HC Deb 23 March 1982 vol 20 cc805-27

'Regulations under section 26 shall provide that the needs allowance shall be not less than the sum of—

  1. (a) the supplementary benefit long-term scale rate, and
  2. (b) 40 per cent. of the national average council house rent, and
  3. (c) the national average domestic rate, and
  4. (d) the national average domestic water and sewerage charges,
being in each case the prevailing weekly rate or charge appropriate to the size of the household for each category of needs allowance.'.—[Mr. John.]

Brought up, and read the First time.

3.55 pm
Mr. Brynmor John (Pontypridd)

I beg to move, That the clause be read a Second time.

Mr. Speaker

With this it will be convenient to take the following amendments: No. 70, in clause 27, page 22, leave out line 20.

No. 82, in page 22, line 27, leave out from 'Britain:' to end of line 30.

Mr. John

The new clause would clarify the needs allowance formula to be applied under clause 26. Frankly, for those of us who were members of the Standing Committee, if anything is in need of clarification it is the needs formula.

Our proposal differs from the needs allowance formula proposed by the Government in that it will include the whole average domestic rate instead of 40 per cent., as the Government propose. It differs also from the Government's intentions in that it would continue to include the housing element in the supplementary benefit uprating figure rather than merely in the housing benefit figure.

In this statutory hybrid, the Government have created two methods of uprating benefit—one for housing benefit, in which the housing element is included and one for supplementary benefit from which the housing element is excluded. This arises out of the Government's decision to change the basis, and the announcement to a startled world of the Rossi price index which would take the place of the retail price index for the purposes of the Bill.

At the moment, only 40 per cent. of the average domestic rate is included in the needs allowance. In my view, that is seriously deficient in that it fails to take account of the tapers and the way in which the increase affects a person whose income is less than the needs allowance. The Government's intention must surely be that a person whose average income is equal to the long-term supplementary benefit scale rate and who has average rent and rates should have 100 per cent. of his housing costs paid. The Government's formula plainly does not do that. Paragraph 41 of the explanatory notes, which were issued to the Committee at a fairly late stage, states that topping up payments of supplementary benefit will be paid to people who are not initially entitled to supplementary benefit. In other words, the Government's objective is not achieved by the legislation as it stands. If it were, topping up measures would not be necessary.

The topping up payments are open to two major objections. First, there is the problem of identifying everyone who is entitled to such payments. If it is difficult to discover exactly who is eligible, this is bound to mean that a number of people who are eligible will not receive the payments. Secondly—and this should at least strike an echoing chord in the Minister's administrative heart—the topping up system will involve very high administrative costs in relation to the total scheme.

I remind the House of the history of topping up. Under the Government led by the right hon. Member for Sidcup (Mr. Heath), £3.50 was added to the needs allowance. Of that, there remains only 81p for a married couple and 31p for a single person. I have to ask the Minister of State today whether all of this will be clawed back in the next November uprating, as seems to be the logical progression of his policy, or whether some of the amount will still remain. In other words, will there be some topping up? If all of it is clawed back, there will be a saving to the Government which has been excluded from the nil cost formula. The Government have several times declared that this Bill has a nil cost, but they have not put a figure on the clawback of the supplement to the needs allowance. I believe that this hides a saving in the Bill. Where that is so we want to know how much is likely to be saved. We also want an assurance that it will be used rather than put back into the general account of the Treasury—to be lost for ever more—and that it will be used on improving the scheme as it stands in the Bill. That is how I believe the adoption of our formula as a needs allowance would work.

4 pm

The needs allowance as a package and in real terms fell for a married couple for the first time in 1981. That hastens and heightens the case for our new clause 6, and I hope that the Minister accepts it. It meets a real problem which his formula does not.

Amendment No. 70 would purely delete from the definition section in clause 26 'prices' does not include housing costs; It would restore the RPI formula for prices. It would delete the Rossi formula. We tabled the amendment for a number of reasons which I set out in the Budget debate.

The Guardian this morning reported that the hon. Member for Bath (Mr. Patten) has stated that he is to call for a completely new formula for judging the costs of low-paid families. May I compliment him on the alacrity with which he has taken over, and assumed the lead in the campaign that I floated, without any response on his part, as long ago as the social security debate on the Budget. I welcome his support and I hope that it will be forthcoming, both vocally and in the Division Lobbies.

Mr. J. W. Rooker (Birmingham, Perry Barr)

The hon. Member for Bath (Mr. Patten) will get a job as a Whip.

Mr. John

the hon. Member for Bath may indeed get a job as a Whip, but I hesitate to think so. I think that that is more the province of those who are willing to wound but afraid to strike, and that the hon. Gentleman has not proved himself willing to do.

The effect of the change in the formula will be to uprate the supplementary benefit by ½ per cent. less than it would otherwise be. The Government agree that that is so because they have already agreed to a valuation based upon savings in the package at £90 million. At a time when supplementary benefit recipients will for the first time in this country top 4 million, it is a totally unwarranted penalty upon the poorest in our society. The emphasis upon there being a smaller uprating depends upon the housing costs rising, as they have done in the last few years with massive council house increases, by more than the retail price index generally. It may be that the Government will take steps to ensure this by deliberately continuing the increase in council house rents. Without such action, however, some people have doubts as to whether the housing element will rise by more than the retail price index generally. In fact, one of the firms of City analysts, Simon and Coates, said that it would be something like 1.3 per cent. less than the rise in the RPI generally. If the Government recognise that this is so, they ought to recognise that they are taking very harsh action.

They should also give a guarantee to the House that they will stick by their formula. We have too much experience in this House of the Government finding a formula which they think will work in their favour and then abandoning it once it does not. This is the no-win philosophy of which I spoke when I was discussing the social security uprating within the Budget. For example, the tax and prices index was brought in by the Government as being the new Messiah. It was to replace the retail price index because it was a much more accurate and flexible determinant of people's living standards. In fact, the tax and price index rose by 15 per cent. as against 12 per cent., so it has been banished to some far distant corner as a monument to the Secretary of State for Energy's previous follies. It has been largely ignored.

What we do not want to happen is for the Government to bring in the new Rossi price index instead of the retail price index, and, when it works to their disfavour instead of their favour, suddenly abandoning it and going back to another formula which penalises recipients of supplementary benefit. The second point I raised in the Budget debate on this subject—and it met with no response from the Minister, no doubt through lack of time in his winding-up on that occasion—was the recognition that there is a differing pattern of expenditure among the poorest households in terms of income as compared with the average retail price index. For example, for the poorest 25 per cent. some basic items such as food and fuel play a more significant part in the weekly budget than they do in the average RPI.

Therefore, if housing costs are being taken out of the RPI because they are no longer relevant to that poorest section, we shall expect complementary action to be taken by the Government in order to have a much more sensitive measure of the weekly budget of a poor family in this country. For example—and I quote figures which I gave on the last occasion—the retail price index rose for the poorest 25 per cent. in our society, not by 12 per cent., which was the average last year, but by 14.4 per cent. Even when one excludes the housing element in that rise, one still has a rise of 12.6 per cent.— in other words, a greater rise than in the average RPI.

The minimum that the House would accept from the Government in order to tolerate the Rossi price index would be if, while removing the housing element from the calculation for the uprating of supplementary benefit, they also introduced a measure of the budgets of the poorest 25 per cent. in our society to give greater weight to the factors which affect them to a much greater degree than they affect other parts of society. In other words, they should make it truly representative of the budgets of the poorest 25 per cent. and not an averaging out, as is done in the RPI at the moment. But I do not believe that they will, and that is why I hope in this debate and in the Division that goes with it they wil be forced to do so.

