CHILD BENEFITS

HC Deb 28 June 1976 vol 914 cc107-68

Motion made, and Question proposed, That This House do now adjourn.— [Mr. Thomas Cox.]

7.12 p.m.

Mr. Patrick Jenkin (Wanstead and Woodford)

We turn from the circumstances of the New Society leak to the substance of the case on which the leaked Cabinet documents have shed much light. The debate gives the House its first opportunity to examine and pronounce on what one newspaper called "the child benefit fiasco". But this is no ordinary fiasco. The tale that was unfolded, blow by blow, in the New Society article is not so much one of ineptitude, although there was plenty of that. What lifts this episode out of the common rut of Government fiascos is that ineptitude has been compounded with panic and deceit.

The Government's unbelievable lack of foresight in failing to make provision for a proper child benefit scheme is extraordinary. The Act was already on the statute book, and it was the heart of their policy on family poverty, yet when the time came there was no money for it.

We had the last-minute panic—a panic that may have been contrived—about the impact on pay policy of the switch from the wallet to the purse—a switch that has been an integral feature of tax credits since the Conservative Green Paper of 1972. Not least, we have had the cynical and disreputable manipulation of Cabinet colleagues, TUC leaders and Back Bench Members of Parliament by the Prime Minister and the Chancellor of the Exchequer in their efforts to defeat the scheme.

I do not want to waste time rehearsing all the sordid details. All I shall say at this stage is that The Sunday Times has described the Prime Minister and the Chancellor of the Exchequer as— using means of persuasion that are less than frank". That is, in effect, a charge of deceit. They are the ones—the Prime Minister and the Chancellor of the Exchequer—who should be here today to stand at the Dispatch Box, and not the hapless Secretary of State for Social Services who is put up to answer the charges.

I noted with interest—as I am sure did many hon. Members—the suggestions in the weekend Press that the Government might let this motion go through unopposed. I find it impossible to believe that even this Government could be so craven. It would mean that they were so unsure of their case, so uncertain of their support and so panicky about losing, that they would be too scared to put their proposals to the test of a vote in the House of Commons. Make no mistake; if the Government stick to their misguided policy but run away from the vote tonight it will be seen as a moral defeat of major proportions.

The Secretary of State for Social Services (Mr. David Ennals)

Will the right hon. Gentleman tell us what motion he is proposing tonight?

Mr. Jenkin

The debate is upon the Adjournment, as is entirely usual on Supply Days. I know that Labour Members do not like it, but a substantive motion can be amended by the Government, and a Government amendment may provide for uneasy Back Benchers an easy way out. The motion on the Adjournment leaves them to stand up and be counted as to whether they support the Government or not.

In the time available I wish to do three things. I wish, first, to remind the House briefly of the main purposes of a proper child benefit scheme or child tax credit scheme—different words for the same concept—whereby tax allowances are exchanged for cash payments. Secondly, I want to look at the reasons why the Government have scrapped such a scheme, despite all their pledges. Finally, I want to tell the House what the Government could and should do now to get themselves out of the hole they have dug for themselves.

I must make the position of the Conservative Party crystal clear. In the face of today's catastrophic public sector borrowing requirement we cannot argue for more public spending, nor do I intend to do so. But I believe that a Government determined to do something effective about family poverty—I stress "poverty"—a Government who recognises the severe limitations that economic necessity imposes, could even now make a start in securing the real advantages that only a proper child benefit scheme can secure.

Child tax credits—tax-free cash payments to mothers in place of child tax allowances and family allowances—are much more than just a way of increasing family support across the board. It is important to make this distinction. Even if for the average family there were no net increase in family income as a result of child benefit, such a scheme could achieve three important objectives in the fight against family poverty.

First, because child benefits are payable to families in which the breadwinner's income is below the tax threshold—which the Child Poverty Action Group refers to as families who "earn their poverty"—they represent a real cash improvement for those families. Here I draw the House's attention to a significant parliamentary Question that my hon. Friend the Member for Wallasey (Mrs. Chalker) put to the Chancellor of the Exchequer. She asked: what would be the estimated extra number of income tax payers in 1976–77 if child income tax allowances were abolished. The Financial Secretary to the Treasury replied: About 250,000."—[Official Report, 11th June 1976; Vol. 912, c. 814.] That means that 250,000 earning families are below the tax threshold—by definition, families with the larger number of children. I estimate that probably 750,000 children or more would come into the category of really poor families—the families who earn their poverty.

The Government scheme gives these families just £1 extra. The child benefit scheme could give them £2 plus for the first child, with extra benefits for every subsequent child, which is a substantial improvement. The actual amount, of course, would depend on the level of child benefit. That is the first and by far the most important of the advantages of a real child benefit scheme.

The second advantage flows from it. There would be a significant easing of the poverty trap, which is something that we would all want to see. The Child Poverty Action Group memorandum says, in paragraph 6 that By providing a larger tax free benefit many of the poorer families would be lifted off dependence on means tested benefits such as Family Income Supplement (FIS), rent rebates and rate rebates. The many thousands of families not claiming these benefits would for the first time receive a full measure of support. Child benefits would provide an income floor on which families can build by their own efforts. Means tested benefits provide a ceiling making it almost impossible for them to escape by their own efforts. That is the second major advantage. The third is that it would help to deal with the situation in which a man can be better off out of work than in work. Because the benefit can he the same in both circumstances, the child benefit would increase the incentive to work.

I am sure that I am not the only hon. Member whose postbag has a regular flow of letters from people complaining with rising indignation of families which seem to have more spending money when drawing social security than when they are at work. A child benefit scheme would ease that problem. Even if no general improvement were possible, therefore, the child benefit scheme would carry significant advantages for poor families. By abandoning child benefits the Government have forgone those advantages.

There is a fourth advantage—which is different, because it applies to all families—which is that it transfers more of the family income into the mother's handbag. As a Treasury Minister, I lived through the row that followed publication of our Green Paper dealing with the payment of child tax credits, in which the payment to the mother was one of three options. The other two were payment to the father or payment split between the two parents. I was wholly convinced by the huge weight of opinion, particularly from women's organisations, that the switch from the wallet to the handbag would bring real social advantages to many hard-pressed mothers.

All these advantages of the child benefit are quite separate from the objective of improving the lot of families with children right up the scale. Of course, there is a strong case for helping families with children. The figures show that they have lost out over the years as compared with single people and childless couples. But the extent to which one can help families across the board depends on the resources that are available. The real question to which the Government should have addressed themselves is whether, even if there could be no improvement, or perhaps a small, nominal general improvement, it was right to abandon the chance of bringing substantial help to the really poor and of putting more money into the mother's purse.

My complaint is not that option was rejected but that, if the leaked documents are anything to go by, it was never even considered. That is the first question that the Secretary of State should answer today. Did the Government ever consider the option of a scheme which while conferring no general benefit, because the Government could not afford it, would secure real benefits for poor families?

I now come to my second point—why did the Government abandon the child benefit scheme? We all know the reason given. The switch from wallet to purse would endanger the pay policy because of the reduction in take-home pay. I leave it to others to trace the tortuous intrigues of the Prime Minister and the Chancellor, which seem to have generated this last-minute panic, if so it was. The TUC has always accepted that the switch was an integral part of an effective child benefit scheme. When it gave evidence to the Select Committee in 1973, it said in its memorandum, at paragraph 15, that The General Council consider that child credits should be payable to the mother … rather than to the father. It went on: The General Council recognise that the effect of a decision to pay all child credits to the mother would be a significant change in the relative positions of the father and mother, as compared with existing arrangements. It continued: an effect of the change proposed would (in the case of the working household) be to reduce the take-home pay of the father. It would be essential, in implementing such a change, to give full publicity to the social objectives underlying the Government's policy. My right hon. and learned Friend the Member for Surrey, East (Sir G. Howe) and my immediate predecessor both recommended that the amount of the child credit should be shown on the man's pay slip. That would bring home the fact that the money was there. It did not stop there. Mr. Feather, as he then was, said, at Question 1274: we will take our share of the responsibility. We will deliver what we agree to deliver. So the TUC has always been clear about this, and there was never a word of dissent from that date until quite recently. All through the successive stages of successive pay policies by successive Governments this switch has never been questioned, or even raised. If the fear that it would be so serious had any substance, are we to believe that nobody—not one member of the TUC or the Government—thought to raise it during the stage 2 talks? After all, it was known that child benefits were coming in three-quarters of the way through stage 2, in April, 1977, and that it would involve a switch from the pay packet to the purse. Was nothing said at any point?

Here I come to the right hon. Member for Blackburn (Mrs. Castle). While these talks were going on, she was the guardian of this policy. Did she not think to remind her colleagues, when talking about the effect of the pay policy on take-home pay, that there was this commitment to the switch and that it would perhaps be wise to secure TUC acknowledgement? After all, her Department was very busy planning for the introduction of child benefit in April 1977. It had even begun printing leaflets about it. It is now my turn to refer to a document that has escaped from the Government's secrets box. It is Leaflet CH1(T) dated September 1976, for issue next autumn. It is entitled The new Child benefit: claiming for one child". It says: From April 1977 a new social security benefit called child benefit will replace family allowances and child interim benefit. Normally it will be paid to the child's mother. If you or your husband are getting an income tax allowance for a child under 11 it will end at the same time, and any tax allowance for a child aged 11 or over will be reduced". There is no doubt about it. Everyone knew that this was being planned and yet while those pay negotiations were going on not one member of the Government, least of all the right hon. Lady, seems to have thought it necessary to mention the matter. With this leaflet actually being printed, she might have given one tiny warning that the switch would be taking money from the wallet and putting it in the purse.

The right hon. Lady is very fond of posing as the guardian angel of the poor, but we know that she was quite content to leave the fate of the child benefit to the hazards of the Contingency Reserve. We know now that she never recognised or warned of the effect which the Budget increases in child tax allowances would have on the cost of introducing the child benefit. She was very frank about that in an article in the New Statesman on 4th June. She said: A higher tax allowance automatically jacked up the level of child benefit. But it also jacked up the cost in public expenditure. In my innocence I did not see how the argument was developing". For the right hon. Lady to pose as "The Angel Innocence" is to move into a dream world of a feminine Walter Mitty. Now we know that her Department was actually printing the leaflets referring to the reduction of child tax allowance. She never thought to warn of the effect on net pay in the context of stage 2. The right hon. Lady has a good deal more to answer for in this fiasco than she has so far cared to admit.

The right hon. Lady may argue that the pay policy threat never had any substance and that it has no substance today; that it was simply manufactured to conceal the fact that the cost was not now acceptable. If she says that, at least she can take the comfort that the present Prime Minister is not the first Prime Minister to have sold her down the river.

Mrs. Barbara Castle (Blackburn)

If the right hon. Gentleman has quite finished, perhaps he will give way. I should not like to interrupt his attack. Is he not forgetting that the child tax reliefs in the Budget were specifically referred to by the Chancellor as unconditional and not part of the conditional tax reliefs which related to pay policy?

Mr. Jenkin

What on earth difference does that make? It was going to have its effect on the cost of child benefit and that, in turn, was going to have its effect on take-home pay. It seems to me that the right hon. Lady was guilty of a very considerable failure in failing to warn her colleagues that this would have an impact on pay policy.

But I do not believe that the real reason has anything to do with pay policy; the real reason is simply that the Government have come to the conclusion that they cannot afford the cost—that is, they cannot afford the cost both of measures to relieve the poor and of a broad general improvement in family support. That is what they have always wanted, and they cannot afford it.

Some hon. Members, notably the right hon. Member the present Secretary of State, appeared still to he harbouring illusions that there was still room for a massive improvement in family support. The right hon. Member told the Cabinet that lie was still hoping to get back to the level of support which the Tories gave to families during their period of office. So the right hon. Gentleman opened his mouth too wide. Instead of recognising the harsh realities of economic stringency, he pressed for a scheme that would have cost £200 million, or £300 million to judge from the Prime Minister. He said that such a scheme was required to restore the support for a three-child families to the level it had been under the Tories in 1971. But by then it was out of the question. He could not have such a scheme. He tried to reduce it to £160 million, but by then the game was up. The pressures were crowding in on the Chancellor, the pound was collapsing, and there was need to negotiate a massive new foreign credit. So the Chancellor was determined to kill the scheme because the cost was too great.

Therefore, we come to ask the question: why, when it came to the crunch, was there nothing in the kitty for child benefits? Where has all the money gone? The answer is clear: gone to the Left wing, every one. The Labour Members below the Gangway and their Left-wing friends in the T.U.C. have in two and a half years stripped the Treasury bare, and there is nothing left for child benefits. Here was a key election pledge. Here was the heart of Labour's strategy on family poverty. Yet when Mother Hubbard left home for the Back Benches, she left the cupboard bare and the poor little doggie got none. The right hon. Gentleman was sniffing around for a juicy £200 million bone and "there weren't none." To make matters worse, we have seen the spectacle since then not of doggie biting the improvident Mother Hubbard, as he was entitled to do, but of Mother Hubbard beating doggie for not having produced the bone. But what a travesty of economic planning by the party of economic planning. What a miserable betrayal of the poor by the party that poses as the champion of the poor. It will be a long time before anyone believes them again.

