to be looked at very carefully. My disappointment—perhaps there will be great revelations when the Minister replies—arises from the fact that the Government have been looking at this matter very closely for three years without result. I hope that today we shall have a positive statement on whether the Government think that such a scheme is practicable.
I understand that the right hon. Member for Sowerby (Mr. Houghton) believes that such a scheme is practicable, and it would be interesting to know whether such a belief is residual in the Government to which he no longer belongs. Certainly, we do not want to get ahead with such a scheme until it has been very carefully considered. In Professor Lee's article in Lloyds Bank Review, he commented:In principle, the case for the introduction of a negative income tax to replace family allowances is strong. But there has been too much fiscal folly committed in the name of principle in the past two years for any but the heroic or the naive to go ahead without a long hard look at the gap between theory and delivery.1713 All in all, there is a great deal to commend in this general idea and I believe that the Government should continue their investigation into it. I hope that the Minister's reply to the debate will herald a new approach by the Government, an end to dogma and to the mythology of the 'thirties and the beginning of an attack on the poverty which still shames our society.
§ 3.25 p.m.
§ The Joint Parliamentary Secretary to the Ministry of Social Security (Mr. Charles Loughlin)
It is not for me to wind up a debate of this kind. I would be presumptuous if I attempted to do so on a day that is essentially for private Members. I begin, as so many hon. Members have begun, by congratulating my hon. Friend the Member for Bedfordshire. South (Mr. Gwilym Roberts) not only on being able to bring forward a Motion of this kind but on the very able way in which he presented his ideas.
The hon. Member for Paddington, South (Mr. Scott) began by saying that he thought that there was a danger of getting involved in some party political debate, adding that he did not want to do so. But he at once proceeded to do it. I do not want to attempt to score points off him on an occasion like this but it is significant that not one back bencher opposite has even listened to the debate, with the exception of the very disappointed hon. Member for Down, North (Mr. Currie) who was hoping to initiate a debate himself.
What has emerged strongly from this debate in almost every speech has been the intense feeling that it is still necessary to bend all our efforts to trying to solve the problem of the poverty which still exists in the country. Give or take a little on methods by which this should be done, this idea has gradually percolated to our political opponents as well and therefore it is even more tragic that, in a debate of this kind and when so many hon. Members opposite are getting into the mood to try and solve the problem, the new Conservative City Council of Manchester, according to my hon. Friend the Member for Manchester, Wythenshawe (Mr. Alfred Morris) is cutting back social services in a mean and petty way. If what my hon. Friend said is true, then the cuts are so mean as to represent very little in the total expenditure of a city 1714 like Manchester and I hope that, even at this late hour, the local authority will reconsider the position.
I am glad that my hon. Friend the Member for Bedfordshire, South included in the Motion the belief that… the removal of poverty should continue to be a first priority for the Government …I do not want to spell out in detail all that we have done, but we have done a lot since October, 1964, to seek out poverty and have tackled it wherever it has been found. One of the Government's first actions was to introduce an Act to increase National Insurance benefits and National Assistance, as it then was. These increases of 12s. 6d. per week for a single person and 21s. a week for a married couple were the biggest increases ever and raised these benefits to a higher value than ever before. Since then the Government have increased the benefits again—supplementary benefits twice and National Insurance benefits once. These increases mean that a single householder will have had increases in retirement or supplementary benefits of no less than 22s. 6d. in the last three years.
Perhaps I can underline the value of the increases in benefits because it is important to show the extent to which the National Insurance and supplementary benefits scheme has been improved. In 1964 a pensioner who possessed £700 of capital other than war savings would have drawn a retirement pension of £3 7s. 6d. per week and could not have qualified for National Assistance because his capital would have precluded his doing so. In 1967, his retirement pension is £4 10s. and he is able to receive a supplementary pension of £1 15s. giving him a total income of £6 5s. a week from these pensions. This is £6 5s. as distinct from the £3 7s. 6d. in 1964 and his capital of £700 would not cause a reduction in the rate of his income if he had no other form of income.
For a second example I should like to quote the case of a younger man. In November, 1964, the standard rate of unemployment benefit for a man with a wife and two children was £7 Is. a week and if he had no capital or other resources and paid the average rent for unemployed of £2 5s., then subject to the usual conditions and assuming that his children were aged 5 and 11, he would qualify for National Assistance at 1715 £2 11s. 6d. a week, so that his income, excluding family allowances, would have been only £9 12s. 6d a week, as against £12 5s. a week excluding family allowances now. That gives some idea of the type of progress which has been made. It shows that the increases we have made in most of our benefits have been far in excess of the increases in wages percentage-wise.