Amendment No. 82 goes with amendment No. 70 so that the needs allowance is treated as one and we end what we believe to be an artificial distinction between uprating the needs allowance in housing benefit and in supplementary benefit generally.

I end by making two general points about this measure and about the subject that we are discussing. On 6 July 1981 Sir Geoffrey Otton gave evidence to the Public Accounts Committee. He is the second permanent secretary at the Department of Health and Social Security. Boiled down, his evidence was to the effect that the removal of the housing supplement from the supplementary benefit scheme might open the way to a further simplication of the scheme for claimants in their first weeks on benefit.

We have heard many times that the benefit scheme will be simplified next week or next month, or that something will happen. It has never happened. The manner in which the Minister said it will happen is much more alarming than the banal statement of intent. He referred to the possibility of what he called a much more bluntly tuned scheme for the first few weeks which might produce a staff saving of over a thousand.

Is that still the Government's intention? Does that still represent Government thinking? If so, how much more blunt is a bluntly tuned scheme? I suspect that it means, like all these euphemistic phrases, that the poor 'will be deprived of their rights, and that they will suffer from the lack of refinement in the scheme, and from the rush to save on civil servants' jobs to prove that the Government's election pledges have not all been totally destroyed.

Finally, will the Government clarify the question of the £90 million arising from the ½ per cent. less uprating? The Government have admitted that this will be the likely effect—although it is not definite—because of the movement of housing costs. There will also be a further undisclosed saving in the clawback provision for the 81p and 31p, but the Government apparently cannot afford the £35 million necessary to ensure that there are no losers under the scheme.

I emphasise, for the benefit of hon. Members who did not serve on the Standing Committee, that the Government cannot guarantee that there will be no losers under their new scheme. It would cost them £35 million to do that, which would be set against the £90 million saving produced by uprating supplementary benefit by less than the amount necessary had the housing element been included. As ever, the Government are taking a totally misleading stance.

The Government have the money if they choose to use it. They have the extra money they intend to save. Following the unemployment debate, and the Government's treatment of the 5 per cent. clawback, hon. Members will not be surprised to hear that the Government will not guarantee that there will be no losers. The Government should be in a position to give that guarantee. It is monstrous that they should deliberately introduce a change in the law knowing that there will be losers when it would be comparatively cheap to make sure that there are no losers.

In the absence of a satisfactory reply from the Government, we shall divide the House to make known the strength of our feeling that the poorest sections of our community are constantly penalised, sometimes dramatically so, and always in the same direction. They are always losers, never winners. That is why the Government have invented the no-win theory of economics.

4.15 pm
Mr. Chris Patten (Bath)

I welcome the opportunity provided by the new clause, first, to deny the rumour which the hon. Member for Pontypridd (Mr. John) reported—that my ambitions may lie in the direction of a living death in the Whips' Office—and, secondly, to enable us to spend a little time discussing on the Floor of the House some of the issues raised so energetically in Committee on clause 26.

We had an interesting debate last week on new clause 4, when we sought to restore the 5 per cent. cut in unemployment benefit. That seemed a clear and simple issue, to which I hope we shall return on future occasions. This issue seems much less clear and rather less simple.

I have never thought that politics is, or should be, about logic, but I can see the logic in what the Government seek to do. Supplementary benefit scale rates have never covered housing costs. They are met separately, and to include them in the calculations of the RPI which we use for uprating supplementary benefit involves double counting: QED. Nevertheless, I am not entirely happy with the proposals put forward by my right hon. and hon. Friends. Double counting has been going on ever since supplementary benefit was first introduced in 1966. I do not see that it is any more logical to change now than it has been at any time in the last 16 years.

The introduction of the unified housing benefit does not fundamentally change the situation in any way. It is not more logical to make a change now, and in some ways it is decidedly less desirable. The number of supplementary benefit claimants is increasing, and many people are under acute pressure because of the recession and the rapid increase in fuel costs. Therefore, these are not ideal circumstances in which to make the change suggested by my right hon. and hon. Friends.

We are told that the change is justified on the ground that it is a rationalisation. Recent experience is that few rationalisations have been welcome, but perhaps I should leave that to one side. Nevertheless, I have a nagging doubt about the rationalisation argument. Would we have been so keen on pressing ahead with it if the result was to increase public expenditure rather than cut it? Would the arguments for rationalisation have been developed in quite the same way?

The Minister for Social Security (Mr. Hugh Rossi)

My hon. Friend will be aware that, under the proposed formula, in those years when prices move ahead of the movement in housing costs there will be an increase in public expenditure. That has happened historically and it could happen again. We are aware that these proposals could increase public expenditure as well as decrease it.

Mr. Patten

I am delighted with that assurance. It deals with an argument that I intended to put to my hon. Friend. To borrow from my hon. Friend the Member for Grantham (Mr. Hogg), one can take that as a Second Reading assurance made on Report. It has all the binding commitment of having been made on Second Reading with no less significance for having been made later. I make that point because it was one that greatly exercised my hon. Friend the Member for Grantham last week. However, I am sure that I have my hon. Friend the Minister's assurance that it is a Second Reading assurance or commitment.

Mr. Rossi

It is a logical consequence of the way in which we have made the change. There is no qualification whatever. It will follow, as day follows night, that in those years when housing costs rise slower than the retail price index, supplementary beneficiaries will have a larger entitlement than they would if the housing costs had remained in the retail price index and thereby watered down the uprating.

Mr. Patten

I am delighted with that assurance. It is true to say, I believe, that when I raised this question in the Budget debate a Treasury Minister would have given that assurance if he had remembered to do so. He had other things to put on record at that time.

Mr. John

Is the hon. Gentleman reassured by the fate of the tax and prices index that has been conveniently forgotten in the dust of the Government cupboard because it does not yield the results that the Government thought it would yield? Is the hon. Gentleman not worried about the danger of the same fate befalling this index?

Mr. Patten

I am not quite so worried. I agree with the hon. Gentleman that the TPI was a good example of being too clever by about one and three-eighths but this is a statutory commitment, as my hon. Friend has reminded me. I am grateful for that. It is therefore slightly different from the TPI.

This leads me to the second point on which I would be grateful for some assurance. I refer to housing costs over the next year. The hon. Member for Pontypridd has mentioned the report of the firm of stockbrokers. There was also a letter in The Times last week from Mr. Piachaud referring to the report. It has been suggested that the Treasury has over-estimated the likely increase in housing costs over the next year by failing to take account of the welcome fall in mortgage interest rates, which is one of the benign results of the policies visited upon the rest of us by the Treasury.

If this turns out to be the case and if, later in the year, it becomes obvious that housing costs are rising by less than the RPI, it would be helpful if the Minister would make it clear that he will make the appropriate adjustments to the benefit rates later in the year, or that he will make the appropriate adjustments retrospectively next year. There is much talk about logic in relation to this subject. It follows logically from what my hon. Friend has already stated that this should be the case. If the Treasury has got things wrong in its assessment of housing costs, I hope that some appropriate adjustment to benefit rates will be made later in the year.

My third point is to ask whether the Government should not take their logic a stage further. This point was made reasonably by the hon. Member for Pontypridd. If it is logical to take out of the basis for calculating supplementary benefit rates an element that they are not intended to cover—in this case, the housing costs—it is presumably logical to take a closer look at the price increase in those items that are covered, or are supposed to be covered, by the scale rates. There is a good deal of evidence that the manner in which the RPI is at present calculated is skewed against the interests of the poorest sections of the community.