I turn to my third question, and ask what should now be done. It would be easy to stand here and say that a Tory Government would not start from here—that we would not have put up income tax to 35 per cent., which has increased the tax cost of child tax allowances; we would not have lowered thresholds for higher rate taxpayers; we would not have squandered money on nationalisation, the British National Oil Corporation, indiscriminate subsidies, dock labour schemes, phasing out pay beds, and all the rest; and that we could, therefore, say that we would be in a better position to pay for child benefits.

AN HON. MEMBER: Groundnuts.

Mr. Jenkin

That was also a Labour Government. The hon. Gentleman has a long memory.

However, I shall not take refuge in that easy answer. I shall tell the Government what they should do now in the situation in which they find themselves.

The first thing that the Government should do is to take away the miserable Ennals scheme, which has found few friends in the House of Commons and none outside it. In its place they should introduce a proper child benefits scheme, next April, which achieves the four objectives I have set out—bigger help for the poorest families, an easing of the poverty trap, restoring the incentive to work, and the transfer of cash to the mother's handbag.

Secondly, such a scheme should leave no family worse off. Thirdly, such a scheme might actually cost less than the Government's scheme, provided—and here I make the concession—that it does not provide for any general improvement in family support. One has to say that, because the present Government cannot now afford any general improvement in family support. The money that might have gone on a general improvement of family support has already been frittered away on other less worthy objectives—

Mr. George Cunningham (Islington, South and Finsbury)

Why does the right hon. Gentleman not put down a motion?

Mr. Jenkin

—therefore, the question is, how is this to be done? The key is to be found in another question asked by my hon. Friend the Member for Wallasey on 13th May. She asked the Secretary of State, how many millions of pounds will be transferred from taxpaying families to non-taxpaying families if a child benefit is introduced at no extra cost". The Secretary of State replied, If the amount of child tax allowance subsumed were the rate for children under 11, the amount transferred under a nil-cost scheme would probably be of the order of £40 million a year. This estimate is, however, subject to a fairly wide margin of error."—[Official Report, 13th May 1976; Vol. 911, c. 234.] That means, in theory, subject to the margin of error, that a child benefit scheme could be introduced and that it would not involve a transfer from taxpaying families provided that one was prepared to spend £40 million on introducing it, which is less than half the £95 million which the Government are proposing to spend. I do not believe, however, that one can be as exact as that. It would be necessary to provide small improvements when one rounds off the figures, and one must make sure that no family is worse off.

There are two categories. A nil-cost scheme involves child credit of £2.34, leaving two-child families no worse off. One is left with families of three or more children. Secondly, the "middle management" families, the families paying tax at the lower rates of higher income tax, also have to be dealt with.

The families with three or more children could be compensated by paying a premium, on those figures, of about 30p per child for the third and subsequent children. That would mean an annual cost of about £37 million and would leave most of those families a few pence a week better off. That is a solution along the lines put forward in The Times today by Pat Healy.

So far as the second group—the higher rate taxpayers—are concerned, I do not see how it can be right to impose the cost of a child benefit scheme solely upon families paying the higher rate of income tax, families with children. After all, the imbalance between families with children and single people and childless couples exists right up the income scale. Therefore, it would not be acceptable to make families with children bear the cost of this scheme.

Without access to official statistics it is not possible to be wholly precise, but the conclusion that I have reached is that the proper approach for ensuring that higher rate taxpayers are left no worse off is that child benefit should replace only the value of child tax allowances at the basic 35 per cent. rate and to leave the taxpayer with the benefit of CTAs for higher rate tax so far as those rates exceed 35 per cent.

It would be 35 per cent. across the board, but if the marginal rate were 40 per cent. one would get child tax allowance on the 5 per cent. difference. If the marginal rate were 50 per cent., there would be CTA on 15 per cent., and, with some adjustments—I recognise that there might have to be some to make sure that they were no better and no worse off—that is how the cost would not be imposed on these families. If the tax adjustment were phased out at the 50 per cent. or 55 per cent. rate, and if the actual numbers were adjusted to leave families below that rate neither better nor worse off, the cost would be well within the limits that I have set.

Mr. Ennals

I am following with interest what the right hon. Gentleman is proposing. Will he go on to explain what he would do about the several hundred thousand children—about 500,000—who are the daughters or sons of people living in this country but who are themselves not resident here? As the right hon. Gentleman will recognise, the mothers would not themselves get the new benefit because that would apply only if the child was here. The right hon. Gentleman suggests that child tax allowance should be taken from the father. He would leave several hundreds of families—about 200,000—positively and sharply worse off. He said—not today—that that would cost about £45 million.

Mr. Jenkin

I think that on this matter is for the right hon. Gentleman to say what he would do. The leaked documents from the Cabinet made it clear that his proposal was for £160 million plus £45 million for dependent children overseas. I have studied again what the Select Committee said about it. It did not come down in favour of paying tax credits to children overseas of people resident here. That was a unanimous recommendation, because it was not divided upon by any of the members of the Select Committee. Therefore, I was surprised to hear it suggested today that the Government were seriously contemplating posting £45 million abroad to support children in other countries.

Mrs. Castle

I have an interest in this matter, in view of a certain Conservative amendment when the Child Benefit Bill was going through the House. Is it now Conservative policy not to continue child tax allowances for non-resident children?

Mr. Jenkin

I am not saying that, because this is a matter that has not been resolved by either the Government or the Opposition. When my hon. Friends moved an amendment in Committee the right hon. Lady said broadly that she would look at it, and that she had not made up her mind. We look forward to hearing from the right hon. Gentleman where he stands.

Mr. Ennals rose—

Mr. Jenkin

I must finish, because this is a short debate.

I believe that on the lines that I have described, it would be possible for the Inland Revenue to devise a scheme that would leave these higher income families no worse off.

Provided it is recognised that there are little or no resources for general improvement in family support, if there were a basic child benefit to replace child tax allowances and FAM at a rate to leave a two-child family no worse off and no better off, if there were a premium of 30p per child for third and subsequent children, and if child tax allowances were adjusted to prevent middle management from having to pay for the scheme, a start could be made now on a proper child benefit scheme at a cost somewhat less than that suggested by the Government. Such a scheme would confer on poor families, and on mothers, all the four advantages that I outlined at the beginning of my speech.

Mr. George Cunningham

Why did the right hon. Gentleman not table a motion to say that?

Mr. Jenkin

That is the way out of the Government's dilemma. As it stands today, the Government's social policy for families is a shambles. It is a shambles of shattered illusions and broken promises, compounded with ministerial deceit. If there is a vote tonight—and I hope there will be—hon. Gentlemen must make up their own mind whether they will support the Government's shambles. I shall not help them. For us on these Benches there can be only one answer. We must vote not only in support of the introduction of child benefit but in condemnation of the Government's feckless and disreputable shelving of the scheme.

7.45 p.m.

The Secretary of State for Social Services (Mr. David Ennals)

First, I very much regret that this debate has been truncated by the unnecessary debate that concluded at 7 o'clock. There will not be time for many of my right hon. and hon. Friends to take part in the debate because we were dragged into an issue that need not have been brought before the House at all today, and we now have less than three hours in which to debate an important subject.

Before replying to some of the points raised by the right hon. Member for Wanstead and Woodford (Mr. Jenkin) I want to say unequivocally that the Government accept the principle of a new benefit combining the value of family allowances and child tax allowances and paid to the mother as the basis of a more socially just means of family support. Such a scheme not only provides the mother with a family income for all her children, making her less dependent on what she receives from her husband's pay, but also gives more support to the poorest families whose income is so low as to deprive them of the benefits of tax allow- ances. I thought it right to state at the outset the Government's commitment to the child benefit scheme.

The policy that I outlined in Parliament on 25th May fulfils to the letter—but only the letter—our manifesto commitment. We shall not have achieved all that we want until we have provided a larger payment to the mother in place of child tax allowances which are of no benefit to the poorest. The Government are committed to introduce the whole scheme when economic circumstances permit. I can give no specific commitment of a date but I want a little later in my speech to look into the future.

Let me first look at the Opposition's case.

In commenting on my statement on 27th May the right hon. Gentleman then suggested that we could have brought in a £2.50 benefit for only £40 million. He did not repeat exactly that today, and I want to consider the proposal that he has put forward. Even at £95 million—which is the amount that we are spending on our new scheme—we could not bring in the premium necessary on top of the £2.50 to make sure that one-parent and large families were not worse off. So it would have cost more than £95 million.

Mr. Patrick Jenkin

To correct the record, it was not I who said £2.50. I referred to a much better scheme. It was the right hon. Gentleman who put the figure of £2.50 into my mouth.

Mr. Ennals

The right hon. Gentleman put the figure of £40 million in his speech.

What is the Opposition's argument? In attacking the Government's decision they are either calling for more public expenditure or they are ignoring the importance of protecting and sustaining the new pay policy hammered out by the Government and the TUC. Let us examine the alternatives before us.

The case has been put forward in the Press and elsewhere for a £2.50 scheme. Compared with £1 and £1.50 that sounds a great deal, but what does it mean in practice? It is true that those families too poor to pay tax and not on social security benefits would have gained more under this scheme than under our proposals. But for all ordinary working families who pay tax—and a man with two children now begins to pay tax at around £30 a week—the extra money going to the wife from the larger benefit—that is £2.50 as opposed to £1 or £1.50—would be offset by the extra loss from the husband's pay packet. Families with more than two children actually gain less overall under this scheme than under the one that I announced on 25th May. Families with more than four children, and all one-parent families, would be worse off than they are now. Extra payment to make good these losses would have added further to the cost of the scheme.

A number of other suggestions have been put forward. My right hon. Friend the Member for Blackburn (Mrs. Castle), in the article to which reference has been made, mentioned the scheme for a payment of £2.70. What this means in terms of net gain to families paying basic rate tax is an extra 68p for a one-child family, with a few more pence for larger families. That is more than our scheme, which gives a net gain of 30p. It is more because it costs more—£220 million as opposed to £95 million; just over twice the gain for just over twice the price.

A rate of £2.90, which has also been mentioned, would cost more than £300 million. It would have been irresponsible at this time for the Government to embark on an expensive new public expenditure commitment from 1977 to 1980. If we had introduced a costly child benefit, we should have had to trim expenditure elsewhere.

Therefore, it is clear that the Opposition are not arguing for a more generous scheme. They could not do so because the basis of their argument is massive cuts in public expenditure regardless of the social consequences. With this repeated call to cut and cut again, it would have been much more consistent for them to table a motion urging that we should postpone the whole scheme.

Mr. Kenneth Lewis (Rutland and Stamford)

The right hon. Gentleman said that there was no possibility of increasing expenditure from 1977 to 1980. If I read the papers correctly, he and the Government have been suggesting that the scheme will be introduced sooner or later. Are we to take it that there is no chance of its being introduced in any form before 1980?

Mr. Ennals

I shall deal with the future as we see it a little later. The hon. Gentleman must wait.

I said that a large, more expensive scheme would not have been possible or reasonable in view of the problems of public expenditure. The right hon. Gentleman put forward a scheme which he said would be a transfer and would not mean additional public expenditure. I intervened to point out that he would be leaving the families of many overseas children at a disadvantage. The right hon. Gentleman has shown little understanding of the reasons why the Cabinet took its decision. He knows that it was not an easy decision, and it was made after an agonising reappraisal. There were difficult issues that had to be faced at a time when the Government were negotiating with TUC on the most important issue of the day—the working out of a pay policy which is essential in the battle against inflation.

I know that the right hon. Gentleman and many of his hon. Friends have no time for pay policy. The right hon. Member for Lowestoft (Mr. Prior), the Opposition spokesman on employment, wrote an article published in The Times on 15th June under the astonishing headline: Three major reasons why the Government's new pay policy will fail. That presumably was because the Opposition wished it to fail—and people ask who is knocking confidence in Britain.

The House must face up to the effect of introducing the full scheme at once. It makes no difference to the new pay policy what the level of benefit is—£2.34, £2.45, £2.50, £2.60 or £2.70. The effect on take-home pay is precisely the same.

Mr. Patrick Jenkin

If that is so, is the right hon. Gentleman coming to the reason why nobody thought of it during the pay negotiations period?

Mr. Ennals

I do not accept that no one thought of it during the pay negotiations. When the negotiations with the TUC were continuing, and before the General Council had pronounced on the negotiations, the Government had to concentrate on the effect on take-home pay. If the right hon. Gentleman is saying that he and his party do not give a rap for the consequences on take-home pay—that must be what they are saying—I take it at its face value. The Leader of the Opposition and others on the Opposition Front Bench have not sought to give strength to the pay policy, which we know is essential in our battle against inflation.

