Commons Sitting of 13 April 1983

Preamble
The House met at half-past Two o'clock
PRAYERS
[MR. SPEAKER in the Chair]
PRIVATE BUSINESS
  HAMPSHIRE BILL [Lords]
  As amended, considered; to be read the Third time.
Oral Answers to Questions
  FOREIGN AND COMMONWEALTH AFFAIRS

    Libyan People's Bureau
    Mr. Ennalsasked the Secretary of State for Foreign and Commonwealth Affairs how many diplomats are currently accredited from the Libyan People's Bureau.
    The Minister of State, Foreign and Commonwealth Office (Mr. Douglas Hurd): Twenty-three.
    Mr. Ennals: Given the recent threats by the Libyan Government to kill exiles in western Europe, including the United Kingdom, and that it is known that funds are distributed from the Libyan mission in the United Kingdom to extremist organisations and publications, does the Minister believe that these actions conform with the normal role of a diplomatic mission that is accepted by Her Majesty's Government?
    Mr. Hurd: The Government have been worried by these signs and they have made their views known to the Libyan authorities at a high level in recent months. My hon. and learned Friend the Minister for Health discussed the matter when he was there in February. He received assurances that were important to the Government. The Government had trouble in this regard in 1980, as the right hon. Gentleman will remember. Three members of the People's Bureau were asked to leave at that time. I trust that there will be no repetition.
    Sir John Biggs-Davison: Does my right hon. Friend consider that the subsidising of such publications as the Labour Herald is a proper function of this quasi embassy?
    Mr. Hurd: No. If my hon. Friend has evidence about that, I trust that he will inform me.

    Arab League Delegation (London Visit)
    Sir John Biggs-Davisonasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement about the visit of the Arab League delegation to London headed by King Hussein.
    Mr. David Watkinsasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the prospects for peace in the middle east.
    The Secretary of State for Foreign and Commonwealth Affairs (Mr. Francis Pym): The Arab League delegation led by King Hussein of Jordan paid a visit to London on 18 March. There was a constructive and wide-ranging discussion on the situation in the middle east.
    Recent events obviously constitute a setback for peace efforts. But, following my discussions in the region, I remain convinced that if peace negotiations are to begin there is no practical alternative to the proposals of President Reagan as the starting point. As I said all along, these proposals constitute an opportunity which will not recur and therefore must be seized urgently. It is essential that the forces of moderation, not least in the PLO, carry the day. It is the Palestinians themselves who stand to lose the most if they do not. Likewise, it remains essential that all foreign forces should withdraw quickly from Lebanon and that the unacceptable settlement programme on the West Bank should be halted. Israel has a heavy responsibility in both bases.
    Our own approach continues to rest on the principles set out in the Venice declaration. We are encouraging to the limit of our ability all those working for peace and are in close touch with them. The role of the United States Government, both in the Lebanon talks and in the wider peace process, of course remains central.
    Sir John Biggs-Davison: While welcoming Her Majesty's Government's support for the Reagan proposals, may I ask whether there was any commitment from the delegation to seek negotiations for peace with the state of Israel?
    Mr. Pym: Yes. There was a discussion of the first declaration, which implicitly refers to the recognition of the security and peace of all states in the region. The discussions began on the basis of the first declaration. The discussion was wide-ranging and both sides found it extremely valuable.
    Mr. Watkins: To what extent was the Israeli illegal occupation and fortification of southern Lebanon and of the West Bank discussed, both of which are in direct contravention of the Reagan initiative? What efforts are the British Government making to end these twin aggressions and obstacles to peace in the middle east?
    Mr. Pym: The hon. Gentleman knows the British Government's view on both of those issues. They are invariably raised in all discussions about the middle east. They were not dwelt upon at length in the Arab League delegation visit, but they were touched upon. In all my recent discussions, they have been referred to.
    Mr. Latham: Now that the Secretary of State has met King Hussein twice, including once recently, and King Fahd, will he go to Israel to meet the Israelis?
    Mr. Pym: I have no plans at present to do so, but that is always a possibility.
    Mr. Healey: Although I agree with the Foreign Secretary that the Reagan proposals still represent the best practical way forward, does the right hon. Gentleman agree that the central problem has been that Mr. Begin's Government have rejected absolutely and unconditionally the idea of negotiating on them? In addition, President Reagan has failed to influence the Israeli Government either to withdraw their troops from the Lebanon, where, as my hon. Friend the Member for Consett (Mr. Watkins)

