Commons Sitting of 3 May 1971

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
MESSAGE FROM THE QUEEN

  MINISTRY OF AVIATION SUPPLY (DISSOLUTION)
  The VICE-CHAMBERLAIN OF THE HOUSEHOLD reported Her Majesty's Answer to the Address, as follows:
  I have received your Address praying that the Ministry of Aviation Supply (Dissolution) Order, 1971, be made in the form of the draft laid before your House.
  I will comply with your request.

ORAL ANSWERS TO QUESTIONS
  WALES

    Water Supplies
    Mr. Scott-Hopkinsasked the Secretary of State for Wales whether he will now set up a Welsh Water Corporation.
    The Minister of State, Welsh Office (Mr. David Gibson-Watt): The future organisation of water services is being considered in the light of the recently published Central Advisory Water Committee Report. The recommendations contained in the Welsh Council's Report will be taken into account in this context.
    Mr. Scott-Hopkins: Does not my hon. Friend agree that there is increasing demand for water from areas like Wales for areas like the West Midlands and the East Midlands? Does he not further agree that it would be a more advantageous method than at present to have
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    a water corporation for Wales? Would this not ensure that Wales got maximum benefit?
    Mr. Gibson-Watt: I am sure that all Welsh Members will be grateful to my hon. Friend for his solicitations. The Welsh Council's Report, "Water in Wales", recommended the establishment of a Welsh Water Development Authority.

    Pembrokeshire (Hospital Service)
    Mr. Nicholas Edwardsasked the Secretary of State for Wales if he will now make a statement on the future of the hospital service in Pembrokeshire.
    The Secretary of State for Wales (Mr. Peter Thomas): I am satisfied that the recommendations in the Report made to me by my Chief Medical Officer offer a reasonable solution to the problem of the health services in Pembrokeshire. The Welsh Hospital Board and others concerned are being informed.
    Mr. Edwards: I welcome my right hon. and learned Friend's acceptance of these recommendations, which I understand have also been accepted by the Welsh Hospital Board. Can he confirm that everyone concerned is being asked to co-operate fully? What steps are being taken as a matter of urgency to ensure that the accident unit is adequately manned in accordance with the recommendations?
    Mr. Peter Thomas: Some of the comments made to the Department were to the effect that there should be a consultant in charge. I was impressed by the arguments, and I propose to seek the advice of the Advisory Committee on Consultant Establishment to that effect.
    Mr. Fred Evans: Is the right hon. and learned Gentleman similarly impressed by the arguments for retaining Caerphilly Miners' Hospital?
    Mr. Peter Thomas: I have considered the representations made to me in that case and am giving them very close consideration.

    Welsh Office (Departments)
    Sir A. Meyerasked the Secretary of State for Wales whether he will transfer

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    some departments of the Welsh Office to North Wales.
    Mr. Peter Thomas: There are already three small sections of the Welsh Office located in North Wales. I do not contemplate a transfer of other departments from Cardiff.
    Sir A. Meyer: Will my right hon. and learned Friend consider whether more might not be done to persuade statutory or other public bodies, such as electricity and gas boards, to transfer office jobs to North Wales? Jobs of that kind are badly needed in that part of the country.
    Mr. Peter Thomas: The Government are anxious to have this sort of office located in different parts of the country, but the Welsh Office is a small Department and I do not think we can transfer any more of our staff outside Cardiff.
    Mr. Alan Williams: Is the right hon. and learned Gentleman aware that it is not the transferance of offices which will help to solve this problem in Wales? The basic difficulty is his non-availability because of his prior commitments as Chairman of the Tory Party.

    Prices and Charges
    Mr. Arthur Lewisasked the Secretary of State for Wales why he will not cease the present practice whereby his Department keeps under constant review the prices and charges for which he is responsible and initiate a system of monthly review of such prices and charges to enable him to show from month to month to what extent since June, 1970, the Government's policy of reducing prices and costs is operating so far as it affects his departmental responsibilities; and whether he will make a statement.
    Mr. Peter Thomas: Such a change would not be worth while.
    Mr. Lewis: This is the usual evasive reply that we are getting from all the Departments. I thought the Welsh Office would be more progressive. Surely, if the Government are succeeding so well in carrying out their election promises, they should want to make monthly reports showing how they have been reducing prices or cutting them at a stroke. Will the right hon. and learned Gentleman not at least try to start the ball rolling by operating this proposal in his own
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    Department? Who knows but that perhaps other Government Departments might follow suit.
    Mr. Peter Thomas: My reply was in accordance with similar replies from other Government Departments. We have given it because it is considered that the present practice is more efficient.

    Steel Industry
    Mr. Roy Hughesasked the Secretary of State for Wales what was the outcome of his recent official discussions with the Deputy Chairman of the British Steel Corporation; what definite plans he has for a future meeting; and if he will make a statement.
    Mr. Colemanasked the Secretary of State for Wales what discussions he has had with representatives of the British Steel Corporation; and if he will make a statement.
    Mr. Peter Thomas: I met the Deputy Chairman of the British Steel Corporation recently in order to review the situation in the steel industry in Wales. I expect to have further meetings from time to time as necessary.
    Mr. Hughes: Will the Secretary of State appreciate that the steel industry is the key to future Welsh prosperity and that it is necessary to remove the threat of hiving off and to restore confidence, that it is not sufficient to make a spectacular announcement in the Welsh Grand Committee about the Spencer Works but essential to authorise the whole of the investment programme of the Steel Corporaiion—
    Mr. Speaker: Order. This is the kind of supplementary question which I was asked to discourage. Will the hon. Gentleman ask a question and be brief, please?
    Mr. Hughes: Will the right hon. and learned Gentleman urge the Cabinet to authorise the whole of the investment programme of the Steel Corporation if this vital industy is to have any future?
    Mr. Peter Thomas: I do not think I could add anything to what was said by my right hon. Friend the Secretary of State for Trade and Industry in the House on 27th April.
    Mr. Coleman: When does the Secretary of State intend to have discussions with the representatives of the six trade unions involved in the steel industry in Wales so that he may discuss with them the outcome of any closures which may take place, and the social consequences arising therefrom?
    Mr. Peter Thomas: I have not as yet received an invitation from the six trade unions the hon. Gentleman mentioned, but I had a discussion with the South Wales Advisory Committee of the T.U.C. on Friday.
    Mr. Michael Foot: Does the right hon. and learned Friend appreciate that we warmly welcome the announcement which he was able to make about Llanwern, particularly because the Labour Government were able to reach the same decision more than 12 months ago? Will he now say whether he thinks it is a proper cause that he intends to follow in future when every individual investment plan of the Corporation is to be subjected to investigation by his Department?
    Mr. Peter Thomas: Certainly not. The hon. Gentleman knows full well that the reason for the deferment was the announcement by the British Steel Corporation about its financial difficulties.

    Animal Carcases (Byproducts)
    Mr. Ellisasked the Secretary of State for Wales how many carcases weekly of sheep during lambing time, and cattle at peak periods, respectively, are collected from the farms of North Wales and surrounding districts for disposal at each processing plant in North Wales.
    Mr. Gibson-Watt: I am afraid that the information is not available.
    Mr. Ellis: Is not a valuable service performed by factories disposing of animan carcases? However, ought not planning decisions on the location of these factories to be decided only on the basis of adequate information being made available to the inspector and the authority making the planning decision?
    Mr. Gibson-Watt: I am not certain to which factory the lion. Gentleman is referring. There are two cases concerning one factory. I limit my self to saying that this is an important service and that this is an important question.
    Mr. Barry Jones: Is the hon. Gentleman aware that one of the factories is in my constituency and that there is regularly an enormous stench or stink which makes life for many people in Saltney intolerable?
    Mr. Gibson-Watt: I am aware of the complaints about smells from his factory. I understand that Flintshire County Council has recently issued an enforcement notice and that there is, therefore, a possibility that the matter will come before my right hon. and learned Friend on appeal, and so I cannot comment further at the moment.
    Mr. Ellisasked the Secretary of State for Wales where those factories are sited in Wales which process byproducts from animal carcases
    Mr. Gibson-Watt: I am informed that there are 20 primary processing factories in Wales. I will, with permission, list their locations in the OFFICIAL REPORT.
    Mr. Ellis: I thank the hon. Gentleman for that reply, but does he not agree that, wherever possible, these factories should not be sited in urban positions and that if there is a proposal to transfer a factory from an urban area to a rural area, it should, other things being equal, be regarded with favour?
    Mr. Gibson-Watt: I accept what the hon. Gentleman says about the environmental problem. However, several of these are the subject of inquiry at the moment and, therefore, I should not like to go further at present.
    The following is the information:

    Anglesey

    Menai Bridge

    Breconshire

    Gilwern

    Caernarvonshire

    Bangor

    Cardiganshire

    Tan-y-groes

    Carmarthenshire

    1. Pen-y-banc

    2. Cwnman Lampeter

    Denbighshire

    1. Marchwiel, Wrexham

    2. Llanfair TH Abergele

    3. Cefn-y-Beidd

    Flintshire

    1. Saltney

    2. Bodelwyddan

    Glamorgan

    1. Llansamlet

    2. Mountain Hare, Merthyr Tydfil

    3. Pencoed

    4. Grangetown, Cardiff

    Monmouthshire

    Mamhilad, Pontypool

    Montgomeryshire

    Guilsfield

    Pembrokeshire

    1. Camrose

    2. Whitland

    Radnorshire

    Knighton

    European Economic Community
    Mr. McBrideasked the Secretary of State for Wales what estimate he has made of the possibilities of regional planning expansion in Wales if Great Britain enters the Common Market.
    Mr. Peter Thomas: A wide range of development policies are pursued by member countries of the E.E.C. The Government have no reason to think that if the United Kingdom enters the Community we should not be able to continue to pursue a vigorous regional development policy.
    Mr. McBride: Is not the right hon. and learned Gentleman aware that that answer shows a lamentable ignorance of the facts? Is it not the case that if we were to become a member of the E.E.C., under the monetary agreement Britain would have only partial control of her regional policy? Is it not the Secretary of State's clear duty to fight full time against this inhibiting threat to the future of Welsh regional expansion, which we all want? In other words, will not the threat of joining the Common Market militate against the interests of the Welsh people?
    Mr. Peter Thomas: No, Sir; I do not agree. Regional policies in this country are compatible with membership of the E.E.C., and there is no reason to believe that as a member this country could not pursue a regional policy which met our circumstances. Co-ordination of the regional policies of member countries in Europe is at a very early stage, and the European countries are pursuing individual regional policies. If we entered the Community, we should be in a position to participate in the evolution of those policies.
    Sir A. Meyer: Has not the European Economic Community been extremely successful in assisting the modernisation of areas where there is an unduly high proportion of run-down industry, as in Belgium, and is it not also a fact that the European Development Fund offers tremendous potentialities for regional development throughout the whole of an enlarged E.E.C. area?
    Mr. Peter Thomas: It is true that it has had great success in Europe—[HON. MEMBERS: "Where?"]—but at the
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    moment each country in Europe is pursuing its own individual policy, and coordination of policies has not yet taken place.
    Mr. William Edwards: Is it not a major problem with these policies in Europe that the Government never thought about the problem of entering Europe when they changed the successful regional development policy which the Labour Party gave them when they came into office? Would not the Secretary of State undertake to examine various investment policies in countries in the E.E.C? If he thinks that the policy which he is now pursuing is inferior, would he undertake to change it?
    Mr. Peter Thomas: The hon. Gentleman is not correct. Although a variety of measures are used by individual members of the Six, the general trend is towards infrastructure provisions, assisted loans and tax reliefs rather than straight grants, and that is generally in line with the British Government's regional policy package.
    Mr. Denzil Daviesasked the Secretary of State for Wales whether he will make a statement regarding the discussion which his officials have had in Brussels with the officials of the European Economic Community.
    Mr. Gwynoro Jonesasked the Secretary of State for Wales how many of his Department's officials have visited Brussels; and what was the outcome of the discussions in relation to the effect on Wales of possible British entry into the European Economic Community.
    Mr. Peter Thomas: Three officials of the Welsh Office had talks with the Commissioner for Regional Affairs and with senior staff of the Commission of the European Communities. Regional policies in the community and their likely future development were reviewed.
    Mr. Davies: I welcome those discussions so far as they go, but is the right hon. and learned Gentleman not aware that there is considerable apprehension in Wales that entry into the Common Market would lead to an even greater concentration of industrial development in the South-East and, in particular, that the freedom of movement of capital and assets which would follow entry would

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    render the policy of refusing or granting industrial development certificates completely worthless and impracticable?
    Mr. Peter Thomas: The discussions with officials brought out clearly the importance which the Community attaches to issues of regional policy, and show that there is a lively awareness in the Commission of the particular problems of the peripheral areas of the Community.
    Mr. Gwynoro Jones: Did the discussions circle around the question of agriculture and the effect of possible entry on agriculture, especially on the Milk Marketing Board and its functions? Would the right hon. and learned Gentleman not agree that if the present policy of the Board over the transport costs system is to be disbanded as a condition of entry, this will be a damaging proposal in all rural areas?
    Mr. Peter Thomas: The interests of Welsh agriculture are receiving full consideration, along with other Welsh interests. Agricultural policy is being dealt with, as the hon. Gentleman knows, in the negotiations.

    Rhoose Airport, Glamorgan
    Mr. Alec Jonesasked the Secretary of State for Wales what advice he has tendered to the Glamorgan County Council regarding its application for a capital grant for developments at Glamorgan (Rhoose) Airport.
    Mr. Peter Thomas: The county council has been told that my right hon. Friend the Minister for Trade will be receiving a deputation to discuss this matter and that I will be represented at the meeting.
    Mr. Jones: Would not the Secretary of State agree that the development of Glamorgan's airport at Rhoose is of great importance for the whole region? As municipal airports at Newcastle and Teesside receive Government grants for their development, we naturally expect Glamorgan to receive similar grants.
    Mr. Peter Thomas: I am well aware of the nature and extent of the works being undertaken at Rhoose and of the significance of this airport to Wales.
    Mr. Gower: In any representations which he makes to his right hon. Friend, will my right hon. and learned Friend
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    take account of the fact that since the war, for various reasons, the proportion of capital resources devoted to civil aviation in Welsh airports has been minute in comparison with that devoted by the Treasury of the United Kingdom to aviation in every other part of the United Kingdom?
    Mr. Peter Thomas: I assure my hon. Friend that all the relevant facts and arguments will be carefully considered before a decision is made.

    Dee Estuary
    Mr. Barry Jonesasked the Secretary of State for Wales if he will make a further statement on the development of the Dee estuary.
    Mr. Peter Thomas: I have nothing to add to the statement I made in the Welsh Grand Committee debate on Economic Affairs in Wales on 28th April, 1971.
    Mr. Jones: A strong case could be made for the crossing on the ground of chronic traffic congestion in East Flint and increasing water shortages in the North-West, but is not the Secretary of State aware that the Dee crossing would be cultural dynamite for the Welsh way of life? Is he aware that there are blandishments from certain quarters to turn Flintshire into a smart bedroom for those in the executive classes in the North-West and Merseyside? Is he not prepared to grant equality of consultation? Will he listen to the wise statements of the Flintshire County Council and the Dee and the Clwyd River Authority?
    Mr. Peter Thomas: This is a complex matter, and many things have to be considered. The views of the local planning authorities have been sought, and the regional planning councils and the Water Resources Board are being consulted. All their views and other views which may be expressed will be taken into account before decisions are taken.

    Jobs
    Mr. Alan Williamsasked the Secretary of State for Wales if he is satisfied with the number of jobs in prospect in Wales; and if he will make a statement.
    Mr. Thomas: I should like to see more jobs in prospect, and the Government's policies are intend to improve the

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    economic prospects of the country as a whole. Wales will share full in this improvement. I am glad to note that the interest shown in Wales by industrialists remains at a good level.
    Mr. Williams: I am surprised at the last comment of the right hon. and learned Gentleman. Since the Budget did not even aspire to reduce unemployment, and since the rate of unemployment and redundancies in Wales is still rising, and since, according to an answer given on Friday, the level of job expectancy from I.D.C.s in the first quarter of this year is the lowest since the last Conservative Government, is it not time he recognised that the only thing the Conservatives can do for Wales is to resign from Government?
    Mr. Peter Thomas: It is about time that the hon. Gentleman realised precisely what responsibility he has for the situation in Wales. He was a member of a Government which abandoned the 2½to 4½ per cent. plan in their White Paper for the containment of wage rises—[HON. MEMBERS: "Answer!"] He was a member of a Government which deliberately created inflation as part of the run-up to the General Election, and he was a member of a Government which deliberately discouraged investment by penal taxation. Far from trying to make political capital out of the difficulties in Wales, he should go round to his constituents and apologise.
    Mr. Gower: In addition to what my right hon. and learned Friend has said, does it not ill behove the hon. Gentleman to make such remarks since the policies of the Government of which he was a member, including devaluation, led to a decline in employment in Wales?
    Mr. Peter Thomas: From 1966 onwards unemployment in Wales rose sharply. In the six months from June, 1966, it doubled.
    Mr. George Thomas: Is the Secretary of State aware—he does not appear to be—that since he assumed responsibility for Welsh affairs unemployment has increased in the Principality by nearly 30 per cent.? Is he aware that there are over 11,000 more people looking for jobs in Wales? Does it not ill-become him
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    to make petty points at the Dispatch Box when he ought to be looking again at the question of investment grants, bearing in mind that the job expectancy in Wales to which my hon. Friend referred is half what it was a year ago?
    Mr. Peter Thomas: What I am aware of is that throughout the period when the right hon. Gentleman was Secretary of State unemployment in Wales topped the 40,000 mark every year.
    Mr. George Thomas: Is the Secretary of State aware that he has a grave responsibility to the Welsh people and that it is about time he took responsibility for the grave and serious increase in unemployment in Wales since last June? Surely he accept responsibility for the Government's change of investment grant policy?
    Mr. Peter Thomas: I accept responsibility for that. I am also fully aware that I had a very harsh inheritance when I took over as Secretary of State.

    Hospitals (Visits)
    Mr. George Thomasasked the Secretary of State for Wales whether he will list the hospitals in Wales that he has visited officially since 1st January, 1971; and whether he will make a statement.
    Mr. Peter Thomas: The Minister of State, who under my overall direction has special responsibility for hospital services in Wales, has paid six official visits to hospitals in Wales since 1st January.
    Mr. George Thomas: The right hon. and learned Gentleman has answered a question which is not on the Order Paper. I asked him how many hospitals he has visited officially. Is he aware that while we appreciate the work that is done by the Minister of State, the right hon. and learned Gentleman is the Minister responsible and yet he shows no sign of a personal involvement in the health service of the Principality? That responsibility cannot belong to the Minister of State.
    Mr. Peter Thomas: The Minister of State, as the hon. Gentleman knows, has, under my overall responsibility, special responsibility for hospitals in Wales. For that reason, he has shown a great interest in hospitals. He has visited 17 since he was appointed.

    Nursery Schools
    Mr. Denzil Daviesasked the Secretary of State for Wales whether he has any plans to accelerate the provision of nursery schools in Wales.
    Mr. Peter Thomas: Priority at this stage is being given to the replacement of inadequate pre-1903 primary schools. Later I hope that we shall be able to turn to the needs of nursery education. I will, however, continue to develop nursery education in areas of special need.
    Mr. Davies: Since it seems that only a minute proportion of children in Wales are able to take advantage of nursery education, and since it is now generally recognised that the years from two to five are crucial for a child's development, is it not time the Government started to show the same urgency in this matter as they seem to show in trying to assist public schools by tax concessions for those who are well able to look after themselves?
    Mr. Peter Thomas: Priority at this stage must be given to improving the facilities for children of compulsory school age who are already in primary school. The hon. Gentleman will be aware of the urban aid programme, which greatly assists the development of nursery education in areas of special need. At the moment we should concentrate on the primary schools.
    Mr. Fred Evans: Does the Minister not appreciate that every practising teacher knows that it is futile to over-expend in the 11-plus sector unless provision against inadequate home background and many other social factors is made at an early stage? Is he aware that the teachers in this section of education are the inheritors of a grave legacy which will continue unless something is done? Will he not admit that it is the differential between the cost of providing one nursery place compared with one primary or secondary school place that is the decisive factor in this matter?
    Mr. Peter Thomas: These are the sort of matters that are considered. The hon. Gentleman probably knows that in many areas in Wales it is customary to admit under-fives into primary schools. In January, 1970, for example, about 57 per
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    cent. of the four-year-old age group were in primary schools.

    New Heath Hospital (Parking and Roads)
    Mr. Michael Robertsasked the Secretary of State for Wales what proposals he has for providing parking facilities and access roads at the New Heath Hospital.
    Mr. Gibson-Watt: The hospital plans provide parking for over 900 cars. Consideration is currently being given to proposals by Cardiff Corporation for further car parking and a third access road to the site.
    Mr. Roberts: Would the Minister of State give further consideration to provide parking facilities, particularly for students, for whom no provision has so far been made? Would he also consider the provision of an access road to Eastern Avenue, which would greatly facilitate admissions in times of emergency and relieve traffic congestion throughout the neighbourhood?
    Mr. Gibson-Watt: I am aware of the particular problem of students and the access road to which my hon. Friend referred. I was glad that he and other residents were able to meet the secretary of the local hospital management committee on 1st May to discuss the matter.

    Local Government Finance
    Mr. Johnasked the Secretary of State for Wales when he proposes to publish details of the new proposals for local government finance in Wales.
    Mr. Gibson-Watt: The Government will publish later this year a Green Paper dealing with local government finance.
    Mr. John: Does the hon. Gentleman not understand that to publish a consultative document without the basis for financing it is rather like publishing a menu without prices, and that many local authorities, such as Powys, cannot possibly consider adequately the viability of their areas as local authority units without knowing the financial considerations involved? Will he not take note of the anxieties being expressed by local authorities over the absence of financial details at this stage?
    Mr. Gibson-Watt: With respect to the hon. Gentleman, that did not stop the previous Government bringing forward a White Paper on local government reform. At the same time, I accept what he says, and the Green Paper will examine the present system and any reforms which may be necessary.
    Mr. Elystan Morgan: Can the hon. Gentleman say whether strategic decisions in relation to local government finances were already taken before the Welsh Office published a White Paper on local government reorganisation some months ago?
    Mr. Gibson-Watt: That is another question.

    North-West Wales
    Mr. Goronwy Robertsasked the Secretary of State for Wales what decisions he has taken on the recommendations of the Welsh Council contained in "An Economic Strategy for North-West Wales", particularly, that South Caernarvonshire and North Merioneth be accorded special development status, and that Caernarvon, Bangor, Portmadoc and Penrhyndeudraeth be treated as growth points.
    Mr. Peter Thomas: The claims of South Caernarvonshire and North Merioneth were fully considered before my right hon. Friend the Chancellor of the Exchequer announced changes in the list of special development areas on 18th February. As I have already stated, I accept the Council's view that efforts to attract industry should be concentrated primarily, though not exclusively, on selected places in this area.
    Mr. Roberts: May I point out to the right hon. and learned Gentleman that he has not replied to the second part of my Question? On the part to which he has vouchsafed an answer, will he say whether the decision of the Chancellor of the Exchequer in February was final, or whether the scheduling of new special development areas is a continuing matter, as is the scheduling of development areas—the very strong argument in the publication of which the right hon. and learned Gentleman called from the Welsh Council in favour of enhanced status for the area mentioned in the Question?
    Mr. Peter Thomas: I can assure the right hon. Gentleman that I studied that Welsh Council Report very carefully. The scheduling of all areas—development, special development or intermediate—is kept under review. When an area is scheduled, that does not mean that it will not be changed at some time in the future if occasion demands.
    Mr. Roberts: And my other point?
    Mr. Peter Thomas: I said that I accept the Council's view that efforts to attract industry should be concentrated primarily, though not exclusively, on selected places in the area.

    Llantrisant New Town
    Mr. Probertasked the Secretary of State for Wales what capital sums will be involved in the development of the new town at Llantrisant.
    Mr. Peter Thomas: The total public and private investment is expected to be about £300 million.
    Mr. Probert: I am sure the whole House will agree that that is a fantastic sum. Will the right hon. and learned Gentleman tell us where the people are expected to come from to fill this new town? Would not it be better to invest only a slight fraction of this tremendous sum to bring new industry to existing communities, since that would result in no waste of existing social capital?
    Mr. Peter Thomas: The population is expected to come from the natural growth, from the fact that the proposal may help stop migration, and also from the valley communities which should benefit greatly from industry on this ideal site at Llantrisant. The new industry in that area should have the effect of stimulating growth generally throughout the whole of South-East Wales.
    Mr. Alec Jones: If the right hon. and learned Gentleman is correct when he says that he expects that some of the population will no doubt come from the valley communities, how can this proposal be said to be of any help to those valley communities? Is it not dishonest to talk of a development at Llantrisant in this way, since it must mean the death

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    knell for many of the valley communities of South Wales?
    Mr. Peter Thomas: The hon. Gentleman must not exaggerate. It is wrong to use expressions such as that. Many people who might otherwise leave the valley communities might be persuaded to remain there. The travel to work from the valley communities to Llantrisant is reasonably good. Llantrisant is an ideal site for growth. It is an area which will grow in any event, and it is expected that growth in that area will stimulate further growth in othes parts of South Wales.
    Mr. George Thomas: Is the right hon. and learned Gentleman aware that these valley communities have an enormous pride in their communities and in their own culture? If he spent £20 million on refurbishing these valleys, he would do a great deal more to protect Welsh life than his present proposal will.
    Mr. Peter Thomas: I am fully aware of the importance of the valley communities, and that is why there is considerable concentration on making them better places in which to live.
    Mr. Probert: On a point of order, Mr. Speaker. In view of the unsatisfactory nature of those replies, I beg to give notice that I shall seek to raise the matter on the Adjournment at an early opportunity.

    Employment
    Mr. Roderickasked the Secretary of State for Wales how many groups of local authorities or other bodies have asked him to meet them to discuss employment in their area; and how many he has met.
    Mr. Peter Thomas: My Department does not maintain a comprehensive statistical record of such matters. By the end of this month I will have met all the county councils and many other authorities in Wales. Employment has usually figured prominently in my discussions with them.
    Mr. Roderick: The Secretary of State has not answered my Question. I asked how many groups of local authorities had requested meetings with him to discuss
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    employment in their areas. Is the right hon. and learned Gentleman not aware that many such groups meet at most weekends to discuss worries about their areas? If the right hon. Gentleman has had very few requests, does he not feel that local authorities may believe that he is either unwilling or unable to help them?
    Mr. Peter Thomas: I answered the Question when I said that my Department does not maintain a comprehensive statistical record of such matters. As for the other part of the Question, I am always ready to consider the request of right hon. and hon. Members that we should meet for the purpose of discussing the problems of their constituencies. The hon. Gentleman will recall that I had such a discussion with him and the hon. Member for Merthyr Tydvil (Mr. S. O. Davies) recently. It was following that discussion that I was asked to meet the hon. Gentleman again with certain local authority representatives, and I felt that little purpose would be served in going over the matter again.
    Mr. John Morris: Is the right hon. and learned Gentleman aware that there is growing concern with unemployment in Wales? Can he confirm that the Government regard high unemployment as a means of combating cost inflation? Will he agree that to the man in the dole queue it is part of Government policy to see 10 men chasing nine jobs in order to stop wage rises? Is not the word "Tory" once again synonymous with "unemployment" in Wales?
    Mr. Peter Thomas: That is quite extraordinary, as the right hon. Gentleman should know perfectly well, since he was a member of a Government which deliberately pursued policies which created unemployment. I ask the right hon. Gentleman to look again at the measures in the 1966 Budget and the restrictive policies which followed. It is totally untrue that high unemployment is part of Conservative policy. Our policy is the creation of full employment.

    Northop, Flintshire (Primary School)
    Sir A. Meyerasked the Secretary of State for Wales what plans have been proposed for a new primary school at

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    Northop, Flintshire; and whether the plans provide for the building of this school on the north side of the A55 road.
    Mr. Peter Thomas: The Flintshire L.E.A. has included in its bids for the preliminary major building programme a proposal for a new primary school at Northop sited to the north of the A55.
    Sir A. Meyer: When my right hon. and learned Friend is assessing priorities for the construction of schools in Flintshire, will he give great weight to the undoubted danger to life which exists in the present layout in this case, with the school on one side of the road and the village on the other?
    Mr. Peter Thomas: Yes, Sir.

    Local Government Reform
    Mr. Roy Hughesasked the Secretary of State for Wales what representations he has received from the County Borough of Newport concerning the consultative document on the reform of local government in Wales.
    Mr. Peter Thomas: None. Authorities have until the end of the month to submit their observations.
    Mr. Hughes: Is the right hon. Gentleman aware that this council has now agreed to the proposal that it should be reduced to the status of a parish council? Will he appreciate that that is quite appropriate and understandable after four years of disastrous control by the Conservative Party, but will he bear in mind that there may be a few changes on 13th May?
    Mr. Peter Thomas: Not for the first time, the hon. Gentleman is wrong. It is not suggested that a district council, under my proposal, should have the functions of a parish council. The hon. Gentleman is thinking of his right hon. Friend's proposal.
    Mr. Alan Williamsasked the Secretary of State for Wales what consultations he intends to hold with Swansea City Council about his local government reform proposals.
    Mr. Peter Thomas: I shall decide this in the light of its written comments.
    Mr. Williams: Will the Secretary of State, if he meets the city council, explain
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    why, other than with the object of gerrymandering, in Swansea he has included in the new boundaries Tory voting villages 10 to 12 miles outside the city while he has excluded from within the new areas villages and parts of communities indistinguishable from Swansea which happen to contain Labour votes?
    Mr. Peter Thomas: If the hon. Gentleman inquires of the city council he will find that it has in the past proposed to extend the city boundaries to include areas such as the Gower rural district and a number of other areas adjoining the city. The hon. Gentleman and some of his hon. Friends seem to be interested in the pattern of local government solely from the point of view of its possible effect on parliamentary constituencies. I think he should have more concern for the value of local government reorganisation. He talks about gerrymandering. That comes ill from a member of a Government which disreputably threw aside the recommendations of the Boundary Commission.
    Mr. John Stradling Thomas: Does my right hon. and learned Friend agree that in discussing gerrymandering we are looking at a party of experts?
    Mr. George Thomas: Is the Secretary of State aware that the sheer hypocrisy of his reply takes our breath away? Has he received many compliments from the Conservative Party constituencies for the excellent job of fiddling the boundaries on which he is engaged?
    Mr. Peter Thomas: That is not the view of the Conservative-controlled Cardiff City Council. Certainly it has made representations to me and, as the right hon. Gentleman knows, has rejected my proposals. Therefore, it does not appear to be pleased. I am wondering what the right hon. Gentleman's attitude was to the Government of which he was a member throwing aside the recommendations of the independent Boundary Commission. Did he not think that that was gerrymandering?
    Mr. McBride: Is it not singular that although not so long ago the city which my hon. Friend the Member for Swansea, West (Mr. Alan Williams) and I represent was accorded the status of a city, the right hon. Gentleman will now demote it to the status of a district council? Is he aware that we know of his

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    distaste for political questions but that we are equally aware of his interest in political matters, particularly when they concern his party, and that we think that he framed this decision thus?
    Mr. Peter Thomas: I suggest that the hon. Gentleman reads my proposals—
    Mr. McBride: I have done so.
    Mr. Peter Thomas: —when he will see that they will still mean that Swansea will remain a city.
    Mr. Alan Williams: On a point of order, Mr. Speaker. In view of the evasiveness and inadequacy of the right hon. and learned Gentleman's reply, I beg to give notice that I shall try to raise this matter on the Adjournment.
    Mr. Johnasked the Secretary of State for Wales if he will publish the exchanges with Lord Crowther as to the effect upon the present proposals for the reform of local government of the likely recommendations of his Commission.
    Mr. Peter Thomas: There were no written exchanges. I had a private discussion with Lord Crowther.
    Mr. John: Is it not remarkable to the House of Commons, conditioned as it is to premature disclosure of official reports, that the hon. Gentleman should have had such an assurance one year before the Crowther Commission is expected to report? Will he not consider publishing the text of those conversations so that hon. Members may judge the accuracy of Lord Crowther's assertion that his report will not affect these proposals?
    Mr. Peter Thomas: The relevant point is that Lord Crowther made it clear in the private talks that I had with him that he saw no objection to the proposals for the reform of local government being put forward before the Royal Commission reported. He told me that I could say that was his view.
    Mr. William Edwards: But surely the point is that it is not so much what Lord Crowther thinks about the situation hut what local authorities in Wales will think if the Crowther Commission brings in a report which takes away from those authorities some of the power which they already possess after they agreed to a reorganisation on the basis of keeping those powers.
    Mr. Peter Thomas: Obviously, I do not know what the Commission will recommend about Wales but, having regard to the terms of reference, I cannot see how its recommendations could affect substantially the structure proposed in the consultative document.
    Mr. John Morris: Could the right hon. and learned Gentleman say whether Lord Crowther was speaking for himself or for the Commission as a whole?
    Mr. Peter Thomas: No. I asked Lord Crowther's view, which he expressed, and I took it that he was expressing his personal view.
    Mr. Elystan Morgan: Since the Crowther Commission from the very start laid great emphasis on the value of taking evidence and holding discussions in public, is there any good reason for believing that those remarks could not have been published in a formal form?
    Mr. Peter Thomas: I have discussed many matters with Lord Crowther. [HON. MEMBERS: "Oh!"] This was one matter which Lord Crowther said he did not mind being made public.
    Mr. Michael Foot: Does not the right hon. Gentleman regard it as an extraordinary development that such discussions should take place between the Minister and somebody in charge of a Commission of this nature and for the House of Commons to be left in the position that we do not know what the exchanges were? Could we be given the precedents for such discussions between a Minister and a head of such a Commission? Will the Secretary of State now agree that the matter is so serious that he should lay before the House some detailed documents on the outcome of these discussions which we can discuss?
    Mr. Peter Thomas: What I did was to let Lord Crowther know in advance and in confidence some of the proposals that I was thinking of putting forward for local government reorganisation in Wales, because I valued his judgment and his advice. Having told him what my proposals were likely to be, I asked him whether there was any objection to those proposals being put forward before the Commission had reported.
    Mr. John: In view of the unsatisfactory nature of that reply, I give notice that

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    I shall seek to raise this matter on the Adjournment at the earliest possible moment.