The question of take-home pay became a great deal more important once the Government and the TUC had reached agreement that in the next pay round, beginning in August 1976, the increase in gross pay should be at a minimum of £2.50 per week but at a maximum of no more than £4 a week. For the first time we had a pay policy based largely on take-home pay—a modest increase in pay linked with significant tax concessions.

I do not believe that even now many Opposition Members appreciate just what could have happened had we then superimposed the child benefit scheme in its original form on the pay policy. It would have meant that, after paying tax—and national insurance contributions on the pay increase, and making the further reduction in tax allowances of £2.02 for the first child and £1.14 for each subsequent child, every family man with two or more children and most of those with only one child would have had less in his pay packet after the full permitted pay increase than he had before. The great majority would have found themselves next spring with an Irishman's rise. In the context of pay policy and the fight against inflation, we could not risk undermining ordinary working people's support for the pay policy.

Mrs. Lynda Chalker (Wallasey)

Does not the Secretary of State realise that what he is saying is that in families where husbands take home £80 or £90 a week and the wife with three or more children is given only £20 a week, the Government are putting the TUC and the man's situation in front of the family? Surely that is something we should be trying to avoid.

Mr. Ennals

What did the hon. Lady and her party do about the matter during the four years they were in power? They had a fine scheme which they did not introduce. Hon. Members on both sides of the House believe in the social philosophy of child benefits, but we must face the fact that we have not got our message over to the average man and woman. I should be very surprised if Opposition Members were satisfied that men and women in their constituencies fully understand the implications. I have found that many people knew that there would be a bigger benefit for the wife but did not understand fully that basically it would come out of the husband's pocket. There is the prospect of some advantage from the serious matter of the leak that we debated earlier in the evening. At least the arguments are beginning to get through to people. We must take advantage of that to secure that when the time comes here will be full support from working people for this transfer.

Mr. D. E. Thomas (Merioneth)

Will the right hon. Gentleman tell us what the total advertising budget of his Department now is and whether it is possible for it to advertise before the introduction of the scheme precisely what it will mean for the husband and wife?

Mr. Ennals

Even if we had done that, we knew perfectly well the concern felt by leading trade union figures. A great deal has been written about the TUCs attitude on the issue. Not all of it is accurate. I should like to make the position clear, as the TUC's views are of great importance in terms not only of the social contract but of the effective implementation of the second stage of the battle against inflation.

There is a great deal of common ground between the Government and the TUC on this as on many other issues. First, the TUC is committed to the full child benefit scheme, and so are the Government. [HON. MEMBERS: "When?"] I shall come to that. It is all very well for that question to be asked by Opposition Members who do not have the responsibility—thank heavens they have not!—of ensuring that the second stage of the battle against inflation is won. Like the Government, the TUC regret that the full scheme could not be introduced next year as originally intended, but the General Council welcomes the introduction of a benefit for the first child as promised in our election manifesto.

In reaching these conclusions, the TUC like the Government, had to take into account two factors—the amount of public money we could make available for child benefit at this difficult time and the effect of reductions in child tax allowances on take-home pay. The Government, the TUC and the Labour Party all want to see the full child benefit scheme introduced. Indeed, at last week's meeting of the Labour Party-TUC Liaison Committee it was agreed that a working party should be set up to report urgently on the steps that can be taken to ensure this.

Mrs. Elaine Kellett-Bowman (Lancaster)

Does the right hon. Gentleman appreciate the tremendous lessening of the pressure by wives on husbands for more housekeeping money resulting from an effective child benefit scheme such as that outlined by my right hon. Friend the Member for Wanstead and Woodford (Mr. Jenkin)?

Mr. Ennals

We shall see the first advantage when we fulfil our commitment to introduce a benefit for the first child, which the Conservative Party never did in all its years in Government. We accept that it is only the first step, but we have taken it and we do not have to accept criticisms from the Conservatives.

Mr. Peter Bottomley (Woolwich, West) rose—

Mr. Ennals

I have given way many times and I do not propose to give way to the hon. Gentleman.

The right hon. Gentleman said that the TUC was in favour of a transfer from wallet to purse and quoted its evidence to the Select Committee. I remind him, first, that there was to be a large net gain to families under the child credit scheme, which would have meant a larger public spending commitment.

I have made clear all the way through that there were two essential arguments. One was the question of the pay policy, which I have developed, and the other was the question of public expenditure. It could be said that if we did the full transfer at a low rate the husband would be told "You have seen this loss of your income but your wife has only 1p or 2p to gain. Family support is hardly better." But if we could introduce a substantial benefit for the wife we could tell the husband "Do not complain. Your take-home pay has been cut because your family income is substantially larger." One could not say that it was substan- tially larger if it were only 4p for some and 22p for others, and the imaginative child benefit scheme would get off to an apalling start. That would have happened if many people had seen that the effect was not to bring great new wealth to the family but that it simply meant a transfer from one part to the other.

I return to the two reasons for the Government's decision. The pay policy argument which I have spelt out, and which is as important to the TUC as it is to the Government, could have been overcome if we did not have to show greater restraint in public expenditure; or if we had been able to say to the breadwinner "Do not just concern yourself about the reduction in pay. Look at the fact that the family as a whole is much better off." We could not say that if it were only a few pence that we could offer them.

Naturally, there has been a great deal of interest in the debate that went on before the Government's decision was announced to Parliament on 25th May. There was a genuine argument. How could we reconcile both our commitment to the struggle against family poverty and the battle against inflation? Must one fall victim to the other? Were we to set aside all else in our determination to do nothing to endanger pay policy? Should we postpone the fulfilment of our manifesto commitment? These were some of the decisions we had to take. I am glad that the Cabinet decided against this latter alternative because it could have postponed the whole scheme.

In February 1974 we promised to introduce—I quote the exact words of our manifesto— a new system of Child Cash Allowances for every child, including the first, payable to the mother. In October we promised to— attack family poverty by increasing family allowances"— we did that last year— and extending them to the first child through a new scheme of child credits payable to the mother. We decided not to put off the whole imaginative scheme but to introduce child benefits on a step by step basis. What we have decided fulfils at least the letter of our commitments.

What of the future? I have already said that the Government are committed to the introduction of the scheme as envisaged. It is not only a commitment; it is on the statute book. For reasons which I have already explained we do not, at present, feel able to introduce it fully in one stage.

As I announced in the House, the Government's proposals mean that from next April over 6 million mothers will be £1 better off with the benefit paid for the first child, and the cut in take-home pay would be by means of the traditional tax clawback. The Government will be free, in the light of the economic situation, to expand the child benefit scheme by variations of the level of child benefit paid to the mother on the one hand and the adjustment of tax allowances on the other.

A working party has been established by the Labour Party and the TUC to consider means of implementing fully the child benefit scheme.

The Government will play a full rôle in this working party, and I very much hope that it will come forward with constructive proposals that will enable the Government to implement the full scheme. But of course the Government themselves must decide what they will recommend to Parliament on this.

The Opposition have been using tonight's debate for purely party-political purposes. They are playing politics with poor families. [HON. MEMBERS: "Rubbish."] The people of this country will well remember that the right hon. Member for Sidcup (Mr. Heath), shortly before the 1970 election, made quite clear his view about what was possible to improve the conditions of families. He said: We accept that the only way of tackling family poverty in the short term is to increase family allowances. I do not know what he considered to be "the short term" but four years later, when the Tory Government were turned out of office, they had not increased family allowances. We will not take lecturing from the Conservatives about how we fulfil our responsibilities to mothers and children. If they had been serious they would have tabled a motion this evening telling the country just what they would do.

Mr. Patrick Jenkin rose—

Mr. Ennals

I will give way to the right hon. Gentleman in a moment. In fact, the scheme they outlined was unreasonable and unaccceptable. The fact that they refused to table a motion on a major issue now facing the country shows that they were chicken. All they have done is to ask us to debate the matter on the motion, That this House do now adjourn.

Mr. Patrick Jenkin

If the record of the Tory Government is so bad as the right hon. Gentleman seems to say, why did he tell his Cabinet colleagues that what he had to do at the very least was to get back to the level of family support of the Tory Government?

Mr. Ennals

The right hon. Gentleman does not have to believe everything he reads in the newspapers. Since the Tories have not troubled to table a motion I see no reason why I or my right hon. and hon. Friends should take the trouble to challenge them in the Lobby tonight. As for my hon. Friends, I am confident that they will accept the assurance that I have given about Her Majesty's Government's intentions.

8.11 p.m.

Mr. David Price (Eastleigh)

In spite of that little outburst at the end, the Secretary of State was about as happy in making that speech as a butcher addressing a conference of vegetarians.

My credentials for seeking the attention of the House in this debate are simple. I served for a year on the Select Committee on Tax-Credit, and that year's experience convinced me that immediate progress in the reduction of poverty in Britain and the advance of the cause of equity in our welfare arrangements lay in the introduction of child credits, as we called them, under a tax credit scheme, or child benefits, as the present Government prefer to call them. I am totally committed to their early introduction, as I have been since I put my name to that report.

I therefore wish to give testimony to the House that all of us who spent that year on the Select Committee studying these matters were agreed that the early introduction of child benefits or credits was essential and urgent.

In their minority report, on page 74 of Volume I of our Report, the present Chief Secretary and the Financial Secretary to the Treasury said: The present 100 per cent. 'poverty surtax' could be better removed by universal child credits paid to the mother. I had the pleasure of sitting next to the right hon. Member for Blackburn (Mrs. Castle) during the Committee's deliberations, and found it a stimulating experience. In paragraph 16 of her minority report, the right hon. Lady wrote: The one field in which there is an overwhelming case for merging tax allowances and social benefits is in the case of children since there is no other equally effective way of preventing the existence of children from plunging a low-paid family into poverty. The proposed merger of child tax allowances, family allowances and FIS into a child endowment payable to all children including the first is therefore in principle highly desirable. From the main body of the report, one can see that none of our colleagues who introduced minority reports divided the Committee, so we are entitled to assume that they agreed when, in paragraph 47, we gave four reasons for paying benefit exclusively to the mother:

1. "(a) because the mother is normally the parent who does most of the day to day spending on the children;
2. (b) to provide some form of income as a right, particularly in the cases where the husband makes irregular or inadequate provision;"—

we got some terrifying evidence about the irregularity and the inadequacy of provision from husbands who were not themselves short in their pay packets—

1. "(c) as Family Allowances are now available for encashment at the Post Office on Tuesdays, to retain a separate mid-week payment to help hard pressed family budgeting;
2. (d) as a means of stabilising family budgeting by using the Family Allowances as a form of small saving."

Those four reasons are as good today as they were when we wrote them.

This is important, irrespective of whether there is any overall increase in public expenditure on these matters. On the basis of a nil increase in public expenditure, it is still right, and urgent, for these sorts of reasons, to move over to child benefit now.

We gave further supporting evidence in paragraph 50: Perhaps the most useful quantification which they were able to produce was the result of an inquiry in March 1969, which showed that 52 per cent. of all family allowances by number and 58 per cent. by value were cashed on the first available day, and a further 28 per cent. by number and 25 per cent. by value were cashed within a week of the first available day (ibid., Annex II). Considering that the Family Allowances are often a relatively small sum, we think that such a large encashment on the first day is evidence that in many cases the money is needed urgently by the person who collected it. The same broad inference may be drawn from the fact that the same study showed that 81 per cent. of orders were cashed one at a time. These are important facts in support of our case for child credits in our report.

In its evidence to us, the TUC made it perfectly clear that it was aware of the very problems over which the Secretary of State and the Government seem to be finding so much difficulty. In paragraph 54, we stressed that the General Council of the TUC were prepared to defend a decision to pay the child credits to the mother in spite of the implied loss to the father's pay packet. Let me amplify that statement from the oral evidence we received from the representatives of the TUC—Mr. Feather, Sir Sidney Greene, Mr. Anderson, Chairman of the Social Insurance Committee, Mr. Lea, Secretary of the Economic Department, Miss Leiser, an assistant and Mr. Jacques, Secretary of the Social Insurance Department.