In addition, in October, 1966, the system of earnings-related supplement for sickness, unemployment and widows' benefits came into operation. This was designed to provide additional help at a time when earnings were suddenly cut off and commitments could not easily be reduced. In December, 1965, the Government introduced a scheme for redundancy payments to provide lump sum payments for men who were forced to change their jobs because of economic or other developments. There were also a whole host of major changes as a result of the changeover in which the Ministry introduced the supplementary benefits schemes.
What I want to underline is that in practice we have done a great deal in many respects to try to solve the problem of poverty. I am underlining it for one very good reason—not to boast, although we can afford to do so, but because when there has been a debate like this all day, because of the publicity given to the contributions of hon. Members there is a tendency for people outside the House to assume that the Government have done very little.
The hon. Member for Paddington, South—and my hon. Friend the Member for Falmouth and Camborne (Dr. John Dunwoody) brought this out very forcefully—referred to the difficulties of getting people to take up the benefits to which they were entitled. Both sides of the House will accept that the Government have done everything in their power to impress upon people their right to accept benefits as a right and not a charity. This is more difficult with supplementary payments than with National Insurance and Industrial Injuries payments, but it is pertinent to note that as a result of the creation of the supplementary benefits scheme and the consequent publicity given to it by the Government, 600,000 new claims were made, 1716 Two-thirds of them successfully, by old people in three months. By September, 1967, the number of retired people getting supplementary benefits had risen by no less than 450,000.
I do not suggest that we have solved the problem of getting people to make the claims they should. I hope that every hon. Member will do all in his power to impress on his constituents that benefits are a right and not a charity. Their constituents can rest assured that if they are in any difficulty and will get in touch with us, they will receive the most courteous possible treatment, because it is now axiomatic in my Department that no official has the right to assume that he is doing a favour to anybody who applies for assistance.
In addition to these aspects of poverty there is the question of poverty in the family. The Government have announced a substantial increase in family allowances—the first since 1956—of 7s. for each child after the first. I do not propose to follow the hon. Member for Paddington, South on the question of the universal application of family allowances. It is only a fortnight ago that I stood at this Dispatch Box and dealt with the whole question of means testing. If the hon. Member wants to appreciate the difficulties of means testing in respect of employed people, although he will never wish to hear my speeches twice, I ask him to read the report of the speech I made then. He will then realise why, in my view, it is impossible to make selectivity apply to family allowances. We shall have another debate on family allowances next week when we consider the Family Allowances and National Insurance Bill in Committee.
I want to make a reference to the wage-stop issue. My right hon. Friend has already made it clear that we are concerned about the application of the wage stop to people earning low wages. I was a trade union official before I came to the House, and if I urge caution upon hon. Members in connection with a wage stop it is only because I speak from experience of industrial and distributive workers at the lower end of the wage scale. I can say that we have been sufficiently concerned to consider the 1717 whole question of a wage stop; the matter was referred to the Supplementary Benefits Commission, that Commission has now submitted a Report, which is in the hands of my right hon. Friend, and we are considering its implications.
So far the Government's record is one of continuous attention to the areas and problems of poverty. It is a measure of what has already been achieved that the changes in social security benefits alone, introduced since October, 1964, will amount to over £580 million in the current year and over £800 million next year. For the future, the Government have announced their intention to get the new scheme for earnings-related pensions on to the Statute Book by the end of the present Parliament, and the Government will also continue its attack on poverty, breaking down the problem into its component elements and producing an appropriate solution for each.
My hon. Friend the Member for Eton and Slough (Miss Lestor) and other hon. Members referred to the chronic sick. I have a double experience of this problem. I had experience of it when I was for two years at the Ministry of Health, and I have had experience of it in this Department. This is a very difficult problem to solve.
One has to examine very carefully the inter-relation between financial benefits and supporting services, and before we begin even to think in those terms, there is much work to be done on identification, which is perhaps the biggest problem we face in this respect. We should have liked to do all sorts of things, but I ask my hon. Friends to be a little patient because we cannot solve all these problems at once. We have instituted through the Ministry of Health a detailed survey for identification purposes and my right hon. Friend the Minister for Social Security will be interested in that work.
§ Mr. Albert Roberts
My hon. Friend has mentioned many facets of poverty, but one point which has not been brought out concerns problem families, where there may be a reasonable income going into the home but the money is frittered away and the children suffer and in some cases there is malnutrition. I hope that 1718 my hon. Friend accepts that these problem families need investigation and help.