    T.U.C. Representatives, South Wales (Meetings)
    Mr. McBrideasked the Secretary of State for Wales what further meetings he proposes to have with Trades Union Congress representatives in South Wales.
    Mr. Peter Thomas: I met the South Wales Advisory Committee of the T.U.C. last week.
    Mr. McBride: Is the Secretary of State aware that all Cardiff is aware of the abortive nature of that meeting? Will he have periodic meetings with the Trades Union Congress representatives to remove the shadow of redundancy which is hanging over Wales and tell them speedily of any large projects going to Wales which will provide employment and, more important, opportunities for school leavers? Will he also tell us—I put this deliberately—how many firms have refused to go to Wales because of the inhibiting financial policies of the Government?
    Mr. Peter Thomas: I shall always be pleased to consider any future requests for meetings with the Advisory Committee of the T.U.C.
    On the last part of the hon. Gentleman's supplementary question, I certainly could not give an answer without notice.
    Mr. George Thomas: Is the Secretary of State aware that the T.U.C. Regional Advisory Committee members who met him were very disappointed that he had nothing constructive to say to them? Will he tell the House how high unemployment in Wales must rise before he will meet these people with constructive proposals?
    Mr. Peter Thomas: I do not know where the right hon. Gentleman gets the impression that they were disappointed. They certainly did not express disappointment to me. In fact, at the end of what I considered to be a very useful meeting, at which we had a general and full dis-discussion, they expressed their thanks to me.

    N.H.S. Charge Exemptions and Free School Meals
    Mr. Nicholas Edwardsasked the Secretary of State for Wales what percentage of the population of Wales at present receives exemption from prescription charges and obtains free spectacles and dental treatment; and what proportion of Welsh schoolchildren has school meals paid for.
    Mr. Gibson-Watt: About 40 per cent. of the population of Wales has been eligible for exemption from prescription charges and for free dental treatment; about 30 per cent. for free spectacles. Information about the numbers receiving exemption or free treatment is not available. 10·4 per cent. of the pupils in schools in Wales receive free meals. These percentages are expected to increase as a result of the new exemption rules recently introduced by the Government.
    Mr. Edwards: While noting the fact that 40 per cent. of the population of Wales receives exemption from prescription charges and welcoming the additional resources being allocated to those most in need, may I ask my hon. Friend whether any part of the current advertising campaign to encourage take-up is being specifically directed at Wales, particularly to those who speak the Welsh language?
    Mr. Gibson-Watt: Yes. I am happy to tell my hon. Friend that my right hon. and learned Friend the Secretary of State on 14th April wrote to lord mayors, mayors and chairmen of local councils asking for their help in giving wide publicity to the new arrangements. Notices in Welsh setting out the new prescription charges and a general information leaflet have been prepared and issued.
    Mr. Alec Jones: Will the hon. Gentleman take into account that many of the newspaper advertisements about exemptions from prescription charges, certainly in Wales, are misleading? I do not say that they are deliberately misleading, but they are having the effect of misleading older married couples who read into the advertisements that they are entitled to free prescriptions provided that their income is less than £16.45, whereas many of my constituents are not entitled to free prescriptions even though their weekly income is less than £12.
    Mr. Gibson-Watt: We will look into this matter immediately. I accept the general feeling that the exemption should be as widely known as possible. I should only add that the publicity campaign is not restricted to the newspapers. It is, in addition, on television and radio.

    Western Scotland (Special Development Areas)
    Mr. Elystan Morganasked the Secretary of State for Wales what studies he has made of the areas in western Scotland which have recently been designated as special development areas.
    Mr. Peter Thomas: My Department, as part of its duties in relation to economic policy, keeps me informed of the general situation in other parts of the United Kingdom, including Scotland.
    Mr. Morgan: Does not the Secretary of State suffer from feelings of embarrassment and shame because some 2 million people living in Western Scotland have been given substantial benefits by way of extended development areas although the conditions of those areas are exactly comparable with those in Wales? Can he hold out any hope that the Government will give something to Wales to make up for the investment grants which were taken away and had such disastrous results nine months ago?
    Mr. Peter Thomas: Account was taken of the numbers unemployed as well as the rates and character of unemployment. Frankly, I thought that the areas in Scotland had a very special case to be made special development areas.

    School Meals
    Mr. Barry Jonesasked the Secretary of State for Wales what is his estimate of the effect on the school meals service in Wales of the higher charge for school meals.
    Mr. Peter Thomas: It is estimated that there will be a fall of about 12 per cent. in the number of children taking school meals as a result of the higher charge.
    Mr. Jones: That was an astonishing answer. Does the Secretary of State agree that this increase is punitive for the children of parents who are already struggling to meet the rise in the cost of bus fares? Does he also agree that in the school kitchens it might be thought that the
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    beginning of the end of the school meals service is in sight? Is it not a fact that there may soon be redundancies in school kitchens?
    Mr. Peter Thomas: I do not think it was an astonishing answer. It is an estimate, and it is difficult to estimate with accuracy. The hon. Gentleman will remember that on the two occasions when the previous Administration raised the school meals charge the numbers not taking school meals were quite considerable for a time, but they fell within a few months. It is extremely difficult to do more than estimate, but the estimate is that it will be about 12 per cent.
    Mr. Alan Williams: Does the right hon. and learned Gentleman realise that most people in Wales would regard as scandalous the Government's suggestion, in the education debate the week before last, that for children whose parents cannot afford school lunches and who do not qualify for free lunches, a system of half or partial lunches should be introduced? Will he tell us on what nutrional advice he bases such a crazy policy?
    Mr. Peter Thomas: That is an announcement which I never made concerning Wales. The increases in the charge for school meals will be offset by the introduction of a more generous scale for the remission of meals charges.

    Cardiff and District (Hospital Reorganisation)
    Mr. George Thomasasked the Secretary of State for Wales whether he will now make a statement on the proposed reorganisation of the Cardiff and district hospitals.
    Mr. Gibson-Watt: I would refer the right hon. Member to the reply given to him by my right hon. and learned Friend on 23rd March, 1971.—[Vol. 814, c. 108.]
    Mr. George Thomas: Is the hon. Gentleman aware that we are getting tired of the very long time that these plans have been with the Secretary of State, and that, if he spent less time chasing around the country as the Chairman of the Conservative Party, he might find time to reach a decision on this matter?
    Mr. Gibson-Watt: In the latter context, the right hon. Gentleman is talking nonsense and he knows it. As for the delay, this is a complex reorganisation.

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    It is our wish to ensure that the right decisions are made. The Welsh Hospital Board's proposals were submitted to the Welsh Office in February of this year.
    Mr. Gower: Is my right hon. Friend aware that many of us will not mind further delay provided that the decision is taken to reverse the proposals of the Welsh Hospital Board regarding the Accident and Maternity Hospitals at Barry and, I believe, the hospital at Caerphilly and similar small hospitals, which serve a valuable purpose, even in the context of district general hospitals and university hospitals?
    Mr. Gibson-Watt: I am aware of my hon. Friend's intense interest in this matter. I assure him that my right hon. and learned Friend and I will give every possible consideration to all these matters and all these hospitals.
    Mr. Fred Evans: Will the hon. Gentleman please realise that hon. Members on this side and their constituents are getting completely tired of so many questions—like the recent 26 put down by the hon. Member for Caerphilly (Mr. Fred Evans)—getting complete non-answers? Is it not high time that he started to bring something out of the egg upon which he has been sitting for so long?
    Mr. Gibson-Watt: I dare say that if the hon. Gentleman put down better Questions he would get better answers.

    HIGH COURT TRIALS (COSTS)
    Mr. Arthur Lewisasked the Attorney-General whether he will publish in the OFFICIAL REPORT as much detailed information as may be readily available giving for the longest most convenient period of time the number of public trials at the High Courts which have taken place where the accused have been found not guilty and costs awarded against the prosecution; and how long it has been before the taxed costs in each

    CASES IN WHICH COSTS AWARDED AGAINST THE PROSECUTION ON ACQUITTAL YEARS 1968 TO 1970

    Date and Court

    Name

    Offence

    Amount

    Date paid

    12.2.68—Cardiff Assizes

    Doxsey, S. W. and Ors.

    Conspiracy and Corruption.

    £1,260

    26.6.68

    5.12.68—Divisional Court

    Freed, G.J

    Exchange Control

    £420

    6.2.69

    27.1.70—Court of Appeal

    Bean, H. and Anor.

    Theft of Government Stores.

    £150

    18.2.70

    5.10.70—Central Criminal Court.

    Crouch, J. E.

    Corruption

    £42

    14.10.70

    case have been delivered; and whether he will publish details of such taxed costs.
    The Attorney-General (Sir Peter Rawlinson): During the period 1st January, 1968, to 31st December, 1970, there were four trials in which the Director of Public Prosecutions was the prosecutor and costs were awarded against the prosecution. I will publish the details in the OFFICIAL REPORT.
    Mr. Lewis: We are used to the legal profession taking so long to do their legal work, no doubt because they get paid higher fees the longer cases go on, but why should it take so long and so many questions to get the facts and figures of these taxed costs? When will the right hon. and learned Gentleman be able to tell me the actual taxed costs of the recent Daily Telegraph case, which was a scandal? Shall I get them in two or three years, or shall I have to wait for about 10 years?
    The Attorney-General: On the last part of that question, the case to which the hon. Gentleman referred was not a case in which costs were awarded against the prosecutor. As for the delay in giving the information, his original Question asked for as much detailed information as was possible of cases in which costs had been awarded against the prosecution. I have given it.
    Mr. Lipton: What costs were involved in the last case mentioned by my hon. Friend—the prosecution under the Official Secrets' Act? How much did that cost the Government?
    The Attorney-General: Fortunately, although that does not arise out of this Question, I can give those details, because I have answered a Question about the matter before. The prosecution costs came to £5,816. The defence has not yet had its costs taxed.
    Following is the information:

    ADMINISTRATION OF JUSTICE ACT 1970 (SECTION 13)
    Sir D. Walker-Smithasked the Attorney-General whether pursuant to Section 54(4) of the Administration of Justice Act, 1970, it is yet possible to specify a date for the coming into force of Section 13 of the said Act.
    The Attorney-General: My noble Friend is waiting for the Attachment of Earnings Bill to be passed before bringing into force Section 13 of the Administration of Justice Act, 1970, as the Bill will consolidate Section 13 of the other statutory provisions relating to attachment of earnings. If, as appears likely, the Bill receives Royal Assent later this month, the Lord Chancellor intends to make an Order bringing the relevant provisions into operation on 2nd August, 1971.
    Sir D. Walker-Smith: Does my right hon. and learned Friend appreciate that that will bring satisfaction to many people, like the constituent who wrote to met on this matter last week, who, while they have very strong cases of liability in respect of these small debts, at the moment shrink from bringing proceedings in the county court because of the
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    difficulties of execution? Will he do all he can to see that that timetable is maintained and, if possible, accelerated?
    The Attorney-General: I will certainly so assure my right hon. and learned Friend. It is hoped that the Bill will receive the Royal Assent on 12th May. There is then certain subordinate legislation to be introduced, and it is hoped that this will be brought into effect by the beginning of August.
    Sir Elwyn Jones: Is the right hon. and learned Gentlemen satisfied that the machinery will be ready for the implementation of these proposals by August? They are important proposals, since they serve the dual purpose of easing the collection of civil debts and reducing the number of people who go to prison for non-payment of civil debt. Could he give some assurance about the machinery aspect?
    The Attorney-General: I believe I can. Of course, there will be six weeks; it is necessary for litigants and advisers to familiarise themselves with this new procedure, which, under the 1970 Act, will greatly reduce the numbers of people who will go to prison for debt. I think the six-week period should give people enough time to familiarise themselves.

ORDERS OF THE DAY

  NATIONAL INSURANCE BILL
  Order for Second Reading read.
  3.32 p.m.
  The Secretary of State for Social Services (Sir Keith Joseph): I beg to move, That the Bill be now read a Second time.
  The House will already be aware from my statement, from the White Paper and from the Government Actuary's Report accompanying the Bill, of the proposals which the Government are putting before the House. The Bill which we are debating today covers only the national insurance and industrial injury ingredients of the total set of proposals. There will be an Instrument laid for war pensions in due course, and before long we shall be laying before the House an affirmative Resolution connected with the Supplementary Benefit Regulations.
  This Bill breaks new ground in several directions. Although it must share with the Act of 1959 introduced by my right hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) and with the Act of 1966 introduced by the Labour Government the distinctions of making the largest changes in the national insurance scheme, it has other distinctions all its own. It is the longest National Insurance Bill since the original Measure was piloted through the House in 1948, it disposes of the largest aggregate sum of money in any National Insurance Bill since then, and it introduces the most varied package of improvements.
  The Bill will be memorable, not just because it is the longest and in terms of money the largest National Insurance Bill since 1948, but because it makes a real start in filling the very large gap in our social security system, namely, in regard to the needs of the disabled and chronic sick. The Government are not pretending that the proposals which are now in the pipeline represent the final story of what is needed for the disabled and chronic sick. That would be very far from the truth. However, we maintain that 1971 will have been a notable year for two substantial steps in filling the needs of these two large and hitherto neglected groups of the population.
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  There is first of all the £24 million of gross expenditure for the chronic sick embodied in the Bill, which will come into effect in late September this year, and then there is the £10 million coming into effect in December by way of an attendance allowance for the very severely disabled. I will explain the chronic sick package deal in its place, but I would draw particular attention to it at the start of my introduction of the Bill as the outstanding feature of the proposals which the Government are laying before the House for the National Insurance Scheme.
  The basic proposal for the standard weekly rate of national insurance benefit will be found in Clause 2 and Schedule 2 of the Bill. These provide that the rate should go up by £1 a week for a single person and by £1·60p for a married couple: from £5 to £6 for a single person; from £8·10p to £9·70p for a married couple from the week beginning 20th September this year. The other rates will go up in proportion, that is to say by about 20 per cent.
  I say with diffidence that there have never been bigger increases in money terms. I say "with diffidence" because we are passing through, and pensioners in particular are enduring, a very high rate of price inflation. Despite that factor, the Government are confident that these increases will make good the erosion in the value of the benefits since they were last increased in November, 1969. Since that increase until the last known date in March this year, there had been a fall in real value of national insurance benefits of 11·6 per cent. Therefore, there is a gap between March, 1971, and September, 1971, of a considerable amount. This is why we are confident that when the increased benefits come into payment they will represent a real improvement upon the benefits as increased in November, 1969.
  These all-round increases in benefits will be welcomed by millions of people. There are 7½ million retirement pensioners. Some 10 million people in a normal year draw sickness benefit for a greater or lesser length of time and all of them will get an increased benefit. Some 3 million people in a normal year draw unemployment benefit for a greater or lesser period and all will get an improvement. Those are the central

  1013
  changes in national insurance benefits proposed in the Bill.
  There are two smaller changes in the basic scheme that will be welcomed by hon. Members on both sides. As pledged by the Government, we are modifying the earnings rule. In Clause 2 the House will see that pensioners will be entitled to earn, after 20th September, £9·50p instead of, at present, £7·50p before their national insurance pension is abated by their earnings. This will help thousands of national insurance pensioners while still preserving intact the retirement condition on which successive Governments have remained firm.
  Then there is an improvement in the increments drawn for deferred retirement. The increment goes up from 5p to 6p per week for every nine flat-rate national insurance contributions paid. This will, in time, benefit about 300,000 people who have deferred their retirement in order to continue earning and who are still, therefore, paying national insurance fiat-rate contributions. There will be resulting increases in their retirement pension, when they come to draw it, either by retiring or by reaching the absolute entitlement age of 65 for a woman and 70 for a man.
  I have passed relatively quickly over the changes proposed in the basic benefits. I come now to the group of selective improvements for which the Bill will be particularly welcome by hon. Members on both sides.
  Mr. John Mendelson: Before the right hon. Gentleman does that, and in view of the particularly accelerated increase in the cost of living in the last seven months—I am not deliberately choosing the date of the change of Government; the cost of living has jumped particularly in recent months—has he any later figures to give of the erosion of the proposed increase of £1 since the Government announced it?
  Sir K. Joseph: No. The last figure I have for the cost of living relates to March, 1971. I am afraid that I do not have a more up-to-date figure.
  One of the election pledges of the Conservative Party was to give priority to those most in need, and we referred to
  "the over-80s without pension, the elderly disabled, the chronic sick, and children in families below the poverty line."
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  Hon. Members will recognise that some progress has already been made in most of these directions. The family income supplement comes into payment at enhanced rates this August. Last December those who had no chance to join the national insurance scheme and are over 80 were brought into the old persons' pension arrangements, and the rates that they were then paid, £3 single and £1.85 for a married woman, are being raised by this Bill to £3·60 and £2·20 respectively. We have already passed into law the attendance allowance for the very severely disabled, which comes into payment this December. It was announced at £4 per week and by this Bill it is being raised to £4·80 and will be tax free.
  We are proposing by the Bill to complete the task accepted in our election commitment by extending the benefit to all those over 80, whether or not they have the chance to join the national insurance scheme, who either have no retirement pension or who have a pension of less than £3·60 for a single person or £2·20 for a married woman. This remaining group of over-80s, about 50,000 in number, will get the old persons' pension from the week beginning 20th September. Thus, there will be no person over 80 after that date who will not have either a retirement pension or the old persons' pension.
  I come now to the chronic sick package, which the House will find in Clauses 3 and 4. When I made the announcement to the House I spoke of the chronic sick as a "neglected group". As the House will realise, there is no distinction in the sickness benefit payable for a person whether he is sick for six days or six years, except for the period between the end of the second week and the end of the 28th week of sickness. No distinction is made between the short-term and long-term sick. That is a defect which both parties have recognised, but the Government are glad to have the opportunity to take the first steps to put this defect right.
  The proposal in Clause 3 is that there should be a long-term benefit for everybody incapable of work and continuously sick for six months or more. There will be a change of nomenclature for such people, from "recipients of sickness benefit" to "recipients of invalidity benefit." They will receive an invalidity pension at the standard national insurance

  1015
  rate, which is £6 for a single person under the Bill and £9·70 for a married couple, plus an invalidity allowance for those who fall sick more than five years before the pension age, that is before 60 for a man and before 55 for a woman.
  The amount of this invalidity allowance will depend on the age at which the incapacity for work began. The thought in our mind is that during a normal working life a man or woman should perhaps be able to put aside something towards old age. If that working life is interrupted by continuous chronic disability that capacity to put aside some reserves is eroded. That is why we propose that the invalidity allowance should be at its maximum earlier in working life at which the person is struck by chronic sickness.
  We do not pretend that the rates at which we are beginning this invalidity allowance are anything but modest. However, they make a start. They represent a new benefit and we will have to see how they work.
  The proposal is that there shall be a £1 per week invalidity allowance for those whose chronic sickness begins before the age of 35; a 60p invalidity allowance for those whose chronic sickness begins between the age of 35 and 45; and a 30p invalidity allowance for those whose chronic sickness begins between the ages of 45 and 55 for a woman or 60 for a man.
  The existing chronic sick who are under pension age will draw invalidity allowance from the week beginning 20th September, provided their chronic sickness began before the age of 55 in the case of a woman or before 60 in the case of a man.
  I wish to be sure that the House fully understands this point. The invalidity allowance will carry through into retirement. If it is still in payment at the date of retirement it will continue as a lifelong benefit. Hon. Members may not fully appreciate how quickly people will get the advantage of what we are proposing.
  Provided a person is under pension age—under 60 for a woman and 65 for a man—on the appointed day when this benefit comes into payment, and provided the chronic sickness for which the invalidity allowance is due started before, in the case of a woman 55 and in the
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  case of a man 60, then at once from late September of this year the invalidity allowance will come into payment and will be a life-long benefit right through retirement.
  This is by no means the only improvement we are proposing for the chronic sick. Under Clause 4 we are seeking deliberately to help those chronic sick households where the wife of a chronic sick person is struggling to help the household income. Only too often the House has to help those who cannot help themselves; that is one of our prime functions as a Government. How much we rejoice to be able to help those who are struggling to help themselves.
  This is the case of a household in which the normal breadwinner is chronically sick but where the wife is able to work. We realise that there are many such households where there is no wife, or where the wife cannot go out to work because of her personal circumstances, because there are small children, or because the husband needs too much attention. Obviously we are not seeking to draw any moral judgment, but where the wife can and does go out to work she is at the moment subject to a very arbitrary and total cut-off rule. If at the moment she earns more than £3·10 a week, which is the level of the dependent wife's benefit, that benefit totally vanishes: the household is not entitled to a penny for that chronically sick person's wife; whereas the retirement pensioner is entitled to earn up to £7·50 now, which is to be increased to £9·50, before his pension is abated in any way.
  What we propose—it is the proposal suggested by the previous Government in the Bill which fell at the election—is that the working wife of a chronic sick man shall be entitled to the same abatement rules for earnings as the retirement pensioner—that is, instead of an all or nothing cut-off at £3·10, which is increased to £3·70 under the Bill, there will be a right to the full dependant's benefit of £3·70 provided that the wife's earnings do not exceed £9·50 as the figure will be under the Bill. The wife's benefit, therefore, will not totally vanish until her earnings exceed about £14 per week.
  Mrs. Jill Knight: Has my right hon. Friend given any consideration to a tax allowance

  1017
  in these circumstances, such as the allowance which is granted to a man who has a housekeeper? This would be an important aid for a woman in the circumstances that my right hon. Friend describes.
  Sir K. Joseph: This is entirely a question for my right hon. Friend the Chancellor of the Exchequer. I am sorry not to be able to give my hon. Friend an immediate reply.
  So far we have broken new ground compared with the last Government only as to timing. Under the last Government's proposed legislation an invalidity allowance would have been paid but only over the years and according to earnings, so that the £1 invalidity allowance we are proposing would have taken many years—I believe about seven years—to come into payment. The improvement where the wife is earning would have been introduced by the previous Government.
  The third component of the chronic sick package in the Bill breaks entirely new ground. We are for the first time proposing to treat the children of invalidity pensioners more generously. After all, one of the most tragic results of chronic sickness is the strain on the standard of living of a family containing children. We are recognising that, and are proposing to provide for the children of an invalidity pensioner children's benefits at the same rate as those now provided for widows instead of at the normal rate for those who are sick. This will produce an improvement of £1·40 per week per child in the households of the chronic sick.
  All these improvements will be provided automatically for the chronic sick. There will be no need for applications or for a take-up campaign, mercifully. Those who have been sick for more than six months, provided that they fall within the age rules, will automatically receive the improvements.
  Mr. Charles Curran: We all warmly welcome the details which my right hon. Friend is announcing of this package. How many men and women will benefit? How many chronic sick are there who will benefit from these proposals?
  Sir K. Joseph: I have a few more points to make before I come to that subject.
  1018
  I do not want to mislead the House. Some people who are chronic sick will get no benefit from this package. If they are within five years of retirement pension, what they will get will be the £1 improvement in their basic single benefit or the £1·60 for a married couple or the equivalent benefit on supplementary benefits. There are some who are in the lowest bracket for an invalidity allowance and who will get only 30p per week on top of the basic increase—that is, £1·30 per week improvement for the single man and £1·90 improvement for the married couple.
  At the other end of the scale, where a man has fallen chronic sick under the age of 35, where he has a working wife who is earning more than £3·70 a week, and if he has one, two, three or more children, the transformation in the household income will be dramatic, and there may be improvements for individual households, even some small number of thousands of such households, ranging up to £400 a year as a result of the basic improvements in the chronic sick package in the Bill.
  I repeat that this is not what the Government regard as the end of the story, but it is a very worthy start to bring help to these households.
  In answer to the question asked by my hon. Friend the Member for Uxbridge (Mr. Curran), there are about 415,000 people who have been sick for more than six months. About four out of five of these will benefit from the new invalidity allowance—that is, four out of five were struck by chronic sickness before the age of five years before pension and are not themselves pensioners. The House will realise when I give these figures that people over pension age are excluded. Pensioners in the future may gain from the invalidity allowance if they carried it through into retirement.
  About one-third of this number are on supplementary benefit and will have that benefit reduced by the improvement of which we are speaking. The cost to the National Insurance Fund in a full year will be £24 million, with £6 million offset for supplementary benefit sickness; so there will be a net cost of £18 million for the chronic sick package.
  Clause 5 deals with the very elderly. I have already explained that, subject

  1019
  only to a residence test, all persons over 80 will be entitled to a pension. The Government now propose to go further and to give every retirement pensioner over 80, whether they are normal national insurance retirement pensioners or whether they are old person retirement pensioners—they are the two groups brought into benefit by the December, 1970 Measure or by the Bill—an age addition of 25p per week. This age addition recognises, albeit in a small way, the special claims of very elderly people who on the whole need help rather more than others. I well remember the constant emphasis that the right hon. Member for Sowerby (Mr. Houghton) laid upon the plight of elderly widows. A very large number of the over-80s are widows, and by this age addition we are giving a small recognition to their need. As they grow older their possessions wear out and they need help for the necessary jobs which they used to do themselves.
  Therefore, the single person over 80 on the full standard rate pension will get from the appointed day £6·25 a week as against £5 now, and the married couple, where both are over 80, will get £10·20 a week as against £8·10 now. Those are increases of 25 per cent. and 26 per cent. respectively. 1·2 million people will benefit from this age addition. A third of them are on supplementary benefit and will therefore have the age addition offset against their supplementary benefit, but they—that is the third whose age addition is offset against supplementary benefit—will be helped by the parallel improvement proposed in the supplementary benefits scheme, which it would not be proper to discuss today but reference to which the House will find in paragraph 39 of the White Paper, whereby we propose an increase of 25p in the long-term addition on supplementary benefit, making it 75p as against 50p where a claimant or a dependant living in the household is over 80.
  The cost of the age addition will be £16 million in a full year of which £5 million will be saved in supplementary benefit, but then the increased long-term addition on supplementary benefit will cost £4 million in a full year. The total
  1020
  cost to national insurance or public funds will thus be £15 million.
  I turn to Clauses 9 and 12 which cover industrial injuries and diseases, All the main benefits in the industrial injuries scheme will be increased by the general uprating. The disablement pension for 100 per cent. assessment goes up from £8·40 to £10; injury benefit from £7·75 to £8·75; and the industrial injuries widows pension from £5·55 to £6·55.
  The selective improvements for the chronic sick and the very elderly, to which I have already referred, will be extended to industrial disablement pensioners receiving unemployability supplement and will be payable to them where appropriate in addition to their industrial injury benefit.
  A small but useful selective improvement peculiar to the industrial injury and war pensions scheme is proposed which will enable industrial death benefit to be paid to the widow or other dependants of a disablement pensioner if he was receiving constant attendance allowance at the nominal maximum or a higher rate at the time of his death, even though his death was not due to his industrial injury or war injury.
  Clause 11 gives power to bring industrial injury benefits into line with national insurance benefits as regards adjustments when the beneficiary has received free hospital in-patient treatment for prolonged periods.
  I turn to the relatively complicated subject in Clause 6 of earnings-related supplement. We propose no change this year and next year in the main provisions relating to the earnings-related supplement for the first six months of unemployment, sickness and widowhood. But for new cases starting in or after May, 1973, changes are proposed. The lower limit will be increased to £10 to take some account of the considerable increase in earnings since these supplements were introduced in 1966. The higher limit will be increased to £42 to correspond with the new upper limit of graduated contributions. Supplement will remain at one-third of earnings between £10 and £30 a week and will be 15 per cent. of earnings from £30 to £42 a week. Those whose supplements depend on earnings in the tax years before 1972–73 will not be affected by these changes.