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    said, they are fortifying their positions in the Bekaa valley, or to freeze the settlements. Today we have heard that the Israeli Government are considering a plan to build 57 more settlements in the next four years on the West Bank. Can the right hon. Gentleman assure the House that our Government will now approach President Reagan to seek his assistance in dissuading the Israeli Government from those courses?
    Mr. Pym: I agree with the right hon. Gentleman's factual assessment. Throughout the dispute, and ever since the Reagan plan was proposed, we have constantly urged with all our strength at presidential level, at Secretary of State level and at every other level, the urgent need for the United States of America to use its influence to bring about a change in approach by Israel. In particular, it is very regrettable that there has not yet even been a withdrawal of all forces from the Lebanon, which King Hussein and other Arab countries regard as an essential prerequisite before the process can begin. It is most regrettable that there has not been more flexibility on the part of Israel and, indeed, of the PLO. After all, the blame does not lie in one place. However, I can assure the right hon. Gentleman that we have made such representations in the strongest terms.
    Mr. Russell Johnston: I am sorry to press the Foreign Secretary, but does he agree that the assassination of Mr. Sartawi shows that more extremist elements are coming to the fore in the PLO and that they will be even more encouraged unless action is taken on the West Bank? Will the right hon. Gentleman bring that, in the strongest possible terms, to the attention of President Reagan, who appears to be the only one with any influence over Mr. Begin?
    Mr. Pym: That murder was a deplorable incident and is regretted, I believe, by everybody. I am not sure whether it is true that more terrorism is coming to the fore, but there is certainly a risk of that, and the murder was a very bad example. However, there are divisions within the PLO which make that side of the negotiations extremely difficult. It is a matter of the utmost regret that the PLO was unable, in the end, to come to an agreement with King Hussein, because that would have been a very helpful aspect of the progress in the negotiations.
    Mr. Walters: Has my right hon. Friend noted the comment by General Eitan threatening to set up 100 new illegal Israeli settlements on the West Bank and his comment that the Arabs would then be like drugged cockroaches running round in a bottle? Is not such a continuing blatant disregard of international law and racist attitude the real reason for the breakdown in peace negotiations?
    Mr. Pym: A number of people on both sides make some rather rash comments that are in no way helpful. I would not say more about the comment that my hon. Friend has mentioned, but I share the view of the right hon. Member for Leeds, East (Mr. Healey) that the proposal to increase the number of settlements on the West Bank by 57 was very offensive at the time and in the circumstances that it was made. The British Government's view is that those settlements are illegal and are certainly completely contrary to the Reagan plan. The sooner the proposal is reversed, the better.

    Iraq
    Mr. Edwin Wainwrightasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on relations with Iraq.
    Mr. Hurd: We maintain normal relations with the Government of Iraq, reflecting the political, economic and cultural ties that we have with that country.
    I visited Baghdad on 27 and 28 March, called on the President, the Foreign Minister and other senior Iraqi Ministers, and discussed in detail with them a number of international and bilateral matters.
    Mr. Wainwright: Did the Minister get any idea about the future of the problems of Iraq and the middle east? Did he raise with the Iraqis the relationship between that country and Iran, and, of course, Israel? Did the right hon. Gentleman mention what happened in the attempted assassination in this country and ask the Iraqis to ensure that none of their people are armed when in this country? We deplore such assassinations no matter where they are carried out, but particularly when they occur in this country.
    Mr. Hurd: I entirely agree with the hon. Gentleman's second point, and on several occasions we have made that clear, not only to the Government of Iraq, but to others whom we are anxious should know our views. We have certainly made it clear to the Government of Iraq. My right hon. Friend has dealt with the Arab-Israeli side of the hon. Gentleman's first point. There is great concern in the Gulf area about the continuance of the Iraq-Iran war, and that is reflected in Baghdad. We discussed ways in which the war could be brought to an end, but at the moment the prospects do not look very hopeful.

    Refugees
    Mr. Gregor MacKenzieasked the Secretary of State for Foreign and Commonwealth Affairs what are the international obligations of the United Kingdom towards refugees.
    The Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Malcolm Rifkind): The principal international obligations of the United Kingdom towards refugees are those arising under the United Nations convention relating to the status of refugees of 1951, as modified by the protocol of 1967. The convention defines a refugee and gives guidance on international standards for the treatment of refugees.
    Mr. MacKenzie: Does the hon. Gentleman accept that many of us are very concerned because in about 1979, 37 per cent. of those who applied for refugee status or for political asylum from the Eastern bloc were granted it, whereas in 1983 only 11 or 12 per cent. of those who applied have been granted it. To many of us that seems to be a tragic reduction in the figure. If the Foreign Secretary wants to maintain the respect of our friends and allies, the number should be very substantially increased.
    Mr. Rifkind: I remind the right hon. Gentleman that decisions on individual applications for refugee status are dealt with by my right hon. Friend the Home Secretary. My right hon. Friend obviously takes into account the guidelines laid down in the United Nations convention to which I have referred.
    Mr. Warren: In view of the reply that my hon Friend has just given, will he bear in mind that the Home Secretary told me only yesterday in a written reply that 142 applications by refugees from the Eastern bloc were refused in 082 and that the eventual fate of those people is not known? Would it not be possible for him to consider with the Home Secretary whether there is any chance of improving the refugee review system to ensure the standard of democracy in which we all believe?
    Mr. Rifkind: I know that my right hon. Friend tries to treat applications for refugee status as sympathetically as possible. Of course, it is impossible to grant every application when pursuing a policy in accordance with the guidelines laid down by the United Nations convention.
    Mr. Greville Janner: Does the Minister accept that this country's obligations to refugees extend to those who are already settled here, such as the many thousands of Ugandans who were driven out by Amin, and that those obligations include making every effort to help them to obtain compensation for what was stolen from them by the Amin regime?
    Mr. Rifkind: The hon. and learned Gentleman is right to draw attention to that problem. He will be aware that the present Ugandan Government have introduced a new initiative to help to resolve some of those problems. We shall do all we can to help British citizens or other persons resident here who seek a resolution of those difficulties.
    Mr. George Robertson: Is the Minister really satisfied that the Home Office takes sufficient account of the views of the Foreign Office about refugees? Is the hon. Gentleman aware of the increasing anxiety about the growing evidence that this country is no longer willing to give a safe haven to those fleeing persecution and oppression? Is he further aware that the Government's record of granting political asylum to people from countries such as Chile, Poland, Iran and South Africa—many of whom are sent home to face imprisonment and, often, death—shows that the Government's policy is arbitrary, inconsistent and a disgrace to the fine reputation that this country once had on this subject?
    Mr. Rifkind: The hon. Gentleman's remarks suggest that he is not aware of the United Nations guidelines to which my right hon. Friend pays attention. The United Nations convention states that a refugee should not be returned to his country where his life or freedom would be endangered on account of his race, religion or political opinion. Those are exactly the criteria to which my right hon. Friend pays attention.