Lord Feather, as he now is, said: I would like to underline some of the main points in our evidence. There are some aspects of the tax credit proposals which we find attractive. In particular we support the proposal that there should be a single form of tax-free child benefit and this would replace family allowances, child tax allowances and national insurance child benefits. But the child credit proposals need to be modified, we think, in important ways. We want all child credits to be paid to the mother to give her a guaranteed source of income to help towards meeting the household bills. All child credits should be paid to the mother; we have had a long discussion about this and that is the conclusion that we ultimately reached". Therefore, I do not know how it is that the right hon. Gentleman takes the view that if he goes ahead with what his Government are already committed to it will ruin the chances of the Government's pay policy succeeding. Indeed, this was the main argument upon which the Secretary of State rested his case in the statement he made to the House on 25th May. I remind the House of what the right hon. Gentleman said: Introduction of the scheme in its original form would, however, have imposed an excessive strain on the pay policy which is vital to the Government's continuing success in overcoming inflation. Current circumstances are not the occasion for the drastic reduction in take-home pay which a substantial cut in child tax allowances would have entailed".—[Official Report, 25th May 1976; Vol. 912, c. 284.] The right hon. Gentleman was saying that the majority of male taxpayers would not accept the transfer of payment that is implicit in the child benefit scheme. I believe that he is doing a grave injustice to the men of this country by alleging that we are not prepared to accept a personal transfer from the pay packet to the handbag—if you like, from dads to mums. I believe that his fears are illusory. I have read to the House the evidence given to us by the General Council of the Trades Union Congress. I have no reason to suppose that it did not think out very carefully the implications of what it was saying. My right hon. Friend the Member for Wanstead and Woodford (Mr. Jenkin) read out from the General Council's written evidence. I have read out from the oral evidence, when Lord Feather went out of his way to stress this point, before we were questioning him in detail.

Mr. Ennals

I am grateful to the hon. Gentleman for reading out part of Lord Feather's evidence. Did he note further evidence given by Lord Feather, which appears on page 269: Perhaps I can add a caveat there; I think that the idea was that it was going to be phased. There would be some phasing of this transfer, as it were, from the pay packets to the mother's child credit. This would be phased; it would not happen over one week or something of that kind. So Lord Feather himself was thinking of phasing when he gave that evidence. That was at a time when there was no agreement between the Government and the TUC to a pay policy based substantially on tax concessions.

Mr. David Price

I do not accept the right hon. Gentleman's interpretation. We have much evidence here, and I would be happier if there were more time to go through it in greater detail with the right hon. Gentleman. That was not the impression that I gained. I wonder whether any other right hon. or hon. Member who was a colleague on the Select Committee drew the same interpretation as the Secretary of State has drawn.

I do not wish to delay the House further. I believe that the Government are assuming that many more male taxpayers are, to use the emotive language of Woman's Lib, male chauvinist pigs than is in fact the case. I think that the right hon. Gentleman and his colleagues in Government have taken a rather abysmal view of the men of this country. I remind him of the words used by the right hon. Member for Blackburn in moving the Second Reading of the Child Benefit Bill: It is appropriate that this measure should be put before Parliament in International Women's Year because it supplements the other measures that the Government have been taking to help women play their vital rôle in society. International Women's Year has always been just as much concerned with the woman struggling at home to bring up a family as with the aspirations of her career sister."—[Official Report, 13th May 1975; Vol. 892, c. 330.] It is very sad that this Labour Government should be the last bastion of male chauvinism in Britain.

8.23 p.m.

Mrs. Barbara Castle (Blackburn)

I am sure that the House is grateful to the hon. Member for Eastleigh (Mr. Price) for a very thoughtful and fair speech.

I regret that I cannot say as much for the right hon. Member for Wanstead and Woodford (Mr. Jenkin). The right hon. Gentleman is the last person in the House to talk about deceit and cynicism on the question of family support. It was the Conservative Party that in 1970 fought the General Election on a specific pledge to increase family allowances, and the Conservatives even fooled the Child Poverty Action Group in the process. In their whole period of four years the Conservatives did not raise the family allowance by a single penny. Despite all the great fanfare about their tax credit scheme, they were backtracking on it almost before the ink was dry on the report of the Select Committee. Recently we had the right hon. and learned Member for Surrey, East (Sir G. Howe) writing articles to the effect that the tax credit scheme would have to be modified.

In the last election it was significant that the Conservative Party election manifesto made no commitment to increase the child credit—not even the child credit—beyond the words "as economic circumstances permit". Yet here is the Conservative Party saying that the economic circumstances of the country are such that we should be slashing public expenditure to figures which have been quoted—to the tune of £4,000 million, even. It is absurd to imagine that that could be done without cutting a number of social policies.

My right hon. Friend the Secretary of State has been accused of being cowardly. That comes very ill from the Opposition Front Bench spokesman, who is too cowardly to spell out his policy in a motion so that the House can vote on it. He said that to have done so would have been to allow an amendment as an easy way out for those of us on the Back Benches. He must surely know that a procedure motion is the easiest of way out of all.

Mr. Kenneth Clarke (Rushcliffe) rose—

Mrs. Castle

I am sorry, but I am not giving way. I am trying to give others a chance. I shall not take interventions. It is obvious that if the right hon. Gentleman and his hon. Friend had tabled a motion he would have had to reveal his deep ignorance of the fact that the problem of the non-resident children and the cost of continuing the child allowance to them are real factors. Here is a former Chief Secretary to the Treasury who did not know that it would add £45 million to the cost of the new child benefit if the Conservative Party were not to renege on the policy that it was advocating only a short time ago that we should temper the loss of child tax allowance to non-resident children. The right hon. Gentleman's hon. Friend had to remind him that a Conservative amendment was moved to the Child Benefit Bill along the lines I have indicated.

Mr. Kenneth Clarke

The right hon. Lady, who has at last grudgingly given way, will remember that she and the late Member for Rotherham agreed to look at the matter again, but that the present Government have refused to state their policy or to make regulations in relation to children resident overseas. Was she surprised to hear the Minister stating that it is the present Government's policy not to do anything?

Mrs. Castle

My right hon. Friend did not say that, and what my right hon. Friend said did not surprise me, because the consideration of this problem, to which we pledged ourselves, has been continuing for many months. Unless we are to make large numbers of immigrant families much worse off at a stroke, when the child benefit is made available, we have to continue the child tax allowance in these cases. I am honest and realistic about this. We have to face those facts, although I may disagree with my right hon. Friend about some of his other figures.

The speech of the right hon. Gentleman was therefore totally irrelevant. The real argument is between my right hon. Friend and those of us on the Back Benches on the Government side of the House. We are the party that has been genuinely willing to face up to the implications of this matter and not merely to make empty promises.

I shall now proceed to the really interesting dialogue, which is between our Front Bench and the rest of us on the Government side. I tell my right hon. Friend that anything that I say to him in criticism—I shall make some criticisms—is in no sense a personal attack on him. All of us who listened to his speech were increasingly disturbed that he should have to argue so out of character, in such an unreal way. The more he argued the clearer it was that the Government have taken the wrong turning and that we on the Benches behind them must pull the Government back before it is too late.

I say to my right hon. Friend that if this matter had been pressed to a Division, many of us could not have supported the Government—not out of any wish to attack him personally but simply because there is a vital principle involved and we feel that the Government as a whole have not been frank with us. They have not been frank about their real reasons for postponing the scheme. They have not been frank about the cost of child benefit, or about the consequences of the postponement that has been announced—a postponement the length of which my right hon. Friend tonight was not able to indicate. In other words, for the lifetime of this Government it means abandonment. We must use that word unless the Government intend to change their policy.

My right hon. Friend has not been allowed by his Government colleagues to assure us categorically that the scheme will be introduced in the lifetime of this Government. My right hon. Friend has not been able to tell us emphatically that if the working party of the TUC and the Labour Party comes forward with a formula to enable the scheme to proceed next year, taking all the public expenditure difficulties into account, the Government will be prepared to change their policy. That is what we have been asking for, and we have not had it, and that is why we could not support the Government in the Lobby.

As to cost, we all know the realities of public expenditure constraints, but I must tell my right hon. Friend that it will not do for the Government to say "We cannot afford a modest measure of child benefit". The figure of £200 million has been tossed about as the cost of one scheme that I was advocating. We cannot say that we cannot afford that—even if it were £200 million, which it is not—when the Government have this year spent £300 million on increasing the child tax allowance and are prepared to spend at least another £95 million—possibly £100 million—next year on increasing family allowances, both taking us in a diametrically opposite direction to the one that we should take if child benefit is ever to be introduced.

It is interesting to note the way in which we conduct our governmental financial affairs, when the Treasury unilaterally take that decision to spend £300 million in increasing child tax reliefs and, therefore, increasing the difficulties of switching to child benefit, without having to take the matter to the Cabinet discussions on public expenditure. It does not count as public expenditure. I put this in a Question to the Chief Secretary to the Treasury the other day, and his reply was as follows: Child tax allowances are not classified as public expenditure and there is therefore no charge on the contingency reserve."—[Official Report, 24th June 1976; Vol. 913, c. 617–18.] So the Government can chuck away £300 million and nobody can have a say in it.

Yet different accounting conventions obtain when some of us try to analyse the alleged cost of the child benefit scheme, as I am going to do now. For nearly £400 million we could have got a child benefit of over £3 a week. I must repeat, because it is relevant, that an increase in the child tax relief was never part of the pay negotiations with the TUC. I can prove it. It is not only that the Chancellor of the Exchequer told this House in his Budget Statement that the child tax increases would be unconditional, but also that they have been in operation since the beginning of June; that is, before the Special Congress of the TUC voted on the pay policy.

The Chancellor says it is right that child tax relief should be treated separately, on its own merits. So he cannot say that he was compelled to do this as part of its own merits. So he cannot say that is why it was always assumed that the increase in child tax relief would automatically be followed by an increase in the level of child benefit, and that the Government were prepared to stand realistically by their pledge to increase the level of family support. That level of family support has declined, is declining and ought to be increased. By increasing the child allowance by 40p per child per week, the Government deliberately put up the transfer cost of moving to child benefit.

The Government now say that it is too late to afford a level of benefit that is attractive enough to enable one to sell to those concerned the switch from father to mother. In other words, there is no room left for what I call the sweetener for the switch. It is said that we cannot even afford a break-even rate of £2.64p. I do not accept that and I shall tell the House why.

I have never been satisfied with the figure given by the Government as to the cost of a level of benefit of that kind. I shall not compete with the Opposition in trying to take on a hair-shirt about reducing public expenditure because the Government have their own public expenditure plans. Indeed, the move to child benefit was included in those plans. The introduction of the child benefit was included in the public expenditure White Paper. It was safeguarded, sacrosanct and earmarked to be financed out of the contingency reserve. That reserve has not been used up. To say that we cannot now afford it is to say that we have switched our priorities, and we on the Back Benches cannot tolerate that.

Let us get a clearer and firmer idea of the cost. My right hon. Friend the Secretary of State for Social Services now has to do what I had to do—namely, to battle for every £1 million of public expenditure. We have been given various figures. The figure of £200 million has been bandied about, and then the Prime Minister used the figure of £300 million. Assertions of that kind may make people's blood run cold. Let us be more specific. The latest figure of the cost sent to me by my right hon. Friend in a recent letter amounts to £180 million. That varies considerably from the figure which I was given before I left of £110 million.

The answer seems to be that the cost of retaining child tax allowances for nonresident children is about £45 million, and I accept that. If we are to care for the non-resident children, the question that has to be asked is whether that should be done at the expense of support for our own children or whether it should borne as part of general Government accountancy.

The Chancellor's give-away of £300 million in increased child tax relief does not come out of contingency reserve. Why should the maintenance of child tax relief for non-resident children come out of contingency reserve? I have never accepted that argument, although I agree that my right hon. Friend the Secretary of State has a tough time arguing these matters, but then one always has a tough time in Government.

There is a further mystical phrase in the letter I received from the Minister of State. He said that the total of £155 million was much nearer than the figure I had been told about. Then he went on to say: All the above figures are at 1975 survey prices and are not fit for publication. He went on to say that at 1977 prices—that is to say in actual money terms that may emerge in 1977—the cost becomes £185 million. I fail to understand that point. The cost of £2.64p per child is the same in 1977 as it was in 1975. If one is to say that there will be an automatic uprating of all the costs of all the items of public expenditure on the basis of the 1975 survey, the contingency reserve is presumably uprated as well and more money is available.

I remain convinced that the basic cost of the break-even rate of child benefit of £2.64p is about £110 million. The problem of the non-resident child should be spread over Government spending as a whole and should not be concentrated at the expense of our own children in this way. The Government have provided adequately for that in the contingency reserve but we find that there will he a switch from that important social policy of child benefit.

If, therefore, the Government now come along—and that is what I am afraid of—and say that the contingency reserve is there and still unspent but they will not allow us to have as much money out of it for child benefit, I believe it means that there has been a switch in our priorities. The postponement of the child benefit scheme is merely the first round of the next instalment of public expenditure cuts. It is a kind of advance cut and it is done at the expense of children and at the expense of a vital principle of our social policy. I tell my right hon. Friend that we are not going to take it. Even if the Government's arguments are accepted, and I do not accept them, we believe that it is better to have a more modest rate even than the breakeven rate. It is better to have about £2.50 than nothing at all.