The Low Pay Unit has done what appears to be fairly convincing work showing that over the last year, even if housing costs are excluded, prices for the poorer members of the community have gone up by about 2 per cent. more than the RPI for the rest of us. The poor are particularly badly hit because a number of items on which they spend a larger proportion of their income than the rest of us, such as fuel costs, have been going up faster than RPI. I have had one assurance already from my hon. Friend. I am confidently expecting a second. It would be nice to get three out of three. I seek the third assurance therefore that the Government are prepared to review the question of constructing a new prices index for poorer families. I ask them to review that question. An index for the poorer members of the community is long overdue.

Since we are hooked on logic and on rationalising things, it would be logical and rational to introduce such a prices index. I hope that the Minister, as well as assuring me on the point I have just made, will be able to indicate the Government's interest in proceeding in that direction

Mr. Reg Race (Wood Green)

I should like to draw to the attention of the hon. Member for Bath (Mr. Patten) the fact that the Government already have a number of specialist price indexes that relate to the specific costs accruing to certain members of the community. There is, for example, an index that relates to the level of costs accruing to one and two-person pensioner households. One would have thought, following the logic of the hon. Gentleman's argument, that the Government would pay attention to that price index when constructing the level of benefit increases for pensioners in the November uprating.

The Government do not take that course because on some embarrassing occasions the pensioner price index rises at a more rapid rate than the retail price index. The real problem of specialist indices for the development of particular scales of benefit is that the Government can ignore them as they wish. I fear that unless the Government change their political, as well as their statistical, mind they will ignore any index that is constructed to reflect more accurately the real character of price increases for the lowest paid in our community.

The argument for a separate index for the low paid and the poorest in society is right. The matter has been argued in Committee on a number of Social Security Bills. The Government have never come forward with serious-minded opposition to the proposal. All that the Government say is that the retail price index reflects the generality of costs in our society to a wide range of people on a wide range of goods that they purchase.

The real problem with the retail price index is that it does not reflect the actual costs of a low-paid family when they are in work. Nor does it reflect the actual costs to a particular family or individual when that person is not in work. It does not reflect the disproportionate amount of family expenditure that goes on fuel and light, on food or on rent and rates. It is clear to all hon. Members that the impact of rent and rates on families where no one is working or where an individual is alone is different from the impact on a family where there may be two, three or even four earners. I support the call by the hon. Member for Bath for more specific information than the retail price index provides about the manner in which costs are moving for the lowest paid. I would remind him, however, that not only statistics are important. It is also a matter of the political will to put that information into effect. One can have as many statistics as one likes. As the Minister for Social Security has shown over the last two years, it is what one chooses to do in office that matters and not what one is theoretically capable of doing.

We have here a classic example of a Government proceeding by sleight of hand. On the one hand, they say that it is totally logical for them to remove housing costs from calculation of supplementary benefit because a separate housing element has been paid in addition to the scale rate of supplementary benefit when calculating the needs of a particular individual or family. It is, therefore, logical, according to the Government, to take out the housing cost element from the calculaton of supplementary benefit scale rates because it is known that there is to be a separate housing benefit that can be claimed from the local authority. The trouble with that argument, although it is entirely logical so far as it goes, is that the Opposition strongly suspect the political intentions of the Government. We are right to suspect those intentions. It is likely, over the next 12 months, as over the last l2 months, that there will be a rise in housing costs—rent and rates—which will be substantially greater than the rise in the retail price index. We shall be looking not only at one housing cost increase or the decline in mortgage interest rate that will affect the housing cost element that the Government now put forward.

4.30 pm

That decrease in the retail price index will also affect the retail price index itself. Therefore, the difference between the reduction in housing costs and the reduction in the retail price index to perhaps about 9 per cent. on an annual basis will not be all that great because of the reduction in mortgage interest rates.

Therefore, the Government are taking out the housing cost from the RPI and uprating the supplementary benefit by less than it would otherwise have been uprated in order to save a substantial amount of money. That is precisely the effect of the Government's proposal and that is why we say in amendment No.70 that we want to remove the Rossi price index from this Bill, because this is sleight of hand and it also has a knock-on effect on other parts of the system.

I refer the Minister of State to our deliberations in Committee on 4 March, reported in columns 665 and 666 of the Official Report, because some questions were asked there which, if I remember correctly, were never answered in Committee. They related to the knock-on effect of doing precisely what the Government are doing—in other words, taking out the housing cost element from the RPI for the purpose of supplementary benefit uprating. We realty want to know the answers to the questions that have been posed by SHAC, Shelter and others about the way in which this change in the calculation of benefits is going to be put into effect. We want to know the effect of that on all the points mentioned in columns 665 and 666, and we hope that the Minister will answer those points at the end of this debate. He has had quite a lot of time since 4 March to consider his answer and I hope that he will be able to specify precisely what the Government intend on that particular point.

It is also of interest that when we discussed the very complicated new clause 26 in Committee it was discovered that one of the subsections of the new clause meant that the Government could weight the housing cost element in whatever way they saw fit. They could take mortgage interest payments, rent, rates and put them together to produce an average increase in housing costs. It enables the Government—and that is why these amendments are important—to weight the increases in rents against the increases in rates and to say that because council house rents are going up more rapidly than they would like they are to reduce their weighting in the housing cost index and save themselves a bit of money.

We want assurances that the Government will not do that in order to save public expenditure. There is nothing easier than for a Minister to make administrative decisions that may never see the light of day in this House and to reduce the effective level of benefit to the poorest people in society.

For all these reasons I hope that either the Government will accept our amendments, which I doubt, or in default of that the House will support them in the Lobby.

Mr. Andrew F. Bennett (Stockport, North)

I rise to support the two amendments we have tabled in this group. Before going into detail on the amendments, we must look at the background against which we are discussing them, because this is crucial.

First of all, we now have a record number of people depending on supplementary benefit. Those of us who listen to the message coming to us from our constituents realise very clearly that more and more of them are finding it harder to get by on the existing levels of supplementary benefit. Those levels are extremely mean. They do not allow the majority of people to have anything like a reasonable existence. Constituent after constituent comes to me in desperation at his inability to make ends meet. They point out—for instance—that the amount of jumble available at jumble sales is getting less and less because more people are on supplementary benefit and are having to buy clothing for their children and themselves at jumble sales. I repeatedly come across constituents who complain that they used to be able to get by on supplementary benefit because on Sunday they would take the children to visit their parents and their Sunday dinner would be provided. It was one way of making the supplementary benefit go a bit further. Now they find that their father has been made redundant and is on supplementary benefit. Thus the opportunity for one generation of a family to help out another generation disappears. The problems for those living on benefits get harder and harder.

It is against that background that we must judge the Government's attitude to the new Rossi price index. If the benefit level had been generous or even reasonably acceptable, it would perhaps have been unnecessary to quibble about 0.5 per cent. But, when we know that the benefit level is for many people already impossibly low, for the Government to have shaved off another 0.5 per cent. seems to me to be deplorable.

I do not believe that there is any logic in what the Government are doing. They say that supplementary benefit never took into account the payment of rent, so why should they take it into account in fixing the supplementary benefit? But supplementary benefit has to be used by people to pay both rent and mortgages. I accept that rent is normally paid as a supplement to supplementary benefit, and that mortgage interest payments are also a supplement. But when capital has to be paid off too—and many people with a mortgage and on supplementary benefit find that they still have to pay a small amount off the capital, particularly if they are middle-aged or older—part of the money they receive in supplementary benefit has to go to meet part of their housing costs. If all that is taken into account, only part of the housing costs should be taken out of the calculation of supplementary benefit. It was a mean trick of the Government to save 0.5 per cent., or £90 million.