§ Mr. Loughlin
That is another sphere in which there is a great deal of work to be done. But if I may respectfully remind my hon. Friend, we are dealing today with a wide range of poverty and how far it will be possible to relieve a degree of that poverty. I very much doubt whether the whole of poverty in this country will be resolved for many years. We are considering whether we shall be able to resolve a great degree of this poverty through financial assistance of one kind or another. My hon. Friend concedes that the cases to which he referred do not raise the question of financial assistance. What has to be done there is that, through the supporting services—through the local health and welfare authorities, the county councils and county boroughs as they are now—arrangements must be made not only to give assistance to the parents of the children but also to teach them how to overcome some of the house-keeping problems.
I turn to the question of negative income tax, or Income Tax in reverse. It is essential that we should study the question in detail. The hon. Member for Paddington, South enjoyed himself a little when he said that we have been studying these matters for three years. I do not know how long he has been in the House, but it appeared to me from his speech that if he has been here for three years he has nevertheless not begun to study negative Income Tax or Income Tax in reverse. He suggested that the practical difficulties of benefits among the old people in full-time work as well as the complex problem of administering such benefits could be overcome by using P.A.Y.E. machinery, to provide financial help to all those whose income fell below nationally fixed figures. But it is necessary to take into account not only people's incomes but also their needs.
Let me make it clear that, at this stage at any rate, I do not want to discount in any way the whole principle of Income Tax in reverse, but we have to be sure that once we attempt to introduce such a system, if it is possible of introduction, that we have it absolutely right. A system based on payments to people with incomes below specified levels would not 1719 reflect their needs which vary with individual circumstances. Moreover, it is doubtful whether a test based on taxable income would be a satisfactory one. Some items, unemployment benefit, supplementary benefit, and so on, are most important, but are not subject to tax at all, yet they must be taken into account in considering needs.
In addition, the suggestion that the P.A.Y.E. machinery should be used to pay benefits to those with incomes below a certain level raises grave questions of practicability. It is clear from studies which have been made that the difficulties are formidable and seem likely to rule out any possibility of this proposal being adopted, at any rate for some considerable time to come. This is not to say that it must be ruled out for ever, but the studies which have been made show that it is impracticable at the present time.
The arrangements for collecting tax on earnings and other income are different from what is needed to pay benefits in accordance with a person's resources, rent, family commitments, and general circumstances. The difficulties involved are not such that they can be overcome by a few adjustments to the P.A.Y.E. system, and I would like to deal with some of the problems.
A considerable number of people are outside P.A.Y.E., and could not be brought within it. These include many of the very people to whom it would be most important to pay benefit, such as the old, non-employed persons, fatherless families, the chronic sick and the long-term unemployed. It is estimated that between 3 million and 4 million old people are not at present required to make Income Tax returns. If such people were to be brought into a tax system, it would mean that everyone would have to be compelled to fill in an Income Tax return, irrespective of income.
If we start trying to apply the filling in of Income Tax forms to our old people, we will not get the forms completed except in a very small minority of cases. I say that because one of the things that we find with our present system is that our officers have to help the old people, and the percentage of cases in which this is done in the home is enormous. It is no good introducing Income Tax in re- 1720 verse if we then have to maintain the supplementary benefit system, because that would be a duplication of the system, and would not help anyone.
If we wanted to introduce the reverse Income Tax on the basis of some code, the present P.A.Y.E. code would not apply at all. It would be necessary to have an additional code, and we would have to relate both codes to the complicated monetary tables so that adjustments of the ascertainments could be made.
The employee would have to give the local office of the Ministry, whether it was social security or Inland Revenue, a full statement about his wife, his children, his rent, his wife's earnings, other income, and so on. In other words, the Ministry would have to get all the information which a man now provides when claiming supplementary benefit. I do not know what my hon. Friend's reaction would be to that, but I think that if we told the trade unions that this sort of information would have to be supplied to the employer they would take strong exception to it.
The hon. Gentleman the Member for Paddington, South said how easy this system would be in meeting immediate needs that there would be automatic adjustments by the employer. The P.A.Y.E. code is now 18 months out of date, and I would ask the hon. Member to direct his mind to the method by which we would get the information at short-term periods in order to make the ascertainment of Income Tax in reverse. What happens if a man becomes sick, is unemployed, throws up his job, leaves his wife? In those cases there would be no employer to pay the benefit, and one would then need an organisation for the payment of supplementation in those cases, as well as in other cases to which I have referred.