    Cruise Missiles
    Mr. Frank Allaunasked the Secretary of State for Foreign and Commonwealth Affairs when he will next discuss cruise missiles with Foreign Ministers of other European countries.
    Mr. Pym: Whenever I next meet them.
    Mr. Allaun: Do the Government intend to press for power to veto cruise launchings, meaningless though that would be? Will the Minister press for the inclusion in his negotiations of all intermediate nuclear weapons in Europe, not excepting Polaris and the French nuclear weapons, and not confining them to Mr. Reagan's selective choice of systems?
    Mr. Pym: On the first point, the question of a veto does not arise, because the weapons can be used only on the basis of joint decision. So there is no question of veto. In answer to the hon. Gentleman's second point, yes, the negotiations on INF are confined to INF weapons. Polaris is not an INF weapon. It is a strategic weapon, and was recognised as such by the Soviet Union in earlier negotiations on strategic weapons.
    Mr. Cyril D. Townsend: When my right hon. Friend next meets his West German opposite number, will he take the opportunity to congratulate him warmly on the robust stand taken by the electorate in West Germany on these issues, which I hope will be repeated in this country before many weeks have passed? Secondly, is it not all too obvious that a gross imbalance of theatre nuclear weapons neither serves the cause of peace in western Europe nor brings a feeling of security to western European countries?
    Mr. Pym: I am sure that my German opposite number is more grateful than anyone else that the German electorate showed the robustness that it did. In answer to my hon. Friend's second point, yes, part of the immediate problem is the imbalance in these weapons. Incidentally, that is why a freeze is quite unacceptable. To ensure the security of both sides we want a reduction in armaments to the lowest number of weapons that it is possible to negotiate.
    Mr. Healey: Does the right hon. Gentleman agree that there has always been an imbalance in these weapons because NATO always decided to match the Soviet intermediate-range missiles in Europe by allocating Polaris and Poseidon submarine warheads to SACEUR? Does he accept the view of Field-Marshal Lord Carver that there is no military case for the deployment of those weapons and the growing evidence that their deployment would immensely damage public support for NATO in all the countries concerned? Will the right hon. Gentleman therefore drop these proposals and align himself with the great majority of people on both sides of the Atlantic who would now support a freeze on the deployment of all nuclear weapons?
    Mr. Pym: I completely reject what the right hon. Gentleman said. In fact, the Labour Government were party to considering and agreeing to address the matter of modernisation. That matter has been addressed and brought to a conclusion by this Government. I am certain that the absence of modernised intermediate nuclear weapons leaves a gap in our deterrence strategy. We have against us a constantly increasing number of SS20s and other weapons, and unless we modernise our weapons—our present weapons are aging and out-ofdate—there will be a gap in our deterrence. The whole basis of our defence policy is to deter war and preserve peace. Therefore, NATO cannot afford to have a gap in that shield. That is why we are proceeding with this modernisation, unless the Soviet Union is prepared to negotiate the zero option.
    Mr. Healey: Does the right hon. Gentleman accept that the word "modernisation" applied to these weapons is wholly mistaken, because there have never been any intermediate-range land-based missiles in the NATO armoury since Thor and Jupiter were withdrawn after the Russians had begun deploying their SS4 and SS5 missiles? Does the right hon. Gentleman accept that to pretend that

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    cruise is modernising the short-range battlefield nuclear weapons now being withdrawn by NATO is dishonest in the extreme?
    Mr. Pym: That is not the proposal at all. We are facing an escalating number of SS20s, which are modernising the SS4s and SS5s, on the Warsaw pact side. We had Vulcans and United States intermediate weapons. We needed the modernisation of these in order to have a deterrent effect against potential use of Warsaw Pact weapons. Had we not taken that decision, we should be completely exposed in that area. That is why NATO decided that it needed a complete range of deterrent capabilities, and that is why we intend to modernise it. On those grounds, it must be the right decision.
    Mr. Wilkinson: Does my right hon. Friend agree that the shift of position by the right hon. Member for Leeds, East (Mr. Healey) is extremely dangerous and will give great heart to the men in the Kremlin? When he suggests that Western strategic nuclear forces should be weighed in the balance against the increasing theatre capability of the Soviets, does he not take into account the fact that the Soviets now have a preponderence at the strategic level and that three quarters of their strategic nuclear force has been constructed in the past five years?
    Mr. Pym: I agree with my hon. Friend. I am bound to say that it is extremely regrettable that the right hon. Gentleman has had that change of mind. However, it is his responsibility, and it is not for me to comment on it.
    Mr. Healey: On a point of order, Mr. Speaker. It has been said twice on the Government Benches that my position on cruise was at one time different from what it now is. That is absolutely untrue. [Interruption.]
    Mr. Speaker: Order.
    Mr. Healey rose—
    Mr. Speaker: Order. I thought that the right hon. Gentleman made his position quite clear, that he has not changed his mind.