Here we come to the second round of the Government argument. We are told that the benefit will not be big enough to make the switch from the father's pay packet to the mother's purse acceptable. In his statement on 25th May, announcing that child benefit was to be abandoned, my right hon. Friend read us a list of figures explaining the effect on take-home pay of the cancellation of the child tax relief and the transfer to the mother in the form of child benefit. Those were figures which we were led to believe brought whistles of dismay from the TUC. We were told that even the abolition of the under-eleven child tax relief would have reduced the take-home pay by £3 a week for the two-child family, £4 for the three-child family and nearly £8 for the large family of six. Those figures were supposed to have led to whistles of astonishment and trembles of anxiety.

Let us be precise about what we are talking about because there are only about 65,000 families with six children or more in the country. That is less than one half of 1 per cent. of all male employees. The assumption behind the horrifying figure of £8 is that all those six children are under elevent because if they are not they, of course, still get child tax relief.

I have consulted my experts—I still have a few to help me though they do not come from the Department of Health and Social Security. They inform me that in a maximum of 20 per cent. of those families would all the children be under eleven. When we talk of workers facing £8 a week deduction in take-home pay therefore we are speaking of about 0.1 per cent. of all male employees—and for that we are to be encouraged to abandon a major principle.

I want to say seriously to my right hon. Friend—and this is the essence of our case—the less money that we have to spend on the levels of child benefit, the more important it is to introduce child benefit at the same time as extending the payment to the first child. That is all he has on offer to make it attractive. That is why we have to dig our heels in and will continue to do that. Paying family allowance to the first child throws away the likelihood of being able to offer any inducement to fathers to make the switch in the next few difficult years that lie ahead.

This is the point which has been plugged by a very respected and authoritative member of the General Council of the TUC, Mr. Harry Irwin, deputy general secretary of the Transport and General Workers' Union. I wish that my right hon. Friend would go and have a chat with Harry Irwin—better still, that he would get the Chancellor of the Exchequer or the Prime Minister to do so. Mr. Irwin is blazing mad at the abandonment of the scheme and keeps saying to me time and again, "Barbara, if we do not do it now, when we extend the payment for the first child, we shall never do it. We will kill it." He has also authorised me to say that at no time has the General Council of the TUC decided that the scheme ought to be deferred. He told me, "If anyone tells you that it has would you please ask him to give the date? No doubt we can then turn up the minutes."

Mr. Irwin also pointed out that the demand for the introduction of the scheme next April is contained in the social contract document which has just been carried by 9 million of the members of the TUC at its special Congress. He said to me, "There it is. No one can get away from it. It is trade union policy."

Therefore, I say to my right hon. Friend that I welcome the setting up of a working party with the TUC and that those of us who are members of it will go through these possibilities line by line. We believe the trade union movement has been severely libelled by the accusations that the scheme had to be abandoned as part of the price to get the unions to accept the pay policy. Of course there will be some male chauvinists among them as there are everywhere, but that is not the official line of the trade union movement, and it is libeling it to suggest that it is.

We shall, in that working party, say to the trade unions, "What, at different levels of the available money, facing all that this will mean in the rate of child benefit and the consequences for take-home pay, are you prepared to accept?" If the working party comes back with recommendations which make it clear that the full child benefit scheme could be introduced next April without doing violence to public expenditure difficulties, and without causing a breach in trade union support for the pay policy, will the Government pledge tonight that they will accept those recommendations?

I know that my right hon. Friend the Secretary of State for Social Services cannot act alone in these matters. I know that the Prime Minister and the Chancellor of the Exchequer are abroad. But I say to him that we are fighting for him against them and that we shall go on doing so.

8.48 p.m.

Mr. D. E. Thomas (Merioneth)

It is a privilege to follow the right hon. Member for Blackburn (Mrs. Castle). I was glad to hear her make reference to the deputy general secretary of my union, the Transport and General Workers' Union, although I am only an ordinary and unsponsored member of it.

When the Secretary of State for Social Services made his announcement on this matter, I pleaded with him to talk again to the TUC about it. He lectured me about the social contract. But I stand firm with my right hon. Friend the former Secretary of State tonight. This pledge was within the social contract, and the social contract is about pay policy and about social policy—that, indeed, is the whole essence of the social contract. I hope that the Secretary of State will take to heart what my right hon. Friend has said on that issue.

I also very much endorse what my right hon. Friend said about tax allowances and the relationship between them and public expenditure. I have always failed to understand why in housing policy, for example, it was never possible to take the tax reliefs on mortgages and switch them into other forms of housing support. I have always been given the same argument that tax allowances on mortgages and mortgage interest do not count as public expenditure and therefore a switch of resources in that way was not possible. So it seems that negative spending is possible but positive spending is not. That seems to be incredible social economics which the Treasury and the Department should look at seriously. Indeed, there has been talk tonight of working parties, and there should be an inter-departmental working party on the issue of what we mean by positive and negative public expenditure. I wish that there was a Treasury Minister here to answer some of these points tonight.

I feel very strongly about this issue because I see it as the collapse of a major plank in the social programme of the Labour Party. Hon. Gentlemen opposite know that we on this Bench have always endorsed fully the social programme of this Government in terms of pay bed legislation, education legislation and housing policy. It is very sad for us to see this major plank of family poverty legislation being postponed indefinitely.

My right hon. Friend the Member for Blackburn was responsible for bringing before this House the major support of incomes in pensions. I only regret that her second plank of family support is not being introduced by the Government. I cannot accept that the granting of 30p, in terms of the £1 family allowance for the first child, which is what it means, is anything but a shadow of what the real scheme should be about. The whole basis of the scheme is that it gives a guaranted income as of right and removes dependence on means-tested benefits.

We have some 14 million children in the United Kingdom, 1 million of whom are in households which are in poverty. There are, of course, within those households, those who claim family income supplement. But a matter of deep concern for us all, even for the Conservatives—and I will not waste any time talking about the hypocrisy we have heard from this Front Bench tonight—is that there is such a poor take-up of means-tested benefits. Of particular concern is the take-up level of FIS, which I believe is only about 25 to 30 per cent. The whole purpose of introducing the child benefit scheme was that it moved away from dependence on the means-tested benefits. The fact is that dependence on means-tested benefits has increased since the social security system was introduced by the great Labour Administration of 1945. It is a sad reflection of the moral state of the Labour Party today that it is turning its back on a major plank of social policy such as this.

The minor difficulties which have been advanced by the Government for not introducing the minimum benefit level of £2.64 do not stand up to scrutiny. There is the question of the departmental advertising budget within the Department of Health and Social Security. It seems to me that it is not outside the bounds of possibility that there is money even under public expenditure cuts for expenditure on advertising under this Government. One has only to look at the money spent on defence recruitment advertising, for example. There is a big public expenditure commitment to advertising, yet there is no money to explain to ordinary working families that are losing money from the husband's pay packet to have it restored in the housewife's purse. This is beyond the bounds of explanation.

The Department of Health and Social Security is continually advertising benefits which are complicated. It advertises the whole supplementary benefit system, the mobility allowances, which are so difficult to get, and the attendance allowance. That is all being done, yet the same Department claims that it is impossible to advertise benefits which would have a substantial effect on the incomes of poor families.

I stress that one of the major aims of this proposal is that it brings benefit to those who are below the tax threshold. There are some 200,000 odd families who are too poor to pay tax and who therefore do not benefit from the child tax allowances. This means that the people who are suffering by the decision to postpone this benefit are those who need help most in a situation of inflation. I was trying to quote figures late on Thursday night to indicate that the inflation rate for low income families was some 4 per cent. higher than the average. The effect of this is that we are impoverishing people below the tax threshold even more by not introducing this benefit.

The Treasury has now decided to withdraw food subsidies. The justification put forward when the decision was announced was that there were other ways of helping poor families, that food subsidies were too universal in their application and that there were other universal benefits through the claw-back system which could replace them as a means of support. This child benefit was indicated to be the one which could help these poor families who benefited so much from food subsidies. It was estimated that to a family with two children they were worth 70p a week. Their withdrawal has meant that these families will be devoid of the strength of the support that they bring.

My major argument, therefore, is that we have had no clear justification from the Treasury Bench, neither now nor when the statement was first made, of the decision not to introduce this benefit. I think that I know what their justification is. It is the whole argument about public expenditure. This is a case where at least my party stands firm, together with our colleagues on this Bench. Since I have been in this House, we have voted against every public expenditure cut with the exception of defence.

My argument is that, if this is a debate about overall public expenditure, the next question that we must ask ourselves is which groups in our society are most deserving of higher public expenditure. In answer to that question, I say that families with children, especially families below the tax threshold with children, are the most deserving of public expenditure, and not the type of expenditure which we are still seeing on the MRCA and such junk on which this Government spend money.

If it is the public expenditure argument, which is the real argument in the corridors of power—every expenditure argument is one about priorities—what astonishes me is that this Government are giving such a low priority to tackling family poverty. That is why the three Members of my party will vote against the child benefit regulations when they come before the House.

8.59 p.m.

Mrs. Helene Hayman (Welwyn and Hatfield)

It is a great pleasure to be called immediately after the speech of the hon. Member for Merioneth (Mr. Thomas), who, I must say, is much better on social security matters than when lie is talking about nationalism. I wish that he had similar principles in other parts of his politics. There is no doubt that his was a much better speech and a much more sympathetic one than that of the right hon. Member for Wanstead and Woodford (Mr. Jenkin). The right hon. Gentleman demanded that Government supporters should stand up and be counted—which I am willing to do any time he likes. But, having heard his speech, strongly as I feel on the matter I find it difficult to feel any emotion that could be construed as support for him.

Mr. Tom Litterick (Birmingham, Selly Oak)

Where is he, anyway?

Mrs. Hayman

He has gone away somewhere. The shock of hearing the way that the motion had been framed was such that it led him into a huddle with the Opposition Chief Whip in an endeavour to discover what they could do to sort out this counting issue.

The right hon. Member for Wanstead and Woodford was much better on what this Government had done wrong than he was on what the Conservative Party could do right on this issue. We know that the Opposition have no case whatsoever on their record. We have no faith in putting the fate of families with children into the hands of right hon. and hon. Members opposite. But just because we have no faith in them, it does not mean that we can support the Government in their present policy on child benefit.

I do not think it is necessary tonight to adumbrate the advantages of the child benefit scheme. That was all done a long time ago. It was done on the Second Reading debate and throughout the Committee stage of the Child Benefit Bill. It has also been done in speeches in the House this evening.

When my right hon. Friend the Secretary of State was talking about the minimal cash advantages of a low-cost scheme, he was talking about the average family being a few pence better off. But that is not true of the poorest families. What is so important about a proper child benefit scheme is that it redistributes, and not just that it redistributes within the family or between husband and wife, because in most families that does not matter. It is the exceptional family in which there is a mean husband and the problem arises of the wife having to get the money from the Post Office. Most families recognise what family income is all about. Most families are not so ignorant or foolish that they do not understand that money from the Post Office is as good as money in the pay packet. It is not like that for the majority of families.

There are, of course, important reasons why that cash benefit to the mother is essentially one that should go to the woman, for budgeting reasons and all the reasons that the Select Committee looked into. But it is not just that redistribution that matters; it is redistribution between the higher taxpayer, the taxpayer and the non-taxpayer that is so important.

That is why I lost any sympathy I had with the right hon. Gentleman when he suddenly became concerned with the people on the higher rates of tax, and with putting the system right for them. He must have changed his mind. It was very early in the morning when we did a broadcast together and he castigated the Government for their scheme because it would help people like him and me, who were on higher rates of tax. He seems to have changed his mind about that, because one of his priorities now is to make sure that no one paying tax at a higher rate should be worse off.

I say frankly to my right hon. and hon. Friends on the Front Bench that I would accept a cheap child benefit scheme as long as no one on standard rate of tax was worse off, because the people who matter are those on standard rate and those who are below the tax threshold.

Nothing I have heard in all the rationales and explanations, in public and private, about abandoning the scheme, for changing it, or for the extension of the family allowance for the first child, has in any way convinced me that the Government are right.

Far from this year being the wrong year in which to introduce the child benefit scheme, I think it was exactly the right year in which to introduce it—for several reasons. One was that we in this House of Commons had passed an Act of Parliament in order to implement the child benefit scheme in 1977, and we had pledges and assurances that that would happen.

Another good reason was that we had the support of the trade union movement, because it was written into the social contract that we would have a child benefit scheme.

A third good reason—this is the one that my right hon. Friend the Member for Blackburn (Mrs. Castle) rightly stressed—was that we were extending to the first child a cash allowance. I honestly believe that all the problems about transfer become that much more difficult if we go for the compromise solution of £1 a week for the first child and make no attempt at a change from the tax system to the child benefit system. We even had the building in Washington New Town—the building to administer the scheme—free of the high alumina cement that was such a problem.