  1021
  The limit on total weekly benefit of 85 per cent. of average weekly earnings will remain and will apply after the appointed day to cases where earnings-related supplements are paid in addition to industrial injury benefit.
  I now come to another rather complicated subject of unemployment benefit for occupational pensioners. Clause 7 is long and complicated and I will try to express its purpose as simply as possible. It deals with a problem which has been exhaustively examined by the National Insurance Advisory Committee, then by the previous Government, and now by the present Government. The granting of unemployment benefit and contribution credits to certain occupational pensioners who are not effectively in the field of employment can be regarded as a misuse of benefit funds. To counteract this, we propose, as recommended by N.I.A.C., that there should be a test of further work and a sliding scale reducing unemployment benefit for those over 60 who have occupational pensions above certain amounts. For those with occupational pensions of over £18 a week—the N.I.A.C. recommendation was £10—unemployment benefit will be reduced by the amount of the excess. If the occupational pension is £30 a week or more—N.I.A.C.'s recommendation was £20—neither unemployment benefit nor contribution credits will be awarded unless the claimant has worked for not less than 21 hours a week for an employer in a new job for at least six months in the year before the claim and since retirement.
  Although not covered by Clause 7, a related change proposed is to exempt all non-employed men between the ages of 60 and 65 from liability to pay contributions. This arises from the strong feelings expressed by some occupational pensioners about their liability to pay a weekly non-employed contribution till 65 for any period when they are not working and are not entitled to credits. They often complain that it is this liability which forces them to attend employment exchanges and register for work in order to have contributions credited on grounds of unemployment. We propose to make such contributions voluntary instead of compulsory, although failure to pay could result in a reduced rate of retirement or widow's pension.
  Clause 13 deals with a subject—polygamous marriages—included in the Bill
  1022
  following the Law Commission's Report earlier this year on family law. The Clause confers power on the Secretary of State to make regulations in this field in relation to social security benefits, and we have it in mind that in the regulations to be made we shall bring into benefit those cases where the marriage was once polygamous but is so no longer—for example, because the first wife has died or was divorced before the parties came to this country.
  I turn finally to the methods of financing the increases and improvements proposed. The total extra cost falling on the National Insurance and Industrial Injuries Funds as a result of the increases and improvements proposed in the Bill is £537 milion and £20 million respectively in the first full year 1972–73. Under Clauses 1 and 8 and Schedules 1 and 3 we propose that the fairest way of linking this cost is to increase the percentage rate of the graduated contributions paid on earnings over £18 a week and to extend the upper limit of payment of such contributions. There will on this occasion be no increase in flat rate contributions for the main body of employed persons, and this is the first time that this has happened. In this way we shall ensure that the lower-paid worker receives the higher cover provided by the Bill at little or no extra cost to himself. We shall also be moving towards the Government's objective of fully graduated contributions for employed persons—
  Mr. Stonley Orme: Before the Minister continues, may I ask him whether he is aware that this proposal of graduated contributions for flat-rate benefit is running contrary to the form in which it was originally understood the previous Government would bring it in? Is the right hon. Gentleman also aware that this will fall heaviest on the average wage-earner in our society and on those just above, and that in effect they will have to pay these increased contributions for the lower-paid worker instead of the money coming out of the Exchequer grant which at the most is 18 per cent. and which originally was proposed to be 33 per cent.? I know that the previous Government did not implement that proposal, but many of us on this side of the House feel that that is the way in which the money should be found.
  Sir K. Joseph: The hon. Gentleman is reaching steeply back into history when he quotes a figure of 33 per cent. Successive Governments have kept an Exchequer contribution of 18 per cent., and it remains at 18 per cent. under our proposals. As for the impact of the graduated contributions on the average industrial wage earner, I can only say that the man earning £30 a week will pay an increase of 15p, which is half the increase at that level proposed by the previous Government, for a benefit now double the size proposed by the previous Government. So the person earning £30 is four times better off in this respect under our proposals.
  We are proposing that the graduated contributions paid by employees and employers on earnings above £18 a week should be increased from 3·25 per cent. to 4·35 per cent. and that the upper limit of earnings for such contributions should be increased from £30 to £42 a week. The table on page 10 of the White Paper shows what these contribution changes will mean for a man at various earnings levels. The lowest wage earner will pay nothing more. A man earning £20 a week will pay 3p a week more. I have just referred to the extra 15p a week which the man earning £30 a week—now almost the current national average—will pay. The most a man will pay extra is 65p a week, that is, if his earnings are £42 a week or more. These increases are to be compared with what happened at the last uprating under the Labour Government, as I said, when everyone, even the lowest paid, had to pay more.
  I have seen some comments that the extra contributions proposed will in some cases more than offset the advantages gained from the recent changes in income tax proposed by my right hon. Friend the Chancellor of the Exchequer. I have even seen tables purporting to show net losses and gains from the total impact of the Budget changes, the October mini-Budget changes, the social security changes, and the changes proposed by the present Bill. Even such tables have been able to identify very few people indeed in the main small ranges of incomes of single men and married men without children who are shown as being worse off. But the conclusions, it seems to me, are fallacious.
  1024
  The basic error is to include the national insurance costs, that is, the increases in graduated contributions, on the debit side, but to omit altogether on the credit side the better benefits provided. The extra contributions under this Bill will go entirely towards providing higher or new benefits. A large proportion of the people of this country, through retirement pensions in due course for themselves or retirement pensions immediately for their parents, through sickness benefits for themselves, or —alas, though a smaller group—in unemployment, widowhood or industrial injury benefits for themselves, will have, if not immediately then within a matter of months, either personally or for their parents a more than 100 per cent. return for the extra contributions which they are paying. In the first full years, there will be nearly £500 million of extra contributions collected, and well over £500 million will be paid out in extra benefits.
  I have not so far referred to the position of self-employed and non-employed persons. As they do not pay graduated contributions, it is proposed to increase their flat-rate contributions by 26p per week for a self-employed man or 21p per week for a non-employed man, so that they will pay their share of the cost of the improved benefits. The Bill proposes to increase the limit below which self-employed and non-employed people need not pay contributions at all from £312 a year—£6 a week—to £468 a year—£9 a week.
  In addition to the Exchequer supplement paid automatically as a fixed proportion of flat-rate contribution income, the Bill proposes an increase in the special Exchequer payments provided for in the 1969 Act so as to restore the total Exchequer support for the next two years to about 18 per cent. of contribution income.
  The higher benefits and contribution rates and the new benefits proposed in the Bill are due to start in the week commencing 20th September. My right hon. Friend the Chancellor described this in his Budget statement as the earliest practicable date, and so it is. It is six weeks earlier than the date of the uprating due in the normal course under the two-yearly cycle to which the Opposition were proposing to tie themselves statutorily under their plans for the future.

  1025
  In the special circumstances prevailing this year, we were anxious to advance the date as much as possible, but it is a mammoth operation and even 20th September will be hard to achieve. It involves some risks in view of the very heavy programme, quite apart from the uprating, facing the staff of my Department in the next few months, the result of the aftermath of the postal strike and the benefit changes and new benefits already approved. My staff will be hard pressed to achieve what we are asking them to do, but they have never yet failed to respond to such calls, and I am confident that they will do their utmost to see that these improvements are effected on time.
  I apologise for having taken so much time, but there has been a fair amount to explain. The Bill proposes substantial improvements in benefit for many millions of people, and additional selective help for well over 1 million especially deserving people. As such, it will, I hope, be welcomed by the whole House.
  4.17 p.m.
  Mrs. Shirley Williams: The Bill makes considerable changes in what has always been the basic principle of national insurance. National insurance in this country has always been our main means of tiding people over years of need or periods in which, for one reason or another, they cannot sustain themselves and are dependent, to a lesser or greater extent, on the community or on their own contributions in the earlier years to help them to do so.
  Basically, we have always had a flat-rate system to which certain graduated elements have been attached. The right hon. Gentleman the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) will remember that his graduated pension scheme did not greatly commend itself to the Opposition because we felt that it was minor in its effects and actuarily not entirely fair.
  Mr. John Boyd-Carpenter: What the hon. Lady says is true of the verbal reaction, but, on the basis that actions speak louder than words, she will remember that her Government maintained and, indeed, extended my scheme throughout their six years in office.
  Mrs. Williams: The right hon. Gentleman will recognise also that the Labour
  1026
  Government prepared carefully to abandon his scheme and to replace it with something quite different, and it was only the exigency of the election which prevented that being carried through. In addition, the Labour Government added two new elements, the graduated national employment and sickness benefit and then, for the first time, took these benefits up to a level rather close to that which people earned when in work or when in good health.
  Fundamentally, what the right hon. Gentleman has done in this Bill has been to depart considerably from the national insurance principle. He has related contributions much more closely to earnings—we shall in a few minutes see how far he has gone in that direction—but he has not related the main benefits, which are, of course, the retirment pension, to those earnings in any effective way. As my hon. Friend the Member for Salford, West (Mr. Orme) pointed out a few minutes ago, we are presented with an extraordinary arrangement of earnings-related contributions for a flat-rate benefit. I believe that when the people of this country recognise the true nature of what they are being offered, they will regard it as a pretty poor deal.
  As my right hon. Friend the Member for Coventry, East (Mr. Crossman) pointed out in questioning the right hon. Gentleman when he made his original statement on social security, the country is being presented, in effect, with a social security tax. When it comes to the payment of earnings-related contributions for the band between £30 and £42 a week, we are moving very close indeed to a social security tax which has no actuarial relationship to the benefits paid.
  Sir K. Joseph: Why is it any more a tax when we move the top of the bracket up to 1½ times average national industrial adult earnings than it was when the hon. Lady's Government did just the same and put it at £30?
  Mrs. Williams: Because the right hon. Gentleman knows that he is not proposing to move the benefits on to an earnings-related scale [Interruption.] We proposed to do so in the National Superannuation and Social Insurance Bill. That was exactly the proposal before the House, that benefits should be earnings-related. I do not understand why the

  1027
  right hon. Gentleman appears to disagree. I am not denying that it would have taken some years to build up to the full amount, but the right hon. Gentleman will not deny that over the whole period from the introduction of the Bill onwards there would have been a gradual movement toward something like 50–75 per cent. return on earnings-related pensions. That is quite different from anything he is planning to do.
  1 turn to what the right hon. Gentleman said about the increase in pensions he is making in money terms. He said that the increases, which are overall about 20 per cent., are the largest in money terms made at any time. I do not quarrel with him on that. He also said, perfectly fairly, that they were very large in money terms but that there was an inflationary situation which had not been reached before. I do not think he will disagree that the largest increase made in real terms, apart from that made when the national insurance system was first changed in 1948, was made in 1965. That was a relative change which brought pensioners in line with the increase in earnings, which has not happened since. The relative position of the retired as compared with the rest of society is worsening. The right hon. Gentleman will find the authority for that statement in the first edition of "Social Trends" for this year, which showed a real increase of 12 per cent. in 1965. This compares with a real increase of 3.8 per cent. in 1971. Since that is a Government document, I rather doubt whether he will disagree.
  Sir K. Joseph: But there was an increase in 1955 of 15·4 per cent. in real terms.
  Mrs. Williams: In that case, I defer to the right hon. Gentleman, but I stick to my point that the current increase does not compare in relative terms with the increase in 1965. The relative position of the old continues to worsen. We are still a society that accepts that to be old is to be poor. The great opportunity presented by the National Superannuation and Social Insurance Bill to deal with the problem of poverty among the old once and for all, in a radical way, has been abandoned by the
  1028
  Government, and there is no sign of its being reintroduced.
  In his Budget speech, the Chancellor of the Exchequer referred to the Conservative election manifesto. He said:
  "… we promised to review retirement pensions every two years to ensure that they at least maintain their purchasing power,"—[OFFICIAL REPORT, 30th March, 1971; Vol. 814, c. 1374.]
  I take that phrase to mean that pensions increases would be in line with prices. I pointed out on 31st March that, on the basis of prices increasing at 8 per cent. a year, which was the forecast of the National Institute for Economic and Social Research, the pension would be worth about 18 pence more in real terms for a single pensioner at 1st September and 30 pence in real terms for a married couple at the same date compared with November, 1969. But since then the latest figures for the annual increase in prices show an increase of 81. per cent. If that is projected on the current basis, then five months after the increase introduced by the right hon. Gentleman the value of the pension will fall to the level of November, 1969, and only a month after that it will fall below it.
  The Government are giving themselves a great deal of credit for the increase in money terms, but the increase in real terms will have virtually disappeared by next winter. They must either tackle inflation with much greater zeal than they have yet shown or adopt the principle of an annual review. The right hon. Gentleman made the fair point that the last Government were dedicated to a two-year review, but he should admit that the level of price increases in 1969, when that proposal was made, was considerably below the level now. We are talking about 9 per cent., which is a near-50 per cent. increase. I am not using in this argument the figures for the pensioners' budget, which would show a higher relative increase than I am using.
  While the Government have gone some way to maintain the purchasing power of pensions—though they will not maintain it for long—they have done virtually nothing to maintain the relative position of the pensioner, which depends upon the level of incomes rises throughout society. Here the position is even worse

  1029
  than that which I have already stated. In 1970, earnings rose by 14 per cent. Over the two years to September 1971, again taking the National Institute figures, they should show an increase of 25 per cent. This means that the relative position of pensioners, with an increase of 20 per cent., is deteriorating. I think that the right hon. Gentleman and his Government accept that there is such a thing as relative poverty. In accepting the Bill, we are straightforwardly admitting as a country that we are still prepared to see pensioners fall into a position of growing relative poverty. I believe very strongly that this position would have been altered, though I admit that it would have taken some time, by the last Government's Bill, and I am extremely sorry that it has been abandoned.
  An Hon. Member: The Crossman Bill?
  Mrs. Williams: Indeed.
  I shall later indicate the parts of what the Government are doing which should be accepted and welcomed by the whole country, but first I want to deal with one other serious gap in their proposals. They have done nothing about family allowances, although family allowances have lost value to the extent of 4s. in the £ pound since they were last increased by my right hon. Friend the Member for Birmingham, Stechford (Mr. Roy Jenkins). There is a very large number of hard-pressed families who fall between the family income supplement level introduced by the right hon. Gentleman and the level now affected by the increased social and other charges across the board. Even those who are so poor that they come within the 190,000 or 200,000 who will benefit from F.I.S. will pay their increased contributions but will receive no benefit from F.I.S. until August. That is a considerable delay.
  But the crucial point is that an increast in family allowances, which it was open to the Chancellor to make at the cost of his increasing child tax allowances would have benefited families which are not now paying tax but are above the F.I.S. level. There are many hundreds of thousands within that group.
  F.I.S. make-up levels are half the difference between incomes and supplemen-
  1030
  tary benefit levels, and tax levels for families with two or more children run at just above supplementary benefit level. In this space—between the F.I.S. makeup level and the level at which taxes are paid—there are, I am advised, several hundred thousand families who will not benefit either from F.I.S. or from the extra child allowance against tax. It is this group of hard-pressed families who would have benefited from an increase in family allowances. This remains the major broken pledge of the Government. They are not benefiting those families with which they claim to be concerned.
  Another important point is that family allowances do not present the disincentive to work that is presented by a special means-tested allowance of the kind the right hon. Gentleman is making. He is well aware of this factor. The reason is that the marginal tax rates are now so high.
  Mr. Stanley Orme: My hon. Friend will probably recall, as many of us on this side do, the statement of the late Mr. Iain Macleod about the need to increase family allowances. Although he felt that this would be politically unpopular for either party, he advocated this his party should increase them. This pledge has not been honoured.
  Mrs. Williams: That is true. I mentioned that this was, in my view, a major broken pledge by the Government.
  Sir K. Joseph: The hon. Lady and the hon. Member for Salford, West (Mr. Orme) are ignoring the fact that the net cost of F.I.S., after allowing for the offset of increased family allowance against national insurance dependency allowances, is more than the Iain Macleod pledge would have provided, so that the poorest families are doing much better in real terms through F.I.S. than through any conceivably practical family allowance proposal.
  Mrs. Williams: The right hon. Gentleman makes a fair point, but he knows that he is talking of a minute section of the people, less than one family in 100, whereas we are talking of a much larger group—not the 200,000 within the F.I.S. scheme but a much larger group who would have benefited from family allowance adjustment.
  Sir K. Joseph: Because of the abominable way in which, under the right hon. Member for Birmingham, Stechtford (Mr. Roy Jenkins), the tax threshold was lowered in nominal and, even more, in real terms for families with children, there was, when we came to office no gap above the supplementary benefit level for the use of family allowance with claw back. By the Chancellor's improvement in child tax allowance, almost every family with children will benefit, either from lower tax or from F.I.S. The hon. Lady's mention of hundreds of thousands of families who will benefit from neither is a very large exaggeration.
  Mrs. Williams: It looks as if we are going to play ping-pong like the Chinese. I make two responses to the right hon. Gentleman. It is the case that an increase in family allowance across the board with no change in child allowances was open to the Chancellor, but this would not have had the consequences to which the right hon. Gentleman has just referred. We are talking about an across-the-board increase in family allowance, subject to the normal taxation procedures, and I am advised—I will argue this further with him in correspondence—that it would have been possible to do that. If the right hon. Gentleman says that it would not have been possible, then it would have been possible to have had a tax-free increase in family allowances which would have run into none of the difficulties to which he has referred. I am also advised that a substantial number of families would have benefited more—and this is the crucial point—from an increase in family allowances which would have come to the same amount as the Chancellor's child taxation reliefs.
  Several Hon. Members Several Hon. Members rose—
  Mrs. Williams: We will have to pursue this through questions, because clearly we are not going to agree about it.
  Mr. Curran: Would not the hon. Lady agree that no increase in the family allowance will make a copper's worth of difference to the one-child family? Does not she agree that it is the one-child family, alas, where so much poverty is concentrated?
  Mrs. Williams: The hon. Gentleman must look to the Secretary of State rather
  1032
  than to me, because the Secretary of State has had a chance to cover that point in the Bill and has not done so. It is a fair point and I sympathise with the hon. Gentleman. As he has said, there is no family allowance for the first child and nothing has been done to change it. I agree that there is no family allowance for the first child. But it is his right hon. Friends who are now the Government, so he should address his remarks to them and not to me.
  Several Hon. Members Several Hon. Members rose—
  Mrs. Williams: I have given way a number of times already. This has been a most useful argument, but I think I should now get on.
  I want to turn now to the starting point for earnings-related benefit, which is about to move up from £9 to £10 but which I cannot find that the Bill also relates to contributions. It looks as if people will be paying contributions between £9 and £10 which are earnings-related, but will not be getting earnings-related benefit. If I were a worker in this bracket—and there are many women workers in it—I would feel at least cheated in that I was paying a contribution on a graduated basis and getting nothing for it. It is also the case that, because of the increase for the £ at the bottom at every level there will be a reduction of 33p—or one-third—in earnings-related benefit all the way up the benefit scales. This point, quite understandably, has not been made by the Government, but we should be clear that the reduction will take place across the whole range. It will be a reduction of 33p per week for all earnings-related benefits. This is something which hon. Members opposite in all their glee should have noticed. It will affect the workers on fairly low earnings most. Such a worker will lose 33p. and if he is earning £9 or £10 a week that will have the serious effect of reducing the benefits he is getting. In all fairness, one should not ask people to pay additional contributions for no benefit at all.
  It is also equally true that, at the other end of the earnings range, as my hon. Friend the Member for Salford, West has pointed out, the deal becomes a very bad one. Men who are earning between £30 and £42 a week—and this number will be increased by the effect

  1033
  of earnings inflation—will be paying an additional contribution of 4·35 per cent., which is a brand new contribution because they were outside the graduated contribution level before this Bill, but they will be getting benefits scaled down by half—a 15 per cent. graduated benefit instead of the 33⅓ per cent. which applies in the band below. So they are going to pay a 4·35 per cent. contribution, starting from nothing, for a benefit which is more than halved. The right hon. Gentleman took the example of a £30 a week man paying only 15p more. But in this band £30 to £42—they get 2 per cent. off tax but 4·35 per cent. on insurance contributions, so their so-called benefit will be, instead of 6p off, 8p on.
  The right hon. Gentleman will say in a moment, if I do not move on quickly, that this is reflected in additional benefits. But I have already made the point that additional benefit, although it exists, is very sharply scaled down on a basis that was not perhaps improperly described the other day by The Times as one which no decent private insurance company would look at.
  So the Government are introducing another swindle, a swindle on the upper grade contributor earning between £30 and £42 a week. Before the right hon. Gentleman says to me, as he no doubt will, "What about the last Government?", I say at once that in the Social Insurance and National Superannuation Bill which we introduced in the 1969–70 Session we offered a 25 per cent. earnings-related benefit for this range. The present Government, however, are providing little better than half of that, only 15 per cent. Granted the speed of inflation today, by the end of the next two-year period the average wage will be in this bracket, because it is already £28 a week. On the National Institute's projection, the average wage will be in that bracket with all the consequences the right hon. Gentleman appears so far to have refused to see.
  Sir Brandon Rhys Williams: Is the hon. Lady suggesting that under the national insurance scheme proposed by the right hon. Member for Coventry, East (Mr. Crossman) the contributors who made earnings-related contributions at the upper end of the wages range were to have had a benefit
  1034
  which was actuarially related to their contributions?
  Mrs. Williams: Yes. Taking the period as a whole, that is broadly speaking correct. The 25 per cent. is very close to an actuarial calculation over the period of the build-up of the scheme. The 15 per cent. here is very far from being that and is a very strange deal indeed.
  I come next to two other facts which are of extreme importance. The Secretary of State pointed out that no additional benefits would be paid—we are talking of the 15 per cent.—until May 1973. In fact, contributions will not even be earning benefit until a year before that. This means that from when benefit contributions go up in September until they first start earning benefit in spring 1972 there will be in effect a free gift of contributions to the National Insurance Fund of about £200 million, for which no benefit will be paid whatever. This is what we on this side mean by saying that this is actuarially a swindle. Nothing will be paid out for this money. It will just go to prop up the National Insurance Fund and will be earning no benefits whatever.
  I want now to say something about two other groups mentioned by the Secretary of State—the non-employed and the self-employed. The non-employed, for whom the increase is to be 21p a week, include a number of people whose position I very much hope the right hon. Gentleman will reconsider. I refer particularly to a group which gains a great deal of sympathy in the House—those single women with dependent relatives. They stay at home to look after those relatives, but they are in a very weak position to prepare for their old age unless they keep up the stamp. I shall ask the right hon. Gentleman in this instance and in the instance of the self-employed—who are sometimes on very low incomes, small shopkeepers, window cleaners and so on—to consider what under the present system is called the concession to poverty, that is to say, that they need not pay if they get less than £9 a week—although, as we all appreciate, they thereby lose any pension rights they may have—and some extension of the rating relief system for those at the very bottom of the national insurance pyramid.

  1035
  I do not expect a reply to that this afternoon. However, we are now reaching insurance contributions which, especially the non-employed and the self-employed who are very low paid, not everyone can bear, and it is up to those of us who are interested in this subject to do something for those who will otherwise be ground into poverty.
  Another subject with which the right hon. Gentleman dealt at length—and I do not blame him, because it is an important departure—was the invalidity allowance. We warmly welcome the fact that he has taken into legislation the increase in earnings for wives. We should like to congratulate him on the additional allowance for children, which, as he rightly said, is undoubtedly his own work. It is only fair to say that my hon. Friend the Member for Manchester, Wythenshawe (Mr. Alfred Morris) deserves some credit for the proposal about earnings for wives, because this proposal originally appeared in his Bill, was subsequently taken over by the Labour Government in their Superannuation Bill, and is now to be found in this. We welcome these changes so far as they go, and I think that they are imaginative and helpful.
  The right hon. Gentleman said with engaging frankness that the invalidity pension was a renaming of the long-term sickness benefit, and of course it is; we are witnessing a change of nomenclature. He went on to say that the invalidity allowance was completely new, which indeed it is. I do not want to crib about the invalidity allowance, and I am glad that the right hon. Gentleman has introduced it, but I should like to ask two questions which arise from it, because they concern issues which deserve reconsideration.
  The first is the extent to which the allowance is graduated to the age at which people become chronically sick. As the right hon. Gentleman said, his Department makes the assumption that those who are not chronically sick until later in life have had longer in which to build up savings. It is fair to say that there is no strong evidence on this point. The only evidence we have had does not bear out the Department's assumptions in this respect. I refer to the recent book, "Registered as Disabled", by Miss Sally Sainsbury, which covered a survey of
  1036
  disabled people in London and the Home Counties.
  Of those she interviewed, a considerable number of disabled people, two-thirds of those aged between 16 and 34 had savings of less than £50 and one-tenth savings of more than £200. In the older age group covered by the invalidity allowance, three-quarters of the men aged between 45 and 60 and three-quarters of the women aged between 45 and 55 had savings of less than £50—three-quarters instead of the two-thirds in the younger group—and one-tenth, the same as for the younger group, had savings of more than £200.
  In other words, there is no evidence to bear out the argument that those who become chronically sick later are more likely to have built up savings over a lifetime. Granted that the great bulk of those who are handicapped under the age of pensionable retirement fall within the low age groups—indeed, 8 per cent. only of those who were severely or seriously handicapped were under 49—I suggest to the right hon. Gentleman that when he makes changes in the scheme he should look again at this sharp differentiation in graduation between the ages, which I suspect has as much to do with the Treasury's desire to save money as it has with the problems of the chronically sick and disabled.
  Sir K. Joseph: Miss Sally Sainsbury's book was useful on this as on many other subjects. The hon. Lady is failing to take into account that responsibilities tend to be larger at the younger ages, particularly family responsibilities.
  Mrs. Williams: I do not want to engage in a sort of ping pong with the right hon. Gentleman, but I should have thought that family responsibilities were greatest over the age of 35 and under 50, that is to say, when children are at the most expensive stages, rather than under the age of 35. After all, we are talking about a fairly large-scale difference in benefits, nearly a doubling.
  Much more serious than this and something which I hope my hon. Friends will agree with me needs to be pressed is the position to which the right hon. Gentleman admitted when he said that supplementary benefits would be reduced by the extent of the invalidity allowance.

  1037
  The great bulk of those who are not retired and who are disabled or chronically sick draw supplementary benefit. A survey undertaken last November by the Supplementary Benefits Commission shows that no less than 86 per cent. of those sick and disabled on the basis of more than three months' sickness and disablement were drawing supplementary benefit. They will not benefit from invalidity allowance.
  This means quite simply that 17 out of 20 of those who are chronically sick and disabled will not benefit from the Bill. I find it difficult to believe that those who have so few resources that they are on supplementary benefit have needs which are less than those who are not. Granted that the long-term supplement is not payable for two years, although admittedly it comes after that, I think that the right hon. Gentleman ought to look very closely again at the position of the disabled and chronically sick drawing supplementary benefit between six months and two years, that is to say, over that 18 months.
  Because it is of crucial importance I repeat that supplementary benefit receivers will not gain from the invalidity allowance and we know that 17 out of 20 of the chronically sick are under the age which the right hon. Gentleman is talking about. I understand that of all those who are chronically sick and disabled, including those over retirement age, 29 per cent. are on supplementary benefit only. I get these figures from official sources which say that 164,182 people under the age of 55 and 60 respectively are getting National Insurance benefits and that of those 158,577 are getting supplementary benefits. These are people who are chronically sick and disabled and who have been drawing sickness benefit for more than three months. Of those drawing national insurance benefit, more than half were drawing some form of supplementary benefit in addition, bringing the total to 86·2 per cent. of those drawing sickness benefit alone, that is to say, those not in receipt of retirement pensions.
  Sir K. Joseph Sir K. Joseph indicated dissent.
  Mrs. Williams: If the right hon. Gentleman disagrees, two bits of his Ministry appear to be in disagreement with each other.
  1038
  I should like briefly to comment on the calculations by the Government Actuary. The White Paper is that on which the financial assumptions for national insurance are based, and they are likely to be found to be based on rapidly shifting sands. The Government Actuary assumed an earnings increase of 8 per cent. a year, which is the average for the last five years. I have already pointed out that earnings rose 25 per cent. in the last two years and for each 1 per cent. earnings increase over 8 per cent., so we are informed by the Government Actuary, an additional £23 million is paid into the National Insurance Fund. In the long run this is against benefit, but, to quote the Government Actuary, changes in earnings.
  "will have a significant effect on the yield of graduated contributions, but the effect on the outgo on benefits will be comparatively small."
  Unless the Government head up into the levels of unemployment which the Opposition sometimes fear, this means that there will be a considerable increase over the Government Actuary's figures in the amount flowing into the National Insurance Fund.
  Because the contribution made by the Exchequer is struck after any surplus has been used, in effect he might find that the 18 per cent. figure he has given in the debate is very much reduced. That might be offset if unemployment goes much higher because the Actuary took 660,000 as his figure and we know it is already considerably more than that. I simply strike a word of warning, that in discussing the National Insurance Bill the Government Actuary's White Paper is already so far out of date that it gives us very little guidance on the actual surpluses or losses to be made.
  Finally, I must warn the right hon. Gentleman that we on this side of the House are very disturbed in the way m which his policies are moving. I am not criticising or quarrelling with him about particular reforms made in the Bill. I am telling him that in principle we are in total opposition as to the way in which he sees, I take it from his Bill, the development of the national insurance scheme in this country. The whole basis of his argument is to create a position especially, as we have pointed out in the higher levels of earnings, where in practice the State scheme will offer what is

  1039
  in insurance terms such a poor deal that there will be a major incentive for the higher-paid worker to clear out of the scheme.
  This is fundamental to the philosophy of the right hon. Gentleman's party. It has two vast disadvantages, quite apart from matters of principle. The first is that it creates out of the State scheme an impoverished fall-back scheme which will be largely in existence for the low-paid worker, the occasional, casual, worker, which will therefore be a sector dedicated for ever to the relative poverty of those who have to depend on it through no fault of their own.
  My second point is that it leaves wide open the great drawbacks that exist today, and there is little sign of it changing, in occupational pension schemes—lack of transferability, lack of adequate cover for widows, lack of adequate protection for those who for one reason or another are actuarial bad risks. I give the right hon. Gentleman fair warning that we cannot go along this path, we totally disagree with it. We believe it is breaking down a national insurance scheme which could have gone on to be a real answer to poverty in old age. At the end of the day we feel that the right hon. Gentleman and the Government are bound to tinker with the problem of the poverty of the old, the greatest poverty that exists in the country, and that they have essentially abandoned the one way out that has so far been put before the people and that will be put before them once again.
  4.53 p.m.
  Mr. John Boyd-Carpenter: Although I will have one or two criticisms to offer on certain aspects of this Measure, I thought that the hon. Member for Hitchin (Mrs. Shirley Williams) was uncharacteristically ungenerous in her description, particularly of the benefits aspect of the Bill, as a pretty poor deal. What is involved is a massive transfer of resources from the working generation to the old, to the sick, and to the widows on a very large scale indeed. Whatever view we may take as to the precise methods by which it is financed, we have to accept that this is a major effort to deal with some of the more serious social problems of our time.
  1040
  In view of one or two things the hon. Lady said, I am bound to say that I would have thought that this Measure gave the lie to those who charge this Government with a lack of compassion. Compassion is nonetheless compassion because it is employed with an intelligent selectivity. One of the good aspects of the provisions in this Bill, apart from the sheer size of the general improvements, is the way my right hon. Friend has set out to deal with the areas of hardship which most social thinkers believe to be the areas of most intense hardship in our society—the large families with low incomes, the long-term sick as they are called, the invalids as my right hon. Friend's phraseology will describe them, and the very old.
  It is one of the great merits of the benefits side of these proposals that in addition to the general increases, my right hon. Friend has been, in the view of many of us, so wisely selective in the areas he has chosen for special, increased provision. When the hon. Lady says, that the relative position of the old has dropped back we cannot altogether overlook the fact that the force of that argument is very much based on what has happened over the last seven years. We cannot wholly forget the figures given on another occasion by my right hon. Friend showing that whereas over the 13 years of Conservative rule from 1951 to 1964 there was an annual average increase in real terms in the value of the main benefits of 4 per cent., this fell to an average of 2½ per cent. for the six years of the last Administration. If there has been a relative falling back it is clear on those figures where the responsibility lies.
  To some extent on some aspects of this Bill I am in the position in which the Liberal Party got themselves a few years ago. It is notable, perhaps, that the concern of the Liberal Party on these matters is such that no member of the Liberal Party is present this afternoon. The House will recall that at one of the previous elections, I think 1959, the Liberal Party produced a magnificent brochure describing the benefits which the Liberal Party would confer on the old, the sick and the disabled. It was beautifully illustrated with a charming old lady on the cover. At the end, when we looked to see how this was to be financed, it said this would be dealt with