    Nuclear Forces (Geneva Talks)
    Mr. Michael McNair-Wilsonasked the Secretary of State for Foreign and Commonwealth Affairs whether he is able to make a statement about progress at the intermediate range nuclear forces talks currently being held in Geneva.
    Mr. Pym: Progress in the fourth round of the INF negotiations, which finished on 29 March, was disappointing. The Russians were obstructionist, and seem to have decided that they would try to appeal over the heads of the negotiators to public opinion in western Europe. They flatly refused to negotiate on the basis of the zero option. As a consequence of this, at the end of the round ambassador Nitze, with NATO's full support, took the important step of offering to negotiate an interim agreement which would provide equal limits on the missile warheads of the United States and the Soviet Union. By definition, an interim agreement is far short of the complete elimination of a whole system of missiles which the Alliance wants to see, but it is the next best alternative.
    Mr. McNair-Wilson: Can my right hon. Friend give an account of the Russian response to Ambassador Nitze's
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    proposal? Is he saying that the balance will now be struck by a reduction in nuclear warheads, rather than in the total number of missiles deployed by both sides?
    Mr. Pym: The proposal that was tabled at the end of the last round was not dealt with in detail at the negotiating table because there is a break between that round and the next one. We have had an almost immediate and apparently total rejection of the proposal by the Soviet Union. Its Foreign Minister held a press conference, the third in his 25 years as Foreign Minister, which lasted a considerable time, and appeared to be completely negative. Whether we like it or not, the present position of the Soviet Union is negative and extraordinarily unhelpful. We have been rightly pressed on this Bench by Members on both sides of the House to be as forthcoming and positive as we can on arms control proposals. We have made them in conjunction with our allies, and the response that we are receiving at present is most regrettable.
    Mr. Hooley: The Foreign Secretary used the phrase "equal limits". By that does he mean the totality of nuclear weapons held by NATO countries as against the totality of nuclear weapons held by Warsaw Pact countries?
    Mr. Pym: We want equality on both sides—a balance that is verifiable. That is the best way to achieve the security to which both sides are entitled.

    USSR (Human Rights)
    Mr. Lawrenceasked the Secretary of State for Foreign and Commonwealth Affairs if he will raise at the United Nations Educational, Scientific and Cultural Organisation the issue of the violation of religious, cultural and educational rights in the Union of Soviet Socialist Republics.
    Mr. Rifkind: We have raised Soviet human rights violations both at the recent meeting of the United Nations human rights commission in Geneva and at the CSCE review meeting at Madrid. We have no present intention of raising these issues at UNESCO, but we shall be alert for any suitable opportunities to make known our concerns.
    Mr. Lawrence: Is my hon. Friend aware that UNESCO is one international organisation that should be doing something to prevent the destruction of cultural rights in the Soviet Union and the destruction of the religion, schools and language of Jews in Soviet Russia? Is he aware that UNESCO appears to have done nothing over the years, that it has remained silent about the arrest of Yosif Begun for championing those rights, and that it has utterly ignored the petition which the all-party group in the House presented on behalf of 120 academics three years ago? Will my hon. Friend do everything that he can to make sure that UNESCO faces its international responsibilities for the defence of human rights?
    Mr. Rifkind: UNESCO's main responsibility in cultural matters is in the sphere of international collaboration rather than in the circumstances of an individual country. But I agree with my hon. and learned Friend that an improvement in cultural freedom in the Soviet Union would be of assistance in promoting international collaboration on cultural matters.
    Mr. George Robertson: When the Minister is considering this important issue, will he accept from me

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    that there is genuine pleasure in this country this week that Lida Vashchenko, one of the seven Pentecostalists, who has been given refuge for the past four years in the American embassy in Moscow, has now been able to leave the Soviet Union for Israel? Will he express to the Soviet authorities our pleasure at this decision and also express to them our hope and expectation that the rest of the members of these two very brave families will soon be allowed to join Lida Vashchenko in Israel?
    Mr. Rifkind: We are of course delighted that Mr. Vashchenko has been allowed to leave the Soviet Union. As the hon. Gentleman will be aware, the other families who were resident at the American embassy have now left it and returned to Siberia. We hope that the Soviet Union will give them similar freedom to leave the Soviet Union if that is their wish.

    Arab League Delegation (London Visit)
    Mr. Cunliffeasked the Secretary of State for Foreign and Commonwealth Affairs whether the recent Arab League delegation, led by King Hussein of Jordan, gave any commitments that the countries represented in the delegation will recognise the state of Israel.
    Mr. Hurd: King Hussein made it clear on behalf of the Arab League delegation that they were committed to the Fez principles, one of which calls for the Security Council to guarantee peace among all states of the region.
    Mr. Cunliffe: As the Foreign Secretary, unfairly in my opinion, accused Israel today of total inflexibility on the Reagan plan, will he list any occasion on which Israel has denied the legitimate rights of any Arab state within the United Nations?
    Mr. Hurd: Israel continues to occupy part of the Lebanon, to increase settlements on the West Bank and to deny self-determination to the Palestinians living in the occupied territories. That is part of the reason—only part of the reason—why President Reagan's peace plan has arrived at the present deadlock.
    Mr. Dykes: As the PLO demonstrated a staggering lack of realism, and indeed courage, in refusing to allow King Hussein of Jordan to negotiate on its behalf for the good of the Palestinians, does my right hon. Friend think that it is time for those negotiations to embrace other than PLO supporters among moderate Palestinians?
    Mr. Hurd: We certainly think that the PLO has failed to take advantage of an opportunity that would have been important not only for the Palestinians, whom it claims to represent, but for the area as a whole. The King of Jordan has come to the conclusion that he cannot proceed further under the Reagan plan without agreement with the PLO. We must respect the reasons for that decision.
    Mr. Roy Hughes: With regard to recognition, is it not rather farcical that American leaders should accuse the PLO of being responsible for the breakdown in the peace negotiations when they refuse even to speak to this body, which is the officially recognised mouthpiece of the Palestinian people? Is it not also farcical that at the same time they say nothing about the increased programme of Israeli settlements on the West Bank and the installation by Israel of sophisticated military equipment in the Lebanon? Will the Minister try to put some backbone into these American leaders so that they can stand up on these matters?
    Mr. Hurd: The Americans have made clear their views about the Israel settlement policy and are doing their best through Mr. Habib to bring about the withdrawal of all foreign forces, including Israeli forces, from the Lebanon.
    Mr. Sainsbury: Does my right hon. Friend agree that it is not entirely satisfactory that one has to infer from statements on the Arab side that they might recognise Israel, as they cannot bring themselves to mention the name of the country? Is my right hon. Friend aware that some of the countries in the area publish maps which omit to show the state of Israel, which is not a safe situation? Surely it is this insecurity that is created in Israel by this refusal of recognition that is leading to the problems on the borders, for instance with Lebanon.
    Mr. Hurd: I agree that it is fuzzy and unsatisfactory. As my hon. Friend knows, we have been urging the PLO for some time to make it clear without fuzziness and ambiguity that it would be ready clearly to accept Israel's rights when Israel makes it clear that she is ready to accept Palestinian self-determination.