Some of us have longer memories of this row and remember the date not of 1977 but of 1976 for the introduction of the scheme. It comes a little hard when we hear the Government Front Bench saying now that 1976 would have been the year to introduce the scheme within the pay policy and the constraints on public expenditure, but that 1977 is difficult.

I was not as "hard line" as I should have been. I did not get on the Committee. I was not as "hard line" as I should have been over 1976. That is why we have to be hard line about 1977. It will not be "jam tomorrow" for ever.

Through inflation, child tax allowances had fallen behind. They were undervalued, and we had to give more support to families with children. What did we do? What was the Government's fatal error? It was in the Chancellor's Budget. I take responsibility for not recognising at the time the danger of what was being done with child tax allowances. Hon. Members on both sides of the House were too naïve.

If the Chancellor in his Budget speech on 6th April, as well as saying that he was asking the trade union movement to accept a lower level of wage settlements in return for the Government's making sure that wages were not in confetti, had said that part of the social wage contract was an increase in family allowances, he could have spent £300 million on the cash side instead of on the tax allowance side. We would not then have had all this talk about not being able to introduce the scheme, because we would not have put the idea into people's minds that the transfer was irreconcilable with pay policy. We should not have had talk of the difficulties of the transfer, because we should have been half way towards the child benefit scheme. We should have had the added push of the first child allowance and we should have been home and dry.

My right hon. Friend says that the message has not got across. Who has tried to put it across? No one has tried to put it across. The Government have not fought and lost the battle for the working people; they have fought the battle in the first place. What is worse, they are not only not fighting the battle, they are creating their own self-fulfilling prophecy every time Ministers tell the House that to bring in the child benefit scheme would be incompatible with a wages policy. They are making a rod for their own backs.

All hon. Members are committed to child benefit, although we may argue when it should be introduced. Tonight we should commit ourselves to the job of getting the message across and showing the value of the scheme as a measure to help the poorest families in our society. It gives me no pleasure to know that the Government are embarrassed over the debate. It gives me no pleasure to know that a vote will not, apparently, be risked. The Opposition Front Bench on the one hand ask us to stand up and be counted and, on the other hand, cannot even produce a form of words saying what they want or what the Government have done wrong. I am happy to rebel, but they will not give me a chance to rebel.

For all that the Conservatives say about this issue, and because they will willingly pick up this rod with which to beat the Government, it is worth saying that they have far more problems than we have in terms of educating their party on the benefits of the scheme. It does not matter whether we go home at 10 o'clock tonight or stay to do the other business of the House. It does not matter whether, tomorrow, the newspapers present this as a Government step-down in the face of Back Bench pressure or a great Tory tactical victory in the war of nerves that is tearing Westminster apart. What matters is the welfare of children.

Last year we passed the Children Act. We put into it a very important clause, which I would recommend to the Government to give them the strength and courage to look again to see where they have gone wrong and to introduce a better scheme. That clause simply said that first consideration should be given to the welfare of the child. That is what we are asking the Front Bench to do tonight.

9.12 p.m.

Sir Brandon Rhys Williams (Kensington)

I hope that the Civil Service in particular, but everyone else who may study Hansard, will realise that the House of Commons tonight is speaking for public opinion and that the Treasury Bench has got it wrong. It is a long time since the point was made that it would be useful to amalgamate the child tax allowance and the family allowance. It was made even before family allowances were introduced. Lord Keynes brought out the idea as long ago as 1939, and there have been many social reformers who have tried to advocate the same reform ever since. It used to be known as the Rhys Williams scheme, not because of anything I have done but because my mother published a pamphlet as long ago as 1942 in which this idea was put forward. But why is it especially relevant now?

Firstly, because tax allowances now are far larger than they were even a few years ago. I turned up a pamphlet which I wrote in 1969—it was called "Redistributing Income in a Free Society"—in which I calculated the value of the tax allowances as they then were. A personal allowance for a single man was then worth £70. It is now worth £257. For a married man whose wife was not at work the allowance was £127. It is now £380. For a married man the allowance, with the earned income allowance for the wife, was £193. Now under the Chancellor's proposals it is to be £637. So there have been substantial increases in the value of certain of the tax allowances.

But not in the child tax benefit. The children have been left behind. Even after the Chancellor's reform the child allowance will be worth only about £105 as I calculate it, and it was worth £87 in 1969. So the child tax allowance has not kept pace with inflation, or anything like it.

Then we have to consider retail prices. The retail price index is no fair measure of changes in prices as they affect families because it is an average, overall index which takes no account of family size. It is adverse to families in the way in which it works.

I can be most brief if I quote from some calculations I made just before the Budget this year. Using information taken from the official retail price index and the Family Expenditure Survey, it appears that an average household of two adults and two children spent about £13.60 a week on food in January 1974 but now has to spend about £19 a week for the same items; in other words, an increase of £5.50 a week. For a single person the increase is about £2.16.

Family allowances were raised in 1975 by 60p for the two-child family, but the increase is taxed in most cases. Using round figures and allowing for the change in child tax allowances in 1974, the average family is now at least £3 a week worse off than a single person in buying normal household essenials as a result of the price changes over the last two years. For larger families the effect of inflation has been even worse.

In his Budget, the Chancellor confirmed that. He said: For a number of reasons, the real incomes of families with dependent children have fallen behind in the last few years, relative to those of the majority of single people. Since 1972 policy on low pay and equal pay has tended to help single people more than married people and married people with children least of all. Although last year I made the first increase in family allowances since 1968, the child tax allowances have not been increased since 1974. As a result families with children have been bearing a disproportionately high part of the total tax burden".—[Official Report, 6th April 1976; Vol. 909, c. 274–5.] However, even with the increases in the child tax allowances which the Chancellor announced, they still have not anything like kept pace with changes in the value of money.

Again, I should like to draw attention to the contrast between British rates of family benefit and the rates in the Common Market. In Belgium, for instance, a mother with two children gets six times the rate of benefit that applies here. In Germany she gets five times our rate. In passing, I might mention that both those countries have lower birth rates than we have here. Germany brought in this particular reform which we now call the child benefit scheme, two years ago, without popular resentment or fuss, and I do not think that the Government are right in assuming that for some reason the British electorate—or British working men—are less enlightened than their German counterparts.

Another thing that must be brought into this balance of calculation is that we have moved forward towards the concept of equal pay. One might use the slogan "Equal take-home pay for equal work." Why should a married man with children take home more pay than a married man without children who has done precisely the same work? One might say that that is only a cheap point, and, that we all know the historical reasons. However, we have moved from the era in which pressure could be placed upon employers to give more money to men than to women, because the men had family responsibilities; and, in particular, more to married men with children than to single men. When I was directly engaged in personnel management, that was still a concept that had survived from the nineteenth century, but now it is dead. We must make good to family men what their wives need by some other means.

We have to recognise, too, that the status of woman has changed altogether dramatically even since the end of the war. We do not now look upon housewives as an appendage or even a junior partner in marriage. The mother is a citizen with vitally important responsibilities, and it is quite wrong that women with families should not have the same degree of self-respect and power of choice as women who are able to go out to work. Women who go out to work, I concede, have had the advantages of women's liberation and they are able to get the benefit—or soon will, we hope—of equal pay. However, the nearer one gets to the kitchen sink the further back one gets into the Middle Ages. It is wrong that we should give mothers functions without the certainty and self-respect which go with a clear and regular cash competence. It is also wrong for the children.

Let us look at the facts in the National Food Survey and the actual things bought by the larger families. They spend less per head on meat, milk and cheese and more on bread and potatoes—for obvious reasons. The mothers have to make do with the less nourishing foods, by and large. Goodness knows what many poor families have done while the price of potatoes have been so high.

Then one has to refer to the large number of one-parent families. We talk about one-parent families, but we do too little for those families that are the worst hit by inflation. We have a cohort of tens of thousands of underfed and under-cared for children waiting for a square deal and a square meal, while the Labour Party sets up another committee.

It is fair to ask where the money would come from. It does not require a money allocation from the State to mothers. What we are looking at here is a matter of incomes policy, because the whole question is one of the redistribution of income. I am not talking of the redistribution of income between man and wife within the immediate tax and benefit situation. We have to look at the incomes policy as it unfolds as a matter of Government policy in tackling inflation. I was told in a Treasury Answer that last year's £6 policy cost about £3,000 million in terms of extra spending power. This year, I suppose the new incomes policy will mean a release of at least £2,000 million in terms of extra spending power.

Why do the Labour Government choose to give higher wages as the only means of beating the index? It is clear that the Labour Party is the party of organised labour versus the rest. It is no longer a party of social concern. The real issues that we are debating tonight are not pence a week for this group or that, but the much larger questions of the status of women, their sanity and self-respect, and the breakdown of family unity. Motherhood is turning into a poverty-stricken interlude in a working career; and that is wrong.

We must think, too, of the nourishment and care of thousands of children. That is apparently amusing to the Minister. The Secretary of State in his amazing and regrettable speech made the trade unions of this country sound like minotaurs that are able to be appeased from laying waste the land only by the sacrifice of the children. But that is an appalling judgment and it is absolutely untrue of the leaders of British trade unions and of British working men as a whole.

The question is: when inflation is reducing our standard of life, who should be protected—women and children, or the men in the powerful unions? The Labour Party has given its answer, and it will not be forgotten. The decision that the Government have taken on child benefit will soon be seen to have been the fatal mistake of the Labour Party in this Parliament.

9.24 p.m.

Mr. George Cunningham (Islington, South and Finsbury)

I shall be brief, in order to be kind to the Opposition, but I do not know why I should be since what we should be doing tonight is passing a substantive motion on this very important matter. The exact words of that motion could have been argued about, but it could have been the lowest common denominator held by all those who regret that Government's decision to suggest to the House that we ought to postpone the implementation of the scheme.

The Opposition know that had we moved such a motion there would have been enough of us on the Government side to vote for and carry it. That is how the House of Commons is supposed to behave, but it can behave in that way only if the Opposition are prepared to use their time and their facility for moving motions to move that kind of motion. We know why they did not do so; it was because they felt that if they put 300 votes into the Lobby and we put in 20, we would have got the credit. That is the way in which the House has to work, but unless the Opposition are prepared to use their time in that way this House might as well give up any opportunity of second guessing any Government and put up with what the Government say.

Secondly, we are going through a repetition of the nonsense of last year, when we had the Treasury operating on the tax side and the Department of Health and Social Security operating on the social security side, with inadequate co-ordination between the two. We received assurances in January last that the liaison between the two would be greatly improved for the future. That was after the earnings rule nonsense. It seems that so soon after that decision the liaison has not at all improved.

A number of hon. Members have talked in terms of take-home pay or child benefit. We have also talked of the need to educate the public about the whole subject. We could begin by ceasing to draw that distinction. Child benefits are part of take-home pay. They are certainly as much part of take-home pay as what is in the husband's pay packet. If we use language in such a way that that is concealed, we are doing the cause no good.

This having become a charade debate, because of what the Opposition failed to do, it is as well to note that next week, or perhaps the week after there will be a real opportunity to do something practical on this matter. This is to ensure that when the Finance Bill comes back from Committee to the Floor of the House the Government's proposal to increase child tax allowances by £60 a head, which, as the Bill is framed, will extend until the next amendment, should be amended so that the increase applies only to the present year. That would mean that there would be £300 million available from next April for switching over to child benefit. At the least, it would mean that next spring, in the Finance Bill, anyone—not only a Minister—would be able to propose that that money should be so used. If the Finance Bill is passed as it stands, no one other than a Minister will next year be able to reduce the tax allowances available for children.

I hope that, this debate having proved of no practical value, we shall decide on the Finance Bill to do that little thing to ensure that we have further opportunities to achieve the purpose on which it is clear from the debate so many people are agreed.

9.27 p.m.

Mr. Kenneth Clarke (Rushcliffe)

I shall attempt to deal with the value of the debate as I contribute to it. Its first practical effect is that it has illustraed the wide measure of agreement among everybody except those on the Treasury Bench about the Government's decision to abandon child benefit. The Secretary of State has been without a friend on either side of the House throughout the evening, though I see that the Minister of State is anxious to leap into the breach as a friend in a few minutes.

Nobody on either side of the House has had a good word to say for the decision. After the Secretary of State's disgraceful speech, I am not surprised that he decided that not enough hon. Members will support his decision at 10 o'clock even if Whipped.

Perhaps I had better begin by reminding the House how much agreement there has been between us in the past, as there was a certain amount of ritual abuse from the right hon. Member for Blackburn (Mrs. Castle) and the hon. Member for Welwyn and Hatfield (Mrs. Hayman) about our position. One of the startling things about the Government's position is that they are trying to go back on what everybody was agreed upon until the Secretary of State rose in the House on 25th May. Until then, every political party represented in the House and every significant organisation outside, including the TUC, was agreed on the implementation of the child benefit scheme.