The hon. Gentleman referred to incentives. I still maintain that even if one does the offset at 68 per cent. this would be a disincentive to the person in industry. Quite frankly, I am not too sure whether one can operate this system at all without introducing a disincentive to the employee. But the main difficulty I see is how it could be done, bearing in mind the construction not only of British manufacturing industry but of British distribution. It would be quite possible, I think, for companies like I.C.I., the 1721 Coal Board—or the Government—or any big organisations to set up clerical departments to deal with this situation, but if we think in terms of the total number of manufacturing units with fewer than 11 employees——
§ Mr. Loughlin
That works because it is relatively easy, but the information required for Income Tax in reverse is totally different from that required for P.A.Y.E.
There are enormous numbers of manufacturing companies employing fewer than 11 people. A few years ago we in U.S.D.A.W. did a survey of distribution, and found that the unit of labour per unit of distribution was 1¾ Taking those figures, we see the immense difficulties that would face employers. The hon. Gentleman asks why it should not apply to P.A.Y.E. I can only say that the general tendency at the present time is for employers to complain of the weight of the burden we impose on them, and I think that even Sir Paul Chambers would find this burden onerous.
§ 3.54 p.m.
§ Mr. George Wallace (Norwich, North)
To speak last in a wide-ranging debate like this is not easy. A number of the matters I would have referred to have already been dealt with, but I want to follow up a point of great importance made by my hon. Friend the Member for Eton and Slough (Miss Lestor), who referred to day nurseries, and their closure. In our present economic and social situation, day nurseries are vitally important, and their closure is a matter of great regret to me because many years ago, as a member of the Kent County Council, I actively fought against that reactionary body's policy of closing down day nurseries.
We have to look at this problem very seriously. It is not only a question of mothers having to go to work—and, in any event, many factories want mothers to go to work. There is also the question of illness in the home for the lower-paid worker and the consequent financial struggle caused by illness of the mother. The day nursery fills a useful service in 1722 that respect. I hope, therefore, that we shall have some good news on this problem in the not too distant future.
My hon. Friend the Member for Kingston upon Hull, West (Mr. James Johnson) referred to the low average wage in his consituency. My constituency covers a wide area of Norfolk, where the average wage is well below the national average. My right hon. Friend the Minister of Housing and Local Government recently presented me with a book from the library of his father, the late Arthur Greenwood, entitled "A Social Study of Norwich", by C. B. Hawkins, published in 1910. Even in those days, the scales of wages show that the area was well below the national average. It is true that many social standards in the area have increased, but I still have many workers whose take-home pay is only about £10 a week. That is no handsome reward for a full week's work in these days of high expenses.
Partially to ease the problem which we have been discussing, the Government and the House should pay greater attention to the problems of areas which have a large number of workers whose average wage is well below the national average. Reference has been made in previous debates to the Hunt Report and the scheduling of so-called grey areas. I suggest that we should study those areas. I would certainly advance the claims of the Norfolk and Suffolk regions for consideration.
One of the ways in which the problem can be tackled is to bring in a number of varied industries calling for skilled and semi-skilled workers. This would force up the average level of wage. I had a case recently concerning Her Majesty's Stationery Office, which, I am delighted to say, has been moved to Norwich. The Stationery Office required a category of worker to train locally. Believe it or not, I had an irate letter from a firm complaining that the Stationery Office was poaching its workers and those of other firms. The answer was that the Stationery Office paid a higher wage for the worker in question than did the local firm. There is, therefore, every reason why we can, at least partially, solve the problem by giving prompt and quick attention to the problem of the grey areas.
1723 My hon. Friend the Joint Parliamentary Secretary has pointed out the tremendous advance which has taken place in social services under the present Government. I accept that, and I have done my part to try to persuade some of the older people to take the supplementary benefit to which they are entitled, because they still think that they are receiving help from the old Poor Law. The point is, however, that we have in a sense increased the problem that we are discussing.
If a man who has a family of two children and who goes home from work with a pay packet of about £10 becomes unemployed, he would be just as well off when out of work when taking into account the cost of his fares to work and other incidental expenses. We have, therefore, reached the situation when a man can be as well off when he is out of work as when he is working. In such a situation, what incentive is there to work?
We must, therefore, do something immediately to redress the balance, even if we cannot go the whole way with my own union, the Transport and General Workers' Union, in calling not only for a national minimum wage, but for progress with a number of other points which affect workers, particularly non-organised workers who are at the mercy of the boss who picks and chooses whether he should give any of them an extra 2s. 6d. a week.
We have had a good debate. I only hope that some of the contributions which have been made will reach the headlines of the newspapers instead of——
§ It being Four o'clock, the debate stood adjourned.