  1041
  by a subsequent pamphlet. It so happened that the onrush of the General Election prevented that second pamphlet from ever seeing the light of day.
  I am in the position of applauding with great enthusiasm the improvements in benefits made by my right hon. Friend but I have some doubts, to which I shall come later, about the methods which he has used to finance these improvements. Before proceeding to that I want particularly to welcome the invalidity changes. I had not appreciated, until I heard my right hon. Friend this afternoon, the particularly sensible and wise provision for increasing the allowance for invalids' children.
  When I had certain responsibilities in this matter I took the view that we should increase, disproportionately to other increases, the provision made for the children of a widow. I accept at once that my right hon. Friend is right in regarding as being in a special category also, for basically the same reasons, the children of the disabled or long-term sick. Although it is not more than a beginning, and although many of us will feel that the rates will have to rise sharply in future, this is very real progress in social reform.
  I am delighted, because I have urged it on my right hon. Friend and his predecessor, that he is increasing the increments earned by those who stay at work and stay in contribution after pensionable age. The State gets a good bargain out of those who do this, and socially for people who are fit to work and have a job to do, it is good and beneficial in many cases that they should remain at work. It is right that they should remain at work earning better pensions for when they retire.
  Perhaps I may be allowed to indulge my curiosity and ask my right hon. Friend what he proposes to do about polygamous marriages, dealt with in Clause 13. I hope the House will not misunderstand if I say that I have a personal interest—let me assure you, Mr. Deputy Speaker, that I am not, as yet, a practitioner in polygamy, but when I was responsible for these matters, I had to deal administratively with the case of a Pakistani gentleman who departed this life in South Wales, bequeathing to the country of his adoption four widows and a number of children who would have made up a com-
  1042
  fortable platoon. There was a question of benefits. No guidance had been given by Parliament.
  The administrative decision which I took was to give a full widow's pension to the widow who was senior by appointment and a full provision for each child. I do not know what my right hon. Friend proposes to do. He is taking wide powers in Clause 13. But I think that it would he hard on other contributors if a contribution which, in respect of most of us, provides for a maximum of one widow should, in the case where there is a fuller establishment, perfectly lawfully, provide full pensions for four. I shall be interested to hear how my right hon. Friend proposes to tackle this tricky problem.
  Mr. Douglas Houghton: Did the right hon. Gentleman give supplementary benefit to the junior widows?
  Mr. Boyd-Carpenter: The right hon. Gentleman has far too much knowledge of social security administration to ask me that. At the time, that was a matter for the wholly independent National Assistance Board.
  I come to the point that I wish to make about the contributions. My right hon. Friend has taken a clear-cut and bold decision to put the whole of the increase, except as regards the limited number of self-employed and non-employed, on to the graduated contribution. With respect, I think that that is unwise. My right hon. Friend may take the point that I am the last man to be in a position to say that to him. But sometimes a difference of degree is so great as to amount to a difference of principle. To put it another way, if my right hon. Friend takes a glass of dry sherry before dinner, it may add to the flow of his urbane conversation. If he drinks four double Martinis, he may become a little noisy and less articulate than usual. If matters are carried too far, something of a change is made.
  Here my right hon. Friend is doing some potential damage to the contributory principle. I know that there are people, in the Press outside and in this House, who say that the contributory principle has gone. I do not believe that for a moment. In fact, some £2,500 million is raised each year with the minimum of difficulty from people who feel

  1043
  that they are, and who are in fact, contributing for their pensions and other benefits. This is brought home to them because, if their contributions fall short, their benefits are cut or may become non-existent. It is in truth a contributory system. However, if it is carried so far that the contributions of one man are used to help to finance the benefits of another, to some extent the link between contribution and benefit is broken.
  Anticipating what my hon. Friend the Under-Secretary of State may say, there is a profound difference between what was done in the 1959 Act and what is proposed now. Under the 1959 Act, none of the contributions of the better-off went to pay the benefits of the lower earners. What happened was that the better-off paid a very large proportion of the costs of their own benefits, and the Exchequer contribution was concentrated on those who, because of their lower earnings, could not contribute enough to finance their pensions. The selective application of Exchequer money to help those most in need is a good principle.
  From the figures in the present Bill, it seems clear that the £2,000 a year man will be contributing towards the flat-rate benefits of the man at the bottom of the scale. This is redistribution, and it seems to me that the proper place for redistribution is not in an insurance scheme but in taxation. The tax system is sometimes unduly redistributive but that is the proper machinery for it, and one damages the insurance concept if one takes redistribution so far as to make a clear transfer from one contributor to another.
  Let me ask my right hon. Friend to consider this point. A man's full entitlement to pension still will depend on his contribution record. Take a man on the £2,000 a year scale who is only 30 years in this country and, therefore, contributes for only 30 out of the maximum of 47 years. In those 30 years, he may contribute more than a man at the bottom of the scale for the whole 47 years. When my right hon. Friend awards flat-rate pensions, the man who has contributed more gets a smaller pension because his contribution record averaged over the years is less good. That risks damage to the contributory system, and I attach great
  1044
  importance to the system for this reason. Once one passes from contributions to a social security tax, one is undermining the whole basis of a contributory system and its merit that benefit is obtained as of right regardless of means. Once one taxes the citizen, rich and poor, to provide a benefit, the case for taking means into account begins to rear its head.
  It has been the merit of national insurance since Beveridge that all have contributed and all have drawn, in accordance with contribution, equal benefits subject to their compliance with the conditions of the scheme. In the words that the late Sir Winston Churchill applied to the original unemployment insurance,
  "It brings the magic of averages to the service of the millions."
  It enables the rich man, like the poor, to exercise his right and claim his benefit because he has contributed to it. That has been the strength of the scheme. One draws, as of right, without a means test qualification.
  It is wrong to break the link of the man who says, "I have paid for my pension", though he has on retiring paid nothing like the full amount, but has paid all that the State has asked him to pay.—[Interruption.] If the State has increased it to his benefit, that is not his fault. But a man can say, "I have paid all that the State has asked me to contribute to my pension, and I draw it as of right." There are real dangers in shifting to a wage-related pension contribution which is redistributive in effect, as this one must be.
  Sir B. Rhys Williams: I have been following my right hon. Friend's interesting argument with interest. Although I am sure that everyone who hears him must agree with the value of the contributory principle, when it is valid, when it is based on a sham—for instance, 18 per cent. Exchequer contribution and the fact that people retiring today have paid only a tiny fraction of the amount that they receive—is not there a danger in regarding that as the underlying principle?
  Mr. Boyd-Carpenter: No. It is not a sham. The State has decided to subsidise considerably, but it still remains the fact that a man's title to his pension follows on his contribution record. He has made

  1045
  the contributions laid down as being his qualification for pension. It is difficult to say at what point one breaks the link. I know that my right hon. Friend has major reforms in mind. But there are dangers in the course which he is following here.
  There is also the effect of this on the occupational schemes. Here, I must declare an interest as a director of an insurance company, although I have had interest in this subject for longer than I have had the interest which I disclose.
  If one takes up 4·35 per cent. up to over £2,000 a year by way of contribution from both sides, one gets into the zone in which occupational schemes may seem less attractive. They also seem less attractive administratively. Under the 1959 Act, a person who was contracted out paid no graduated or wage-related contributions. In fairness, he paid a slightly higher lump sum flat rate but no graduated contribution. Under my right hon. Friend's proposals, even if one contracts out, one will be paying a graduated contribution and a flat-rate contribution to the State, plus the contribution, however based, to the occupational scheme. I cannot help wondering whether the sheer administrative trouble involved may not be a deterrent to the development of private schemes.
  There is also the fact that the value of contracting out, though my right hon. Friend is retaining it in absolute terms, is proportionately diminished. Looking at the table, the advantage of lower State contribution, where someone is contracted out, is becoming a smaller proportion of the total contribution than it used to be. In both ways my right hon. Friend may be slowing down the development of those occupational schemes in whose success I know that he and my right hon. and hon. Friends are very much interested. So, here, I should like to give a warning.
  The only other point I wish to mention springs from what I said about the dangers of undermining the doctrine of payment as of right. This relates to Clause 7. I accept at once that there is a problem concerning people with occupational pensions retiring at 58 or 60 going off to seaside towns and registering for employment where there is obviously no suitable employment for them. On the other hand, whether it is a problem
  1046
  which is worth dealing with in the way proposed by my right hon. Friend, introducing a kind of means test into the receipt of national insurance benefits, I am inclined to doubt.
  I know that my right hon. Friend called in aid the National Insurance Advisory Committee. He did not mention that it wos a majority decision in favour of something of this kind, the dissenting member of that committee being the noble Lord, Lord Collison, now the Chairman of the Supplementary Benefits Commission. I used to deal with Lord Collison when he was chairman of the Social Services Committee of the T.U.C. I found him immensely knowledgeable and wise in these matters. With respect to the other distinguished members of the Committee, I rate Lord Collison's dissent as a very substantial factor. It certainly fortifies my doubt whether my right hon. Friend is right to say that in respect of one form of income, the occupational pension, there shall be diminution of the right that a man would otherwise have to draw unemployment benefit. My right hon. Friend is leaving the multimillionaire with an investment income free to draw any unemployment benefit for which he can qualify.
  Sir K. Joseph: If he registers.
  Mr. Boyd-Carpenter: Indeed, if he registers. If he does not register, of course not. My right hon. Friend is saying that if a man has an occupational pension it must be diminished or phased out or have separate conditions added. This is carried to the point where, instead of an occupational pension or in addition, the person who wishes to claim benefit has a lump sum payment from his former employer. We are here in the curious situation where getting a lump sum from an employer may prevent a man getting unemployment benefit. If a man wins it on the pools he is all right. This indicates the dangers of what, with the highest of intentions, my right hon. Friend is doing.
  This is an enormous Clause—I know that it will be discussed fully in Committee—of great complexity. I think that it will be very difficult to work administratively, and I express doubt whether it is necessary at all.
  I believe that the problem could be perfectly well tackled if the Department

  1047
  of Employment were prepared to take a little more trouble and show in certain cases a little more courage. If the Department were prepared to say to someone who comes in to register—a retired bank manager, for instance—"There are no bank managers' jobs, but there is a good job looking after the deckchairs on the front which you can have", the Clause would be unnecessary. If that Department were prepared to take a more robust step to test whether a demand for employment was genuine, all this elaborate apparatus in Clause 7 would be wholly unnecessary.
  I dislike it very much because it seems to be the very small end of a very small wedge, but it is a hole in the doctrine which I mentioned, which was accepted for a good many years until the right hon. Member for Coventry, East (Mr. Crossman) laid a Statutory Instrument altering it, that no means, whatever form they may take, should inhibit a man from drawing national insurance benefit. I do not think that the comparatively small abuse to which my right hon. Friend has referred is worth endangering that principle or worth the administrative trouble which he is giving to himself and to his hard-worked and admirable officials.
  I say again that, on the benefits side, this is a remarkable reform. It does immense credit to my right hon. Friend and his advisers, and, reading between the lines, to his dealings with the Chancellor of the Exchequer—and to the ingenuity with which a number of the more difficult areas of our society are to receive substantial help.
  Obviously the House will not wish to delay the Bill. We shall wish to see it in effect as soon as possible so that my right hon. Friend's officers may set forth on the very heavy task of putting 7½ million retirement pension increases and heaven knows how many million other improvements into effect. We wish them well. I hope that they will be able to start on the work as soon as possible.
  5.17 p.m.
  Mr. Jack Ashley: The House is always delighted to listen to the right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) not only because of the felicity of his language but because of the
  1048
  way in which he presents his case on any issue. No matter how much some of us on this side of the House may disagree,—and we do—we really enjoy listening to the right hon. Gentleman.
  I propose to confine my remarks to two points concerning the disabled. The recognition by the Secretary of State of the chronically sick as a special category is to be warmly welcomed, because it is a step forward. It is rather like, though less ambitious than, the Chronically Sick and Disabled Persons Bill introduced by my hon. Friend the Member for Manchester, Wythenshawe (Mr. Alfred Morris).
  Although this Bill is inadequate and by no means satisfactory to hon. Members on this side of the House, it is nevertheless welcome because it shows that the Government now see the chronically sick as a category requiring action. I assure the right hon. Gentleman that we shall begin to press and push forward and use that concession as a springboard. And although, as I say, it is by no means as ambitious as the Act initiated by my hon. Friend, I hope that in time it may become so.
  The first plea that I make is that the next priority should be some provision for disabled housewives. There is a great gap at the moment. I suggest that this category of disabled persons should become the Government's priority. I was delighted when the Prime Minister last week promised to consult the right hon. Gentleman and his colleagues about provision being made for disabled housewives.
  The case for the disabled housewife has been advocated most articulately by the Disablement Incomes Group for many years, but as yet no provision has been made. It is a curious anomaly that, although a disabled housewife can receive State medical aid, she cannot receive State social security. I hope that this curious anomaly will be rectified.
  The effect of a severely disabled housewife on a household can be catastrophic. In the last few days I have been reading through a large number of case histories of chronically disabled housewives. Their effects on families are heartbreaking and really sad. I think that we make a mistake if we under-estimate the tremendous

  1049
  effects of this disability. I am aware of the economic problems, but I hope that the right hon. Gentleman will take into account the economic and the social problems involved and do what he can to mitigate the major problem which the chronically disabled housewife poses.
  There is one other way in which these people can be helped, and that is by changing the qualifications of constant attendance allowance. People can receive this allowance only if they are needing constant attendance day and night. I know that the right hon. Gentleman cannot widen this provision indefinitely, but he should at least widen it to include the chronically disabled housewife who needs attention during the day. If that were done it would represent a considerable step forward and would mitigate a great deal of hardship, without any undue increase in the financial outlay involved.
  The disabled who returns to work ought to get some kind of disability benefit. At the moment they get nothing. The recent D.I.G. European Study showed that in all the six countries considered there was some kind of provision for disabled people who returned to work—not only to disabled housewives, but disabled people generally. That is an important provision which could be adopted here, because it would be an incentive to disabled people to return to work.
  Work is not only theraputic, although the theraputic effects are important. Work is crucial to the self-respect of severely disabled people, and it is ludicrous that they should have to pay to work if they are severely disabled, because that is literally what it means at the moment. They lose money if they go to work. If that factor could be taken into account and the problem dealt with as I have suggested, this greater help would be greatly appreciated by thousands of severely disabled people.
  I conclude by urging the right hon. Gentleman to give sympathetic consideration to those two, I hope, constructive suggestions. He will alleviate a great deal of human misery if he accepts them.
  5.23 p.m.
  Mr. Richard Luce: On 1st April, of all dates, I was elected the Member of Parliament for the constituency of Arundel and Shoreham. The by-election was caused by the
  1050
  sad death of my predecessor, Captain Kerby. Although I never knew him, by all accounts he was a great servant of his constituency. He was a great champion of individual rights, and quite clearly was a man of outspoken and strong views, which he expressed most forcefully in the constituency. Whether one agrees with his views or not, one should respect any Member who is prepared to speak up for those things on which he feels strongly.
  I am pleased to take part in the debate shortly after hearing the hon. Lady the Member for Hitchin (Mrs. Shirley Williams) whom I opposed for four years in the Hitchin constituency. I enjoyed my dialogue with her then, and I look forward to a further dialogue with her in the House of Commons.
  My constituency has a great history. In particular, Kings came and went. King John arrived to succeeed Richard I, and Charles II left hastily after the battle of Worcester, to escape to Normandy. Today in Shoreham there is a growing port and it has become the largest wine-importing port in the country.
  Arundel is the seat of the premier peer of England and has the distinction of opening the cricket season. The constituency has the largest village in England—or reputedly so—in Lancing, and it is made up of some light industry, it has a strong tourist attraction, there is plenty of farming, and there is a good deal of horticulture, particularly mushroom, flower and apple-growing.
  The constituency is a great residential area. Like many other constituencies, it has a wide range of environmental problems. I believe William Blake said in 1800 when he came to the constituency that the people of this area were
  "genuine Saxons, handsomer than the people of London."
  I think that perhaps rather hastily, I ought to move on to the problem of pensions because clearly a significant feature of my constituency is that so many people come to Sussex when they retire. Whilst in the country about 15 per cent. of the population are retired, in my constituency the figure is well over 30 per cent. It is these people who are suffering from the effects of inflation. The great rise in prices and in rates over the last few years causes lack of security for them, and this was

  1051
  impressed on me most forcefully during the by-election.
  In an age of pressure groups when people with bargaining power can demonstrate and exercise their right to strike, it is the old people who deserve the greatest possible support and help from the Government and Parliament. There are many demonstrations with which I do not have a great deal of sympathy, but I should have considerable sympathy with them if 7½ million pensioners were to walk down Whitehall demanding the rights which they so richly deserve.
  The argument is always one of priorities, and I welcome the fact that the Government are giving less emphasis in terms of State aid to agriculture and industry, and more to those who really deserve help. Therefore one must welcome, and can only but welcome, the fact that the Government are giving pensions as of right to the old people; that they are introducing a constant attendance allowance; that they are introducing an invalidity allowance; that they are giving the biggest increase ever in the basic disablement pension and war widows' pensions which will benefit no fewer than half a million people; that they are easing the earnings rule; that they are giving the biggest ever increase in pensions to retired people; and that they are for the first time introducing an automatic biennial uprating of pensions, a system which operates in most of the countries of Western Europe.
  All that represents an encouraging start, and to those who have accused this Administration of a lack of compassion, I must say that it is wonderful to come to the House this afternoon and be able to support an Administration which really is showing compassion for those in need. I regret that more Members are not present this afternoon, and particularly those on the other side of the House who have criticised this Administration for a lack of compassion. I regret that they have not attended the Chamber this afternoon to give their welcome to the Bill.
  Having said that, there are four points that I should like to make briefly. My first point concerns adjustments to pensions. Although I understand that, administratively, it is very difficult to
  1052
  bring forward the date upon which increases are payable, I regret that the increase could not have been made payable this spring. I am glad that we are introducing a statutory two-year review, but I should like the Government to consider the system which operates in Belgium, whereby the pension is automatically uprated whenever there is an increase in prices over a certain percentage.
  My second point is this: there is a constant argument over the relationship between cash and community services in relation to the problem of the aged. This must surely be regarded as a combined operation. Of course one wants pensioners to have adequate cash so that one does not constantly have to consider whether they should have exemptions or half-fares on public transport. But there are certain services in which cash is not enough. I should like to see a steady improvement in the community services for the aged to enable more people to live at home and enjoy their lives, to improve the meals-on-wheels service, and to alleviate loneliness.
  Thirdly, if we enter the Common Market, the people on fixed incomes, the retired people, those who have a shorter time to live than most of us, will benefit least. We must surely recognise that the retired people would not have the chance to enjoy any long-term benefits. Therefore, if we do go in, I suggest that the Government should give a top priority pledge of special help to the retired in our community.
  Surely our ideal in the last part of this century is not just to provide a basic pension which will give a subsistence income in retirement, but to try to produce a society in which everyone has, in the long term, a supplementary scheme which will give him more than enough to live on. I believe that the Government must develop, as they are doing, the strongest possible incentives for people to enter private occupational schemes, by fiscal means or preservation of pension rights, or various other measures.
  In the meantime, because there are still many people who do not have the benefit of occupational schemes, it is essential to provide and develop a scheme to supplement the basic pension. This is why I welcome the proposals published last week of the Metropolitan Pensioners

  1053
  Association, which argued in favour of a State reserve scheme. I hope that the Government will seriously consider that.
  The mark of a civilised nation is its generosity of spirit to the deserving and the needy. I believe that the conscience of the nation demands that those who have contributed to so much to the country in the past should be able to enjoy their retirement in peace and security.
  5.35 p.m.
  Mr. Michael Meacher: I am sure that all hon. Members will agree that the hon. Member for Arundel and Shoreham (Mr. Luce) has just delivered a speech which was witty, well-informed, confident and very interesting. Having myself recently paid a visit to his constituency—not for electoral purposes, I hasten to add—I entirely endorse his remarks about the magnificent beauty of his constituency. The hon. Member made a speech which showed enormous good sense on a wide variety of points. However, since my own maiden speech is not yet exactly hoary, it would be presumptuous of me to make further comments, and I will leave any further felicitations to some of my more veteran colleagues.
  I would take issue with the right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) who spoke about the massive transfer of resources represented by the Bill. I should have thought that that was a peculiar description of a series of benefits, which are, in most cases, little more than the provision of a cost-of-living increase.
  But my main point of issue with him is on the wider significance of the Bill. It is remarkable that, despite sizeable increases in costs to workers and a substantial shift to an earnings-related contributions system, the Bill is limited to essentially tactical and short-term objectives. Despite superficial resemblances to the national superannuation plan introduced by the last Government, it has none of the latter's strategic sweep, and with only one or two exceptions that I have been able to find, it bears all the marks of the Secretary of State's commitment to the marginalities of tokenism—[HON. MEMBERS: "What does that mean?"] It means very simply that there are small improvements to uprate benefits in accordance with the standard of living,
  1054
  but there is no attempt to introduce a new structure of social security which would give benefits as of right. It is merely a comparatively small improvement in the existing situation relative to what it was two years ago.
  It is not simply that the increase in the retirement pension and virtually all the other benefits has been pitched at a level of some 20 per cent. above that reached in November, 1969, when price rises during exactly the same period had done away with about 16 per cent. of the increased value of the benefit, so that the real improvement in the position of the pensioners' purchasing power is about 4 per cent., which at current rates of inflation will certainly be whittled away in about six months. It is not simply that the same relationship with national average earnings will be achieved at the start of this current two-year review period as was maintained throughout the whole of the similar period at the time of the 1965 increase.
  What is of vastly greater and longer-term significance is the structural question whether retirement poverty is to be indefinitely perpetuated, with the pension level never finally catching up with the supplementary benefit entitlement, or whether a policy will be pursued of achieving a Beveridge-type ideal of a pension as of right above the poverty line.
  It is clear that there remains a major ideological difference here between the parties. The National Superannuation and Social Insurance Bill of the last Government would have provided a pension by the year 2000 high enough to need no means-tested supplementation for all but 13 per cent. of the elderly, compared with about 88 per cent. at present. In the case of this Bill, however, the real meaning of the changes was most starkly revealed by the Secretary of State when replying to the hon. Member for Kensington, South (Sir B. Rhys Williams) on 31st March following a statement on social security benefits and contributions:
  "… the numbers who will be taken off supplementary benefit altogether will, I fear, be only scores of thousands."—[OFFICIAL REPORT, 31st March, 1971; Vol. 814, c. 1507.]
  Turning to the contributions side of the matter, there is an important difference of philosophy between the parties about who should bear the burden of the cost. The Conservative National Insurance

  1055
  Act 1959, for which the right hon. Member for Kingston-upon-Thames was responsible, imposed a graduated contribution charged on the £9 to £15 earnings range, which was later increased from £9 to £18. Exactly the same basic principle is now being applied with the £18 to £42 per week earnings band, being the relevant earnings range for contributions. In other words, it encompasses the broad mass of manual workers. It is more or less exclusively the working class who will bear the burden of this uprating in social security benefits. This is an enforced restriction by occupational level, which I believe is unjustified on any ground of equity.
  Labour's scheme contained a considerably higher ceiling on contribution at £80 a week, so that almost the whole community, rightly and properly, was included in that inter-generational transfer of income. Indeed, a ceiling was imposed at all only to maintain a relationship between contributions and earnings and to cement the partnership with occupational pensions schemes.
  Now that this Bill has effectively renounced this relationship with an earnings-related levy matching flat-rate benefit increases, there is no need to impose such a ceiling. In insurance logic, the only necessity is one of deliberate choice. The deliberate limitation at manual worker ceiling has to be seen as part of the Government's wider and more general policy and, at the same time, enhances the possibilities of increasing inequalities in our society. It is difficult otherwise to see any sufficient argument as to why this ceiling has been imposed at this level.
  Another criterion for assessing social security systems is the effect in regard to women, inasmuch as it is the prevention of poverty among women which is the most important single change in the social security system. How far is this problem recognised by this Bill, and how far is their status reinforced by the advancement of new rights? There is singularly little evidence of any new departures, though the relaxation of the earnings rule for working wives whose husbands are chronically sick certainly must be welcomed. However, there is absolutely no sign of any acceptance of women as equal partners in social
  1056
  security, which made the Labour Government's national superannuation plan such a break-through and a charter for women, whatever their civil status.
  A woman, divorced before the age of 60, obtained a legal right to her ex-husband's dynamised contribution and credits record, both for the period for as well as for the period during the marriage. Widows aged 50 or more obtained the right to their husbands' full personal rate and of the earnings-related pension. Provisions of this kind are unmatched in any social security system in the world, and there is no flicker of recognition of such a break-through in this Bill.
  Perhaps the most significant part of the Bill is the dog that did not bark. There is absolutely no mention of any increase in family allowances or of any excuse for this omission on this occasion. On previous occasions such an omission has been justified on the ground that there is a distinction between insurance benefits earned by contributions and family allowances which are not. But the elimination by this earnings-related Bill of any relationship between graduated contributions and the benefits which are bought by them entirely eradicates this excuse. If non-contributory pensions can be paid for out of the National Insurance Fund to improve the position of the over-80's, why cannot family allowances on the same age principle also be raised at the same time? After all, unlike the other benefits in this package, family allowances have not been increased since 1968 and hence the effect of the cost-of-living erosion at some 20 per cent. has been all the greater.
  Mr. A. E. Cooper: Surely there is a great difference between the two things. If family allowances are increased, that becomes part of the income of the family and is taxed, but the deductions—or reductions—made by my right hon. Friend the Chancellor of the Exchequer in his Budget of £40 per child is a positive improvement to help families with young children. There is all the difference in the world between the two. The hon. Gentleman is asking for an increase in the tax payable by a family. We are proposing a reduction in the tax payable by a family.
  Mr. Meacher: It is a remarkable conclusion to say of the family allowances

  1057
  that, because they are a cash benefit and have to be paid for by the general body of taxpayers, they are not of assistance to the poorest families, whereas an increase in the child tax allowances, which is necessarily and selectively geared to those on higher earnings, will give more benefit to the higher earners, which therefore gives no assistance to those at the bottom. Is the hon. Gentleman saying that that is a better alternative? There can be no argument in logic to support such an idea.
  Mr. Cooper: That is absolute rubbish. The great majority of people pay some tax and if there is one child in a family then, under the Budget proposals, that family will receive a direct benefit in tax of £40 a year. One cannot argue against that.
  Mr. Meacher: I can argue against it, and I would insist on the simple fact that there are many of the poorest families who do not pay tax, or who pay very little. For them, an increase in child tax allowance is of no value at all. Since income tax now starts below the poverty line, the scope for claw-back if family allowance is increased is severely limited, unless the family allowance is extended to the first child, or made tax-free, which I feel would be preferable. But if family allowances had been increased across the board without any continuation of child tax allowances, the poorest families would have gained—and would have gained far more than any other families in the country—while the benefit to the better-off would have been selectively taxed back.
  All this could have been achieved without any of the inevitable and undesirable concommitants of the family incomes supplement, which has now had added to it the Secretary of State's "passport system", the advantages being a substantial reinforcement of the stigma upon such people. This could be aptly entitled "a passport to poverty" and will involve the erection of a massive barrier of disincentives. What we have been given as a result of the Bill is both these major disadvantages—no increase in family allowances but a substantial rise in child tax allowances, which, from the point of view of the poor, is by far the worst of all possible worlds.
  5.50 p.m.
  Mr. R. T. Boscawen: With regard to the argument put forward by the hon. Member for Oldham, West (Mr. Meacher), about the poorer family not getting any benefit, I would suggest that, if the hon. Gentleman had suggested an increase in family allowances, he would have put back into the tax bracket a large number of families who do not pay income tax at all, only to have it grabbed back again from them. This is a nonsense, and it is one of the non-senses which have caused a great deal of worry and concern on earlier occasions.
  Mr. Meacher: I made it clear that this anomaly can easily be remedied by making child tax allowances either tax free or in the form of an extended payment to the first child. By this means, there would be considerable scope left for clawback.
  Mr. Boscawen: When I was a Parliamentary candidate I hoped that pensions would not be made a political shuttlecock or, in more modern language, part of the game of Chinese ping-pong. Not only pensioners but the vast majority of people want to see this whole subject kept out of politics. A few months here taught me that that was quite impossible.
  There is a wide degree of agreement between the two sides of the House about the improvements that are necessary and about the importance of the improvements that have been made. The pensioners and disabled in particular do not want to see us adopt a holier-than-thou attitude towards this issue. In any event, neither party has reason to feel holier than thou, and I am dead against us adopting that stance now.
  There are honest differences of view between the two sides of the House about how to help those individuals who are particularly in need, and we can certainly argue along those lines, but let us keep our arguments honest and sensible. I believe there is an underlying philosophy which has resulted in our getting right away from the flat-rate approach to this subject. The hon. Lady the Member for Hitchin (Mrs. Shirley Williams) suggested that widows of the non-employed and self-employed perhaps

  1059
  needed more help. There are other individual cases where need is great. We are now adopting a philosophy of helping those most in need instead of helping all on a flat-rate basis.
  I applaud what my right hon. Friend has done in the various areas of need which he has identified. He described the invalidity allowance as a modest step forward for the long-term sick. I hope that as soon as this allowance has been in operation for some time, my right hon. Friend will be less modest and timid and will give greater benefits. I agree with the hon. Member for Hitchin about the gap that will exist for women over 60 and men over 65 in respect of the invalidity allowance. As she said, it has not been proved that the people have saved sufficient to meet their needs compared with the long-term sick. I hope that before long my right hon. Friend will find it possible to fill what must be a small gap in this provision.
  A great deal of the trouble with national health insurance is that over the years there have been too many sacred cows. We are still finding it hard to get rid of some of them. As every good farmer knows, if one is to build up a healthy flock, there must be deaths from time to time. The sacred cow of the contributory system has been dealt a severe blow by my right hon. Friend's proposals regarding earnings-related contributions at the higher levels, and I do not believe that it will be possible any longer to persuade people of the fiction of calling it a contributory scheme when there is such an element of redistribution, particularly at the higher echelons of earnings-related contributions.
  In Clause 5 the Bill deals with the elderly and particularly with elderly widows. They have had small recognition up to now. I welcome the change which give a 25p increase to single persons and a 50p increase to married couples over the age of 80. This seems to be paralleled by the position of those who are in receipt of supplementary benefit. Although my right hon. Friend has not taken this to the point of the invalidity allowance—and where supplementary benefit is paid the recipients lose the benefit of the invalidity allowance—I trust that further thought will be given to this aspect, and I should like to know whether it would be costly
  1060
  to extend it to include the invalidity allowance.
  Some people believe that those aged 75 to 80 are not in greater need of cash than the somewhat younger elderly, but require better services like meals-on-wheels, home helps and other voluntary assistance. Nevertheless, they still require cash, and there may be something to be said for them having a little more, in the sense that it might help them to get about more readily, especially in the summer, when they may be taken for bus rides and so on. I appreciate, however, that selective benefits are bound to be rough and ready, especially in the imperfect world in which we live, and I thoroughly support the advances my right hon. Friend is making.
  My right hon. Friend referred to the widows of men who had been in receipt of the highest constant attendance allowance and had been war pensioners. These widows will now get the full rate of war widows' pension, which represents an excellent advance, however critical some hon. Members may be of it. Only a relatively few, about 1,500 widows—women whose husbands died either normally or as a result of war wounds; nobody can be sure—will benefit from this change, and I greatly welcome it.
  A comrade-in-arms of mine was wounded by the same shell that destroyed my tank. He appeared to recover fully. Recently, however, he fell seriously ill and for a considerable time it was thought that he would die. Fortunately it was discovered that there remained in his body a small shell splinter. This was removed and he has survived. Indeed, he is now back at work. He might have been in the category of people whose widows my right hon. Friend is anxious to help. In fact, had he died, his widow would not have received the benefit.
  Compliments are given so rarely in the House that when given they are much more valuable. Having been on the books of the Ministry of Pensions and National Insurance for almost the whole of my adult life, I welcome the opportunity to pay a compliment. Throughout all this period, whatever Government have been in power, whether Tory or Labour, war pensions have been administered efficiently, with great consideration and with promptness. On only one occasion was a benefit late. I have received a

  1061
  tremendous amount of good advice from the Ministry about treatment. The boards which carry out the difficult task of assessing percentages have carried out their task well and with consideration. We should all pay tribute to the way in which Governments have attended to the needs of the pensioners of both world wars.
  6.0 p.m.
  Mr. Robert Edwards: I apologise for not being present during the earlier part of the debate. Other Parliamentary business kept me away.
  All the Common Market countries have an earnings-related pension which works out at 60 per cent. of earnings. In Britain the pension works out at about 30 per cent. of average earnings. I hope that if we enter the Common Market we shall at least harmonise retirement pensions, to the great advantage of our seven million pensioners.
  It is scandalous that the increase of £1 is not to become operative until September, by which time the £6 for a single pensioner will be worth about £4. Every week the prices of 200 to 30C household commodities are increased. Electricity and gas charges are increased. The price of paraffin oil, on which many old people rely, has been increased. It takes about one-fifth of a week's pension for an old person to have his shoes repaired.
  Few working-class people over 70 eat much meat. For them meat and butter are luxuries. There is a great tendency to forget that millions of people who are now over 70 and who went through the depression of the 1930s, and who consequently lacked job security, to say nothing of their having gone through two world wars, had little or no opportunity to put anything by. Their lives were a constant struggle from the cradle. I know that this is true, because I come from the working class and spend all my time among working-class people. There is great poverty among old people.
  When hundreds of thousands of old people retire they do not lose their dignity. They refuse to ask for supplementary benefit because they think that they would be asking for charity, something that they have not paid for. Despite massive publicity to make them aware of the availability of extra facilities,
  1062
  hundreds of thousands of old people, because they were brought up in the tradition of paying for things, are not taking advantage of the facilities.
  The reports by welfare officers make tragic reading. A welfare officer who covers the Blackburn area has said that he visited an old lady of 84 who was living on her own. When he went to her house at one o'clock—this was in January—she was still in bed. She said that she would not get up because she could not afford to have the gas on. She had not even had a cup of tea for breakfast because she could not afford it on her little pension. She was the type who would not ask for extra. I am not exaggerating when I say that meat and butter are becoming real luxuries to millions of old people.
  Every hon. Member will agree that this pension increase is not adequate to meet the present situation. The hon. Member for Wells (Mr. Boscawen), who made a speech which was acceptable to everyone, mentioned the amenities which can be enjoyed by old folk. It is true that many local authorities have developed amenities such as concessionary fares, meals on wheels, chiropodist services and low-rent bungalows for old people. However, the provision of these facilities is unequal—they are not available under all local authorities. The best service for the old should become the average service. This can be achieved only by legislation.
  Old people as of right should have concessionary faces and a chiropodist service, because old age brings illnesses. Illnesses such as arthritis and rheumatism often arise because the sufferers worked in damp atmospheres or lived in damp houses. We do not know enough about the illnesses of old age and we do not do enough about them.
  If a home medical service were to be established, hundreds of thousands of old people could be taken out of hospitals, where at present they remain until they die, and allowed to live at home happily among their own people.
  We should be ashamed that we are accepting a position where £5 a week for a single retired person and £8·50 a week for a married retired couple is considered adequate. The number of retired people is added to at the rate of 1,000 a day.