    European Security Conference (Madrid Discussions)
    Mr. Greville Jannerasked the Secretary of State for Foreign and Commonwealth Affairs when he expects the discussions at the European Security Conference in Madrid to be concluded.
    Mr. Hurd: The conference resumes on 19 April. We hope that agreement on a substantial and balanced concluding document will be reached during the forthcoming session. But we are not there yet.
    Mr. Janner: Does the Minister's hope extend to the Soviet Union agreeing to comply with its obligations under the final act of the Helsinki agreement and allowing those thousands of its Jewish citizens who are seeking to leave to do so in accordance with the Universal Declaration of Human Rights and to let out of prisons and slave camps people such as Anatoly Shcharansky?
    Mr. Hurd: One of the reasons why agreement on a concluding document has not been reached is that we are not satisfied with the human rights performance of the Soviet Union. This applies in particular to the hon. and learned Gentleman's point. We are deeply concerned about the reduction in Jewish emigration, which fell to around 2,600 in 1982, compared to 51,000 in 1979.
    Sir Bernard Braine: Bearing in mind that the Soviet Union and its satellites have repeatedly violated both the letter and the spirit of the Helsinki accord, that gross violations of human rights continue, and that those heroic souls who have attempted to monitor those violations in their own countries have been thrown into prison, why do we continue with these farcical discussions?
    Mr. Hurd: We continue them because it is the Helsinki process that gives us the right to make representations in these matters. Without the Helsinki final act and the continuing procedures our position would be much less strong. Therefore it is worth while trying to see—we have not yet succeeded—whether we can agree a document at the end of this conference which would represent an advance in human rights, to which my hon. Friend is rightly devoted, and to achieve a proper balance through all the baskets of the Helsinki final act.

    Argentina
    Mr. Douglasasked the Secretary of State for Foreign and Commonwealth Affairs what are his plans to discuss the future of relations between the United Kingdom and Argentina with other American nations.
    Mr. Pym: I take every opportunity to explain to other American nations our attitude to future relations with Argentina. The Governments of these nations can be in no doubt of our willingness to move back towards a normal relationship with Argentina, but so far Argentina has not even declared a definitive end to hostilities, still less renounced the possibility of a further resort to force.
    Mr. Douglas: Does the Foreign Secretary agree that, while the decision to expand the existing airport at Port Stanley, or to site a new airport, may be a decision for another Department, that decision will have enormous foreign policy implications, in that it will be a signal to the Argentines and to others of our intention to stay there until kingdom come? Therefore, before he undertakes further discussions with countries in Latin America, will he consult the Secretary of State for Defence to ensure that the right decision is made on that capital investment?
    Mr. Pym: It was not so long ago that the House was criticising this Government and the previous Government for not acting on the recommendations of an earlier Shackleton report that there should be a second airfield. The situation being what it is, the airfield is necessary in present circumstances for the defence of the islanders. We have taken the decision, although we have not yet decided exactly how it is to be carried out. We believe it to be necessary.
    Mr. Bill Walker: Does my right hon. Friend agree that the building of an air base in the Falklands is in keeping with the policies that have been pursued by successive British Governments? There is a military need to provide this base and later it can be used for civil purposes as the circumstances change.
    Mr. Pym: It will be used for civil purposes, anyway.
    Mr. Dalyell: On 2 May, did the Foreign Secretary know of the Prime Minister's decision to sink the General Belgrano and if so, why did the Government not consult our American allies whose hemispheric relations were affected?
    Mr. Pym: I do not think that that arises under this question.
    Mr. Clinton Davis: In any consultations that the right hon. Gentleman embarks upon with other American nations in relation to this matter, will he give an assurance to the House that he will not seek to secure closer and more friendly relations with Chile while it continues under the present odious regime? In particular, does he recognise that it would be seen as being very cynical indeed to denounce, rightly, in the way that he has done the Argentine regime for being fascist, while at the same time giving some form of approbation to the odious regime in Chile?
    Mr. Pym: The Government's policy is to improve relations with all countries in Latin America.
    Sir Bernard Braine: Was there an inquiry into General Matthei's remarks about the representations made to my
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    right hon. Friend's Department concerning Oscar Rojas, about whom assurances were given by the Chilean Ambassador in London, who is now his country's Foreign Minister? What steps were taken to ensure that the inquiries made by the British Government were being followed through?
    Mr. Pym: I require notice of that question.