I heard the hon. Member for Welwyn and Hatfield tell millions of radio listeners this morning that she voted for child benefit last year. She never did, because nobody has ever voted against it. Not one hon. Member has ever made a speech against it. The Secretary of State's announcement on 25th May was the first occasion on which anybody indicated that he disagreed. The right hon. Gentleman and his Cabinet colleagues were the first, and are so far publicly the only people, to break ranks with the previous agreement.

Only twice in the evolution of the child benefit scheme has there been controversy. When we first produced the scheme in the tax credit Green Paper, the Conservative Government allowed incautious words to be included about the possibility of the child credit not being paid to the mother. We faced an uproar from women's organisations throughout the country, and there were 300,000 signatures on a petition presented by the right hon. Member for Blackburn before we hastily retracted and committed ourselves to child benefits payable to the mother.

The only other controversy was about the April 1976 start. One feels a little chastened when the right hon. Member for Blackburn attacks us for being hypocritical and inconsistent. The only time we challenged her proposals last year was when we pressed a vote in support of the original intention of an April 1976 start. That was a substantive amendment. It was not carried, because not enough Labour members abstained, and the Government got away with it. They did not abstain, because they were given assurances, no doubt in good faith, by the right hon. Member for Blackburn that they did not have to support the Tories on that occasion, because in April 1977 the scheme would definitely be introduced. When the hon. Member for Welwyn and Hatfield recalls her record on this I can only say that last year we told her so. Last year she had the opportunity of voting for a Conservative amendment that would have had it in the bag, but she was persuaded by promises, which her Front Bench have completely reneged on, that the scheme would come in April 1977.

It is worth recalling that the wide measure of agreement among all political parties and groups interested in social policy came into being because of the virtues of the child benefit scheme, which were quite regardless of the level of benefit that the economic circumstances at the time might allow. We all accept that in present economic circumstances it would not be possible to introduce a scheme at anything like the level of benefit that everyone would have wished. We Conservatives would say that is because of the Government's mismanagement of the economy, the disasters of the social contract, their squandering of funds, and other matters.

There are other virtues which led the hon. Member for Welwyn and Hatfield, the Child Poverty Action Group, and others to accept a scheme although at a disappointingly low level of benefit. First, the child benefit scheme would end the tangle of family allowances, child tax allowances and national insurance child additions. That was a feature of our tax credit proposal, adopted by the Government—that it would turn the different provisions in different systems of tax and benefit into one pool of money so that we could use that to provide a child benefit tax free to all mothers, including those below the tax threshold.

The second reason for the advantage of the structure is that it is aimed to ease the poverty trap and give an incentive to work. This is something on which feelings are not confined to Members on the Opposition side of the House. There can be no Member of this House who does not know that the resentments about the present system of family support comes from the low wage earner who is struggling to try to earn something for himself and for his family but discovers he has no encouragement to earn when he sees what is available to those on national insurance benefit without working. A particular advantage of Child benefits is that they would go to the low wage earner and would be an advantage that he would get to a greater extent than the national insurance beneficiary, who would have his child addition reduced to take account of the new benefit. Another reason which should appeal to Members on both sides is that this benefit would be uncomplicated by the cohabitation rule, which so bedevils many one-parent families at the moment.

Most important of all to everyone except the Prime Minister and the Chancellor of the Exchequer was the transfer from the pay packet to the handbag. As my hon. Friend the Member for Eastleigh (Mr. Price) has reminded us, this was always a positive advantage of the scheme contemplated throughout. It is astonishing to read the Cabinet minutes, in which it apparently suddenly began to dawn upon those present that this was a feature of the scheme when it had actually been advocated as a benefit of the scheme from beginning to end.

We still see it as a benefit. It is a reflection of the changed status of housewives and mothers in society—a change which I believe is acceptable particularly by the age group likely to have families and likely to be affected. One cannot help feeling that in this particular case the reason that it has been challenged only by the present Treasury Front Bench is that they perhaps no longer have such young families, and are not in touch with changed social attitudes towards women and motherhood—and the fact that the Labour Party is not led by a woman.

I have listed benefits that would flow from the child benefit scheme regardless of the level of benefit. It was a great social reform, supported by everyone in public life, and for that reason free from controversy—until today.

The child benefit scheme was quite different from what the Government are proposing now. They are proposing a family allowance for the first child, subject to tax and clawback. The cynicism that enables the Secretary of State to present that as a first step towards child benefit beggars belief. His right hon. and hon. Friends have demonstrated to the satisfaction of us all that the Government's policies this year have actually gone in the opposite direction.

The Government's cynicism in saying that this is a step in the right direction is made worse by the fact that their proposals do nothing for the poorest families, in particular those below the tax threshold. Their scheme also runs the risk, when one considers families in receipt of family income supplement and means-tested benefits paying tax and subject to clawback on family allowance for the first child, that there are families who could be worse off if they applied for the Government's new benefit, in precisely the same way as there are single-parent families worse off now if they apply for the child interim benefit. To describe that scheme as a step towards child benefit is a disgraceful attempt to mislead the House about what the Government have decided.

Most of the reasons for the Government's U-turn have been adequately dealt with. The Government are asking the entire House of Commons to march back in the opposite direction to the road we have all gone along in social policy for families.

Public expenditure has been thrown in as a reason by the Secretary of State, largely by putting up Aunt Sallies in the form of highly expensive versions of the scheme that no one is advocating and then knocking them down. But public expenditure was not the main point of the argument; the Cabinet leaks have made that clear. There are constraints on public expenditure which everyone has to accept. A scheme of nil cost to public funds would have been very difficult to accept—although the Child Poverty Action Group was even prepared to accept that—and the transfer from taxpayers to non-taxpayers under a nil cost scheme would have made many standard rate taxpayers worse off, and that was not advocated.

But the Government have found £95 million for their pathetic scheme. That is enough for £2.50 plus residual tax allowances for those with children over 11. The Secretary of State cannot deny that. On 25th May, he said: I cannot pretend that I am happy to make the announcement. The introduction of the full scheme without premium would have cost precisely the same amount, £95 million. The new level of child benefit would have been £2.50. That would have been substantially paid for by a greater reduction in take-home pay."—[0ffical Report, 25th May 1976; Vol. 912, c. 293.] There are other variants on what one can do with that money—or, as my right hon. Friend the Member for Wanstead and Woodford (Mr. Jenkin) has shown, with less money—without interfering with public expenditure constraints. Variants are described by Pat Healy this morning in The Times, and others can be explored. For a much lower expenditure of public funds, a much more worthwhile step towards child benefits could have been taken.

The real reasons, as we know from the leaks, was that the pay-packet-to-handbag argument suddenly occurred to a few reactionaries in the Cabinet. The Prime Minister and the Chancellor were terrified by it, and they manipulated first the Cabinet into thinking that that was the view of the trade union movement and then the trade union movement into thinking that that was the view of the Cabinet, and tricked both bodies into this situation. The Government, having tricked the Cabinet and the trade union movement, are apparently contemplating tricking the House tonight by avoiding a vote on the motion.

In turning to this, my last point, I shall deal with the half-hearted leaping to the Government's defence by the hon. Member for Islington, South and Finsbury (Mr. Cunningham), about Adjournment debates. All of us have taken part in many debates on the Adjournment. It is a strange but long-established constitutional procedure by which the most clear-cut decision on the Government's position can be made on the Adjournment. On the argument used by hon. Members on the Government Benches, Chamberlain could have abandoned the Government's business for the night and carried on with the conduct of the war when the House debated an Adjournment motion on the Norwegian campaign. As we all know, he was in fact brought down on just such a motion.

A substantive motion could have been amended. The hon. Member for Islington, South and Finsbury, for instance, could join me in producing a motion, from the Government's point of view: "reaffirming the Government's commitment to end family poverty; regretting that it is not practicable to introduce child benefit now; welcoming the setting up of the working party; urging the working party to be speedy in its deliberations and in reporting its conclusions". On such a motion the hon. Member and all hon. Members opposite would vote with the Government.

The Government will not vote tonight. There is only one reason why they will not do so. There is no other reason why they are abandoning their late night busi- ness and why the Secretary of State for Industry, who has now entered the Chamber, will sadly have to go home. It is that the Government knew that they would be defeated. They knew that Parliament would not approve of that disgraceful speech and that disgraceful decision. They are attempting to deprive Parliament of the right to pass judgment on that decision. It is not an attempt that will succeed for much longer.

9.41 p.m.

The Minister of State, Department of Health and Social Security (Mr. Stanley Orme)

The reason the Government will not vote tonight is that the argument between my hon. Friends, right hon. Friends and the Treasury Front Bench is a real one. It is an argument about the social conscience. It is about priorities and how those priorities should be implemented by a Labour Government. It has nothing to do with the fallacious arguments we heard from the Tory Benches. A week ago the right hon. Lady the Leader of the Opposition was going to table a motion on this issue but she withdrew it.

Mr. Patrick Jenkin

What is the right hon. Gentleman's evidence for that?

Mr. Orme

It is a well-informed leak. The reason the Opposition did not pursue the matter was the public expenditure argument, and they ducked it. So they thought that tonight by dividing on the Adjournment motion they would have the pleasure of seeing the genuine division that exists between many hon. Members on this side about the interpretation and adoption of this scheme—not about the principle. We are denying right hon. and hon. Members that pleasure.

Mrs. Audrey Wise (Coventry, South-West)

Does my right hon. Friend agree that the true face of the Conservative Opposition is shown by their repeated statement that it would be worth while introducing a scheme which actually spent less than the Government intend to spend on family support? That is the true face of Toryism.

Mr. Orme

I thank my hon. Friend This is the point I want to develop. I want to say something about the past policy of the Tory Party on this issue. When we talk about family allowances—

Mr. Patrick Jenkin

Go on.

Mr. Orme

I shall talk about them because the Tories did not talk about them between 1970 and 1974.

Mr. Patrick Jenkin rose—

Mr. Speaker

Order. If the Minister does not give way, the right hon. Member for Wanstead and Woodford (Mr. Jenkin) must resume his seat.

Mr. Orme

I will give way if the normal courtesies are observed by the right hon. Gentleman.

Mr. Patrick Jenkin

Will the right hon. Gentleman say why his right hon. Friend the Secretary of State said to the Cabinet in his minute that families with children were getting substantially less support than the Tories provided in 1971 and 1972?

Mr. Orme

As I said previously, and as my right hon. Friend said, one must not believe everything one reads in the papers.

Mr. Jenkin

But the right hon. Gentleman said so.

Mr. Orme

No, he did not.

The Conservative Party fought an election in 1970 promising the introduction of the family allowance for the first child. The late Mr. Iain Macleod gave that firm promise. Mr. Frank Field, the gentleman who is creating a little stir at the moment, became a very strong Conservative supporter at that time because he believed that the Conservative Party would implement this scheme. I must say that during the four years between 1970 and 1974 I did not notice Mr. Field marching up and down Downing Street with a poster asking "Why have not the Conservatives carried out their manifesto promise?" The present policy of the Conservative Party is sheer hypocrisy and we are not going to fall for the type of argument which has been used by them tonight.

It has been said that the Conservative Party is led by a woman and that she understands these issues better than a man. Where does the right hon. Lady stand on major social issues? Where did she vote in this House on school milk, divorce reform, abortion and on race? Where does she stand on these issues?

I want to come to the arguments which my right hon. and hon. Friends raised during the debate. There is a genuine argument—it was deployed by my right hon. Friend the Member for Blackburn (Mrs. Castle) and by my hon. Friend the Member for Welwyn and Hatfield (Mrs. Hayman)—that the transfer ought to be made on a straight forward basis and that there would be no difficulty in selling that transfer. On the other hand, they argued that the time to introduce it was when the benefit was introduced for the first child because it would make it easier to sell the scheme. The fact has got to be faced that this scheme, which is a major social revolution—[An HON. MEMBER: "We have not got it."] It is not a funny matter, either. The scheme is a transfer of real economic power to women in this country, many of them working-class women, who with this money will have an independence that they have not had before.

Mr. Patrick Jenkin

Where is the scheme?

Mr. Orme

The Government have made it absolutely clear that this scheme has not been abandoned and will not be abandoned.

Mrs. Kellett-Bowman

What about the women who demonstrated in the Public Gallery earlier?

Mr. Orme

I wish the hon. Lady would allow me to develop the argument about the transfer because this is absolutely crucial.

On the question of transferring on the basis of a figure of £2.50—in other words, a straightforward transfer—obviously we would make adjustments in respect of working people in the poorest categories so that there would be no financial loss to any family, however poor it may be. When it comes to this transfer, the Government will make the social revolution stick. But to do this we need a net gain for the family as such. That is absolutely crucial. The argument has been used by Pat Healy and other people in the columns of The Times—namely, that all one needs is a straight transfer with no extra public expenditure.