The hon. Member for Bath said that it was not too bad, because the Government would guarantee that when housing costs went up by less the people would benefit. That is all right, but the Department of the Environment has more or less given a guarantee that rents are going to be forced up each year, so it is unlikely that that will happen for some time to come. That is certainly something that we have to take into account. It is very easy for Governments to give assurances that if something that is totally unlikely happens they might do something about it, but they have a habit of coming back to the House on supplementary benefit measures and saying that they did not expect this, they did not foresee that, and it is all very difficult, so they are not going to do anything. We can listen to Ministers giving assurances from the Despatch Box. It is pretty easy to assure the House at the moment that if rents do not go up as much as in recent years the Government will do something, but the Minister knows full well that the Department of the Environment is hell-bent on sending up housing costs so much that it is very unlikely that the Government will have to meet this commitment which the Minister has made.

The whole idea of introducing this measure was to make things simpler for claimants. Anybody who has read through the Committee proceedings or talked about the Bill knows that so far it has certainly not made life any easier for hon. Members. I do not think that it has made life easier for people in the Department. I do not believe that it will make life easier for those in local authorities who will have to administer it, or for claimants. It will be increasingly difficult for them to understand, and it will be particularly difficult for them to understand why the benefit is not adequate to meet their needs.

It seemed to me that the matter of the needs allowance was a major step in trying to persuade the Government to simplify the scheme. If the allowance is set a little higher, it will not be necessary to calculate so many extra topping-up amounts. Two things are likely to happen in the calculation of those amounts. First, there will be confusion. Secondly, there will be even more underpayment of benefit. Back in 1977 a total of £340 million supplementary benefit was underpaid. We have been pressing the Government to give us a more up-to-date figure for underpayment of benefits. I do not think that the Government have yet made a new calculation.

With the topping-up provisions in the Bill there is a grave danger of increasing the number of people who will not receive the benefit that we believe they need. By accepting amendment No. 70 and thus increasing the needs allowance, the Government would reduce the need to top-up for many people, would simplify the system and in doing so ensure that more people received what they needed.

We have not proposed a very generous increase in the needs allowance. There is a case for going for an even higher allowance. Certainly if we used the money that the Government have saved by introducing the Rossi price index we could go for a slightly higher level. That would make the calculations much simpler. The allowance would be easier to administer and it would be easier to guarantee that those who needed the benefits received them.

The Government should say that they will not try to confuse the issue with a new retail price index taking out housing, but will stick to the old one, which contained a simple principle. It had a broad band of requirements, many of which people on supplementary benefit never benefited from, because they could not afford some of the luxury items that it contained. The Government should say that they therefore stick to it as a broad band but that they will increase the basic level and, secondly, will this year ensure that they do not allow it to slip back in real terms but will keep it moving forward.

In introducing the new scheme the Government should have gone for a needs allowance that was generous, preventing the need for so many extra topping-up payments, so that we really were moving to what the Government claim is a simplified housing benefit making matters easier for claimants. The scheme appears to be making it harder for them to see whether they have the right amount, and it is based on a system that will still pinch hard most of the poorest in our community.

Mr. Frank Field (Birkenhead)

I support the new clause and the amendments. Before speaking to them, I wish to take up some of the comments made by the hon. Member for Bath (Mr. Patten). I was not sure whether it was the hon. Gentleman or I that was thrown by the vision with which he began his speech. He seemed to tell the House that the nightmare that regularly visits him is the telephone call from No. 10, with the reward for his new behaviour in giving up supporting the Government for Lent being a spell in the Whips' Office. Sometimes nightmares come true.

The hon. Gentleman went on to tell the House—and here I may have been thrown—that there was some logic in what the Government were saying. We had a retail price index that had been used to gauge the size of the increase in pensions and other benefits, and those on supplementary benefit had their housing needs covered in full, so he asked why we should not take the housing element out of the RPI. Whether or not one is in the middle of a nightmare, one must concede a certain logic.

The lack of logic becomes more apparent when we look at the nature of the retail price index that the hon. Gentleman hinted at and that was elaborated in more detail by my hon. Friend the Member for Wood Green (Mr. Race). Of course, logic should prevail in this case, if the RPI were an accurate gauge of the living costs of ordinary families, let alone poor families, but we know from the submissions that were made, for example, to the Royal Commission on the distribution of income and wealth that in the 20 years since the middle 1950s prices for the poorest members of the community rose by about 30 percentage points more than those for the richer members of the community. Therefore, it is a very inaccurate gauge of the living standards of the poor.

However, there was at least some justice, if not logic, in having in the basket of goods on which the index was judged an element of housing costs that was largely irrelevant to the poorest, as their housing costs were covered by the supplementary benefit payment, because at least it managed to ensure that the price rise that was registered was nearer to the real rise in prices for the poor than it would otherwise have been.

4.45 pm

Therefore, taking logic to its full conclusion, I believe that there would be a case for our not pressing our main amendment if the Minister were honest with us and could give us a guarantee that the index that he has introduced is a temporary measure, conceived in haste and to be replaced by a more accurate measurement of the living costs of the poor in future years. If we knew that this was a one-off measure for one year, there might be a case for swallowing what the Minister is offering.

What is unacceptable is that the provision should remain on the statute book year after year. The hon. Member for Bath received an undertaking from the Minister, and I am sure that it will be met. But there are now built into the system a number of pressures to increase the level of rents in the public sector. If they are increased, the size of the subsidy to public sector housing will be reduced, and at the same time we shall start shaving off part of the increase in benefit that we would award to those on supplementary benefit.

Most Governments find themselves in a position in which it is difficult to manoeuvre. Therefore, £90 million becomes an important vision when the Government are trying to balance the books. I fear that the undertaking is not worth much. We now have a machinery that builds in pressures to increase housing costs when reviewing public expenditure and which at the same time will mean savings on the supplementary benefit front.

I hope that the Minister will answer carefully the points advanced from both sides of the House that maybe there is a case for change, but only if the change would give us a more accurate gauge of the living standards of the poor—not a change that would allow him to deliver £90 million or more to the Treasury.

I raise my second point on behalf of Age Concern. It is worried about clause 27, which we are in effect debating by asking the House to accept our amendments. Its worry is about the upgrading of the needs allowance. If Age Concern and I have read the clause correctly, it means that the Minister will have to lay before the House a report saying why he has not increased the needs allowance in line with his undertaking, unless the increase is so small that he considers that the loss in the uprating is "inconsiderable". I ask him what he considers "inconsiderable" in these circumstances. What does he mean by an "inconsiderable" difference? After all, in his short tenure as Minister for Social Security, he has presided over the loss of 1, 2 and 5 per cent. in benefit upratings. He sometimes presents these cuts as not being terribly important and occasionally they are considered to be important.

When asking the Minister what is meant by inconsiderable, I am reminded of the phrase used against President Nixon when this question was posed. "Who would buy a second-hand car off this man?" was the phrase so often thrown at him. Considering what the Minister has done with the retail price index one might pose the question "Who would buy a second-hand price index off the Minister for Social Security?" There is an important point behind this retort. He has given himself powers not to report to the Commons if the expected and final difference between the needs allowance increase is inconsiderable. When the Minister replies, will he give the House some idea about what he now means by "inconsiderable"?

Mr. Rossi

This is a difficult and complex matter and I will do my best to thread my way through the arguments and give explanations asked for by Opposition Members and my hon. Friends, although I will not necessarily be able to satisfy them. I certainly cannot satisfy the Opposition by saying that I shall advise the House to accept this new clause or the amendments.

There is a certain amount of difficulty about this matter and a tendency to confuse two separate things—first, the uprating of the needs allowance and, secondly, the uprating of supplementary benefits. Those are two distinct exercises, having completely different consequences. The Bill relates to needs allowance and not to the uprating of supplementary benefits—that is dealt with by other statutes and will be discussed when we are dealing with the uprating of needs allowance.

Mr. John

rose—

Mr. Rossi

I shall continue at this point.