  EUROPEAN COMMUNITY

    Budget
    Mr. Knoxasked the Secretary of State for Foreign and Commonwealth Affairs what progress has been made towards reaching an agreement about the European Community budget.
    Mr. Ginsburgasked the Secretary of State for Foreign and Commonwealth Affairs what progress has been made in reaching agreement on European Community finance; and if he will make a statement.
    Mr. Hicksasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement regarding the latest position in resolving the Community budget problem.
    Mr. Pym: The European Council on 21 and 22 March agreed that the Commission would submit specific proposals as soon as possible on the future financing of the Community, to include a lasting solution to the problem of budgetary imbalances. The Foreign Affairs Council will report to the June European Council its conclusions both on the long term and on the arrangements for the interim until the lasting solution can be implemented. Provision for United Kingdom refunds in respect of 1983 will be incorporated in the draft Community budget for 1984.
    Mr. Knox: Does my right hon. Friend agree that the extension of common policies for regional development, energy and transport could play a real part in the long-term resolution of our budget problem?
    Mr. Pym: I think that the development of these policies would make a contribution to the long-term wellbeing of the Community as a whole. However, I think that their effect upon the budget problem would be minimal. The policies that my hon. Friend has in mind will probably not be implemented until the 1983 budget has been negotiated, and, perhaps, the budgets of later years.
    Mr. Ginsburg: Does the right hon. Gentleman agree that currency stability is an important condition for the resolving of the budgetary problem? Will he be prepared to make his contribution to resolving the problem by offering British entry into the European monetary system at what is still an extremely propitious moment?
    Mr. Pym: That issue is kept under constant review by my right hon. and learned Friend the Chancellor of the Exchequer. If he were contemplating a change of policy, he would announce that himself. The variation in exchange rates is an inhibiting factor in international trade, but I do not think that it is fundamental to the solution of the budget problem.
    Mr. Hicks: Will my right hon. Friend confirm that it is still the Government's intention that the issue of the 1983 budget rebate for the United Kingdom should be resolved at the June meeting? Can he say whether he thinks that will be the case in view of recent speculation?
    Mr. Pym: That was the clear wish of the European Council at the meeting that I attended. We shall see how things develop. I have every reason to suppose that there is now a clear intention, which was missing before, to solve the 1983 budget issue reasonably quickly. I think that the longer term solution will take longer to reach, and so I hope that a conclusion will be reached in the way that the European Council decided.
    Mr. Heffer: Is the right hon. Gentleman ignoring what happened at the European assembly yesterday, when the EC President, Mr. Thorn, made it clear that the Commission would not be taking any part in the negotiations? Does this not mean that the Government's hopes of achieving a June settlement have been dashed? Is he aware that hon. Members on both sides of the House have been saying that the European assembly is now becoming a European Parliament and is flexing its muscles, taking decisions and putting Parliaments such as this into an impossible position?
    Mr. Pym: I have not seen a full text of the speech of the President of the Commission, but I can tell the hon. Gentleman that, having been at the European Council, I know what was decided. The Commission, of course, will act in accordance with its decision. Therefore, I have every reason to suppose that what was decided there will be carried out.
    Mr. Russell Johnston: As the right hon. Gentleman has indicated that the paper from the Commission is intended to provide a long-term solution, is it not envisaged that it might contain some mechanism to allow the budget to be enlarged?
    Mr. Pym: That has not yet been addressed. The Commission has submitted only a discussion paper on the long-term solution, and that has not yet been addressed in any detail. There has been one tour de table and member states have been invited to submit their views on it. As I have said, it has not yet been addressed, but it will be at subsequent meetings of the Foreign Affairs Council.

    Council of Ministers (Agenda)
    Mr. Spearingasked the Secretary of State for Foreign and Commonwealth Affairs what items discussed at the meeting of Heads of Government of the members of the European Community will be placed on the agenda of further meetings of Councils of Ministers; and if any items are likely to be of legislative consequence.
    Mr. Hurd: I refer the hon. Gentleman to the statement made by my right hon. Friend the Prime Minister on 24 March describing the main items discussed at the European Council. All of the Community matters discussed there are likely to be considered further at meetings of the Council of Ministers. I cannot at this stage be specific about which will lead to legislation.
    Mr. Spearing: That being so, does the right hon. Gentleman accept that if the Heads of Government agree on a particular matter, which becomes the subject of legislative action, the Council of Ministers, which is the only constitutional body, can do little other than carry out the wishes of the Council, which at present is a non-treaty body? Does the right hon. Gentleman think that after the Prime Minister attends these Council meetings it would be much better if she made verbal statements to the House rather than statements in the form of written answers?
    Mr. Hurd: I think that my right hon. Friend's statement was clear. The hon. Gentleman has many opportunities to question both her and Foreign Office Ministers on the matter. The European Council asked the Foreign Affairs Council to report back at the Stuttgart meeting in June on the British budgetary refund.
    Mr. Neil Thorne: Will my right hon. Friend please do his best to ensure that the Helsinki agreement is considered by the Council of Ministers at an early date, especially its effect upon postal communications with the Soviet Union, which seems to be the main cause of current problems? We seem to have little assistance in getting my constituents' messages through to their Jewish colleagues in that totalitarian country.
    Mr. Hurd: There is good co-ordination among the Ten on the stand to be taken at the Madrid conference. I shall ensure that my hon. Friend's point is considered by us and the Ten.
    Mr. Ioan Evans: In Granada's "World in Action" programme on Monday night a film was shown entitled "The Golden Harvest", which drew attention to the tremendous amount of public funds that are being wasted by the common agricultural policy. Will the Government seek to bring about a fundamental reform of the CAP as a priority in their discussions in Europe?
    Mr. Hurd: In discussing the Community's long-term financial structure we consider that the first priority is to ensure that there is a proper check on the growth in spending on agriculture.