  1063
  Our provision far the old is becoming one of the most serious gaps in the whole of our welfare State. The main problem is not poverty but loneliness and ill-health. There should be no reason why old people should go short of the good things of life in this age of scientific development and relative affluence.
  I am sorry that more hon. Members are not present, but I suppose that there are good reasons for it. I plead with the Government to think again and to try to make this a retrospective increase of £2 a week—double what they propose.
  6.10 p.m.
  Sir Brandon Rhys Williams: We have enjoyed a number of extremely interesting contributions this afternoon and I am delighted to congratulate our new colleague, the hon. Member for Arundel and Shoreham (Mr. Luce) on his very thoughtful and well-informed speech.
  Although we have a small attendance, those who read the Report of our debate will say that in this Parliament there are a number of serious, generous and well-informed Members on both sides of the House who are anxious to contribute on questions of social security. For this we must be particularly grateful to my right hon. Friend the Secretary of State who gives us such splendid leadership in this matter and has inspired so many Members to appreciate the enormous importance and scope of this subject.
  Even in a Bill of this complexity there are only two main subjects: one is benefits and the other is contributions. Where benefits are concerned it would be difficult to better the way in which my right hon. Friend is distributing the funds which he has been able to procure.
  I listened with great interest to the hon. Lady the Member for Hitchin (Mrs. Shirley Williams) and to the hon. Member for Oldham, West (Mr. Meacher) on the subject of family allowances. I agree fully with the gist of their remarks, although I do not always follow them in detail; but it has always been understood that family allowances are outside the scope of national insurance, and we can enjoy further debates on the subject of family allowances on other occasions.
  Granted that this is a Bill primarily about national insurance benefits, I feel
  1064
  bound to pay tribute to my right hon. Friend and to say that I think his sense of priorities could hardly be improved upon. We have a significant increase in basic benefits. Of course, we must regret that for one reason or another we seem to be lumbered with an administrative system which, try as the public officials may—and I know how dedicated they are—does not seem to be quite as responsive to changes in the cost of living or to the intention of this House as the systems in use on the Continent. I hope that study is being given to the introduction of electronic data processing so that on future occasions changes in national insurance benefits can be introduced immediately they are decided upon.
  In the Bill we have especially favourable treatment for the chronic sick. We have a significant change for the better in the operation of the earnings rule. Increments for deferred retirement are made better—and quite right, too. We have an age addition for the very old, which indicates the comprehension and the compassion of my right hon. Friend; and—something for which I have campaigned and which I am delighted to see—the possibility of voluntary withdrawal from contributions to national insurance for men at the age of sixty. It has always seemed to me to be an anomaly that since 1940 the retirement age for women has been 60 and for men 65 or later. This is a bed of Procrustes. Everybody must realise that people's life spans are bound to differ, and national insurance ought to take note of this fact and to make it permissible for people to retire at the time which is suitable to them and not at the time which is suitable for the system.
  Coming to the question of contributions. It is in the area of contributions this this Bill is momentous and, as my right hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) said, it introduces significant new considerations. The objections that have been raised this afternoon to the idea of the earnings-related contribution were basically two. One is that it hits the average man in particular. Of course, if one is trying to introduce a Bill which gives special benefit to minority groups, inevitably it is the average man who will be relatively less favourably treated. I have often argued the case for minorities

  1065
  which are tending to be forgotten in our society with the electoral pressures which have resulted from universal suffrage. In this House we must never forget the minority groups who are not able to reach us by electoral pressure but who nevertheless have a command on our attention.
  Much the most significant objection, I think, to the idea of the earnings-related contribution for a flat-rate benefit is that it represents a new departure, and its unfamiliarity makes it questionable. I am surprised to hear it questioned by the Labour Party. I cannot resist giving a welcome to a system which will take from each according to his capacity and give to each according to his need. If hon. Members opposite will recall some of the basic tenets of their faith, they will realise that what my right hon. Friend is doing in this Bill is precisely in accordance with what they have always clamoured for. But it is a change which I feel needs to be welcomed from these benches, too, because it is a significant advance in the direction of what I call the social contract.
  Of course, an earnings-related contribution to finance a basic benefit is a social security tax. But what is wrong with that? The Welfare State is financed by social security taxes at the moment. One does not need simply to allude to the 18 per cent. subsidy for national insurance. One has only to think of the way in which we pay for education—the enormous subsidy to education from the Exchequer; the way that we pay for the health services; and, since the Exchequer itself is largely dependent upon taxes of an earnings-related character, we may say that we have had earnings-related contributions for basic benefits for many years. This Bill tacitly admits the fact, and that is a step in the right direction.
  Let us ask ourselves: what is a contribution to national insurance? Is it money which goes into a personal fund of a capital nature and which builds up a particular personal entitlement? Or is it in effect part of the general revenue of the Government? Much of the misunderstanding and the disputes which arose out of the introduction of the earnings-related scheme by my right hon. Friend the Member for Kingston-upon-Thames were due to the fact that no clear answer seemed to be obtainable to this question, whether the earnings-related
  1066
  contributions were a build-up of personal entitlements or were simply a way of boosting the ailing finances of the national insurance scheme. Possibly the right answer was that they were both.
  I was pleased to hear my right hon. Friend make the point this afternoon that the money-transfer element in the earnings-related scheme hinged entirely on the Exchequer contribution, and that the personal contributions that were paid into the earnings-related section of the national insurance pension scheme were strictly related to the benefits which were eventually to be drawn out. Nevertheless the income from the earnings-related contributions was very welcome, no doubt, to the Government of the time in keeping national insurance in some sort of balance. I do not think the Secretary of State is neglecting the income that accrues from increasing current contributions as a way of financing the increased benefits which are set out in this Bill. In fact, he said it quite clearly this afternoon.
  We must recognise and not cavil at the fact that the earnings-related national insurance contribution is a social security tax. It is money which goes straight into a system of money transfer or redistribution of income—or repartition, as it is called in France—and a perfectly respectable and straightforward system it is.
  Nevertheless, that is not to say that there does not remain room for the buildup of premiums or the build-up of personal contributions of a capital nature. I look forward, therefore—I hope it will come in a few weeks—to the White Paper which we have been promised by my hon. Friend the Under-Secretary of State, who is giving particular study to the future of earnings-related pension benefits, whether by a State-sponsored scheme or by approved private schemes.
  I hope that, when we eventually have these two systems running side by side, it will be clear to the public that part of the earnings-related contribution is of a revenue character and goes straight, in effect, to the Inland Revenue in order to meet the Government's outgoings on current commitments in the Welfare State; and that the other part of the earnings-related contribution is not so much a contribution as a premium, and is purely of a personal character, without any significant money transfer element. We have perhaps a job of education to do here,

  1067
  to show that in effect we are splitting national insurance into two parts, the capital account and the revenue account. We must show plainly how the money contributed will in future be dealt with in entirely separate ways.
  The hon. Lady the Member for Hitchin—I am glad to see her now in her place—used the rather strong word "swindle". I appeal to her not to use that word again, not because I think that it is particularly damaging electorally but because I feel that in using it she does, perhaps, betray a certain lack of penetrating understanding of what is happening to the contributions of the public in the Welfare State. The hon. Lady is someone to whom we on these benches listen with a great deal of enjoyment. I assure her that, when her party breaks up—as is inevitable in due course now it has finished its work—she will be very welcome on these benches.
  Mrs. Shirley Williams: I shall have to disappoint the hon. Gentleman, in spite of his attractively phrased invitation.
  Sir B. Rhys-Williams: I assure her that she will find the atmosphere extremely congenial. Her approach, which is humane and well informed, is exactly what we admire, and, what is more, she will find here a particular admirer of her views on the subject of increases in family allowances.
  I know that, when my right hon. Friend turns his head in my direction, he fears that he may at any moment find himself looking down the barrel of a gun. There are some subjects, for instance, the preservation of pension rights, on which he knows that I might even be so mad as to fire it. I hasten to assure him, therefore, that there are no severe dangers ahead for him even in the minor provisions of the Bill, except, perhaps, in one or two respects which I shall now mention.
  It is a pity that we are, once again, treating the self-employed as though they were undesirable extras who had drifted on to the scene, gypsies, as it were, whom we do not quite know how to tackle. I realise that they present a serious administrative problem. I should rather call it a challenge. I hope that our public officials will find themselves equal to
  1068
  this challenge and that they will be able to reintegrate the self-employed with the general body of the population. Putting them into a separate category, putting them on a flat-rate contribution basis because there is no other way of coping with them, is deeply unsatisfactory. I think that my right hon. Friend knows my views about that.
  I regret also the inclusion of Clause 7, which singles out the occupational pensioner for unfavourable treatment in regard to unemployment. I recognise that there is a certain misuse of funds and that there are some black sheep among occupational pensioners, who apply for unemployment benefit when they have no serious interest in ever again securing employment. But I think that the number will be sharply reduced now that it is made possible for them to withdraw from contributing to national insurance at the age of 60.
  None the less, it seems to me a pity that the occupational pensioner should be singled out for this type of treatment, when somebody else, perhaps an annuitant, a person living on life savings by running down his capital, or someone who is, in one way or another independent, is apparently to escape the provisions of the Clause.
  I realise that it could be said that, since we have moved forward to the recognition of the view that an occupational pension is a form of deferred pay, a man who is living on deferred pay from his previous employment cannot be said to be unemployed. That is a type of argument which I might advance, but I think it dangerous for my right hon. Friend to do so until we have had a much longer look at the implications.
  All I say at this stage, not wishing to prolong our proceedings, is that I hope that my right hon. Friend, having reconsidered what he has set down in Clause 7, the unfairness of it and, in particular, the administrative difficulties, will withdraw it when the Bill goes into Committee.
  The right way to tackle this question is to tighten up the procedure for ascertaining whether these people are genuinely seeking employment. It is not good enough simply to say, "We cannot solve the problem whether you are really

  1069
  looking for work. Therefore, we shall hit you whether you deserve it or not and, of course, you can afford it". That is not the way to approach the subject of occupational pensions of national insurance benefits. As my right hon. Friend the Member for Kingston-upon-Thames said, it introduces in another unexpected quarter the means test practice from which we hope ultimately to be able to escape altogether.
  This long Bill abandons the old basis of national insurance—and good riddance. We are moving forward to a basis for the relationship between the individual and the State which will enable the State to do what the conscience of the British people requires. It will no longer be necessary—because it was impossible to raise the flat-rate contribution any more—to hold down benefits below what the public wishes them to be or to be forced to resort to unfortunate dodges of every kind to get the money from here, there and everywhere. In future, what is needed on revenue account will be raised on the basis of capacity to pay, and I hope that what is needed on capital account will be raised through the stimulus which this Government will give to genuine savings.
  I do not consider that the contributory principle will be lost by the introduction of a social security tax. The whole conception of our relationship to the community as expressed in terms of cash should grow up, and we should get away from strictly arithmetical considerations. A tax is a contribution to society. This Bill recognises that fact, and I welcome it because it takes us a significant step towards the achievement of a genuine and satisfactory social contract.
  6.28 p.m.
  Mr. R. A. McCrindle: I join my right hon. and hon. Friends in extending a general welcome to the Bill, and I shall restrict my remarks to three broad points, one applying to a part of the Bill in the immediate term, the other two applying to a more futuristic approach to, so to speak, the road along which the Bill begins to lead us.
  I confess to being in something of a dilemma over Clause 7. I must declare an interest here in occupational pensions. My dilemma arises from the fact that, on the one hand, I can very well see the
  1070
  equity and justice of what is proposed in the Bill and I recognise that it is right to restrict unemployment benefit to occupational pensioners, since this has been anomaly in the system which has developed over the years, but, on the other hand, with my devotion to the extension of occupational pensions schemes, I am a little afraid that they will be seen as being singled out in what is proposed under Clause 7.
  Therefore, I ask my right hon. Friend to think just once more about whether it is possible, by administrative methods within his Department, as suggested by my hon. Friend the Member for Kensington, South (Sir B. Rhys Williams), to eliminate the necessity for the Clause. If I am told that it is not possible to do what I have suggested, I must reluctantly come to the conclusion that there could be misuse of public funds, and shall be obliged to go along with the Clause. But I believe that there is possibly an area of opportunity still remaining for my right hon. Friend, and I hope that he will pursue it very thoroughly.
  My other two points are points for the future. The flexibility of the age at which a person retires under an occupational scheme has always seemed to be one of the advantages of such a scheme. I use this factor to turn my attention to the whole question of the age of retirement. Must the age of 65 for payment of the national insurance pension go on being a sacred cow for all time? Is it right that a woman should continue to have the differential age of 60 applied to her?
  There are broadly two schools of thought on this question. One says that now that we are all much fitter and are living much longer it would be a good idea if we did not retire until 70. There is an equally appealing school of thought that says that as we grow much richer as a nation it should be normal to retire at 60 and enjoy the benefits of retirement five years earlier. It is probably true that 65 as a normal retirement age is with us for a long time, but it appears from the latest statistics that I can gather that the average retirement age under an occupational pension scheme is now about 63.
  I know that any move by the Government to reduce the general age at which national pensions are paid would be

  1071
  costly. If there is any recasting of the difference between national insurance provision and provision by occupational schemes, and if the Government retain 65 as the normal date of retirement, should not occupational schemes progressively reduce the retirement age? This would give the opportunity for earlier retirement, and then perhaps three, four or five years after retirement there would be a supplement to an occupational scheme pension in the shape of the national insurance pension.
  There continues to be a considerable delay between the announcement of the intention to raise pensions and actually paying the increased pension. I have heard successive Governments over a long period explain why it is impossible to shorten that period. Does my right hon. Friend have evidence that we are using that modern device, the computer, to the maximum? I am no great believer in computers as such. But I understand that there are European countries which manage to pay their pensions rather more quickly after announcing them than we do. Governments are suspect in the eyes of many people on this subject. The people do not understand why there should be such a lengthy delay, and I urge my right hon. Friend to reconsider this question and make quite certain that there is no way of shortening the period.
  We are now committing ourselves to a biennial review of pensions. Is not there an argument for an annual review? Well within the period of two years considerable pressures build up from a variety of organisations. On this occasion we are paying the increase one month before we were due to pay. I believe that the pressures will continue, but with an annual review they would not have the same opportunity to occur as they do with a biennial review, and with an annual review there would be less fear among the elderly of the value of the pension being eroded by inflation.
  Those are my general observations on the Bill, which I broadly very much welcome.
  6.36 p.m.
  Dame Irene Ward: I congratulate my right hon. Friend the Secretary of State for Social Services on the creative ideas in the Bill. While he and the hon. Member for Hitchin (Mrs.
  1072
  Shirley Williams) were talking so fluently I came to the conclusion that the longer I live the less I seem to know. I always felt that I knew quite a lot about the problems of social insurance and the people who live in this country, subscribe to it, and very often are supported by it. But I have come to the conclusion that with so many new things I know hardly anything.
  Therefore, I shall take refuge in saying that I congratulate my right hon. Friend, adding that if some of the provisions do not work out as he hopes and believes they may I am certain that he will be strong enough, with my hon. Friend the Under-Secretary of State, to alter things where they do not go in the direction in which he hopes they will. When we introduce a new type of system it is very difficult to see very far into the future how the new ideas will work out. It is magnificent that my right hon. Friend has been so creative. If things do not all work out satisfactorily, we must have another go. It is tremendously important in legislation that we should not be rigid. We have tended in Parliament in the past to be so rigid that many injustices have continued unnecessarily.
  I should like to know a little more about the people who opt out of contributions because their incomes are too low to pay them. There is a large number of people in this category, and they are just mentioned in the House from time to time. Is a survey being made to see whether it is possible to help people who are employed at too low a salary or wage, so that we can discover whether they could be covered by the schemes?
  It is very distracting to people to know that they cannot afford the contributions which would enable them to draw retirement pensions at the appropriate time and, when such people finally retire, the supplementary benefits which will have to be paid will increase the burden on the Treasury. In some way, the House has not taken sufficient notice of the problems of these people, so I would like to know whether this side of the subject is being examined. Perhaps, with his creative ideas, my right hon. Friend may find some solution. I hope so, because this is a tremendously important matter.
  The problem of increasing family allowances seems to be all mixed up

  1073
  with the Treasury, and taxation, and the rest. I have always thought—though I do not seem ever to have achieved anything about it—that when we get reductions in taxation which are very welcome and which take a large number out of the category of taxpayers, it is rather depressing for those taken out later to see those remaining in getting very necessary and welcome reductions. Public memory is very short, and these people do not remember for long that they were taken out of the tax-paying category. Then they feel that they are being rather neglected by Governments.
  Could we not, when giving taxation relief, give something in the way of family allowance to make those people feel that though they are no longer having to pay taxes they are still regarded as a valuable section of the community in their contribution to the national wealth? As my right hon. Friend seems to have got on very well with the Treasury, perhaps he could discuss this subject with that Department.
  I am devoted also to my right hon. Friend the Chancellor of the Exchequer, but I am always willing to take part in putting a little extra pressure on him. I have had a considerable exchange of letters with him, and some of the correspondence is very nice. Secretaries of State cannot say, "I have lost the battle with the Treasury," but many of us in the House know when these battles have been lost. We could do a lot to bring about greater co-ordination in order to get done some of the things we want done. Chancellors of the Exchequer take a lot of notice of their financial advisers: I should like to get at the financial advisers.
  I am very sorry to have heard only a small part of what I understand was throughout a very interesting speech by my hon. Friend the Member for Arundel and Shoreham (Mr. Luce). He commented on what will happen to people on small fixed incomes if we go into the Common Market, and it is important that that matter should be on the record before we take final decisions. It is equally important that when we legislate to alter the method of support grant to farmers we remember also that the position of those living on small fixed incomes can equally be affected. If we alter the support grant we may find
  1074
  ourselves with the need for an annual review rather than a biennial review.
  This is not only a practical problem but an anxiety problem. People living on small fixed incomes, who have done so much for the country in the past, find that the life that has to be led today is very difficult. I do not think that my last letter from the Chancellor of the Exchequer was at all private so I will just put part of it on record, because my right hon. Friend is a very approachable and very humane individual. In writing me a very nice letter about something quite different, he put at the end:
  "You can be assured that I will not forget those in whom you have such an interest."
  That seems to give an opening to my right hon. Friend the Secretary of State.
  During all the years I have been in the House of Commons I do not remember our having such a very good Social Security team. I feel that very genuinely, and I want to say it. But the team's position in relation to overall policy may be not at the top of the priority list. It is up to us to support our Social Security team, so that those engaged on the wider issues, which we all recognise, are not allowed to lose sight of the plight of those on small fixed incomes. We are attempting to give them a better and a happier life. It is no good our thinking just of increased economic advantage, if that be the case, in going into the Common Market. These people, too, must be remembered. We must remember, too, as my hon. Friend the Member for Arundel and Shoreham said, that most of those on small fixed incomes will not live long enough to see the whole developing future if we enter the Community.
  Therefore, if the members of our Social Security team want any help I am sure that the House will be delighted to give it to them. I ask my right hon. Friend to make quite certain that the Minister of Agriculture and the Chancellor of the Exchequer know that the whole House will be equally interested, when the negotiations are being discussed, in what is to happen to these people for whom we have to take a very heavy responsibility.
  6.50 p.m.
  Mr. Alfred Morris: This has been a stimulating and suitably controversial debate. It has also been notable for the much less combative, not to say quiescent, mood of

  1075
  the Secretary of State. In the recent past he has been at times very excitable. Today he kept his cool remarkably well. This may be because the criticisms of the Bill have come not only from this side of the House. The right hon. Member for Kingston-upon-Thames (Mr. Boyd Carpenter) and the hon. Member for Kensington, South (Sir B. Rhys Williams) were kindly to the Secretary of State but also somewhat critical of his Bill. I hope that the Secretary of State will take seriously the criticisms expressed on both sides. I thought that he was in danger at one stage, so fierce was some of the criticism on his side, of suffering the fate of Oscar Wilde who after the first night of one of his plays said:
  "The play was a great success, but the audience was a failure!"
  The debate has been characterised also by the engaging and effective maiden speech of the hon. Member for Arundel and Shoreham (Mr. Luce). The House will look forward to hearing him again. He has what appears to be a reasonably safe seat. It may well be, therefore, that we shall hear him on many occasions in the future. My prejudice was aroused in that one of his shrewdest points related to the European Economic Community. I hope that he will make that point again not only in the House but also in the country as frequently as his commitments allow.
  We also had a most eloquent speech from my hon. Friend the Member for Stoke-on-Trent, South (Mr. Ashley). He recognised that there are important new propositions in the Bill which make it an extremely important Measure from the point of view of all who are chronically sick and disabled. All of us marvel at the way in which he is conquering—not to say has conquered—his own severe disablement.
  Hon. Members: Hear, hear.
  Mr. Morris: The speech of my hon. Friend the Member for Oldham, West (Mr. Meacher) was, as always, thoughtful and constructive, as well as deeply informed. We have come to expect from him important interventions when discussing these subjects. I know that he is listened to with great attention on both sides of the House.
  1076
  The right hon. Gentleman will appreciate that I have a very personal interest in one of the propositions in the Bill. As he said, in cases where a man is longterm sick the wife often becomes the main breadwinner. His proposal is to apply to her earnings the tapered retirement pension earnings rule, eased to £9·50 in place of the all or nothing rule which at present exceeds the increase paid to her if her earnings exceed £3·10.
  My hon. Friend was kind enough to recall that this proposition was originally made by me in the original draft of my Chronically Sick and Disabled Persons Bill. I transferred the proposition to my right hon. Friend the Member for Coventry, East (Mr. Crossman) so that it could be included in the National Superannuation and Social Insurance Bill in the last Parliament. It seemed then that my right hon. Friend's was a far stronger vessel than the one I was hoping to steer through parliamentray waters. Nevertheless, the cargo I gave to my right hon. Friend went to the bottom of the sea and it is with great pleasure that I welcome its reappearance.
  Mr. Boyd-Carpenter: It has been salvaged.
  Mr. Morris: Indeed. But as the right hon. Member for Kingston-upon-Thames knows, this is a profoundly important proposition for the wives of men who become long-term sick.
  Mr. Boyd-Carpenter Mr. Boyd-Carpenter indicated assent.
  Mr. Morris: The right hon. Gentleman will recognise that the proposal for an attendance allowance was also a feature of my right hon. Friend's Bill; I note also that my proposal for an Attendance Allowance Board, which again I transferred from my Bill to his National Superannuation and Social Insurance Bill, has been happily revived by the Secretary of State. I am glad also that Miss Mary Grieves, Honorary Director of the Disablement Income Group, has been appointed to membership of the Attendance Allowance Board by the right hon. Gentleman.
  I welcome the increase in the attendance allowance, but it cannot be considered as a comprehensive reimbursement of the likely costs incurred. It can only be a limited contribution in a case

  1077
  of, for example, respiratory aided polio, since £4·80 will not pay for very much more than two to three hours of attendance per day and will not enable the husband who has given up his job to look after his wife to return to work. Nevertheless, it is a very important beginning and, with my hon. Friend the Member for Stoke-on-Trent, South, I confirm that we shall be using this as a lever to improve the living standards of those who are very severely disabled.
  The House as a whole has welcomed the important new departure in introducing the invalidity allowances. I notice that the allowance will be £1 if the incapacity begins before the age of 35; 60p if it begins before the age of 45; and 30p if it begins before the age of 55 for women and 60 for men. Perhaps we can be told how many claimants the Secretary of State expects there to be in each of these categories. I am convinced that the onset of severe disablement is heaviest in the third category, that is, among those who will qualify for a weekly invalidity allowance of only 30p.
  It has been unkindly said that this is the equivalent only of a box of chocolates for the severely disabled or what someone unhappily called a donation. If it is true that the largest group of beneficiaries is to receive the smallest of the three allowances, it would seem as though the Treasury has had a much bigger victory over the right hon. Gentleman than has so far been suggested in the debate. Nevertheless, we welcome this very modest beginning to the recognition of the special problems of the long-term sick and disabled. The House must, however, appreciate that most of the chronically sick and disabled will not receive the invalidity allowances. They are allowances only for contributors. But the contributors are the few and the non-contributors are the many among the chronically sick and disabled. I am impressed by what has been put to every hon. Member by the Disablement Income Group. D.I.G. rightly argues that the socially just basis of provision is need.
  The Group says that the Bill does not end present discriminations and will still leave four categories of disabled people: those whose needs are well recognised by war pensions and industrial disablement pensions and their various supplements; those who qualify for the invalidity pension, which is so variable in
  1078
  its relationship to past earnings, and, where appropriate, the attendance allowance; those who qualify only for the attendance allowance and in some cases also have supplementary benefit; and those for whom the Bill makes no provision, probably more than a million, of whom perhaps half are of working age or less. In the absence of provisions in the Bill, what does the Secretary of State propose to do for these people? I have no doubt that the Parliamentary Secretary, who takes a deep personal interest in these matters, will comment on the submissions of the Disablement Income Group when he comes to reply.
  Disablement is almost always another word for poverty in Britain today. If one wishes to find a deprived child, one should first find a disabled father. We must ask ourselves what the Bill will do to help the deprived children of disabled fathers. It is extremely melancholy for disabled people that unemployment is rising so rapidly. As the House knows, there are now 814,000 able-bodied people seeking work, but unemployment among employable disabled people is well upwards of 12 per cent. The House should be reminded that disabled people much prefer to be taxpayers than to continue, as most of them have to do, as supplementary pensioners. When things are difficult for the able-bodied, they become even more difficult for the disabled. It is deeply tragic that we are likely to see a substantial increase in the numbers expected to qualify for the invalidity allowance because of rising unemployment.
  Sir K. Joseph: The hon. Gentleman speaks with such authority on this subject that I ought to intervene here, because rising unemployment, even if it occurs, will not bring into benefit larger numbers of invalidity pensioners. The invalidity allowance is payable to those who are sick for more than six months and does not reach over into unemployment.
  Mr. Morris: I am saying that many beneficiaries of the invalidity allowance will cherish the hope of returning to paid employment, but there will be many who will have to continue on the invalidity allowance because there are now fewer jobs available for the able-bodied let alone those who are disabled. I am glad to see that the right hon. Gentleman now accepts this very real and sombre possibility.

