HC Deb 22 May 1980 vol 985 cc710-1
Q2. Mr. Ralph Howell

asked the Prime Minister if she will make a statement on the steps being taken or proposed to deal with the "Why work?" syndrome.

The Prime Minister

The Government have sympathy with the views expressed by my hon. Friend. Policies which en courage effort and improve the balance between income in work and out of work are central to our approach. The measures announced in my right hon. and learned Friend's Budget to bring short-term benefits into tax, and meanwhile to increase the uprating of these benefits by less than the rate of inflation, to improve substantially the family income supplement for lower-income families in work, and to withdraw the earnings-related supplement are examples of this policy in action.

Mr. Howell

I thank my right hon. Friend for that reply. Whilst I appreciate the great efforts that the Government have made to remedy the "Why work?" problem, does she not agree that incentives will be restored only when tax thresholds are raised considerably and the basic rate is considerably reduced?

The Prime Minister

I agree that we should like to do both those things, and that both would go quite a long way to deal with the problem on which my hon. Friend has taken such an excellent lead. But to raise the thresholds for single and married people would cost more than £700 million for each £100 by which they were raised. To reduce the standard rate of tax by 1p also costs about £700 million, so it is a very expensive policy.

Mr. Ioan Evans

Will the right hon. Lady get her priorities right? Rather than worrying about the "Why work?" syndrome, why does she not worry about the "Right to work demand"? With 1½ million unemployed and massive redundancies in the steel and coal industries, why do not the Government change their economic policies?

The Prime Minister

I entirely agree with the hon. Gentleman in that I look forward to the day when everyone can have a good job. I hope that he also put that point cogently to his own Front Bench when they were in government and had even more people out of work than we have now.