Clauses 26 and 27 relate to the uprating of needs allowances that determine the level of housing benefits for those who are not on supplementary benefit. Claimants on supplementary benefit automatically receive 100 per cent. of eligible rent and rates. Therefore, we are not talking about the supplementary benefit uprating provisions; they are irrelevant to our consideration of housing benefits. Housing benefits, as they relate to people not on supplementary benefit, will not be introduced until April 1983. Again, points made about the 1982 uprating are irrelevant. The needs allowance is relevant only to people not on supplementary benefit because the rate rebate and rate allowance scheme—tapers and all the rest of it—can relate only to those not on supplementary benefit. Those on supplementary benefit will receive 100 per cent. of their rent and rates.

Mr. John

The Minister is looking through the wrong end of the telescope, as usual. It is he, by his cutting of the common way of uprating between supplementary benefit and housing benefit, who is introducing this aspect. Therefore, it is not impermissible to state the effect on housing benefit or on supplementary benefit.

Mr. Rossi

I am sure that if it were not permissible the Chair—it is a matter for the Chair and not for me—would rule this discussion out of order. I shall deal with supplementary benefit, because it was raised. Because of the confusion that can easily arise, I was trying to make it clear that in the Bill and these amendments we are not strictly dealing with uprating of supplementary benefit. These are affected by the consequences of uprating supplementary benefit because long-term rates are an element of housing needs. However, none of our amendments can affect the supplementary benefit uprating.

Mr. John

We cannot, even in a fairly minor debate, have such gross misinformation. If the Bill, as it stands, changes the basis of uprating, clearly the uprating is involved because it takes place on a lower base than it would have done but for the Bill.

Mr. Rossi

We are concerned with uprating of the needs allowance and we can change it. What we are not concerned with and what we cannot do in this Bill, with respect, is to change the basis of uprating of supplementary benefits. One will have a consequence on the other because one element of the needs allowance is, of course, the long-term rate of supplementary benefit. However, we cannot alter that today. That is all I am seeking to do. None of the arguments directed to the manner that supplementary benefits may or may not be uprated and the relevance of the RPI index to supplementary benefit can affect these amendments, because they can only be directed to the way that the needs allowance is calculated. I hope that I have made that point clear.

As we know and have discussed in Committee, the needs allowance is composed of two elements: housing and the main element covering all other living expenses—expenses other than housing. Naturally, we propose that uprating of the housing element should be considered by reference to changes in the level of housing costs. Because housing costs will be considered separately, it is simply a question of logic to provide for the main element to be considered by reference to changes in the level of prices, excluding housing costs. That will ensure that housing costs are not double counted and is not a ploy to reduced benefit.

This year's forecast is irrelevant; by the time of the 1983 uprating the relative increases in prices, including and excluding housing costs, could be different from today. That point was accepted in the arguments made.

I was asked questions concerning aspects of supplementary benefits and I shall try to answer them. Under the new basis for uprating supplementary benefit scale rates, all beneficiaries are fully protected against the expected rise in inflation by next November. That applies to pensioners, covered by the pledge made by my right hon. Friend the Prime Minister to protect them against price increases throughout the lifetime of this Parliament, and to all other beneficiaries. On heating additions, paid to over 2 million beneficiaries, we have gone further and raised their value in line with the forecast rise in fuel prices over the 12 months to November 1982, even though the 1981 uprating turned out to be more than enough to protect payments against rises in fuel costs to last November.

Because the scale rates have been raised by a few pence less than they would have been but for the change, and the difference for the single householder is 15p. a week in the long-term rate and 10p in the short-term rate—the difference for married couples is 25p and 20p respectively—a small number, up to a few thousand families, who would otherwise have qualified for supplementary benefit may lose benefit—that is the knock-on effect mentioned by the hon. Member for Wood Green (Mr. Race)—or fail to qualify from November 1982.

For some, this loss could be significant in terms of title to single payments, within the supplementary benefits scheme, and outside the scheme to free NHS prescription charges, help with other NHS charges, especially dental and optical costs, refund of hospital fares, free welfare foods and free school meals. Almost without exception, those not qualifying for supplementary benefit could continue to receive free prescriptions, help with dental and optical charges, and free welfare foods on income grounds, but they will have to make a separate claim. So, whatever knock-on effect there is, the matter is dealt with and can be covered by making a separate claim.

5 pm

There is a knock-on effect in respect of free school meals, which were not specifically mentioned. Help is available to low-income families through the discretionary powers that local authorities may exercise. When we introduce the scheme, we shall give local authorities guidance on these matters, in the hope that they will exercise their discretionary powers so that people who might otherwise suffer from the knock-on effect will not be adversely affected.

It was suggested by hon. Gentlemen, in connection with the effect on supplementary benefits, that the Government were saving £90 million. We were asked whether that amount could not be used. I must correct hon. Gentlemen. The change will mean that the uprating will cost £10 billion—not £90 million—less in 1982–83, and £30 million less in a full year. That should be compared with the cost of making good the shortfall for supplementary benefits under pension age, which is £21 million in 1982–83 and £60 million in a full year. In addition, we are spending £10 million on raising the capital cut-off point and giving extra help with fuel bills.

These matters should be taken into account. We are discussing a saving that is the result of a change in the uprating in supplementary benefits, and I am saying that money has been used to give other benefits—benefits that did not exist before—to people on supplementary benefits.

Mr. Field

The Minister is saying that the introduction of this change will not lead to a saving of £90 million, as we had assumed, but of £10 million. When we debated the matter in Committee, he gave a formula for the difference between his new index and the retail price index, whereby each percentage point difference was a saving of £10 million. Is he now saying that, according to the forecasts for housing costs which, presumably, have been given to him by the Treasury, in a part year the difference in the two indices is only 0.1 per cent., and in a full year it is 0.3 per cent.? If so, why is he bothering to make the change at all?

Mr. Rossi

There is a ½ per cent. difference as a result of the uprating statement this year. It will produce a saving of just £10 million for 1982–83.

Mr. Field

If it is half a percentage point, according to the formula that the Minister gave in Committee, that will be £50 million. If the formula is £10 million for 0.1 per cent., then 0.5 per cent. is £50 million.

Mr. Rossi

In Committee we were talking about the relationship between the rise in prices generally—the price index, with housing costs included—and what would happen if the retail price index did not include housing costs. Perhaps I should quote what I said in Committee: It is a question of the relationship between the rise in prices generally and the rise in housing costs. In a year when housing costs rise faster than prices generally, there is bound to be a saving in the payments made for supplementary benefit if the housing element is not taken into account. But in years when other prices rise faster than housing costs, the reverse is true. Having taken that into account, each 0.1 per cent. difference in a year's uprating movement of the RPI as a whole and of housing costs element makes a difference of £6 million in a full year. For example, if housing costs were in advance of the general movement of prices in the RPI by more than 0.1 per cent. this year, the saving for 1982–84 that should be 1982–83— would be £2 million. The relative difference between the two sets of figures has to be considered year in and year out. If housing costs relatively exceed the general movement in prices by 0.1 per cent. there is a saving to the Exchequer of £6 million in that year. If the reverse occurs there is a notional loss in that year. That is how the scheme will operate."—[Official Report, Standing Committee B, 2 March 1982; c. 641–2.] All I am saying now is that the change in the uprating that has taken place will result in a saving of £10 million in the current year, and it will be the equivalent of £30 million in a full year.

Mr. Rooker

We never said that it would cost £90 million in terms of a cut. The sum of £90 million was used as an example, if the formula were applied this year, when the difference is 1½ percentage points. That is where the £90 million figure comes from. I do not believe that I or anyone else said that it was a cut of £90 million, but in advance of the Budget we did not have the Government estimate of the difference between the two indices in the year when the scheme starts.