  1079
  There have been frequent references to the fact that contributions are to be substantially increased, and my hon. Friend the Member for Salford, West (Mr. Orme) expressed deep concern about this. We have had another campaign in the war of statistics in the House. As usual, it was not fully established who won. However, I ask the Under-Secretary of State why the maximum increase in contribution, an increase of 65p, should apply in exactly the same way to the man earning £42 a week, £50, £60, £70 and even £80 a week. The right hon. Member for Kingston-upon-Thames endorsed the arguments recently advanced by the General Secretary of the T.U.C., Mr. Vic Feather, who said that it seems wrong that exactly the same new imposte should fall on a man whose weekly earnings are £42 a week and the man whose earnings are £80 a week. I hope that the Under-Secretary will find it possible to comment on that.
  The result of the Budget and the social service charges combined is that a man earning £40 a week and with two children will make a net loss of £14 a year, while the man earning £20,000 a year will make a net gain of a staggering £2,063. The Financial Secretary to the Treasury is present, and no doubt he will consult his right hon. Friends about the morality of this contrast in treatment.
  As I have said, the right hon. Gentleman was extremely equable in his introduction to the debate. But recently he has used some extremely exciteable language when commenting on the trade union movement. He has even accused the trade union movement of stabbing the old-age pensioner in the back. In that speech he gave gratuitous offence to the trade union movement. Of course, the movement is now comprehensively offended by the Government and the offence given by the right hon. Gentleman was merely a drop in the ocean. Those manning Labour's committee rooms in localities throughout the country know how offended trade uunionists have become. They are being helped by trade unionists who previously did not recognise the importance of political as well as industrial activity.
  I congratulate the Transport and General Workers' Union and other unions and co-operative organisations for cam-
  1080
  paigning, from their own resources, to improve the standard of living of retirement pensioners. Many trade unionists help elderly members of their families. This is one of the realities of life for working people. If they are working, they help those who are not. For they know well that it is impossible for a retirement pensioner to live decently on the present pension. Moreover, it is the average trade unionist, who sees himself as belonging to the next generation of elderly people in need.
  The right hon. Gentleman tiled to imply that the trade unions were responsible for rising prices. That is not so. Nor is it fair. The right hon. Member for Lowestoft (Mr. Prior) is not a trade unionist. But it is the right hon. Gentleman who is now needlessly increasing food prices. What is more, food forms a large part of the pensioner's cost of living and the right hon. Gentleman is not only introducing levies on food imports but increasing living costs in other ways. It is the right hon. Member for Worcester (Mr. Peter Walker) who is increasing the cost of housing. What kind of trade unionist is he? When the Labour Party were in Government it was always Ministers who were to blame if the cost of electricity, gas and other fuels went up. What kind of trade unionist is the right hon. Member for Knutsford (Mr. John Davies)? He has spent most of his life as a professional anti-trade unionist. And again, what kind of trade unionists are the hon. Members for Bournemouth, West (Sir J. Eden) and Cirencester and Tewkesbury (Mr. Ridley)?
  They regard even Tory trade unionists as subversive. The right hon. Gentleman must also appreciate that the Tory trade unionist is just as prepared to accept the increases in pay negotiated by his trade union as are other trade unionists. I hope that the right hon. Gentleman will not return to the extreme language he has used in attacking trade unionists over their attitude to retirement pensioners.
  Dame Irene Ward: As a non-trade unionist, and since everyone else seems to have settled quietly, may I say that I am devoted to many trade unionists, but they could help the country a great deal more if they advocated a fair day's work for a fair day's pay.
  Mr. Speaker: Order. I think we are getting a little wide of the subject. The hon. Gentleman did rather bring it upon himself. Perhaps we can get back to the Bill.
  Mr. Morris: I bow to your Ruling, Mr. Speaker. I have no doubt whatever that the trade union movement will take note of all that has been said in this debate.
  Dame Irene Ward: And my point.
  Mr. Morris: Of everything that has been said. I naturally hope that it will give special attention to the points I raised on its behalf. The main point of our attitude to the elderly is that we let people survive, but on the whole this is all that we do. The proposed increase in the retirement pension will just about have been wiped out before it is paid. The retirement pensioners, who suffered badly during last winter, look with no joy to next winter. A high proportion of our 7 million pensioners just cannot share fully in the life of the community.
  Mr. Victor Feather, General Secretary of the T.U.C., has said that the purpose of graduated contributions should be to earn graduated pensions. He said that the level of graduated contribution bears no relation to the totally indequate pension provided by the graduated scheme. He goes on:
  "Yet the Government are now proposing to increase the graduated contribution still further, in order to increase flat rate benefits."
  Mrs. Marion Green, acting General Secretary of the National Federation of Old-age Pensions Associations, has said that the association is concerned that by September inflation will have entirely eroded the increase. She has pointed out also that many pensioners will not receive the full value because the new rate of supplementary benefits will not rise by the same amount. This is a point of great importance for very large numbers of elderly people. Nor do criticisms come only from such organisations. Here is another comment:
  "I believe that the Chancellor has not done nearly enough for those at the lower end of the income scale. But what is really tragic is the lack of any sort of regional element…"
  That comes from Mr. Keith Rassan, National Chairman of the Pressure Group for Economic and Social Toryism, or
  1082
  P.E.S.T., as hon. Gentlemen opposite may like to call it.
  I hope the Under-Secretary will comment on the proposition that there should be more frequent reviews of pension and welfare benefits and also on the proposal that has been made, especially strongly by The Guardian, that we should compile a special cost of living index for pensioners and invalids.
  The main difference between the two sides of the House is that this side has made proposals, and has a policy, for improving the relative standard of living of all retirement pensioners and others in special need. The party opposite did not know whether to support that policy or to oppose it. The country wants to know the Government's long-term policy for improving the standard of living of elderly people in relative terms. I am reminded of what Sir William Oastler called: "…the serene satisfaction with the status quo." Some of the right hon. Gentlemen's colleagues in the present Government, much more than he, seem to suffer from that serene satisfaction. We shall subject this Bill to deep scrutiny in Committee and shall seek to improve it. We shall seek the review of many other provisions than those I have mentioned. Above all we shall seek to improve the Bill not only for the benefit of elderly people but of so many other groups who are in special need.
  7.0 p.m.
  The Under-Secretary of State for Health and Social Security (Mr. Paul Dean): The House has listened with pleasure to the first contribution to our debates by my hon. Friend the Member for Arundel and Shoreham (Mr. Luce). We all echo his tribute to his predecessor, the late Captain Henry Kerby. My hon. Friend spoke on this subject with obvious knowledge, assurance and compassion, and we look forward to hearing further contributions from him on this and other subjects.
  It has been an interesting, thoughtful debate in which we have listened to six contributions from this side of the House and to three from the back benches opposite, and I shall deal as quickly as I can with some of the questions which have been put to me.
  The selective increases which my right hon. Friend described at length are

  1083
  among the key hall-marks of the Bill, and they have been referred to in every speech. Incidentally, I am sure that my right hon. Friend and I, together with our Treasury colleague, were grateful for the warm tribute which came from my hon. Friend the Member for Tynemouth (Dame Irene Ward). We all hope to continue in her good books.
  The significance of the selective increases is that they allocate priority so as to bring more help where the need is greatest, especially to the chronic sick and the over-80s. They do this by categories within the national insurance scheme, and they follow the precedent set by my right hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) in the preferential treatment within national insurance for the children of widows.
  The Bill brings in the existing chronic sick and the existing over-80s. It is not just a plan for the future. It deals with those who, had these provisions been in operation, would have benefited from them in the past. It also carries through into the war pensions scheme and the industrial injuries scheme these new selective increases. As my hon. Friend the Member for Wells (Mr. Boscawen) said, it maintains the preferential arrangements which we have in our war pensions and industrial injuries schemes.
  The Bill also reflects in the supplementary benefits scheme. Here, perhaps, I might deal with the age addition point made by the hon. Member for Hitchin (Mrs. Shirley Williams). There will be a 25p addition where there is a person over the age of 80 in the household. As for the chronic sick package, in many cases the supplementary benefits scheme, which is tailored to people's individual needs, reflects the additional needs and requirements of the chronic sick. In addition to that, the figures for which the hon. Lady asked are broadly that, in the case of the invalidity allowance, only about one-third of those now getting sickness benefit and will be getting the invalidity allowance are also getting supplementary benefit. In other words, about two-thirds will benefit from the proposals in the Bill.
  Then I come to the figures for which the hon. Member for Manchester,
  1084
  Wythenshawe (Mr. Alfred Morris) has asked—the number of people likely to qualify for the invalidity allowance in the three categories. The estimate is that, at the £1 rate for those who become chronically sick or disabled earlier in life, there are 60,000; for the 60p rate, 70,000; and for the 30p rate, 220,000.
  I turn next to the points made by the hon. Member for Wythenshawe, whom we gladly acknowledge as a fellow architect in our arrangements for the chronic sick and the disabled. As my right hon. Friend said, this Bill and the earlier 1970 National Insurance Act represent a four-pronged assault on the cash problems of the chronically sick. There was the attendance allowance in the Act last year which starts in December and there are the three aspects of cash allowances in this Bill, namely, the age of onset allowance, the improved arrangements for the working wife of the disabled man, and those for their children.
  To give one example of the increases which are possible and which some families will get under the Bill, I take a man who became chronically sick at the age of 30. who has two children, and whose wife earns up to £9·50. At present, including family allowance, this family receives £11·20. After September, under the proposals in the Bill, the family will receive £16·60, an increase of nearly 50 per cent.
  I come next to the short-term benefits, especially the earnings-related supplement. I was sorry to hear the hon. Member for Hitchin again talking about a swindle. Some time ago, I remember how the right hon. Member for Sowerby (Mr. Houghton) admonished us and criticised us very severely. He said that in a debate on social security it was damaging to talk about swindles. I am surprised that the hon. Lady has not learned this very wise lesson from her right hon. Friend. I have learned it, and I am determined not to use the word again.
  All the money being raised is going to pay benefits, and, by "all", I mean every single penny. There will be no reduction for people on earnings-related supplement when the change is made in May, 1973. We intend to preserve their entitlement. In the vast majority of cases,

  1085
  the growth in earnings which will take place meantime will more than compensate for the fact that, on the higher bracket of earnings, the earnings-related supplement will be at the rate of only 15 per cent.
  What it comes to basically is the allocation of priorities within the scheme. I admit freely that this means a modest re-allocation of priorities as between short and long-term benefits. The welcome that the House has given to the chronic sick package and the provision for the over-80s suggests that we are on the right lines.
  The hon. Member for Stoke-on-Trent, South (Mr. Ashley), who also paid a tribute to the package and equally can claim some of the authorship, asked about the gaps still existing. My right hon. Friend acknowledged freely that this is but a start and that there is much more to be done. One of the categories mentioned by the hon. Gentleman, the disabled housewife, who will be helped to some degree by the attendance allowance, is a category of individuals we have very much in mind in considering what our next steps should be.
  The other package is the selective increase for the over-80s. The numbers involved are about 1·1 million, of which no fewer than 70 per cent. are women. The right hon. Member for Sowerby has often told us that poverty in this country is basically amongst women. This has been one of the criteria which influenced the Government to propose this addition for people over 80.
  My right hon. Friend mentioned two particular aspects in the Bill. First, those who are at present either getting no pension or getting a pension which is lower than the old persons' pension who will be brought in at the age of 80; second, the age addition of 25p which will be available not only for the full retirement pensioner but for the over-80 pensioner.
  I should like to give the House one example of an increase which will take place. A married couple on full pension, bothof whom are over 80, now get £8·10. Under the proposals in the Bill, they will receive £10·20; in other words, an increase of 26 per cent.
  Other examples—there are many examples of the selective increase—are the earnings rule and the increments, both of
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  which will provide additional encouragement for those who work after retirement age. I am glad that those proposals have been welcomed on both sides of the House.
  I turn to what this package will cost and how it will be met. This point has been mentioned by most right hon. and hon. Members who have spoken. Although my right hon. Friend the Member for Kingston-upon-Thames expressed some reservations, he said that, however it is arranged and whatever it is called, it involves a transfer of resources from the working to the retired population. It is, always has been and will continue under the Bill to be, a pay-as-you-go scheme in which we pay the pensions of our grandfathers and fathers, or, more likely, our grandmothers and mothers—because women live longer—in the hope and expectation that eventually when we retire the then working generation will pay our pension. In this sense, it is a contributory scheme rather than an insurance scheme in the way we normally understand the word "insurance". However, it is a scheme in which the contribution creates a title to benefit. That will continue under the Bill. We are trying fairly and squarely to meet the fair distribution of this cost. My hon. Friend the Member for Kensington, South (Sir B. Rhys Williams) particularly mentioned that point. In other words, it is based on the ability to pay.
  We are criticised for this by hon. Gentlemen opposite, so let us look at the comparison of the contribution increases in the Bill and in 1969. The actual increase in the basic level of pension and other benefits in the Bill is twice as great as in 1969. A pound under this bill compares with 50p in the 1969 Act.
  Mrs. Shirley Williams: Does the hon. Gentleman accept that the only fair comparison is in real terms? If we start talking purely in money terms we have no real basis of comparison at all.
  Mr. Dean: I accept that. I am dealing with the other argument which has been put from the Opposition. Although the Bill provides twice has big an increase in money terms—I fully concede this—as the 1969 Act, I want to remind the House what the increases in contributions will be this time compared with 1969.
  In 1969 the lower paid contributed an increase of 5p, whereas on this occasion

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  they will pay no increase whatsoever. In 1969 the £20-a-week man paid an increase of 12½p. On this occasion he will pay an increase of only 3p. In 1969 the £30-a-week man paid an increase of 38p. He will now pay an increase of only 15p.
  Mr. Orme: Why stop there?
  Mr. Dean: I am going on. The £42-ormore-a-week man in 1969 paid an increase of 38p, which was the ceiling. Under this Bill he will pay 65p. So only about a quarter of the working population will be paying a bigger increase than in 1969 for twice the money increase in the benefit being offered. That means that three-quarters of the working population will be paying less than the increase in 1969. In the face of those contribution figures, it comes ill from hon. Gentlemen opposite to make the criticisms which have been made.
  There is also an increase in the Exchequer contribution which, broadly, is being restored to a position from which it had slipped under the last Administration-18 per cent. These are substantial figures. It means that the Exchequer contribution—the contribution from the taxpayer—will go up from £491 million in 1971–72 to £537 million in 1973–74.
  Another significant point is the comparison between the percentage contribution in this Bill and the previous Administration's Bill which the hon. Member for Hitchin mentioned. The contribution in this Bill is 4·35 per cent., whereas the previous Administration in their Bill envisaged a contribution of 6¾ per cent.—substantially more.
  The hon. Member for Hitchin said that only a scheme of that kind held out hope of dealing with poverty most effectively in future. I fear that the hon. Lady forgot that that Bill would exclude existing pensions entirely. The significant point about my right hon. Friend's proposals is that they will bring immediate help—this is not a plan for the future—to those who are most in need.
  Mr. Alfred Morris: I hope that the hon. Gentleman has not entirely left the question of contributions. Will he explain why the £42-a-week man should pay exactly the same increase of 65p as the £80-a-week man?
  Mr. Dean: For the same reason as that used by his right hon. Friends. They also had a ceiling on the contributions, because they felt that it was not reasonable to expect employees to pay over a certain level. The reason which held good for his right hon. Friends holds good for this Bill, too. If the hon. Gentleman wants confirmation, I am sure that he can get it from his right hon. Friend the Member for Sowerby.
  Mr. Meacher: Will the hon. Gentleman give way?
  Mr. Dean: I am coming to the hon. Gentleman's point. Perhaps it would be more convenient if I continued. I think that I know the point which he has in mind.
  I turn now to the points made by my right hon. Friend the Member for Kingston-upon-Thames and my hon. Friend the Member for Billericay (Mr. McCrindle) about the unemployment benefit for occupational pensioners. My hon. Friend the Member for Billericay said that he, albeit reluctantly, would agree with the proposal in the Bill if he were assured that it was not possible to deal with the misuse of public funds, as he described it, by the availability-for-work test. I assure the House we have looked with the greatest care to see whether it would be possible to deal with this misuse of benefit by redefining that test. The National Insurance Advisory Committee has looked at this matter with extreme care but has reached the conclusion that it would not be possible to deal with the situation in that way.
  There are strong reasons against dealing with the matter in that way. First, there is the tendency for men at the age of 60 retiring with an occupational pension to move to another part of the country where there are limited opportunities for sedentary work of the type to which they have been accustomed. But even if work were available, and they were anxious to pass the test, in many cases an employer would naturally prefer a younger man, if one is available. Equally, I think that it would be right and proper for the employment exchange if it is asked to advise, to suggest the younger man, rather than the older. Those are the main reasons why the

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  availability-for-work test will not provide the solution that we have teen seeking to this problem.
  I am glad that my hon. Friend the Member for Kensington, South welcomed the voluntary contribution which we propose for the non-employed person from the age of 60.
  Mr. Boyd-Carpenter: Before my hon. Friend leaves that, will he deal with the point, which is formally made by Lord Collison in his minority report of the National Insurance Advisory Committee, that this provision is a departure from the principle that national insurance benefits should not be subject to a means test?
  Mr. Dean: I was going to answer that. I wanted to deal first with the voluntary contribution point. Many of the criticisms made when the proposal first saw the light of day related not so much to the receipt of unemployment benefit as to the fact that the person concerned had to continue to pay a compulsory contribution whether he wanted to or not. It is to meet that criticism that the Bill proposes that a person who is non-employed at the age of 60 or over shall not have to pay a contribution. The choice will be his, and I think that this provision goes a long way to deal with the criticism levelled at the proposal previously.
  The final point is that mentioned by my right hon. Friend the Member for Kingston-upon-Thames. I put it to the House in this way. In the circumstances, what was the choice before the Government? Having satisfied ourselves that the availability-for-work test was not a runner, we had the choice of doing nothing, or of proposing to the House the course set out in the Bill, albeit with its disadvantages, and the criticisms that have been made against it.
  My right hon. Friend has before the House a Bill by which he is shifting some expenditure from non-priority areas to greater priority areas. I am referring to provisions on the striker's disregard and waiting days in the Social Security Bill. Surely my right hon. Friend would have been subject to great crticism had he decided to do nothing about the people to whom I have referred. It is the balance of the argument which has
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  resulted in the Clause, and I hope that on reflection my hon. Friends will feel that the balance has been struck the right way.
  Now I turn to the question of polygamous marriages, about which my right hon. Friend the Member for Kingston-upon-Thames asked. He instanced the case with which he had had to deal when there were four potential widows.
  Mr. Boyd-Carpenter: Actual widows.
  Mr. Dean: I stand corrected—four true widows. This is a highly complex matter, as I think the House has gathered. The intention is that in the regulations which will eventually be submitted to the House the test will be whether a marriage which was once polygamous ceased to be polygamous when the woman concerned became a widow. [Laughter.]
  Mr. Boyd-Carpenter: I do not think that my hon. Friend has got it quite right. Was not my hon. Friend trying to say that if a man had serveral wives and he died and left one, one is all right? Is not that what my hon. Friend is wishing to say? Will he answer the point that I raised? Can any man, by his death, involve the payment of widow's pension to more than one widow?
  Mr. Dean: I think that that shows how wise the Bill is to suggest that this problem should be dealt with by regulations. What we hope to achieve when we have sorted this out and presented the regulations to the House is that if a person, on coming to this country has a wife who is a normal wife under the rules and regulations of this country, she will qualify for widow's benefit in the same way as anybody else. They will be within the rules. That is what we are hoping to achieve. I hope that I have got this right. If not, perhaps I can clear up the confusion at a later stage.
  Mr. Boyd-Carpenter: My hon. Friend said that "they would be within the rules", which suggests that there might be a multiplicity of widows for these pensions.
  Mr. Dean: Instead of "they" I should have said "she".
  I now propose to deal with the questions asked by the hon. Lady the

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  Member for Hitchin and the hon. Member for Oldham, West (Mr. Meacher) about the family income supplement and the family allowance. The complaint is that there is a gap in the Bill. In his intervention my right hon. Friend made it clear yet again that the only course open to the Government at the time to bring effective help was through the family income supplement arrangements, and there is no doubt that these, plus the tax relief on the child's allowance which my right hon. Friend the Chancellor has introduced, will provide substantial help.
  My hon. Friend the Member for Billericay asked about the period between the announcement of an increase and the paying of it. He wondered whether it would be possible to speed things up with the introduction of the computer. The answer is that that will be possible in due course, but this is the first uprating on which the computer will be in full operation. We may have teething troubles, but it is not possible to expect a computer, doing this job fully for the first time, to be able to do it more speedily than it is done now. Added to that there is the substantial load on the staff in my right hon. Friend's Department as a result of the other new benefits that are being introduced.
  I think I can answer my hon. Friend's question by saying that, in the long term, if we are to have—as we are committed to have—a regular review of pensions every two years, then what will matter will be calculating the period that is needed for the administration, and, as it were, working backwards from that.
  Not a great deal has been said about the industrial injuries scheme, but I know that hon. Members on both sides of the House have expressed considerable interest in it, and particularly about possible developments that might be made in it. My right hon. Friend described the improvements in the scheme, which are broadly similar to those being introduced in the national insurance scheme, but some concern has been expressed about industrial diseases, and I should like to tell the House that the Industrial Injuries Advisory Council is engaged in a major review of pneumoconiosis and associated respiratory diseases.
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  The questions referred to the council raise fundamental issues, and the council has been hearing evidence from many eminent medical witnesses and research workers. Simultaneously, the council has been heavily engaged in trying to find a way round the difficult problems involved in the prescription of occupational deafness under the Act. This is an increasing hazard of present-day industry, with which we are all concerned, and here again the council is examining a considerable weight of evidence from interested persons and organisations, Needless to say, as soon as we receive the advice of the council, we shall consider it in the hope that it will be possible to make advances on these two important fronts.
  The Bill fulfils a number of important pledges which the Government gave at the last election. I do not say that in any spirit of complacency or self-satisfaction. After all, we are contributing the money of contributors and taxpayers in this Bill. But it shows that, when we talk about compassion and care for the needy, we mean what we say. We match words with deeds. On that basis, I commend the Bill to the House.
  Question put and agreed to.
  Bill accordingly read a Second time.
  Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).

  NATIONAL INSURANCE [MONEY]
  Queen's Recommendation having been signified—
  Resolved,
  That, for the purposes of any Act of the present Session to amend the provisions of the National Insurance Acts 1965 to 1970, the National Insurance (Industrial Injuries) Acts 1965 to 1970 and the Industrial Injuries and Diseases (Old Cases) Acts 1967 and 1969 as to contributions and benefits and to make provision for invalidity benefit for the chronic sick and for a retirement pension and age addition for certain persons over the age of 80, it is expedient to authorise the undermentioned payments out of money provided by Parliament—

  (1) in connection with the increase of contributions under section 3 (flat rate contributions) of the National Insurance Act 1965 or under section 2(1)(a) of the National Insurance (Industrial Injuries) Act 1965, the payment of any resulting increase in

  1093
  the sums so payable by way of Exchequer supplement under section 7 or, as the case may be, section 2(1)(b) of that Act;

  (2) the payment to the National Insurance Fund, in addition to the Exchequer supplements under the National Insurance Act 1965, of the sum of £135 million in respect of each of the financial years 1971–72 and 1972–73 and the £185 million in respect of each subsequent financial year;

  (3) the payment of any sums required to be paid out of money so provided in consequence of provisions of the said Act of the present Session—

  (a) increasing the weekly rate of attendance allowance to £4.80;

  (b) increasing the weekly rate of retirement pension payable by virtue of paragraph (a) or paragraph (b) of section 1(1) of the National Insurance (Old persons' and widows' pensions and attendance allowance) Act 1970 to £2.20 where the pension is payable to a married woman who has not, at any time since she first became entitled to the pension, ceased to be a married woman and to £3.60 in any other case;

  (c) providing for a retirement pension for certain persons over the age of 80 at a weekly rate of £2.20 where the pension is payable to a married woman who has not, at any time since she first became entitled to the pension, ceased to be a married woman and of £3.60 in any other case;

  (d) providing for a new benefit, known as age addition, at a weekly rate of £0.25 for persons over the age of 80 who are in receipt of any such retirement pension as is mentioned in paragraph (b) or paragraph (c) above; and

  (e) providing for increases in any such retirement pension as is mentioned in paragraph (b) above in respect of children and adult dependants;

  (4) any increase attributable to the said Act of the present Session in the sums payable out of money so provided under any other enactment in respect of the expenses of the Secretary of State or any other government department.—[Mr. Patrick Jenkin.]

FRIENDLY SOCIETIES BILL [Lords]
Order for Second Reading read.
7.51 p.m.
The Financial Secretary to the Treasury (Mr. Patrick Jenkin): I beg to move, That the Bill be now read a Second time.
I think the House will agree that this is a Measure which it would be appropriate for me to deal with briefly, but I shall be happy to answer any questions at the end of the debate.
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This Bill is much the same as one which fell at the election, when it had already completed its proceedings in another place and had had an unopposed Second Reading in this House. The Bill was reintroduced by the present Administration in another place and the only significant change from that which the previous Government introduced is the addition of Clauses 5, 6 and 7, as they now are, which confer new powers on the Registrar to inspect friendly societies and, if necessary, stop them from taking new business and to give him power to petition a court to wind them up.
The background to the Bill lies in the growing difficulty of many of the smaller societies, due to declining membership and rising management costs. The answer, as in other fields, lies in their merging into larger and more viable units. However, the existing procedures for mergers and amalgamations and for undertaking the liabilities of existing societies are so cumbersome, expensive and time-consuming as to make the process extremely difficult. The primary purpose of the Bill is to provide new, simpler and cheaper procedures both for mergers and amalgamations and for dissolutions. At the same time, new safeguards for members, particularly for minorities, are ensured.
In the case of mergers, instead of having to have the positive assent of at least five-sixth of all the members by value and of everyone, member or not, entitled to benefits from a society's funds, the Bill provides that in future all that will be necessary is that the merger should be approved by three-quarters of the members who actually vote. Of course, everyone concerned must be told what is proposed, and there are rights of appeal to the Chief Registrar if the proper procedure has not been followed. In the case of dissolution, instead of, as at present, five-sixth of all members, the Bill provides that three-quarters of all members must approve.
The new Clauses, Clauses 5, 6 and 7, confer power on the Registrar to inspect societies and to petition the court for their winding up. They also give him power to require the production of documents for this purpose. I must emphasise that these powers are intended as reserve powers only, to be used in those, fortunately rare, cases where friendly societies get into financial or administrative

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difficulties and where the interests of the members or of the public may call for some action by the Registrar.
The Bill is the result of consultations with the friendly societies movement and has their full support. Indeed, they have been urging this reform on successive Governments for about seven years. The Government are firmly of the view that the friendly societies perform a valuable service in the community. One of my first actions when I went to the Treasury was to set on foot a study to see whether we could lift the limits on certain types of business done by friendly societies so as to give them greater scope to serve the community and encourage savings. This was done last October, and was warmly welcomed by the part of the movement affected. This Bill is another measure to remove obstacles to the societies continuing to operate successfully for the benefit of their members and the whole country, and as such I commend it to the House.
7.56 p.m.
Mr. Robert Sheldon: I too will deal with this matter shortly, although this is a valuable Measure, which was first introduced by the last Government. I would, more as a jest than anything else, compare my own length of speaking with the speech which the Financial Secretary made in the Second Reading Committee, when he spoke for 26 minutes and perhaps did not cover ground much more relevant than that which he went over tonight.
This is a useful Bill, giving opportunities to those friendly societies which have become rather smaller than they used to be to merge and wind up, and as such we have produced a Measure which will be of benefit and might possibly give them opportunities to enter fields where they are not quite so prominent as they might be.
It is right on Second Reading that something should be said from this side about the useful work of the friendly societies—
Mr. Patrick Jenkin: The hon. Gentleman will perhaps agree that 20 of the 26 minutes I spoke in Second Reading Committee were devoted to the useful work of these societies.
Mr. Sheldon: I was not complaining about the content of the hon. Member's speech. I was only drawing the contrast between his claim to brevity on this occasion and the notable absence of brevity on the last occasion.
The friendly societies have done some useful work and continue to do this work. The purposes of the 1896 Act show some of the ways in which these societies could help the newly industrialised communities in which they were so involved. Those purposes included the relief and maintenance of their members in sickness, paying money on the birth of the child of a member or the death of a member, the relief or maintenance of a member travelling for employment, and the endowment of members' insurances of various kinds. This summary of some of the valuable work of the friendly societies shows how much a part of the local fabric they were, working as they did on behalf of local people.
The reason for the present decline in the position of the societies is that so much of the foundation which they laid so well has been embodied into the subsequent Welfare State.
We see from the report of the Chief Registrar of Friendly Societies the nature of their work and the way in which it has changed. One of the sad things to be noted is the decline in membership. At the end of 1968 we see that for the first time the number of members under the heading of "Orders and Branches" fell below under a million, but the sums involved were very substantial at over £75 million, which works out at an average of £76 a head.
The names mentioned in the Registrar's report, such as the Independent Order of Oddfellows Manchester Unity, the Ancient Order of Foresters, the Independent Order of Rechabites Salford Unity and the Order of Sheffield Unity are great names in the part of the world which I represent. Although they have an aura of the nineteenth century about them, they are still very active in the area which I represent, carrying out valuable work although, perhaps, not enjoying the prominence they once did.
We see that the branches have declined by over 5 per cent. and that membership declined by over 4 per cent. in one year. We realise the difficulties which face these branches when there is such a multiplicity

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of other organisations, not least the State itself, which have taken over and benefited from work done by the friendly societies themselves.
The great tribute to the friendly societies is that they led the way and showed the need which existed and provided the means of assessing that need in the local democracy under which they work. They were among the first to provide pensions and national insurance, methods of saving and of meeting the difficulties that arose during the formative period of the Industrial Revolution. We see today that they still control very large sums of money since the orders and branches, for example, have over £70 million, the centralised societies have over £250 million and the collecting societies nearly £500 million. These are very large sums indeed. Therefore, we need to concern ourselves very closely with the way in which these organisations, with rather high levels of charges for management expenses and so on, are brought into line with the smaller needs which at present have been shown possible for them.
In assessing the different needs, we see that death benefits have declined by 7 per cent, and that the other changes in regard to annuities and pensions have increased by 7½ per cent., and that accident benefits have increased also by 4½ per cent. The kind of benefits which it is still possible for them to engage in is a matter upon which they should be given every encouragement. Their great strength is that they are strongly rooted in the locality where they operate. Democracy comes in because they are involved with people in and around the area where the work is done and their work is obviously important; only part of that work could be done by the State.
I notice that the societies hold a large number of Government guaranteed securities and local authority stocks. I wonder what they feel about the situation of the Mersey Docks and Harbours Board and the trustee status of this security which was put in doubt. I hope that that was an exception and that their investments will be to the benefit of the country as well as to the benefit of themselves.
I also see that the method by which they were enabled to merge and were
1098
able to change their position required five-sixths support in value, and this was thought to put too much of an obligation on the societies in present circumstances. The situation in regard to the various localities is now changed, and the change in regard to three-quarters of those who vote is to be welcomed.
I should like to ask the hon. Gentleman one question in regard to Clause 9, which is the provision relating to fees. The hon. Gentleman put this question during the Second Reading debate in the Labour Government's term of office, and did not receive a very satisfactory answer from an hon. Friend of mine. However, having had a year in which to digest the situation, he is no doubt now fully equipped to deal with the point. I was interested in the reason for the charging of these fees. I know that this is meant, to come into line with similar kinds of fees, but I do not think that this fully gives the position as we would want to understand it.
Do the Government intend to charge the full cost of registry? This was not the case previously, and it would be interesting to know what is the situation. Has the hon. Gentleman any idea whether the scale of fees has been discussed? What are the principles of charging fees and what proportion of the total costs will be covered by the fees? I mention this matter because the present Government are much dedicated to reducing support where it is not shown to be absolutely necessary. Bearing in mind the recent hard-hearted way in which the Government have been hitting "lame ducks", it may well be thought that the friendly societies are not-too-healthy ducks, and they may be suitable for rather less beneficial treatment than we on this side of the House would wish to see.
One final point about the different dates on which the Act comes into operation. In fact, no dates are given. The answer which was given on this matter by my hon. and learned Friend the Member for Lincoln (Mr. Taverne) on the last occasion when this legislation was discussed in the House was not wholly satisfactory. I should like to ask why the dates need to be different and if I can be given any information on this matter.
I commend this valuable Measure to the House.
8.9 p.m.
Mr. Patrick Jenkin: I am grateful for the welcome given to the Bill by the hon. Member for Ashton-under-Lyne (Mr. Sheldon). I very much enjoyed hearing the hon. Gentleman with his own local knowledge of a part of the country where the friendly societies have flourished in the past. I was pleased to hear his assertion of the continuing importance of these societies, which I believe is absolutely right. Although, as he said, the Welfare State has now taken over the liabilities which the friendly societies were orginally formed to provide, the fact is that they still play an extremely important part in the lives of millions of people. The total value of their assets at present is about £800 million and, by any standards, they represent an important facet of our national life.
The hon. Gentleman asked two questions, one about the fees to be charged and the other as to why the different parts of the Bill have to come in at different times. On the matter of fees, it has never been the policy of the Registry to seek to recover the whole of the costs involved in this part of its work. Indeed, the percentage in past years has been about 7 per cent. of the total cost of the registry met by fees. However, as the hon. Gentleman acknowledged, what has happened in the past is not necessarily any clear indication of what ought to happen in future.
The purpose of Clause 9 is to extend the power to charge fees to all friendly societies—a power which hitherto has existed only in respect of the specially authorised societies like the National Deposit Friendly Society, the Hearts of Oak Friendly Society, and so on.
They have always paid fees, but none of the other friendly societies has done so. This is now rather ridiculous, remembering that one category of friendly society, which is perhaps not always recognised as such, is comprised of working men's clubs, with which hon. Members who represent constituencies in the North may be more familiar than those who represent constituencies in the South-East.
Many of these clubs are now immensely profitable and successful undertakings and spend large sums hiring topflight entertainers. It seems ridiculous
1100
that they should not be expected to pay reasonable fees for the services which they get from the Registrar by way of registration and so on.
It is the intention of the Registrar to consult the various bodies in the friendly societies movement with a view to determining a level of fees appropriate for that particular kind of society for which fees should be charged. We believe it right that the fees should keep pace not only with the movement of inflation but with, as it were, the market being able to bear a fee which bears a closer relationship with the costs that are actually incurred.
It is certainly not the intention to go anywhere near paying for the whole of the cost of the registry. That would be both unreasonable and impossible. However, that a larger proportion of the costs should be borne by fees from the societies which benefit from the services is something which we can and should pursue, and, as I said, it is the intention of the Registrar to consult with those concerned.
The answer to the hon. Gentleman's second question about the Measure coming into force in part on different dates is that this is designed to give the greatest measure of flexibility and opportunity for consultation with the different interests involved. These interests are quite extraordinarily diverse, as even this short debate has indicated. It is because we want greater opportunity to make sure that the Measure is applied to the different categories of friendly society at a time and in a manner most appropriate for them that it is appropriate for different parts of the Bill to come into force on different dates.
It would, I suppose, be possible to make it all come into force at the same time, but the advice I have received and accepted is that this would not allow for sufficient flexibility. It is clear that the Bill, as it stands, is likely to be more appropriate.
Question put and agreed to.
Bill accordingly read a Second time.
Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).