    Policy Reforms
    Mr. Teddy Taylorasked the Secretary of State for Foreign and Commonwealth Affairs if he will restate his objectives for European Community reforms in 1983 in light of the Council of Ministers meetings on 21 and 22 March.
    Mr. Pym: We have put forward proposals for developing European Community policy over the whole range of its activities. These include proposals for extending the internal market in goods and services, for reform of the operation of the common agricultural policy, for building on the agreed framework for an energy strategy, for a lasting solution to the Community's budget problem and for extending the regional and social policies. Our objectives have not changed as a result of the most recent meeting of the European Council, though progress was made towards achieving them.
    Mr. Taylor: Will my right hon. Friend give a rather fuller explanation of the rebate issue, which is pretty vital for Britain when we consider that Britain, in the absence of a rebate, will have to pay about £1,500 million net, which is about £5 million a day? Is it not serious if the Council of Ministers agrees that we should get a rebate fixed in June, yet the chairman of the Commission announces yesterday in Strasbourg that the Commission is not bound by the recommendation of the Commission? What do we do if we do not get a rebate from our extraordinarily large net contribution?
    Mr. Pym: Last month we received a rebate of £568 million for 1982, and more is to come. As I have announced, the European Council agreed that the United Kingdom refund would be included in the budget for 1984.

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    There is a commitment to solve the immediate problem by June and I believe that that will be adhered to as an interim solution until a permanent one can be found.
    Mr. Leighton: Does the Foreign Secretary agree that we are as far away as ever from a permanent solution to the budgetary problem? Is it not true that, during our period of membership, we have handed over £4 billion, which shows that we are being greatly exploited by our richer neighbours? Why, in equity, should we make any contribution? Why, as one of the poorer members, should we not be a net beneficiary, as most other member countries are?
    Mr. Pym: Had it not been for the negotiations that have been carried out by the Government, the rebates that we have received recently would not have been received. That was the situation that we inherited from the Labour Government. I disagree with the hon. Gentleman about our being further away than ever from a lasting solution, precisely because, as a result of action that has been taken by the European Parliament, the Council has now decided to go for a lasting solution. That has always been the British objective. We are, therefore, much nearer to attaining it than before, so I disagree with the hon. Gentleman.
    Mr. Crouch: Does my right hon. Friend agree that the first objective for reform in the EC is for the EC at all levels, from the summit downwards, to begin to consider foreign affairs problems as a first priority and to turn its attention once again to the problems in the middle east? It is one thing to blame Israel or the PLO, but does he agree that an international approach is now essential if we are to stop the descent into war, or terrorism, which might occur if an initiative is not taken in Europe?
    Mr. Pym: The political co-operation within the Community recently has been one of its most successful achievements. We have made statements or declarations about the middle east several times. Most recently, the European Council published the conclusions of our discussions on the subject, which were international. We use the influence of the Community as best we can on issues of that kind. We regret that, so far, we have not been successful in reaching a solution to that problem, which we believe would be in the best interests of the Palestinian people. However, the co-operation for which my hon. Friend asks is definitely present.
    Mr. Heffer: As the interim agreement has meant that the European Parliament has now decided how we should spend the money that we get back from the European budget, will the right hon. Gentleman consider my party's commitment as it was recently expressed in our policy document, which, I understand, a Minister threw across the Floor. I hope that he will read it. In it we say clearly:
    "British withdrawal from the Community is the right policy for Britain—to be completed well within the lifetime of the parliament."
    Mr. Pym: I think that the hon. Gentleman is on to an election loser there.

    Spain and Portugal
    Mr. Haselhurstasked the Secretary of State for Foreign and Commonwealth Affairs whether he is satisfied
    800
    with progress over the negotiations for the entry into the European Community of Spain and Portugal; and if he will make a statement.
    Mr. Hurd: Reasonable progress has been made in the accession negotiations with both Spain and Portugal, bearing in mind the scale and complication of the problems. The European Council of 21 and 22 March made some progress in respect of arrangements for olive oil, fruit and vegetables and invited Agriculture Ministers to take early decisions on these matters. There will be a ministerial conference with Spain in the margins of the 25 and 26 April Foreign Affairs Council and with Portugal in the margins of the 24 May Foreign Affairs Council.
    Mr. Haselhurst: Does my right hon. Friend agree that, whatever economic or political difficulties may raise their heads from time to time, Britain's paramount concern should be the political cohesion of western Europe? Does he agree that the best guarantee of that lies in the enlargement of the Community along these lines?
    Mr. Hurd: There are strong political reasons, which remain as strong as ever, for encouraging and making possible the accession of both Spain and Portugal.
    Mr. Dalyell: What is the Government's response to Spanish protests about HMS Invincible and other units of the Fleet going to Gibraltar?
    Mr. Hurd: That issue does not arise on this question but, as the hon. Gentleman is anxious for news, I can tell him that we have made it clear to the Spaniards that it is quite normal for ships participating in Exercise Springtrain, which is an annual exercise, to visit Gibraltar.
    Sir Anthony Kershaw: Will my right hon. Friend bear in mind that circumstances in Gibraltar are germane to the negotiations that are likely to take place? What can he do to bring home to the Spanish Government and, for that matter, the Spanish people, the point that childish and ill-tempered outbursts are likely to alienate Gibraltarians and that unless they make friends with the Gibraltarians we cannot do anything about it?
    Mr. Hurd: The restrictions on trade between Spain and Gibraltar are germane, it is the visit of the fleet which, I suggest, is not germane. It is inconceivable that Spain should join the Community while restrictions on ordinary traffic between Spain and Gibraltar remain. That was made clear to the Spanish Foreign Minister when he came here last month.