Let us remember that Members of the Tory Party have said that they do not want to spend any more money—[HON. MEMBERS: "They want to spend less."] They want to spend less and yet they want better benefits. That is a fallacious argument—[interruption.] I am embarking on a serious argument that involves implementation of this scheme—[HON. MEMBERS: "When?"] A first start will be made in April next year with the payment in respect of the first child—something that was never done by the Conservative Party.

I understand the arguments used by my right hon. and hon. Friends. We shall discuss these issues with the working party in which the Government will take part. It will then be possible to discuss these issues away from the present controversy. It must be remembered that the pay policy and the public expenditure situation have coincided with the implementation of this scheme. However Government are firmly on record that they will implement this scheme.

Mr. William Molloy (Ealing, North)

When the working party reports, will there be an opportunity for a sensible debate in this House? Will my right hon. Friend ensure that the Government will not make the mistake, as they have tonight, of annoying many of us and of permitting the Conservative opposition to indulge in an orgy of hypocrisy?

Mr. Orme

I assure my hon. Friend that I should like to see an ordered debate in this House, but obviously the Opposition will not give us this opportunity.

Hon. Members

Vote.

Mr. Speaker

Order. I remind the House that the Opposition spokesman was heard in reasonable silence.

Mr. Orme

The fact that the incomes policy and the public expenditure situation have coincided with the implementation of the scheme has meant that the priorities have to be examined. I know that every section of the people who are deeply involved—the TUC, the Labour Party and the Government—will examine those priorities. We shall want to discuss the issues and to debate them in the House of Commons. [HON. MEMBERS: "When?"] This is a serious issue. When my hon. Friends speak from personal experience, there is no difference between the Government Front Bench and those behind me on what we eventually want to achieve in our policy.

Apparently it is in order to quote one's personal experiences at the Dispatch Box. As the child of a one-parent family, I know what poverty is and know what the introduction of this scheme means to poor families. I believe in the scheme, as does my right hon. Friend and as do the Government. Are the Opposition prepared to spend the amount of public money needed for the full scheme? They are not.

The basic argument is that of phasing in, and it is interesting to recall that the right hon. Member for Leeds, North-East (Sir K. Joseph) said on 10th November 1970 that it shifted £180 million from the pockets of the men to the handbags of the women. That point of view may be over-estimated or under-estimated but at least it has implications of which no Government can be certain. My hon. Friend the Member for Bedwellty (Mr. Kinnock) challenged the right hon. Gentleman on that and he reiterated that phasing-in should take place.

My right hon. Friend the Member for Blackburn said that the scheme would cost £95 million, but that would bring in a benefit of only £2.45 a week. Frankly, if one is to sell the issue one has to have a benefit that is in excess of that figure. It is a figure about which there must be debate and one which the Labour party—

Mrs. Wise

Will my hon. Friend bear in mind that £103 million was allocated in the Chancellor's current Budget for improving the position of people earning £4,500 and over. Perhaps he could suggest to the Chancellor that that is an area from which funds could be found for improving family benefit.

Mr. Orme

I take note of what my hon. Friend the Member for Coventry, South-West (Mrs. Wise) said. She will remember that the right hon. Memfor Wanstead and Woodford (Mr. Jenkin) said that he wanted to protect the higher earners and that he believed in helping them while, at the same time, introducing the scheme. How are they to pay for that?

I say to my right hon. and hon. Friends that the Government's answer to that problem is for the working party to start as early as possible on negotiations with the people in the Labour movement who believe in the scheme, and certainly not with the Opposition. [Interruption.] Earlier, we saw part of the human face of Conservatism, but look at the hon. Members who have arrived in the Chamber now. Those are the real faces of Toryism. The Government will go ahead, they will implement the scheme and we shall not back down in the face of the Opposition.

Mrs. Margaret Bain (Dunbartonshire, East) rose—

Mr. Hamish Watt (Banff)

rose in his place and claimed to move, That the Question be now put.

Question, That the Question be now put, put and agreed to.

Mr. Speaker

The Question is, That this House do now adjourn—

Mr. Patrick Jenkin

On a point of order, Mr. Speaker—

Mr. Speaker

There can be no point of order when the House has instructed me to put the Question.

I shall put the Question again.

Question put accordingly, That this House do now adjourn:—

The House divided: Ayes 259, Noes 0.

Division No. 202.]	AYES	10.0 p.m.
Adley, Robert	Edwards, Nicholas (Pembroke)	Hurd, Douglas
Aitken, Jonathan	Elliott, Sir William	Hutchison, Michael Clark
Alison, Michael	Emery, Peter	Irving, Charles (Cheltenham)
Arnold, Tom	Evans, Gwynfor (Carmarthen)	James, David
Atkins, Rt Hon H. (Spelthorne)	Eyre, Reginald	Jenkin, Rt Hon P. (Wanst'd & W'df'd)
Awdry, Daniel	Fairbairn, Nicholas	Jessel, Toby
Bain, Mrs Margaret	Fairgrieve, Russell	Johnson Smith, G. (E Grinstead)
Baker, Kenneth	Farr, John	Johnston, Russell (Inverness)
Banks, Robert	Finsberg, Geoffrey	Jones, Arthur (Daventry)
Beith, A. J.	Fisher, Sir Nigel	Jopling, Michael
Bell, Ronald	Fletcher, Alex (Edinburgh N)	Joseph, Rt Hon Sir Keith
Bennett, Sir Frederic (Torbay)	Fletcher-Cooke, Charles	Kaberry, Sir Donald
Bennett, Dr Reginald (Fareham)	Fookes, Miss Janet	Kellett-Bowman, Mrs Elaine
Benyon, W.	Forman, Nigel	Kershaw, Anthony
Berry, Hon Anthony	Fowler, Norman (Sutton C'f'd)	Kilfedder, James
Biggs-Davison, John	Fox, Marcus	Kimball, Marcus
Blaker, Peter	Fry, Peter	King, Evelyn (South Dorset)
Body, Richard	Galbraith, Hon. T. G. D.	King, Tom (Bridgwater)
Boscawen, Hon Robert	Gardiner, George (Reigate)	Kitson, Sir Timothy
Bottomley, Peter	Gardner, Edward (S Fylde)	Knight, Mrs Jill
Bowden, A. (Brighton, Kemptown)	Gilmour, Rt Hon Ian (Chesham)	Knox, David
Boyson, Dr Rhodes (Brent)	Gilmour, Sir John (East Fife)	Lane, David
Braine, Sir Bernard	Glyn, Dr Alan	Langford-Holt, Sir John
Brocklebank-Fowler, C.	Godber, Rt Hon Joseph	Latham, Michael (Melton)
Brotherton, Michael	Goodhart, Philip	Lawrence, Ivan
Bryan, Sir Paul	Goodhew, Victor	Lloyd, Ian
Buchanan-Smith, Alick	Goodlad, Alastair	Loverldge, John
Buck, Antony	Gow, Ian (Eastbourne)	Luce, Richard
Budgen, Nick	Gower, Sir Raymond (Barry)	MacCormlck, Iain
Bulmer, Esmond	Grant, Anthony (Harrow C)	McCrindle, Robert
Burden, F. A.	Gray, Hamish	Macfarlane, Neil
Butler, Adam (Bosworth)	Griffiths, Eldon	MacGregor, John
Chalker, Mrs Lynda	Grimond, Rt Hon J.	Macmillan, Rt Hon M. (Farnham)
Channon, Paul	Grylls, Michael	McNair-Wilson, M. (Newbury)
Churchill, W. S.	Hall, Sir John	McNair-Wilson, P. (New Forest)
Clark, Alan (Plymouth, Sutton)	Hall-Davis, A. G. F.	Marshall, Michael (Arundel)
Clark, William (Croydon S)	Hamilton, Michael (Salisbury)	Marten, Nell
Clarke, Kenneth (Rushcliffe)	Hampson, Dr Keith	Mates, Michael
Clegg, Walter	Hannam, John	Mather, Carol
Cockcroft, John	Harrison, Col Sir Harwood (Eye)	Maude, Angus
Cooke, Robert (Bristol W)	Harvie Anderson, Rt Hon Miss	Maudling, Rt Hon Reginald
Cope, John	Hastings, Stephen	Mawby, Ray
Cordle, John H.	Havers, Sir Michael	Maxwell-Hyslop, Robin
Corrie, John	Hawkins, Paul	Mayhew, Patrick
Costain, A. P.	Hayhoe, Barney	Meyer, Sir Anthony
Crawford, Douglas	Heath, Rt Hon Edward	Miller, Hal (Bromsgrove)
Critchley, Julian	Henderson, Douglas	Mills, Peter
Crouch, David	Heseltine, Michael	Miscampbell, Norman
Crowder, F. P.	Hicks, Robert	Mitchell, David (Basingstoke)
Davies, Rt Hon J. (Knutsford)	Higgins, Terence L.	Moate, Roger
Dean, Paul (N Somerset)	Holland, Philip	Monro, Hector
Dodsworth, Geoffrey	Hooson, Emlyn	Montgomery, Fergus
Douglas-Hamilton, Lord James	Howe, Rt Hon Sir Geoffrey	Moore, John (Croydon C)
Drayson, Burnaby	Howell, David (Guildford)	More, Jasper (Ludlow)
du Cann, Rt Hon Edward	Howell, Ralph (North Norfolk)	Morgan-Giles, Rear-Admiral
Durant, Tony	Howells, Geraint (Cardigan)	Morris, Michael (Northampton S)
Dykes, Hugh	Hunt, David (Wirral)	Morrison, Charles (Devizes)
Eden, Rt Hon Sir John	Hunt, John	Morrison, Hon Peter (Chester)
Mudd, David	Ross, Stephen (Isle of Wight)	Tebbit, Norman
Neave, Alrey	Rossi, Hugh (Hornsey)	Thatcher, Rt Hon Margaret
Nelson, Anthony	Rost, Peter (SE Derbyshire)	Thomas, Dafydd (Merioneth)
Neubert, Michael	Royle, Sir Anthony	Thomas, Rt Hon P. (Hendon S)
Newton, Tony	St. John-Stevas, Norman	Thompson, George
Normanton, Tom	Scott, Nicholas	Townsend, Cyril D.
Nott, John	Scott-Hopkins, James	Trotter, Neville
Onslow, Cranley	Shaw, Giles (Pudsey)	Tugendhat, Christopher
Osborn, John	Shaw, Michael (Scarborough)	van Straubenzee, W. R.
Page, John (Harrow Weat)	Shelton, William (Streatham)	Vaughan, Dr Gerard
Page, Rt Hon R. Graham (Crosby)	Shepherd, Colin	Viggers, Peter
Parkinson, Cecil	Shersby, Michael	Wainwright, Richard (Colne V)
Pattle, Geoffrey	Silvester, Fred	Wakeham, John
Penhallgon, David	Sims, Roger	Walder, David (Clitheroe)
Percival, Ian	Sinclair, Sir George	Walker, Rt Hon P. (Worcester)
Peyton, Rt Hon John	Skeet, T. H. H.	Walker-Smith, Rt Hon Sir Derek
Pink, R. Bonner	Smith, Dudley (Warwick)	Wall, Patrick
Price, David (Eastlelgh)	Speed, Keith	Warren, Kenneth
Prior, Rt Hon James	Spence, John	Watt, Hamish
Pym, Rt Hon Francis	Spicer, Jim (W Dorset)	Weatherill, Bernard
Ralson, Timothy	Spicer, Michael (S Worcester)	Wells, John
Rathbone, Tim	Sproat, Iain	Welsh, Andrew
Rees, Peter (Dover & Deal)	Stainton, Keith	Whitelaw, Rt Hon William
Reid, George	Stanbrook, Ivor	Wiggin, Jerry
Renton, Rt Hon Sir D. (Hunts)	Stanley, John	Wilson. Gordon (Dundee E)
Renton, Tim (Mid-Sussex)	Steen, Anthony (Wavertree)	Winterton, Nicholas
Rhys Williams, Sir Brandon	Stewart, Donald (Western Isles)	Young, Sir G. (Ealing, Acton)
Ridley, Hon Nicholas	Stewart, Ian (Hitchin)	Younger, Hon George
Ridsdale, Julian	Stonehouse, Rt Hon John
Rifkind, Malcolm	Stradling Thomas, J.	TELLERS FOR THE AYES:
Rippon, Rt. Hon Geoffrey	Tapsell, Peter	Mr. Spencer Le Marchant and
Roberts, Michael (Cardiff NW)	Taylor, R. (Croydon NW)	Mr. James Lester.
Roberts, Wyn (Conway)	Taylor, Teddy (Cathcart)
NOES
NIL
	TELLERS FOR THE NOES:
	Mrs. Winifred Ewing and
	Mr. Dafydd Wigley.

Question accordingly agreed to.

Adjourned at twelve minutes past Ten o'clock.