Mr. Rossi

I accept that that is what happened in Committee, but the saving of £90 million this year has been bandied around today. I therefore wanted to make it clear that we are not talking about a saving of £90 million, which we discussed in Committee in the context that the hon. Gentleman explained. Since then, we have heard the Chancellor's announcement, and also my right hon. Friend the Secretary of State's statement about the uprating. So now we are talking about an actual saving of £10 million as a result of the change that is being made in the uprating.

Mr. Field

Is the Minister saying that the difference between the two indices would be 0.15 per cent?

Mr. Rossi

I repeat what I have already said. I shall not be drawn into any further mental arithmetic on this issue.

Mr. Field

I want to be clear about the magnitude of the difference. Is the Minister saying that the saving is now only £10 million? Let us understand the nature of the change which the Minister thought was so important. He is saying that the difference between the two indices is 0.15 per cent. Is that correct?

Mr. Rossi

I said that the saving this year, as a consequence of the change in the uprating that is being made, will be £10 million in 1982–83. With that, I am afraid, the hon. Gentleman will have to be satisfied. I have just received a note to say that £10 million is the correct figure for 1982–83.

Mr. Chris Patten

May I complicate the issue by trying to help my hon. Friend? I follow what he said about the £10 million. £30 million for ½ per cent. over a full year is obviously much less over 1982–83. So it is still ½ per cent. It is not 0.15 per cent., as the hon. Member for Birkenhead (Mr. Field) is trying to say. It is ½ per cent. over a year. Is that what he is saying?

Mr. Rossi

My hon. Friend is right.

Mr. Field

rose—

Mr. Rossi

Does the hon. Gentleman want a Division or not?

Mr. John

On a point of order, Mr. Deputy Speaker. It may be in order for hon. Members to interrupt each other's speeches, but is it in order for the Minister to interrupt my daydream?

Mr. Deputy Speaker (Mr. Bernard Weatherill)

I thought I heard a comment that I wished I had not heard.

Mr. Rossi

It would seem that this is now a lighthearted occasion. I was just adding to it. That is the way it developed.

The hon. Member for Pontypridd (Mr. John), on introducing new clause No. 6, referred to the extra element in the current needs allowance. As he knows, that addition stems from the special addition of £3.50 to the needs allowance in 1973 as part of the Government's counter-inflationary policy. Subsequent Governments have eroded that. They have adopted the policy of phasing out the addition as housing costs increased. In that way, no one has suffered any cash loss. Therefore, the continued phasing out—the policy of both Administrations—would have happened whether or not we introduced housing benefits this year. To that extent, the introduction of housing benefits does not disadvantage anybody more than they would have been—if disadvantaged they were—by the phasing out of that additional extra element which both Governments agreed to do away with.

Mr. John

With respect, the question that I asked was whether in next November's uprating that additional advantage—81p for a married couple and 31p for a single person—will now be removed. If so, what do the Government say that will cost those at present receiving it in total benefit?

Mr. Rossi

I regret that I cannot give the hon. Gentleman the answer to that question. That is a matter that will be taken into account by the Secretary of State for the Environment who will be responsible for the next uprating. That will take place before this scheme comes into effect. Therefore, I cannot deal with that specific point. The hon. Gentleman will have an opportunity to raise that matter in due course. My responsibilities for this scheme will begin in 1983. Clause 27 spells out the Government's commitments on uprating the needs allowance in the context of that responsibility.

The case for new clause 6 relates to the introduction of a 100 per cent. rate element into the needs allowance. That is contrary to the way in which those matters have been dealt with hitherto. Hon. Members will be aware that the needs allowance is based upon the supplementary benefit long-term scale rates which we have already discussed—40 per cent. of the national average rates, 40 per cent. of the national council house rent, together with water and sewerage charges. The rationale behind those 40 per cent. figures is that a claimant whose income equals the needs allowance is entitled to 60 per cent. of his rent in rebate or allowance and 60 per cent. of rates as rebate. That is perfectly logical and nothing I have heard this afternoon suggests that it should be altered.

If we increase the rates element to 100 per cent.—contrary to that logic, it is true—the number of topping-up cases will be reduced. It is obvious that any increase in the needs allowance will have the effect of reducing the topping-up cases. Again, that is one of the reasons—we discussed this in Committee—why we intend to add 75 per cent. to the needs allowance for pensioners.

5.15 pm

What we are discussing this evening under new clause 6 is, in effect, the case for a general increase in the level of needs allowance, which we are doing in another more modest way. I say "more modest way" because if the Government were to accept this amendment the cost would be in excess of £120 million. I have not got that money. What I have done is to use £24 million, which I have saved in the ways that Labour Members know, by adding 75 per cent. to the needs allowance for pensioners. That will help those in greatest need. What I have not got the resources for—

Mr. Andrew F. Bennett

rose—

Mr. Rossi

Let me finish the sentence. I do not have the resources to accede to the request that we increase the rates element in the needs allowance to 100 per cent. because the cost of that would be £120 million.

Mr. Bennett

The Minister has just referred to 75 per cent. in regard to pensioners. Surely he means 75p.

Mr. Rossi

I am most grateful. That was a slip of the tongue. We voted upon, and agreed to in Committee, a 75p addition to the needs allowance for pensioners. That will cost £24 million, which I saved by making other alterations in the scheme. That is the only latitude that I have and that is the only practical way in which it is possible for me to increase the needs allowance. I cannot increase the needs allowance in the way that is proposed here because of the cost involved. Quite apart from the question of costs, it is not the accepted way in which such matters are dealt with, namely, the uprating of the needs allowance.

Two questions asked by my hon. Friend the Member for Bath (Mr. Patten) remain outstanding. I must revert to the question of the uprating of the supplementary benefit. If the adjustment turns out to be incorrect, the Government will, as is the case with the forecast movement in prices generally, consider whether a compensating adjustment should be made at the next uprating. In reaching a decision, the Government will take into account the extent and direction—the shortfall or the overshoot—of the difference.

The Government feel that a broad-based index is the fairest method that we have at our disposal. We do not feel that we should impose choices on claimants by breaking down all items of expenditure. We should not isolate those who are worse off by making separate provisions. Housing costs are different, because, uniquely to supplementary benefit, separate provision is made for housing costs. Where individual circumstances demonstrate special needs, the supplementary benefit scheme helps with a sophisticated network of single payments and additional requirements.

Mr. Chris Patten

rose—

Mr. Rossi

My hon. Friend has scored two out of three on the questions that he has asked me. I must request that he be content with that.

Mr. Patten

I probably scored about one and five eighths out of three, rather than two out of three. Presumably the objective is to provide the poor with what they need. Therefore, it does not seem unreasonable to devise an index that takes account of what they spend their money on.

Mr. Rossi

All Administrations have used the retail price index, because it is the most convenient way of finding out about the movement in prices and the inflationary effects on the cost of living. Obviously, there is no law of the Medes and Persians about that. If better means are found, they will be used. However, so far no one has found anything more satisfactory. That is not to say that the search will not continue.

In uprating, regard is paid not only to the retail price index, but, to a limited extent, to what has happened in the six months before the date of the uprating statement. To that extent, it is a guide. In addition, Treasury forecasts of the likely movement in prices are taken into account for the next six months until November, when the uprating comes into effect. Therefore, the retail price index is not the only factor to be taken into account when the uprating judgment is made. It has an important influence, but it is not the last word or the only factor to be taken into consideration.

The uprating judgment is not based solely on that. As I have said, it is not a question of the law of the Medes and Persians. If it is possible to find a better way of ascertaining the way in which prices or inflation have moved during the six months before the uprating statement, there is no reason why it should not be used. However, so far that has not happened and all Governments concerned with uprating have been defeated when looking for anything better.