WOOL TEXTILE INDUSTRY (LEVIES)
Motion made and Question proposed,
That the Wool Textile Industry (Export Promotion Levy) (Amendment) Order 1971, a draft of which was laid before this House on 7th April, be approved.—[Mr. Ridley.]
8.13 p.m.
Mr. Ben Ford: While I hope the House will endorse this Order, which is viewed with considerable importance by all sections of the wool textile industry, I feel that I must comment on it before it leaves our hands.
This industry, along with the wool textile industries of most other countries, is undergoing somewhat of a depression. I had the good fortune to be in Hong Kong recently, where I saw the products of the West Riding wool cloth industry being prominently displayed with great pride by the retailers concerned. Because the promotion of our wool cloth products deserve every encouragement, I hope the House will endorse the order.
Question put and agreed to.
Resolved,
That the Wool Textile Industry (Export Promotion Levy) (Amendment) Order 1971, a draft of which was laid before this House on 7th April, be approved.
Resolved,
That the Wool Textile Industry (Scientific Research Levy) (Amendment) Order 1971, a draft of which was laid before this House on 7th April, be approved.—[Mr. Ridley.]

NORTHERN REGION (EMPLOYMENT)
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Speed.]
8.15 p.m.
Mr. T. W. Urwin: Hon. Members will appreciate the extent of my pleasure at being called at this early hour to raise the subject which I have chosen for this Adjournment debate, which is the unemployment situation in the Northern Region, when hon. Members must frequently sit waiting patiently well into the night before being able to raise the subject of their choice.
1102
Last Thursday the House of Commons dealt at length and objectively with the serious question of unemployment. It did so on a national basis. I may he forgiven for suggesting that the voice of the development areas was not heard to the extent that it might otherwise have been heard in the debate. I appreciate, in raising this issue from the point of view of the Northern Region, that the regional picture must inevitably be seen against a national background.
The Northern Region, in common with Wales and Scotland, is always worse hit in times of economic depression. Not unusually, therefore, when we look at the April unemployment figures we find that 72,300 people in the Northern Region are currently without jobs, including 4,906 aged 18, many of them tragically still looking for their first employment. The figures at present are 7·2 per cent. unemployed males and 2·3 per cent. unemployed females, giving an average for the region of 5·5 per cent., almost traditionally only marginally exceeded by Scotland, with a rate of 7·5 per cent.
If we look further into the figures we find that between January and April of this year there was an increase, seasonally adjusted, of about 6,000 people. This increase occurred at a time of the year when one normally expects to see an improvement. In other words, there has been a reversal of the normal trend.
If it had not been for the extremely mild winter through which we have just come, these figures would have been considerably swollen by the inclusion of 2,000 to 3,000 construction workers. Also in the Government's favour is the fact that they are not contending with the dramatic job losses in the coal-mining industry, losses which particularly bedevilled the distribution of industry policies pursued by the Labour Government.
I think of how, between 1964 and 1970, 50,000 jobs were lost in the Northern Region as a result of the recession in the coal-mining industry. When these figures are borne in mind, one begins to get a measure of the difficult problem with which the Labour Government were confronted.
I recall the promise which was made during the last election campaign by the Conservative Party to create a united nation in Britain. It is not for me in this

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debate to talk at length about the sordid policies which have resulted in the payment of increased school meals and the action that has been taken over school milk—all to finance tax concessions for the rich.
However, I recall their promises in the context of the creation of what we have now, which is an even greater army of unemployed than we had when the Conservatives took office. The worst effects of this are clearly felt in the North and in the other development areas. This developing situation is due largely to the Government's failure to reflate the economy and to provide greater stimulus to industrial investment, which, is woefully lacking.
It is not surprising that there is a great deal of pessimism in the Northern Region, not only about the present but also about the future. This pessimism is felt not only by Labour politicians, but also by many Conservative representatives, especially those in local government. The pessimism is shared by many leading newspaper commentators and industrialists in the region.
I draw attention to the ever-increasing and alarming number of jobs being lost in the region. There is almost daily evidence of another closure or further redundancies as a result of reorganisation. I quote from the Sunday Sun of 25th April:
"Unions count roll of despair."
The paper speaks of one of the
"blackest weeks ever in North's employment history"
with 4,000 more workers facing the prospect of joining dole queues. The same newspaper, in its leader column, says this:
"There can be no doubt that neither the Government's incomes policy nor its regional policy is working. Unless something is done very quickly we shall be in the heart of an economic blizzard by the end of the year."
The last sentence heavily understates the position. More than 72,000 people in the Northern Region are already in the icy grip of unemployment, and there is the prospect that many more people will join them.
The assertion that regional policy is not working will not be opposed by many in the Northern Region. To a large extent the Government's unwilling-
1104
ness to continue operating the policies which were in train when they came to power is a major contributory factor to the decline in industrial activity in the North. Moreover, sporadic decisions made in advance of the completion of the review of regional policy cause not only confusion but also a diminution of confidence in the future of incentives related to industrial promotion, especially following the abolition of investment grants and the abandonment of regional employment premium by 1974.
I can call in aid no less a person than Mr. Campbell Adamson, Director-General of the C.B.I., a report of whose speech appears in the Newcastle Journal of 17th March of this year under the banner headline—
"The North-East: the point about a policy is to stick to it."
Campbell Adamson rather succinctly made these points:
"Without certainty, business will have very little confidence in measures of regional policy. Without confidence, business will tend to disregard regional incentives when formulating long-range plans The frequent changes in the designation of development areas are bewildering. Areas are included, then excluded, then added again. The basic trouble now is that uncertainty has caused industrialists largely to discount the value of regional incentives. It has proved highly dangerous to rely upon the continuance of any particular incentive"
Those words of wisdom are fully borne out by the attitude of prospective industrial developers and especially measured in terms of the number of industrial development certificates and approvals since the end of June, 1970. This is the Government's only real yardstick to measure the extent of development and the only real weapon at the Government's disposal to control industrial development and to ensure that the development areas get their fair share of it.
I refer briefly to the comparison with the first half of 1970, when 13,900 new jobs were expected to arise as a result of I.D.C.s. Had this level of progress been maintained throughout the whole of 1970, we should have ended with a record year in the generation of new employment opportunities in the Northern Region. However, such was the uncertainty that only a meagre 4,400 new jobs were estimated to accrue in the second half of 1970.

1105
The trend continues in 1971. The tempo of new job provision has not quickened appreciably. In the first quarter ending in March of this year only 2,720 new jobs are expected to arise. This is the lowest figure since 1964 when the Labour Government first began to give additional impetus to the problems of the development areas. This number represents a 24·8 per cent. decline over the same period of last year and is a staggering 50 per cent. less than the figure achieved in the same period in 1969.
Under the present policies, in totality 38,000 jobs are expected to accrue from I.D.C.s, compared with 42,700 jobs from I.D.C.s to the end of April, 1970. This represents an 11 per cent. reduction in gross and a 12·9 per cent. reduction in male jobs. Contrasted with the rapid erosion of existing jobs the present situation does not augur well for the future of the Northern Region.
What is clearly needed now in the Northern Region is a strengthening of the diversified industrial base bequeathed to the Tories by the Labour Government in June of last year. A great deal of progress has been made and the region ought not to be placed in jeopardy now as a result of the uncertainty which has been created.
I concede that the bestowal of special development area status to Tyneside and Wearside must be helpful, but S.D.A. incentives in themselves do not and cannot assist indigenous industry. It has been estimated that 83 per cent. of new jobs accruing in the region are now due to the extension of existing industry, the remaining 17 per cent. arising from incoming firms.
Even in an expanding economy the development areas must continue to rely heavily on financial incentives. Inevitably, unless the same economic plateau already attained by the more prosperous regions is reached by the Northern Region, it must benefit last from any such reflation. In these circumstances, and as the struggle to capture a decreasing amount of mobile industry intensifies between the development areas—now the intermediate areas—increasing emphasis must be placed upon the expansion of existing industries.
It is, therefore, in this context that I ask the Minister and the Government
1106
urgently to re-examine the regional policy. We have been told that no further changes are to be made following the sporadic announcements that we have had in the House, but I would remind the Under-Secretary of State that the Government ought not to continue to be inflexible in their approach to this matter. In a rapidly changing and possibly worsening situation there is an outstanding requirement to be continually looking at regional policy for refinements and improvements.
I would also remind the hon. Gentleman that in the last full year of the Labour Government the direct Government investment in the Northern Region was well in excess of £300 million. I urge him to consult his colleagues to ensure that the full amount of money continues to be invested on an annual basis in the Northern Region as occurred under the Labour Government, and, with a determined effort, to treat it on the most urgent basis; and to devise new methods of assistance to established industry on which we clearly have to rely so much in the future.
8.30 p.m.
Dame Irene Ward: Mr. Deputy Speaker, am I right in assuming that this Adjournment debate can continue until 10 o'clock?
Mr. Deputy Speaker (Sir Robert Grant-Ferris): Yes, I think the hon. Lady is quite right.
Dame Irene Ward: That is all right. That gives me an opportunity to say something. I should not like to intervene in a debate, important though it is, which has been initiated by the Opposition, if we were restricted to half an hour. I congratulate the hon. Member for Houghton-le-Spring (Mr. Urwin) on having chosen this subject because we in the North feel that the situation requires very serious examination.
Before I raise one or two matters in which I am particularly interested and on which I have been fighting a battle for some time—I must say unsuccessfully—I wish to place on record the fact that I gladly support what was said by the hon. Member about money going into the area during the time of the Labour Administration, although, of course, a great deal of the work in the establishment of a regional policy originated with the

1107
Conservative Party. It is as well to have that on the record.
If essential money continues to be put into our region, we must have value for that money. What is so disturbing—and this is no fault of either Administration—is that the money that has been put into the region does not seem to have developed the region in providing full-time employment as we would all have wished. It should also be stated that unless we can get profitability from what is being done in the region, before long we shall not be able to have money which the Government can tax for the provision of development in our regions.
I missed the opening remarks of the hon. Member for Houghton-le-Spring, but it should be pointed out that a great deal of unemployment has been created in our region through numerous dismissals. I am not arguing for or against the one-man bus service because I do not know how efficient that service is, but we must take into account the fact that the introduction of the one-man bus service—with one man driving the bus, taking the fares and carrying the whole responsibility for running the bus—means that a large number of conductor and conductresses have been put out of work.
That is an example of the problems which must be faced. There is a great desire to have the highest possible standard of living, not only in my part of the country but generally, but the result of what has been done by the transport undertaking which is running our services has certainly not been to run the buses as well as they were run in the old days before the Transport Commission, or whatever it was on Tyneside, was taken over. In fact, the service is bad, and, as for making improvements in productivity, what has been done has made productivity less likely to improve, for the regularity of the services has been much impeded. Nevertheless, the fact remains, as I say, that the introduction of one-man buses has resulted in many men and women being put out of employment.
There are other decisions taken in the North-East which have had an impact on employment. A good many porters have been deliberately sacked by British Rail. I am very close to the men and women who work on the railways and I know what happens. I have lived there
1108
all my life, and I have been a Member of Parliament for 34 years, so I know a great deal about our railways and the men who work on them, many of them absolutely first-class individuals.
The Railways Board conducts its affairs on the basis that they must be run at a profit. We cannot go on running everything in this country at a loss because in that way our economy would collapse. It is a fact, nevertheless, that, in pursuit of that end, British Rail has sacked a good many men, with resulting inconvenience to passengers. Porters are now doing duties which they never had to do before, and hundreds of men in the Northern Region have been sacked
Mr. Urwin: I am most interested in the argument which the hon. Lady is developing. She has claimed credit for the Conservative Government for instituting a regional policy. That will be strongly refuted by us on this side, and, what is more, no Conservative Government did anything like as much for the Northern Region as Labour did both before 1964 and since. However, will the hon. Lady, having taken that credit for the Conservative Government, also lay the blame for the massive redundancies on the railways at the door of the Conservative Government who appointed Lord Beeching to do exactly that and denude the Northern Region of thousands and thousands of jobs?
Dame Irene Ward: I am taking up what the hon. Gentleman said, and I hope that he will be fair. I have been in the House for very much longer than he has, and I know—[Interruption.] Perhaps the hon. Member does not like it, but, fortunately, people in the North do. It is untrue to say that the regional policy was not developed by the Conservative Party. The instigator of it was Mr. Stanley Baldwin. In the time of high unemployment arising from the economic crisis after the Labour Government of 1929–31, Mr. Baldwin instituted his inquiries and, before the outbreak of the last war, our regional policy was started by the Conservative Government of the day.
I remind the hon. Gentleman of what is said on the plaque at the Team Valley Trading Estate and the Treforest Trading Estate in South Wales, the first two trading estates, and both started under

1109
Mr. Baldwin's aegis. Also, at the West Chirton Trading Estate in my constituency, there is a plaque which shows that International Formica, a very important industry in our part of the country, was begun before the outbreak of the Second World War. Therefore, it is completely untrue to say that it was not the Conservative Party's idea, and I resent it.
The present Lord Chancellor, my noble Friend, Lord Hailsham, went north at the time of the then Conservative Government and set in motion a much improved system of regional development. We are both realistic and intelligent people in the North of England, and we follow what happens. It is ludicrous for the Opposition to refute what the Conservative Party did, and it is not right to say what has been said.
Having got that off my chest, I return to British Rail. The sacking of porters was a decision not of Lord Beeching but of the present British Railways Board. I take great exception to this. We have a very good south-north and north-south service, but the only people in whom the Board is interested are the business community. It has no thought for the elderly, those who have had operations, or women travelling with children. One cannot get a porter for love or money unless one is very lucky. Some very nice police officers at Newcastle Central found me a porter the other day, but there are not enough porters to do the job. Talking to them, one finds that porters have been sacked or taken off to do jobs that they never had to do in the past. This creates more and more unemployment.
There is a similar situation in the service industry. Hotels have reduced their staff to an absolute minimum, partly because of S.E.T. There is very good and dedicated service in many hotels, but the employees are run off their feet. It is very difficult for hotels which hope to attract the tourist trade, because they have had to sack so many workers as they cannot make ends meet. Exactly the same thing is found in shops, where the staff have to work—and by Jove they do!—twice as hard as they ever did. The shops cannot afford to keep the same number of staff as they had in the past. Therefore, when we are discussing
1110
these matters we must remember that other factors arising out of Labour Party policy have had their effect on employment.
I have kept on saying, and I repeat, that my idea is to have a fair day's work for a fair day's pay, and then if there is a profit in the big industries that we have on the North-East Coast, it is equally fair that those who are part of the labour force should share in that profitability. But that is not the Opposition's approach. They never say anything like that. I do not know whether the hon. Gentleman has any news about what has happened on the Tyne, where there was a strike of fitters.
Mr. Urwin: They go back to work tomorrow.
Dame Irene Ward: They may be going back tomorrow. I certainly hope so. Swan Hunter is a very good firm which have been losing on the ships it has been building. Certainly its balance sheet did not give much cause for comfort. In my division they closed down the ship-repairing yard, with consequent loss of employment for men from both sides of the river. I am glad to say that the hon. Member for South Shields (Mr. Blenkinsop) and I fought very hard, and managed to get the old ferry restarted, and a new ferry is being built.
The workers' representatives who have been arguing with the directors of Swan Hunter's said that they would not go back even if it meant 11,000 men being out of work. It is about time we had a Measure such as the Industrial Relations Bill. I am in very good contact with people—not necessarily voters of mine, but people who talk to me. I know what they think about 600 men saying they would prefer to close the yard, thus throwing 11,000 men out of work than compromise.
I only wish that hon. Members opposite, as well as some of my own hon. Friends, would argue the realities. For instance, I believe that it is regrettable that when firms make good profits they do not at once give bonuses to the workers who have helped to make those profits. I could say a great deal about industrial relations and what I think is good management for good workers. But nothing like that is ever said by the Opposition.

1111
All hon. Members opposite do is take credit for things they have never done, and deprive us of the credit for anything that the Conservative Party does.
Again, voluntary absenteeism loses money, not only for the firm concerned but for the country; that might not interest hon. Members opposite, but it should interest those who work. To ensure a good return for wages, so keeping us alive in a competitive world, would be very much better, not only for the country's economy but for the men's standard of living, but nothing like that ever emerges from the Opposition.
Hon. Members opposite speak of all the jobs they claim to have created, but I can only say that unemployment on Tyneside and in Sunderland is higher than it ever was in the previous Conservative era. We had begun to make some progress, and the trading estates had been built up magnificently. I was only too delighted when the Labour Government went on helping in the regions, but the fact is that, at the end of their time, with all the money that they spent, unemployment had doubled. I do not understand how that can be very well received on either side.
It is very much better for the regions for us to talk realistically, and to try to explain in no uncertain terms that there would be a great deal of support for increased wages if we were to get a fair day's work for those wages, and a reduction in voluntary absenteeism.
That is all I have to say on that subject. I have given a lecture, but I have been longing to get this off my chest because I get tired of hearing about what the Labour Government did when, in fact, when they left office, the situation was worse than when they took office, despite all the money spent on trying to develop our region.
I want to ask about the Local Employment Act. I do a lot of unpleasant writing behind the scenes. I wrote many unpleasant letters to Labour Ministers and I often write unpleasant letters to Conservative Ministers. I must say that Ministers of both Governments have been very good in the way in which they have replied—although action has not necessarily followed. But I have been in this House for a long time, and I have come
1112
to realise that it takes about ten years to win a battle. It gets won in the end, however.
The Government are now using the Local Employment Act for the purpose of tourism. But the Act is couched in perfectly ridiculous terms for such application. This has nothing to do with the large grant which was given towards the building of new hotels and which came to an end on 31st March. The Act says that a grant can be given for service industries and the building up of tourism, provided the project carries an undertaking that a certain number of jobs will be found. That is a ridiculous provision in relation to tourism. The Act was not designed to help the tourist industry. The tourist industry is one of our best financial earners for the country. Indeed, it has saved us from going on the rocks.
We have beautiful scenery in our North-East countryside. It is absurd not to have proper hotel accommodation. I do not mean necessarily those ghastly cement blocks which I loathe. I would not stay on the ninth floor of some of them for all the tea in China. What we want in some of the lovely parts of Northumberland and Durham is a little more accommodation for tourists. We have so much to offer. No part of this country has more to offer in scenery and history.
But it is very difficult for tourists who want to visit our part of the country to find accommodation. Yet, the more we can offer, the better it is for the country's economy, for tourism helps enormously to stabilise the economy and to protect the balance of payments. There are delightful little inns and pubs all over Northumberland and Durham. What many of them want is just a couple of extra bedrooms. I have stayed in dozens of these places in my lifetime. The people running them do not want to have to engage additional staff, for they are perfectly prepared to do the work themselves and to see that tourists are properly looked after. They are very pleasant to tourists. Northumbrians and the people of Durham and Cumberland are delightful and co-operative. All they want is a few extra bedrooms to put up people motoring through or tourists who apply through advertisements urging them to come and see the beauties of the area. It is ridiculous that the small inns and hotels should not be assisted by the Local Employment Act.

1113
I resent the Department's attitude, because it is trying to interfere with the commercial judgment of those who apply for grants in order to make additional accommodation available. The Department knows nothing about the little inns of Northumberland and Durham, or the delightful pubs of the kind which can be run by a man and his wife. If a man and his wife who are running a pub want to add a couple of new bedrooms to it, there may not be the people in the local village for them to employ. The Government constantly asks for greater productivity and yet will not provide the tools for it. This approach is so silly that it nearly drives me mad.
The Under-Secretary is having a private conversation with the hon. Member for Houghton-le-Spring. I should like him to listen to what I am saying and I shall wait until he does so.—[HON. MEMBERS: "Oh."] I am addressing my remarks to my own Minister and it would be a jolly good thing for the Opposition to listen to what I have to say. [HON. MEMBERS: "Oh."] I shall sit down when I am ready. If I want, I can go on until half-past nine.
Mr. David Watkins: On a point of order. Is it in order for an hon. Member to attempt to intimidate other hon. Members by threatening to filibuster in order to prevent them from speaking in the debate?
Mr. Deputy Speaker (Sir Robert Grant. Ferris): The—
Dame Irene Ward: I am not filibustering.
Mr. Deputy Speaker: Order. I am quite capable of dealing with the point of order myself.
The hon. Lady is entitled to be heard by the Under-Secretary and hon. Members should not stop the Under-Secretary from hearing what has to be said. I do not consider the hon. Lady to be attempting to filibuster. The hon. Lady is entitled to put the point of view of her side of the House. I am sure that she sees the clock and knows at what time the debate has to end, and I know that she would not wish to take more time than she would like to give to any hon. Member opposite.
Dame Irene Ward: I am coming to the end of this argument.
I had a letter from my right hon. Friend the Secretary of State for Trade and Industry to say that the Department was considering this point. Within days I had a letter from the Under-Secretary to say that it had been decided that no alteration would be made. That is not the kind of thing I expect from a responsible Department.
We have a tourist board in the North-East which is doing its best to attract tourists, and it is getting little or no help from the Government. Although the official concerned has no idea about it, I know that a letter went from Welbar House—I have not seen it, but I have a good grapevine—making exactly this point. Yet no attention has been paid to it. This is intolerable. I did not know how I could raise the matter, and I am grateful to the hon. Member for Houghton-le-Spring for giving me the opportunity.
In the North-East we must have new industry, more employment, more expansion. There is a feeling that most industrial development comes from firms already in the area. It gives me great pleasure to hear from people who have taken jobs on the North-East Coast, and from their wives, too. The North-East Development Council has said that people who want to expand in the North-East do not have the same advantage as new industry entering the area. Is this matter being considered? I am not at all satisfied with the two Ministries, the one dealing with Trade and Industry and the other with the Environment. They each have different responsibilities and I would rather there was one Ministry so that we could get at it. I do not like the present position. I have written to the Prime Minister and I believe that I have a Question down tomorrow.
I want to make it perfectly plain to my Government that I am not at all satisfied that everything that could be done is being done. I hope that I shall be given a sensible answer to my question about the Local Employment Acts and about the point of view put forward from the North-East Development Council. I recently attended a meeting of the council with a large number of my Labour colleagues. I do not know whether this

1115
is or is not a possibility—the alteration of the whole scheme. Now that we have a Conservative Government reasonably concerned with these problems, they must carry on the great tradition established by Mr. Baldwin. Are they examining this alteration in the system? I do not know whether it is right or wrong, I am not a technocrat, I only try to use what brains God has given me and what experience I have gained through having had the honour of representing my area for so long in this House.
I hope that I will get a sensible answer, otherwise I shall continue to harry the Government until I get someone in the Department interested, someone who will examine the proposal without giving ridiculous answers. If anyone cares to come up on a tour with me and look at some of the things that need doing, he is welcome. We spend enough money on keeping a tourist board there, we ought to be able to do something to help the inns which need more beds. I am grateful to the hon. Gentleman for initiating the debate and glad that such a lot of time has been spent on the subject. Something must happen, and soon.
9.4 p.m.
Mr. Ernest Armstrong: I promise the Minister that I will certainly not make such a long speech as his hon. Friend the Member for Tynemouth (Dame Irene Ward). I congratulate my hon. Friend the Member for Houghton-le-Spring (Mr. Urwin) on initiating the debate. I want to put one or two considerations to the Minister, which are not cheap political points but deal with very serious human problems in the Northern Region. This is a continuing and difficult problem to which there are no slick answers. This problem has existed throughout my lifetime. I want to present the situation and say what I think ought to be done in future.
In the Northern Region, among industrialists, representatives of local authorities, whatever their political colour, trade unionists and industrialists who have come to the region in the past decade to whom most of us have had an opportunity of talking, there is a growing lack of confidence and considerable apprehension about the future.
1116
At the outset, I want to deal with a couple of myths which have been repeated tonight and which always come from the Treasury Bench. The first is that my right hon. and hon. Friends did not get value for money when they injected massive resources into the region. That is said over and over again. No one can deny that, during the time of the Labour Government, there was a massive injection of resources into the Northern Region. But we are told that the changes in regional policy have come about because we were not getting value for money.
I dare say that all hon. Members, including the hon. Lady, have had dealings with the old Board of Trade over the past 10 years. When an industrialist made an inquiry in our region, the local authority became aware of the inquiry. Unfortunately, the beginning of the new project was held up because the Board of Trade was awaiting a judgment from B.O.T.A.C. on the firm's viability. Sometimes, I felt that it was being over-careful in making sure that the firm did not receive public money and, after a short time, move out of the region because the project had failed. My experience in West Durham is that the Department has been completely scrupulous and very cautious before paying public money to a new firm coming to the region. But I have had some painful experiences of the natural irritability and impatience of people in the locality because it took the Government so long to ensure that the money that they were spending was well spent.
No firm which has been encouraged to come north has come there with the idea of continuing for long without making a profit. One of our complaints about the new structure is that not enough time is given to firms to establish themselves in order to take advantage of the changed incentives which are now offered.
The other myth is that the resources that we poured in did not have the effect in the region that they should have had. No one can deny that in the past five years we have so transformed our communications that we now have one of the best road systems in the whole country. That has been made possible by the injection of Government money and resources. It was money very well spent.

1117
No region in the country had suffered more from the rapid rundown of basic industries. Durham, especially, has suffered greatly from colliery closures. To achieve a standstill, there had to be a massive injection of Government resources and the creation of new jobs. In the past five years, 86,000 new jobs have been created. The difficulty has been that, due to the rapid closure of pits, that has not meant a substantial increase in job opportunities. What has happened is that there has been a radical transformation in the basic structure of industry in the region.
When my predecessor came to this House in 1955 there were 26 coal mines. Today there is only one. The number of miners employed in West Durham aver the past seven years has been reduced from 15,000 to 2,000. Looking at the overall structure of the Northern Region, it will be found that the majority of men—indeed two-thirds—are employed in the new developing modern industries. This represents a great transformation.
The trouble with Government policy today is that it is based on saving money. I do not object to the slogan which is so often repeated about value for money, but I should like a commitment from the Government that they are prepared to inject into the region the same percentages that we were injecting during our six years in Government. If they would give that commitment, they would have all the assistance they required from both sides of the House, from industry, and from the trade unions to see that we were getting value for money. But the Government's objective—announced during the election campaign—was to cut public expenditure, and one sector where public expenditure was to be cut was in aid to the development regions.
We are now suffering because of the Government's obsession with the market forces—that Government intervention is always the dead hand of intervention and that we should leave it to the market forces. This discussion is taking place tonight because the situation in the Northern Region was created by the operation of the market forces. Most of us have seen direction of labour from the north with people moving south to earn their living. We on this side of the House believe in a Government com-
1118
mitment and then in Government intervention.
I should like to mention the development of the new regional policy, on which I should like an answer from the Minister. It was widely reported that on 2nd November last year the Secretary of State for Trade and Industry gave an assurance to a North-East Development Council deputation that the Government would be announcing a second stage to their plans for the development areas. All that we have heard since has been the extension of special development area status. Certainly nobody on that deputation and nobody who knew what was, going on thought that this detailed review which was taking place would end by merely extending special development area status to other parts of the region.
In the Northern Echo and The Sunday Times we had one of the familiar leaks from the Department of Trade and Industry. I shall not read the whole report. On 26th January this year the headline in the Northern Echo was,
"Secret report shocks Heath's plan for the regions."
On 24th January The Sunday Times carried the headline:
"Whitehall slates Tory regional plan".
Both articles declared that the Government's major proposals had been condemned in a secret report by the civil servants who had been asked, when the Tories took office, to conduct a review.
My great complaint is that the Government decided their policy before they had a look at the Northern Region. They changed from investment grants to allowances before they had time to examine the situation, and that has had disastrous effects.
The North-East Development Council estimates that the change in incentives means a net loss to the Northern Region of £36 million annually. I should like the Minister's comment on that assessment by a specialist body which is not party political in any way.
Mr. Urwin: That is for the North-East only.
Mr. Armstrong: That is for the North-East only. I thank my hon. Friend for that interjection.