Therefore, I invite the House to reject the new clause and the amendments.

Mr. John

I doubt whether I can do justice to the full flavour of the Minister's reply, because it was so confused that I am not sure what he was saying. However, I shall try to isolate some of his more egregious mistakes.

In response to the hon. Member for Bath (Mr. Patten), the Minister said that the Government did not take prices alone into account. If that is so, why is there so much boasting about uprating benefits to take account of prices? Of course, prices are taken into account. Those prices are in an averaged out form and that forms the basis of the retail price index. The Minister said that all Administrations had used the retail price index. However, he is changing the basis by removing the housing element. Therefore, next time he uprates supplementary benefit he should have a formula that takes account of the needs of those who live on supplementary benefit. It was said that that might represent an unacceptable intrusion into the circumstances of private individuals. However, it is quite possible for the Minister to have a formula. Indeed, as the hon. Member for Bath said, much work has been carried out by the low pay unit to isolate the factors that loom largest in the budgets of the poorest 25 per cent.

Therefore, the idea that it might be undesirable or impossible to take account of the needs of those who live on supplementary benefit, or that it might represent an intrusion into personal freedom is sheer nonsense. The Minister has given no pledge about uprating, but has referred only in the vaguest terms to the type of promise that the Department wishes that it had had from the former Secretary of State for Social Services, now the Secretary of State for Industry. Those terms are so vague as to be meaningless. Therefore, those who will suffer because the housing element has been taken out have no assurance that they will be uprated.

I specifically asked the Minister to give an assurance that, even if the formula meant that prices moved ahead of housing costs, he would abide by that formula. The hon. Gentleman has chosen not to do so and has, instead, spoken in terms that may not have been totally unintelligible, but which were so vague as to provide the perfect get-out. We can conclude only that the Minister is keeping his options open and that if prices—excluding housing prices—move ahead, he will change the formula and relegate his new formula to the realms of the tax and prices index, from which the Government have now distanced themselves.

The Minister mentioned the cost of our various suggestions. If his formula takes account of average income and payments, there would be no need for topping-up. However, as topping-up payments are provided for, the Minister must know perfectly well that his formula will not meet every case. I objected to the topping-up process when I opened the debate, but I received no reply. For the Minister's benefit, I shall repeat one of my points. It is difficult to know who is eligible for the topping-up provisions. Given our experience of social security payments, if it is difficult to know who is eligible, a large percentage of those who are entitled to topping-up payments may not receive them. If that happens, there will be a substantial and continuing injustice.

Acceptance of our new clause will largely remove the need for topping-up payments. It would substantially diminish the need for such payments. Therefore., in a cumbersome and administratively costly manner, the Minister would have to achieve an objective that would be met more simply by accepting the needs formula set out in new clause 6. The Minister said that recipients of supplementary benefit were not under debate in new clause 6. That was true. The new clause refers to those who are slightly above the supplementary benefit level, and who, through thrift or otherwise, have just too much to qualify for supplementary benefit. I always thought that the Minister regarded that as a virtue. However, the formula will penalise such people and that seems an ill reward for them. It will not take account of their full domestic rate burden. New clause 6 seeks to deal with that.

I am sorry that the Minister was unable to confirm that the 81p and 31p will be taken away in the next uprating. In default of any information, I shall assume that it will be. I am also sorry that a figure cannot be produced. If the £30 million in a full year, which the variation between the one basis and the other will yield, is added to the amount that will be saved or cut, the total will at least exceed the £35 million that would be needed to ensure that the Bill provides for there being no losers. Indeed, as has been said, what the Government call a saving is, in every case, a cut for the poor.

It is all very well for the Minister to talk about a capital limit. He complained that supplementary benefit was not germane to the debate but then ranged widely, as if Marco Polo were remonstrating with a day-tripper to Brighton. The hon. Gentleman's remarks were all over the place.

5.30 pm

The Minister talked about capital limits and fuel additions. I would have thought that if one was germane so was the other. However, if he wishes to stick to the point, his Bill has been constructed in such a way that some people who do not lose by it at the moment will lose by reason of the formula. He has extra money which he could use to put that right, but he has chosen not to do so. This is another classic case of the line having to be drawn somewhere. It will be drawn at the expense of the losers under the Bill, as it was against the unemployed.

The Minister will go down in history as "stick-to-the-formula" Rossi. It is rather like Latimer saying "play the man" when he was being roasted alive at the stake. The analogies are not dissimilar. As the Minister struggled with his figures and got deeper and deeper into the mire, one could only feel sorry for him. But that sorrow is tempered by the knowledge that he has created his own difficulties. He is one of the authors of the Bill and an author of the appalling complexity and subterranean deceit that is going on, which will mean that some people will have their supplementary benefit uprated by an insensitive formula that will remove one element while not paying due regard to others.

For that reason we propose to divide the House to show our total contempt of the way in which the Minister has approached the matter.

Question put, That the clause be read a Second time:-

The House divided: Ayes 145, Noes 202.

Division No. 101] [5.30 pm
AYES
Allaun, Frank Evans, loan (Aberdare)
Archer, Rt Hon Peter Evans, John (Newton)
Ashton, Joe Ewing, Harry
Atkinson, N.(H'gey, ) Field, Frank
Beith, A. J. Fitch, Alan
Bennett, Andrew(St'kp'tN) Flannery, Martin
Booth, Rt Hon Albert Fletcher, Ted (Darlington)
Boothroyd, MissBetty Ford, Ben
Bradley, Tom Foulkes, George
Brown, Hugh D. (Provan) Freud, Clement
Buchan, Norman Garrett, John (Norwich S)
Callaghan, Jim (Midd't'n&P) Golding, John
Campbell-Savours, Dale Graham, Ted
Canavan, Dennis Grant, George(Morpeth)
Carter-Jones, Lewis Grimond, Rt Hon J.
Cartwright, John Hamilton, James(Bothwell)
Clark, Dr David (S Shields) Hamilton, W. W. (C'tral Fife)
Cocks, Rt Hon M. (B'stol S) Harrison, Rt Hon Walter
Cohen, Stanley Hart, Rt Hon Dame Judith
Coleman, Donald Haynes, Frank
Concannon, Rt Hon J. D. HomeRobertson, John
Cook, Robin F. Hooley, Frank
Cowans, Harry Howell, Rt Hon D.
Craigen, J. M. (G'gow, M'hill) Howells, Geraint
Crowther, Stan Hoyle, Douglas
Cryer, Bob Hughes, Robert (Aberdeen N)
Cunliffe, Lawrence Hughes, Roy (Newport)
Cunningham, G. (IslingtonS) Jay, Rt Hon Douglas
Cunningham, DrJ. (W'h'n) John, Brynmor
Dalyell, Tam Jones, Rt Hon Alec (Rh'dda)
Davidson, Arthur Jones, Barry (East Flint)
Davis, Terry (B'ham, Stechf'd) Kerr, Russell
Deakins, Eric Kilfedder, James A.
Dean, Joseph (Leeds West) Kilroy-Silk, Robert
Dixon, Donald Lamond, James
Dormand, Jack Leighton, Ronald
Douglas, Dick Lewis, Ron (Carlisle)
Douglas-Mann, Bruce Litherland, Robert
Dubs, Alfred Mabon, Rt Hon DrJ. Dickson
Dunlop, John McDonald, DrOonagh
Dunwoody, Hon Mrs G. McElhone, Frank
Eastham, Ken McGuire, Michael(Ince)
Edwards, R. (W'hampt'n S E) McKay, Allen(Penistone)
Ellis, R. (NE D'bysh're) McKelvey, William
English, Michael MacKenzie, Rt Hon Gregor
McWilliam, John Silkin, Rt Hon J. (Deptford)
Marks, Kenneth Skinner, Dennis
Marshall, Jim (LeicesterS) Smith, Cyril (Rochdale)
Martin, M(G'gowS'burn) Soley, Clive
Mason, Rt Hon Roy Spearing, Nigel
Maynard, MissJoan Spriggs, Leslie
Mikardo, lan Stoddart, David
Mitchell, R. C. (Soton Itchen) Stott, Roger
Morris, Rt Hon A. (W'shawe) Summerskill, HonDrShirley
Morris, At Hon J. (Aberavon) Taylor, Mrs Ann (Bolton W)
Morton, George Thomas, Dafydd(Merioneth)
Oakes, Rt Hon Gordon Thomas, DrR. (Carmarthen)
O'Neill, Martin Thorne, Stan (PrestonSouth)
Park, George Tinn, James
Parker, John Varley, Rt Hon Eric G.
Parry, Robert Wainwright, E. (DearneV)
Pitt, William Henry Wainwright, R.(ColneV)
Race, Reg Welsh, Michael
Radice, Giles White, Frank R.
Richardson, Jo Whitlock, William
Roberts, Albert(Normanton) Williams, Rt Hon A.(S'sea W)
Robertson, George Wilson, Gordon (Dundee E)
Robinson, G. (Coventry NW) Winnick, David
Rooker, J. W. Woodall, Alec
Ross, Ernest (Dundee West) Wright, Sheila
Rowlands, Ted Young, David (Bolton E)
Sandelson, Neville
Sever, John Tellers for the Ayes:
Sheerman, Barry Mr. Hugh McCartney and
Short, Mrs Renée Dr. Edmund Marshall.
NOES
Alexander, Richard Faith, MrsSheila
Alison, Rt Hon Michael Fell, SirAnthony
Ancram, Michael Fisher, SirNigel
Arnold, Tom Fletcher, A. (Ed'nb'gh N)
Aspinwall, Jack Fletcher-Cooke, SirCharles
Atkins, Robert(PrestonN) Fookes, MissJanet
Atkinson, David(B'm'th, E) Forman, Nigel
Beaumont-Dark, Anthony Fowler, Rt Hon Norman
Bendall, Vivian Fox, Marcus
Benyon, Thomas(A'don) Fraser, Peter (South Angus)
Berry, HonAnthony Fry, Peter
Best, Keith Gardiner, George(Reigate)
Bevan, David Gilroy Glyn, Dr Alan
Biffen, Rt HonJohn Goodlad, Alastair
Biggs-Davison, SirJohn Gorst, John
Blackburn, John Gow, Ian
Boscawen, HonRobert Gray, Hamish
Bottom ley, Peter (W'wich W) Greenway, Harry
Brinton, Tim Griffiths, PeterPortsm'thN)
Brooke, Hon Peter Grist, Ian
Brown, Michael (Brigg&Sc'n) Gummer, JohnSelwyn
Browne, John (Winchester) Hamilton, Hon A.
Buck, Antony Hamilton, Michael (Salisbury)
Budgen, Nick Hannam, John
Burden, SirFrederick Haselhurst, Alan
Butcher, John Hawksley, Warren
Cadbury, Jocelyn Hayhoe, Barney
Carlisle, John (Luton West) Heath, Rt Hon Edward
Carlisle, Kenneth (Lincoln) Heddle, John
Chapman, Sydney Henderson, Barry
Churchill, W.S. Higgins, Rt Hon Terence L.
Clark, Hon A. (Plym'th, S'n) Hill, James
Clark, Sir W. (Croydon S) Hogg, HonDouglas(Gr'th'm)
Clarke, Kenneth (Rushcliffe) Holland, Philip (Carlton)
Clegg, SirWalter Hooson, Tom
Cockeram, Eric Howe, Rt Hon Sir Geoffrey
Cope, John Hunt, John(Ravensbourne)
Costain, SirAlbert Hurd, Rt Hon Douglas
Cranborne, Viscount Jessel, Toby
Dean, Paul (North Somerset) JohnsonSmith, Geoffrey
Dickens, Geoffrey Jopling, RtHon Michael
Dorrell, Stephen Kaberry, SirDonald
Douglas-Hamilton, LordJ. Kellett-Bowman, MrsElaine
Dover, Denshore Knox, David
Dunn, Robert(Dartford) Lang, Ian
Edwards, Rt Hon N. (P'broke) Latham, Michael
Eggar, Tim Lawrence, Ivan
Fairgrieve, SirRussell Lawson, Rt Hon Nigel
Lee, John Renton, Tim
Lennox-Boyd, Hon Mark Rhodes James, Robert
Lester, Jim (Beeston) Rhys Williams, Sir Brandon
Lewis, Kenneth (Rutland) Ridley, Hon Nicholas
Lloyd, Peter (Fareham) Rifkind, Malcolm
Lyell, Nicholas Roberts, M. (Cardiff NW)
McCrindle, Robert Roberts, Wyn (Conway)
Macfarlane, Neil Rossi, Hugh
MacGregor, John Sainsbury, Hon Timothy
Macmillan, Rt Hon M. St. John-Stevas, Rt Hon N.
McNair-Wilson, M.(N'bury) Shaw, Giles (Pudsey)
McNair-Wilson, P. (New F'st) Shaw, Michael (Scarborough)
Major, John Shelton, William (Streatham)
Marland, Pau I Shepherd, Colin (Hereford)
Marlow, Antony Shepherd, Richard
Marten, Rt Hon Neil Silvester, Fred
Mather, Carol Skeet, T. H. H.
Maude, Rt Hon Sir Angus Speller, Tony
Mawby, Ray Spicer, Jim (West Dorset)
Mawhinney, Dr Brian Spicer, Michael (S Worcs)
Maxwell-Hyslop, Robin Sproat, Iain
Mayhew, Patrick Stainton, Keith
Mellor, David Stanbrook, Ivor
Meyer, Sir Anthony Stanley, John
Miller, Hal (B'grove) Stradling Thomas, J.
Mills, lain (Meriden) Taylor, Teddy (S'end E)
Mills, Peter (West Devon) Tebbit, Rt Hon Norman
Miscampbell, Norman Temple-Morris, Peter
Moate, Roger Thomas, Rt Hon Peter
Monro, Sir Hector Thompson, Donald
Montgomery, Fergus Thorne, Neil (llford South)
Moore, John Thornton, Malcolm
Morgan, Geraint Townend, John (Bridlington)
Morris, M. (N'hampton S) Townsend, Cyril D, (B'heath)
Morrison, Hon C. (Devizes) Trippier, David
Morrison, Hon P. (Chester) Viggers, Peter
Murphy, Christopher Waddington, David
Neale, Gerrard Walker-Smith, Rt Hon Sir D.
Needham, Richard Waller, Gary
Nelson, Anthony Ward, John
Neubert, Michael Warren, Kenneth
Newton, Tony Watson, John
Page, John (Harrow, West) Wells, Bowen
Page, Richard (SW Herts) Wells, John (Maidstone)
Parris, Matthew Wheeler, John
Pawsey, James Wickenden, Keith
Percival, Sir Ian Wilkinson, John
Peyton, Rt Hon John Winterton, Nicholas
Pink, R. Bonner Wolfson, Mark
Pollock, Alexander Young, Sir George (Acton)
Porter, Barry Younger, Rt Hon George
Prentice, Rt Hon Reg
Proctor, K. Harvey Tellers for the Noes:
Rathbone, Tim Mr. David Hunt and
Rees-Davies, W. R. Mr. Tristan Garel-Jones.

Question accordingly negatived.

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