1119
Let us look at the present situation. In a reply last week from the Department, we were informed that in February there were 1,250 redundancies, and that in March there were 2,850. These men were not all railway porters, hotel servants, or people in those categories. They were in the industry which means a good deal to the North and, indeed, to the nation.
In reply to my hon. Friend the Member for Chester-le-Street (Mr. Pentland), on Thursday or Friday of last week, we were told that this summer 24,000 youngsters would leave school. We know what a tremendous human problem arises when a youngster leaves school. The mark of becoming an adult is to get a job, and if a young man cannot get a job when he leaves school he often drifts into a pattern of life which makes it difficult for him to start work when the opportunity to do so presents itself.
The other day I received some figures from the Department of Employment relating to West Durham. Unemployment among males in the Bishop Auckland area is running at 9 per cent. I was shocked to learn that in the whole of West Durham, and that includes the constituencies of Consett and Durham—as the Minister knows, it is not possible to get separate figures for one's own constituency because an employment area often extends over two or three constituencies—46·8 per cent. of the men unemployed are 55 years old or more. We all agree that these people present a tremendous human problem which it is difficult to solve. Most of them have worked for 30, 35, 40 or 45 years in the mining industry, and when a man has worked underground for so long, undergoing retraining, or doing any other regular work, presents a tremendous difficulty.
The only hope is for this area to be given special consideration. When we talk about extending special development area status to other areas, we are not contributing to solving the kind of problem that I have outlined. The decision to extend S.D.A. status to the whole of the Tyne and Wear area was a panic decision, and I challenge the Minister to justify it. Including Washington New Town, Peterlee New Town, the whole of Tyneside, down to Tynemouth, North
1120
Shields, and so on, in the S.D.A. area, and to leave out Aycliffe and other parts of the region cannot be justified on economic, human or social grounds. There is no argument for it. It was a panic decision.
We know that S.D.A. status was conferred on areas like mine because of the particular problems caused by the closure of pits. The extension of the idea has made nonsense of the original concept. Other incentives are now necessary, because the result of the Government's policy is that industry, which in any case is not footloose, and which is not inclined to move because of the changes in incentives, is merely presented with more places from which to choose. Because of what the Government have done, our area is not getting any extra industry.
I want a firm commitment to regional policy, with the guarantee that aid will not be diminished. I want some consistent policy, not the chopping and changing which we have had under the hon. Gentleman's Department, and an understanding of the real problems. Unemployment in the Northern Region has caused tremendous concern and I can find no one with any confidence that the present Government's policies will help at all.
9.21 p.m.
Mr. Edward Milne: My hon. Friend the Member for Durham, North-West (Mr. Armstrong) mentioned the 20,000 additional school leavers who will be seeking employment where prospects are bleak. This situation has faced school leavers in the Northern Region for a long period, but it is greater at the moment because, in the traditional areas of high employment, the Government's policy has resulted in one of the highest unemployment rates which the country has faced for some time. The prospect for school leavers is of leaving their own area to other parts of the country, where employment has become increasingly difficult. I am not arguing against people seeking employment elsewhere, but what we object to is that they are forced to do so by the prevailing economic forces.
This debate has shambled and wandered into many fields, one of which was the pre-war situation. I want to confine myself to post-war developments. The unemployment figures of the region, until the mid-fifties, were much the same as

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the national figures. It was only in the closing stages of the fifties that they accelerated. We were told that the policies then set in train would be useful, but the experience of the last six or eight years shows that even the existing policies are inadequate to deal with the mounting unemployment.
I should like to give two examples from my own area. In 1959 Northumberland County Council, then Labour-controlled, decided to create two new towns in south-east Northumberland. Those two new towns were denied any form of Government grant but with tremendous courage the county council went ahead and laid the foundations of Cramlington and Killingworth. This work was not carried out under the New Towns Act but on the initiative of the county council itself. It was not until 1962–62 that the now development areas of the North-East began to be created. The creation of development districts was given great impetus by the return of the Labour Government in October, 1964.
Let us examine the present situation and the means of securing new jobs. At present by far the greatest number of new jobs is created by the inflow of new firms. Bearing in mind the new firms which have developed in south-east Northumberland in the 1960s, I am certain that if the Government were now to make a close examination of the possibilities of expansion and were to set in train financial incentives to deal with the firms already established in the area, a considerable number of new jobs could be obtained within the existing firms. That is one way of dealing with the situation.
There has been a fairly comprehensive diversification of industry and a number of industries unknown to the area have moved in during the period we have been discussing. However, even greater diversification is needed; the pattern of industry in the modern world does not stand still and new industries are appearing. It is true that we have seen the introduction of aluminium smelters, the chemical industry and factors of that kind, but more diversification is still to be desired.
I hope that the hon. Gentleman in his reply will give some indication that in the forthcoming expansion of the motorcar industry in Britain, some attention
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will be paid to the question of siting a major car plant in the North-East, with its ancillary industries. This would give us a real stake in one of Britain's growth industries. It is to be remember that the aluminium smelter at Lynemouth will be moving into production very shortly and, in view of the increasing amount of aluminium being used in the production of motor cars, the question of siting a car plant in close proximity to the aluminium industry is a reasonable step to take for the future.
Mention has been made by some hon. Members of the contribution of tourism to the prosperity of various areas. I yield to nobody in my admiration for what has been done in developing the tourist potential of Northumberland and Durham. Northumberland has great potential, but at the moment it lacks a shop window in which to place that potential before the nation. I suggest that the Government should consider the possibility of siting a major conference hall in Northumberland, somewhere between Blyth and Whitley Bay. This would not only afford an opportunity in the area to cater for major conferences which are held in Britain every year, but would also provide a shop window to attract tourists and visitors to that area.
We should do our best to bring the beauties and facilities of Northumberland to the attention of tourists. There are many inaccessible tracts of land which could be opened up for the benefit of tourists and others seeking recreation. Indeed, the whole question of the ownership of land should be examined. For example, I have never felt sure that the resources of the Kilda Forest have been properly identified in terms of ownership and potential, and considering the high unemployment levels, not only in the industrial areas but in towns like Amble and Berwick, something should be done to make sure that these places enjoy the benefits of the areas in which they are situated.
We have talked a lot about the reorganisation of local government and development areas. I now want the Minister to consider the constructive suggestions that have been made and take action to reduce the number of unemployed in this part of the country. He can certainly consider immediately the siting of a major motor car plant in the

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North-East, where we have all the necessary transport facilities, with the harbours and ports of the North-East Coast. A good case could be made out for linking the industrial potential of South-East Scotland with that of North-East England to make a large industrial complex based on attracting modern industries.
We do not need more plans, surveys and schemes for the North-East. We have been littered with them for the past three or four decades. Indeed, surveys have been undertaken since the dawning of the industrial revolution. No Government need be told about the wants of the Northern Region and no Minister needs reminding that the workers of the region are the most adaptable to be found anywhere.
The people of this area have proved their adaptability in both world wars, apart from the way in which they have adapted to the decline of the coal mining industry and other major industries associated with it, like the ports and the railways. The workers have transferred to the new towns about which we have spoken. If ever there were an opportunity for providing full employment in this part of the country, that opportunity is now. The manpower is there to take up the demand and I trust that we will now see action.
9.33 p.m.
Mr. David Watkins: My hon. Friend the Member for Houghton-le-Spring (Mr. Urwin) has performed a public service in initiating this debate on the unemployment problems of the Northern Region. It is both his and our good fortune that the business of the House terminated rather earlier than might have been expected. This has resulted in this valuable debate taking place.
The high level of unemployment in the Northern Region is not new. For a number of years, irrespective of the political complexion of the Government in power, its unemployment rate has consistently been double that of the national average. Despite the greatest drive in regional policies ever to be inaugurated by a Government, the obstinate unemployment problems of this area pertained even when the Labour Government were in power. Even with that tremendous
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national drive unemployment level obstinately remained at double the national average.
It is not new for the House to debate the high level of unemployment in the Northern Region. What is new is that we now have a Government who have a specific policy of rising unemployment. Amongst the policies of the Government which have contributed to that end has been the policy of replacing investment grants by investment allowances. Investment allowances do not provide the incentive which is necessary to persuade companies to establish themselves in an area of special difficulty. This measure above all amongst the measures introduced by this Government is bound to worsen the situation.
My hon. Friends have said that those of us who represent constituencies in the Northern Region know only too well that all the drive which used to exist in the development of new industry and in the increasing of employment in the Northern Region has virtually disappeared. In large measure this dates back to the measures introduced last October by the Chancellor.
On 19th February the House debated the Northern Region on a Private Member's Motion which had been tabled by my hon. Friend the Member for White-haven (Dr. John A. Cunningham). I sat all through that debate without having the opportunity of catching Mr. Speaker's eye.
The debate was notable, first, for the filibustering engaged in by hon. Members opposite, who made a calculated attempt to prevent hon. Members on this side, who represent the overwhelming majority of the people in the Northern Region, from contributing to the debate. The debate was notable, second, for the announcement by the Secretary of State for the Environment of the extension of the special development areas. This was a panic measure announced on the eve of that debate. Having announced the measures, the Secretary of State disappeared from the Chamber.
The announcement boiled down to nothing less than a desperate attempt to retrieve something from the wreckage of the Government's policies as a result of the measures introduced the previous October and did not merit the lavish praise showered upon it by hon. Members opposite. The Tories had consistently

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claimed that the criterion was to be whether we were getting value for money. It was said in October that we would get better value for money as a result of the measures then introduced.
Although in October the Chancellor had announced measures to reduce expenditure in the development areas, the Secretary of State for the Environment in the debate on 19th October spoke about measures to extend the special development areas, but that did nothing more in terms of Government expenditure than to restore the position to the pre-October position.
The extension of the special development areas in the North-East has done nothing in terms of firms which had gone there and provided employment and in terms of jobs created. It has disadvantaged certain areas which had formerly enjoyed special development area status and which because of their special problems of communication and geography need to be advantaged as compared with Tyneside. All the advantage which was formerly enjoyed by such areas was wiped out by the extension of special development area status.
Having said that, I now want to refer to the situation in my own constituency which is in the area of North-West County Durham. I was interested, incidentally, to hear the statement made at an earlier period of the debate that it was the Conservative Party who originated regional policy. I shall not delve into the days of Stanley Baldwin, or even Neville Chamberlain who said he thought that the problems of mass unemployment could never be solved. But, with specific reference to my own constituency, I would refer to the Cmnd Paper which is popularly known as the Hailsham Plan, produced by the right hon. Gentleman who is now the Chancellor of the Exchequer, which has been cited again and again in this House as having been the starting point for modern regional policy—
The Under-Secretary of State for Trade and Industry (Mr. Anthony Grant)The Under-Secretary of State for Trade and Industry (Mr. Anthony Grant) indicated dissent.
Mr. Watkins: The hon. Gentleman may shake his head, but we have listened to this so many times.
Mr. Grant: The hon. Gentleman means the Lord Chancellor, not the Chancellor of the Exchequer.
Mr. Watkins: I beg pardon. Of course, I meant the Lord Chancellor. It is rather confusing when one looks at the grey mass on the opposite side of the House and in the other place. I accept the correction. I meant the right hon. and learned Gentleman who is now the Lord Chancellor, who produced a plan which has been repeatedly cited in this House as having been the starting place for modern regional policies. That plan wrote off my constituency completely. It wrote off the whole of North-West and West Durham. There are specific proposals in it that these would become nothing more than dormitory areas and that the people employed in them would have to travel down to Tyneside to find employment. I hope we can once and for all get rid of the idea that that was the start of regional policy.
In the Consett, Stanley and Lanchester travel-to-work area which covers my constituency and part of the constituency of my hon. Friend the Member for Durham, North-West, on 8th June, 1970, which is the date nearest to that at which the present Government took office, and for which the figures are available, there was an unemployment rate of 5 per cent. It is now substantially over 6 per cent. and it is increasing month by month. There has been an increase of substantially more than 20 per cent. in the period since the present Government took office.
In the General Election which put the party opposite into power, the Tory Party made a great issue of unemployment in the North-East of England. I well remember that the Conservative candidate in my constituency, in his election address, referred to the record unemployment which existed in the constituency, and he achieved a great deal of publicity being photographed speaking to those who were unemployed at the exchanges and clearly implying that the election of a Tory Government would provide more employment in the area.
I invite the Under-Secretary to explain to the House what has happened, and furthermore I invite him to come to my constituency—I will accompany him if he wishes—and go to those same employment exchanges and explain why there

1127
are hundreds more people seeking unemployment benefit than there were at the time when his party made its specious promises to reduce unemployment.
If I may digress briefly, perhaps the hon. Gentleman will at the same time explain the extraordinary statement recently made at the annual general meeting of Consett Conservative Association, as reported on the front page of that powerful organ of public opinion, the Consett Guardian-Chronicle dated 8th April, 1971, as follows:
"Consett workers hear of new jobs for old in Germany."
Perhaps he will also say why it was that a gentleman who was invited to address that organisation and received great publicity for so doing said that when we joined the European Economic Community the people who were unemployed in this country would be able to go to Germany and look for work. Is this the sum total of the policy of the Government?
All the drive has now gone out of regional policy as it affects the North-East. There is in the region a situation of stagnation and growing hopelessness. I hope, though without great expectation, that the Under-Secretary of State will have something constructive to say.
9.45 p.m.
Mr. Ted Fletcher: I echo the sentiments expressed by my hon. Friend the Member for Consett (Mr. David Watkins). There is in the North-East a feeling of stagnation and hopelessness. I have lived in the region for 25 years and I say without hesitation that there is a general feeling of depression and hopelessness there such as has not been experienced since the end of the war. Hardly a week passes without one reading in the Press of redundancies at this firm or that, and we know that there is the possibility of more redundancies, particularly in the steel industry on Tees-side.
We have to press the Government to find out what their regional policies are, if they have any at all. The Labour Government pumped financial assistance into the region against a background in which thousands of jobs were being lost in the coal industry, the railways were contracting, and we faced a time of possibly mounting unemployment. But we
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did at least hope during that period that, by 1973, we should have climbed over the hump and be able to say that we had unemployment at a level equal with that in the rest of the country. Now, however, because the present Government are intent on saving £100 million at the expense of the region, it seems that unemployment is bound to rise.
It is not too early to warn the Government that we want a winter programme in the North-East. As things are going, it seems likely that there will be one million unemployed before the end of the year, and 100,000 of those in the North-East. We want the Minister to tell us specifically what measures he has in mind to bring employment to the North-East.
Now that the special inducements provided by the Labour Government have been withdrawn, employers in the Midlands and the South are understandably reluctant to transfer their industries to the North. There is no special inducement for them to do so, and they know that they can now expand in their present territory because of the Government's I.D.C. policy. In these circumstances, the Government have a duty to tell us what steps they intend to take to reduce the high level of unemployment in the North-East.
Let me suggest some specific ways in which that could be done. It was announced in the Budget that the Government intend to introduce a value-added tax. I shall not open a discussion on whether I find that acceptable or not—in fact, I disagree—but it is estimated that, if such a tax is instituted, another 10,000 civil servants will have to be employed at a central office to administer it. I put the question directly to the Minister, and I hope that he will answer: could this office be sited in the North-East?
I could put in a special plea for my own constituency of Darlington, which is geographically centred on the Al, is near an airport, and has all the facilities for such a centre, but I do not intend to do so. If that centre could be sited anywhere in the North-East, it would bring additional jobs to our area. Although I disagree with the imposition of the tax and shall do my best to fight it, I hope that the Minister will make representations to his right hon. and hon. Friends to see whether the office can be sited in the North-East.

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Second, what about a programme for public works in the North-East? For example, there is a great need for a road between the A1 and Peterlee, which is an expanding town. Have we any programme of winter relief to build the road? What is the projection of Government expenditure in the North-East during the winter, when we shall face even more formidable problems of unemployment than we do now?
Third, what is the Minister doing to induce more Government Departments to release their office allocation in London and to site their offices in the North-East? The cost of office space in the North-East is one-sixth of that in the London area. Anyone concerned with providing jobs in the North-East should be concerned with transferring highly-priced Government offices from their present location in London to development areas such as the North-East.
Those are three practical proposals that the Government could implement in an endeavour to bring employment into the North-East. We are facing a particularly serious problem—not only the continuing problem of the close-down of mines and the contraction of employment in the railway industry but also the possibility of wide-scale redundancies in the steel industry. This will be a problem, particularly on Teesside.
We need answers to our problem, which is to provide employment for our people in the North-East. For too long we have had to rely on the general prosperity of the country. In spite of this, over the past decade unemployment in the North-East has been twice the national average. The feeling of depression because we are being left out of consideration is not confined to working people. Industrialists to whom I have spoken are also not very optimistic about the future.
We have condemned the Government's parsimonious attitude to the grants, to the withdrawal of the assistance given to the area by the Labour Government. This withdrawal has made a big impact on the number of applications from employers to site their factories in the North-East. These are real, human problems for our people, and particularly, as my hon. Friend the Member for Durham, North-West (Mr. Armstrong) said, for school-leavers, many of whom are condemned
1130
in their teenage years to face not months but years of unemployment. These problems will be accentuated if the country enters the Common Market, because the region that is remote from Europe stands little chance of attracting new industries.
These are formidable problems. I have cited certain avenues that the Minister could explore to bring new jobs into the region immediately. I hope that the Minister will give some indication that he intends to get on with the job of bringing employment to an area which has suffered for so long from the fact that it is a region where older industries have been established which are passing from existence. The immediate task is to bring in new industry. We want to know what the Government are doing to bring new jobs to our region.
9.55 p.m.
The Under-Secretary of State for Trade and Industry (Mr. Anthony Grant): The hon. Member for Darlington (Mr. Ted Fletcher) thought that the voice of the North was not heard, but this cannot be the fault of the procedure of the House because I can recall four debates on the subject, and certainly two of them have been unexpectedly early Adjournment debates. There has, therefore, been a very full opportunity. Nevertheless, I welcome this present debate, and I am very glad to be able to reply to it.
The hon. Member raised the specific point of the V.A.T. centre, if it were to come about, or other Government offices being sited in the North-East, and we are actively pursuing the dispersal of offices. I know that my right hon. Friends will have carefully noted what the hon. Gentleman had to say about the attractions of the North-East as a site for offices. Moreover, in the White Paper on machinery of Government we announced a searching review into this matter.
But if the hon. Gentleman wishes to attract private industry to the North he must not say that there is no incentive to go there. Such a statement must be corrected. There are very substantial incentives to go there, and incentives on which we spend much time and money advertising in order to encourage industry to go there. To say that there is no incentive to go to that area is quite wrong. I know that later in the month I shall be meeting a deputation which the hon.

1131
Gentleman is bringing from his constituency, when no doubt we can continue that debate.
As a result of our completing Government business rather earlier this evening, a number of hon. Members have had an opportunity to speak, and I am very glad of it. I have listened carefully to what they have had to say. However, as I was expecting to reply only to the hon. Member for Houghton-le-Spring (Mr. Urwin) I know that they will not expect detailed answers to any specific points. Without necessarily agreeing with what they said, we shall study most carefully their comments.
I was delighted that my hon. Friend the Member for Tynemouth (Dame Irene Ward) should, with her vast experience, have brought such a sense of historical perspective to the debate. We all know what a tremendous fighter she has been for the Northern Region during her time in the House. She referred to a matter which I do not believe constitutes a disagreement between herself and my Department. There has, perhaps, been a misunderstanding as to what the Local Employment Acts are about. They are designed, and have been continued under successive Governments, for the specific purpose of providing employment. They are not designed specifically to aid tourism.
That is where I think the confusion has arisen. I have written to my hon. Friend as clearly as I can in response to her latest complaint and, if she is dissatisfied with that reply, or feels that the position is confused, I shall be only too delighted to see her, and perhaps some of my colleagues would wish to see her as well.
It is right not only that we should debate the Northern Region but also that we should try to conduct the debate as objectively as we can. I am sure that that did not happen tonight, for hon. Members opposite made their points fiercely but not necessarily fairly. But at least I do not think that they imputed any lack of sincerity in those who may not be in political agreement with them. No party has a monopoly of concern about the need of the people in every region to have open to them a range of job opportunities.
It being Ten o'clock, the Motion for the Adjournment of the House lapsed, without Question put.
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Speed.]
Mr. Grant: I was referring to a range of job opportunities, since the subject of the debate is employment and not simply unemployment. I want to dwell on this for a few minutes. I am sure hon. Members agree that it is all too easy when quoting job figures to slip into the habit of thinking only in numerical and not in qualitative terms. It is all too easy to forget what a changing employment structure, such as we have in the Northern Region, means in human terms. For the man who has been used to strenuous open-air work or to work calling for physical strength—and often considerable physical courage—the change to the routine of modern factory life may not always be easy. Nor do I think we can forget that our overall job statistics frequently disguise the extent to which not all new employment generated is suitable for men who have been in recent years those most affected by structural change.
I do not wish in any way to diminish the importance of providing more jobs for women in areas such as the Northern Region. After all, a lower activity rate represents a feature of unemployment, or, rather, under-employment. But my point can be illustrated by the fact that of the 18,700 jobs estimated to have been created in the Northern Region last year 6,000 were for women.
Nor in discussing employment can we overlook the need to create a proper spread of jobs. Without doubt there is an urgent need for new jobs in manufacturing industry, but it is also important in the Northern Region, as in other development areas, that there should be an adequate supply of jobs in the service sector. The service sector is the one which in modern economies holds out most prospects of growth. The last Government took the view that it was right to discriminate against the service sector. When selective employment tax was introduced the right hon. Member for Cardiff, South-East (Mr. Callaghan), then the Chancellor of the Exchequer,

1133
referred to making labour available from the service sector to the manufacturing sector.
In the Northern Region, where there were not enough jobs in the service industries or in manufacturing industries, such a policy was thought to be nonsensical. The present Government also believe that this and other measures introduced by their predecessors to discriminate against the service industries were nonsense, and we are doing something about it.
The hon. Member for Houghton-le-Spring and others uttered harsh words about the Government's regional policy. But they know as well as anyone that there is no recipe for instant success. I remind the hon. Gentleman that when the Labour Government came to power in October, 1964, unemployment in the Northern Region was 40,000; five years later, it was 62,000; and during the following months when the hon. Gentleman was Minister with special responsibility for the North it rose to 69,000 in April, 1970. In relation to the situation in Great Britain as a whole, the Northern Region has suffered an increase in unemployment which is less severe than national trends would lead one to expect.
Mr. Urwin: I am sure that the hon. Gentleman does not wish to be unfair, or even to seem to be unfair. I said that the job of the Labour Government in terms of the generation of new employment and the redistribution of industry was bedevilled largely by the heavy job losses in coal mining, which amounted to 50,000 between 1964 and 1970. In addition, there was the heavy decline in agriculture and in British Railways because of the economic policy in respect of the latter. Those were far greater problems than anything which has yet confronted the hon. Gentleman.
Mr. Grant: Of course I appreciate that, but unemployment is unemployment if one is on the dole, whether it arises from the decline in coal mining or ship building, or the steel industry, or any other industry which is changing over a period.
As Labour Members are not slow in drawing attention to the figures for unemployment under the present Government, I am entitled to quote the figures when they were in office.
Mr. Ted Fletcher: Will the hon. Gentleman quote the figures of unemployment for 1963, when the Tories were in power and which were an all-time record until recent months?
Mr. Grant: I am not going back that far, but I shall go back a long way.
I was saying that the Northern Region had suffered an increase in unemployment which was less severe than the national trends would lead one to expect and when compared with the rest of Great Britain, and I am concerned with the whole of Great Britain. I draw no comfort from statistical comparisons of this kind, but they demonstrate the falseness of the assertion that the Government are neglecting regions such as the North.
The hon. Member for Darlington referred to the steel industry. He knows that the British Steel Corporation announced plans which have been gestating for a considerable time. It was announced by the Corporation as early as January, 1969, that it aimed to reduce its labour force by 50,000 in the period up to 1975. It is not only the coal industry job losses which have an impact when an industry is rationalised.
The right hon. Member for Barnsley (Mr. Mason) took a much more sensible view than that taken by hon. Members recently when he was Minister. He shadows me in the House and I have a considerable respect for him. On the Second Reading of the Iron and Steel Bill he said:
"As a trade unionist myself, I hope that the unions will respond to the need for rationalisation."—[OFFICIAL REPORT, 8th May, 1969; Vol. 783, c. 683.]
That is a sensible point of view and that is precisely what is going on, and I commend the right hon. Gentleman's words on that occasion to hon. Members opposite. It is important to see this matter in perspective.
Certain figures relate to job losses amounting to more than 2,000 in the Tees-side area, but actual redundancies are likely to be fewer and spread over a period. There will be a natural wastage and the Corporation will redeploy wherever possible. Some of those affected will no doubt secure other employment without registering. It would be wrong to suggest that these losses will have an immediate and

1135
marked effect on unemployment on Tees-side. Naturally, I regret the need for some of the decisions of the B.S.C. as much as do hon. Members opposite, but they know as well as I do how important it is to secure a firm foundation for a modern and effective steel industry.
Of course the Government are concerned about redundancy, but some of the indignation which I heard this evening from hon. Members opposite almost gave the impression that redundancies did not occur when they were in power. I remind them that in the Northern Region between 1967 and 1969 some 46,900 redundancies were notified, figures which do not include notified redundancies in the shipbuilding and construction industries.
What is important is that policies should be implemented which are relevant to the needs of the Northern Region. I was asked to be specific about the Government's plans. First, it is evident that the pattern of area coverage which we inherited in taking office in June last year did not reflect the realities of the situation, realities which have been evident for some time had hon. Members opposite cared to look. In 1966 when male unemployment in the region was 2·4 per cent., the rate on Tyneside, Wear-side, Peterlee and Hartlepools was 2·7 per cent. In 1967 the gap widened. Unemployment in the region jumped to 4·6 per cent. but in the older industrial areas of the North-East, which contain almost half the working population, it rose to 5·3 per cent.
By June, 1970, the gap was even wider—5·8 per cent. in the region but 7 per cent. in the older industrial areas. This situation developed during the time when hon. Members opposite were in Government and the hon. Member for Houghton-le-Spring was Minister with special regional responsibilities in the D.E.A. and later a Minister for the North. Was he aware of what was happening? I find it hard to believe that he was not, when Tyneside and Wearside Members persistently in the last Parliament drew attention to the problems of that area. If the Government knew about it then, why did they not do something about it? Hon. Gentlemen opposite must admit that this deteriorating position of the older urban areas was unsatisfactory.
Mr. Urwin: The hon. Gentleman surely recognises that special development area status has recently been bestowed on Sunderland, Wearside and Newcastle, but that of itself does not make any contribution to the economic problems of that part of the region. It downgrades the rest, it spreads thin resources over a wider area. It is simply not "on" to suggest that it is an improvement to do that.
Mr. Grant: It is implicit in any regional policy that there must be discrepancies and differences—if one likes, unfairness—between one area and another. That is what regional policy is about. I am surprised if the hon. Gentleman's suggestion is to do away with regional incentives, which is the implication of what he says.
Mr. Urwin: No.
Mr. Grant: Then the hon. Gentleman cannot have it both ways. Faced with the situation, about which the previous Government did nothing, faced with this widening gap in the older areas and the unemployment situation, the steps which the Government took, which caused irritation to hon. Gentlemen opposite—because I was present at the last debate and it rather took the wind out of their sails—gave considerable satisfaction to those who have to deal with the problems in the North-East as opposed to merely debating party political points in the House. It is extraordinary that it was left to a Conservative Government to take action to try to reverse the deteriorating situation in these areas.
Mr. Eric G. Varley: Part of our case has been that there has been a rapid and marked deterioration since last June, and loss of confidence began when the Government announced that they would change incentives. If the hon. Gentleman will direct his attention to the answer given to me by the Secretary of State for Trade and Industry he will see that, based on any comparison for any quarter over the last 15 months, the position has deteriorated.
Mr. Grant: I will study that answer carefully. What I am not prepared to accept for one moment is that the change from investment grant to investment allowances has caused a lack of confidence among that section of industry we most want to encourage—namely, the profitable section. The Government have

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greatly strengthened the package of measures of preferential assistance to industry to give greater weight to the provision of employment and to stimulating enduring and profitable investment. That is the point I am making.
The new pattern of special development areas which we have created to deal with the problem and the worsening position of the older urban areas of the North will benefit from our decision to increase operational grants from 20 per cent. to 30 per cent., those grants being linked to the salary and wages bill of incoming projects to help them in the critical early years of operation.
The hon. Member for Houghton-le-Spring referred to the problems of the indigenous industry and said that the special development incentives in some way worked against industry which is already there. This is the purpose. The purpose is to attract and bring in new industry. That is why special incentives are necessary. New industry coming in has additional costs to bear which do not have to be borne by industry which is already there. It has also a free choice of where to go. That is the reason for the special incentives.
Dame Irene Ward: But my hon. Friend should not ignore the North-East Development Council, which is asking for an examination. Policies cannot remain static. They have to alter to meet changing situations. I hope that my hon. Friend will not just say that this is the position and not look at it again.
Mr. Grant: Certainly we shall not be inflexible. We shall look at the situation carefully and study the report of the Development Council. The last thing that I want is for regional policy to be rigid. This applies to the areas themselves, although there must be a period of stability. Hon Gentlemen opposite have criticised us for chopping and changing. But we have done it only once. Industry must have a period of stability and certainty. I can assure my hon. Friend that her point will be looked at carefully. Development area status is not holy writ, and areas will be kept under constant review.
As for investment grants and free depreciation and their merits or de-
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merits, hon. Gentlemen opposite and I will just have to differ. We on this side of the House are convinced that investment grants were wasteful and indiscriminate. They subsidised investment for its own sake and gave an especially heavy inducement to firms in development areas to substitute machinery for men. Whether we have grants or allowances, plant and machinery are only part of a firm's investment. I cannot believe that hon. Gentlemen opposite seriously question that the substantial improvements that we have introduced under the Local Employment Acts or the extension of the S.D.A.s themselves are right, or doubt whether the steps that we have taken will be of real help to regions such as the Northern Region. They are very substantial.
A former Member of this House and a one-time Labour Minister for whom I have considerable respect observed on a number of occasions that these indiscriminate grants could have the effect of actually reducing employment since they were given to capital-intensive firms which did not need them and whose location decisions were not influenced by them. It would be an absurd situation if the taxpayers' money which was poured into the regions under the last Government had the effect in many cases of reducing employment. However, it is clear from the figures that that has been the precise effect.
I return to my earlier point about the service industries and employment. The previous Administration thought it right to discriminate against service employment. We believe that it was a mistaken policy to try to damp down the growth of service employment, and we have taken steps which will benefit the growth of service industries in the Northern Region. We have widened the scope of free depreciation to include plant and machinery used for industrial purposes in the service sector, and we have halved and will abolish the selective employment tax which has borne so heavily on service employment, not least in hotels and tourism generally.
Hon. Gentlemen opposite have sought to show that these policies have not worked. They must know that incentives do not create jobs instantly. If we have as long a period in office as the last Administration and our record is as bad,

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then it will be thoroughly disgraceful and deplorable. But my forecast is that the effect of our new measures and incentives will achieve what was manifestly a failure under the previous Administration—namely, to provide the right sort of investment and employment in the regions and development areas.
We inherited a situation in which unemployment in the Northern Region had risen relentlessly since 1966. The hon. Member for Houghton-le-Spring referred to I.D.C. figures published last month for the first quarter of 1971. I do not read too much into figures for one region for one quarter. However, I point out that the January/March, 1971, figure was the same for the comparable period in 1970. I also point out that since July, 1970, the development areas have substantially increased their share of the total for Great Britain as a whole. In that period July, 1970, to March, 1971, the Northern Region had 7·1 per cent. of the Great Britain total, whereas in the period July, 1969, to March, 1970, it had only 6·9 per cent. of the total.
Mr. Urwin Mr. Urwin rose—
Mr. Grant: I think that I must get on. I need hardly say that I.D.C.s are an important and valuable weapon. They gladden the heart of the Treasury because they are inexpensive for the Government to operate for regional policies. I.D.C.s will be operated with a view to encouraging industry to go to the assisted areas where they will be freely available.
Mr. Urwin: Surely the hon. Gentleman agrees that it is nonsense to talk about the numbers of I.D.Cs allocated when the important factor is the numbers of jobs accruing from them. The hon. Gentleman's figures, given to me on Friday, show seven I.D.Cs for the Northern Region in March with a total of 510 jobs. The total for the whole of the quarter is 3,620 jobs for only 37 I.D.Cs. It is the number of jobs which we finally get from I.D.C.s which is important.
Mr. Grant: Numbers of jobs generally stem from the square footage involved. If the hon. Gentleman studies the matter closely, as we have—I have not time to engage in an arithmetical computation—he will find that in square footage,
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which is the usual test, the development areas' share of I.D.Cs has increased. In what I accept is a bad situation, they have done very well. There has been a lack of mobile transport, but the development areas' share of I.D.Cs has been extremely good.
We shall administer the I.D.C. policy firmly with a view to assisting the development and other assisted areas. Hon. Gentlemen opposite know the constraints under which any Government operate in selecting the priorities for assistance to areas of need. Too many priority areas simply means spreading the effort and reducing its effectiveness. I know of the disappointment on Tees-side that we have not made it an S.D.A., and we are watching the position very closely. But despite the setbacks, it cannot be said that Tees-side's problems are as severe in scale as the hard-core areas on Tyneside, on Wearside or in Central Scotland.
I have tried to show that the Government are aware of the problems of the Northern Region and are taking energetic steps to deal with them. Hon. Members opposite and I have our differences, but we both want to see progress towards the substantial reduction of regional disparities. The hon. Member for Darlington would like to see a big car plant in the region. So would we. No doubt the Scots and the Welsh might have something to say about it but, if that were available, no one would be more pleased than I.
But I wonder whether hon. Members opposite, in uttering pessimism or denigrating our measures and in the general gloom which they spread, are helping to further our common objectives. They have to make constituency and party political speeches, but I hope that they will hesitate before denigrating the substantial assistance which is being given and will not take their own areas and constituencies out of the market. I hope that they will play their part in encouraging industry to take full advantage of the help available and avoid undermining confidence in a region which I believe has a promising future.
Question put and agreed to.
Adjourned accordingly at twenty-seven minutes past Ten o'clock.