    Budget
    Mr. Rentonasked the Secretary of State for Foreign and Commonwealth Affairs when he expects progress on the budget of the European community.
    Mr. Pym: I refer my hon. Friend to the reply that I gave earlier to my hon. Friend the Member for Leek (Mr. Knox).
    Mr. Renton: Does my right hon. Friend agree that President Mitterrand's support at that previous European summit for a fair and speedy settlement to Britain's budgetary problem this year was a welcome development? What steps can my right hon. Friend take to ensure that that support does not dissipate under the summer sun but is still strongly in evidence at the June summit?
    Mr. Pym: As I said in reply to an earlier question, whereas until recently there was not a general desire to see that reform carried through, there is now such a general desire around the Council table, and I have no reason to suppose that it will not be maintained.
    Mr. Skinner: Is it not a fact that Britain always comes off second best in regard to the provision of money, whether it be in the tour de table talks or anywhere else? Is it not a fact that in the 10 years of Britain's membership of the EC our net contribution has been £3,911 million and that, despite all the talk about coming back from Brussels and Strasbourg with pots of money, more than 62 per cent. of that net contribution has been incurred in the past four years of this Thatcher Government?
    Mr. Pym: In the past three years we have recovered at least two thirds of the money that we have paid out net. If it had not been for our negotiations with the Community and if matters had been left as they were under the Labour Government, which the hon. Gentleman supported, there would have been no rebates.
    Mr. Arnold: What type of change to the financial system is my right hon. Friend now prepared to accept?
    Mr. Pym: Any system that irons out the imbalances and makes an arrangement that is fair to all members of the Community.
    Mr. Ioan Evans: Does the Foreign Secretary agree with the Commission's document, which says:
    "Any new developments of the Community's financing system should, in the Commission's view reflect and enhance the role of the directly elected European Parliament."?
    If that is so, will it not be at the expense of this House? Does he realise that the refunds to which he has referred are subject to the will of the European Parliament? Does he agree with that?
    Mr. Pym: The powers of the European Parliament will continue as they are for the time being. If they were to be altered, quite a few processes would have to be gone through before that could be achieved. We shall continue as we are throughout this year and until those arrangements are changed.

    European Parliament (British Members)
    Sir Anthony Meyerasked the Secretary of State for Foreign and Commonwealth Affairs what methods he uses to consult British Members of the European Parliament on matters affecting British interests within the European Community.
    Mr. Hurd: We keep in close touch with British Members of the European Parliament. Foreign and Commonwealth Office Ministers, like Ministers in other Departments, have frequent meetings with them.
    We also maintain regular contact with British MEPs through the office of the United Kingdom permanent representative in Brussels.
    Sir Anthony Meyer: In view of the growing importance of the European Parliament, especially its budget, is my right hen. Friend satisfied that the relationship between the British delegation to the European Parliament and the House is as close and as trusting as it should be?
    Mr. Hurd: There may be exceptions, but on the whole the answer is yes.
    Mr. Foulkes: Is it not manifest today and on other days that those who are both Members of Parliament and Members of the European assembly cannot participate fully in the work of this Parliament and cannot properly represent the interests of their constituents? Will he consider introducing legislation to prohibit the practice of dual representation?
    Mr. Hurd: No, Sir. That is a matter best left to the good sense of the electors.
    Sir John Biggs-Davison: Following recent discussions in the European assembly, may we be assured that Her Majesty's Government will defend the right of veto In the Council of Ministers for the protection of national interests?
    Mr. Hurd: Yes, Sir.

Cunard Countess (Reconversion Contract)
3.30 pm
Mr. Don Dixon: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 10, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
"the placing of a contract worth in excess of £2 million for the reconversion of the requisitioned liner Cunard Countess in a yard outside the United Kingdom."
The Cunard Countess has just taken relatives of the war dead on a pilgrimage to the Falkland Islands. Many of those who died or who were wounded in that conflict were the sons of shipyard families. To place the order outside the United Kingdom is an insult to all those who gave their lives in the war. To place the order outside the United Kingdom is an insult to all the shipyard workers who worked so hard to get the task force ready on time. To place the contract outside the United Kingdom when the British shipbuilding industry is going through its worst crisis is an insult to every worker in that industry. Another insult is that British Shipbuilders put in the lowest tender, but it was rejected.
In this morning's Daily Telegraph, Mr. Van Ness of Cunard said that the contract was as good as placed:
"Malta can put more than 5,000 people on this job if necessary."
In the Tyne and Wear area that I represent, more than 5,000 skilled shipyard workers have been made redundant during the past 12 months, and as many jobs are threatened because of the Government's policies. The story can be repeated throughout the country. In recent weeks in South Tyneside—that area that I represent together with my hon. Friend the Member for South Shields (Dr. Clark)—1,200 ship repair workers have been thrown on the scrapheap. The reconversion of the Cunard Countess will be paid for by taxpayers' money and it is a scandal that the work should be done outside Britain when so many of our shipyard workers are in the dole queue.
If a debate is granted, it will give the House an opportunity to debate the shipbuilding industry and its importance to us as an island nation. It will also give us the opportunity to discuss patriotism. During the Falklands dispute I recall seeing the Prime Minister coming out of No. 10 Downing Street and telling television reporters that they should rejoice because British troops had landed on South Georgia. Many of those who fought and worked hard for the Falkland Islands are now rejoicing on the dole queue.
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My father was gassed in the trenches in France during the first world war. He was a shipyard labourer who was retained during the first world war to work in Palmer's shipyard. He was thrown on the streets with many thousands of good, hard-working men in 1934 and was not required again until 1939 when we went back to war. Conservative Members should remember that when they talk about patriotism. The Government should place orders with the British shipbuilding industry. If we debate this subject, perhaps the Prime Minister can come to the House and talk about her patriotism, as she is now doing throughout the country.
Mr. Speaker: The hon. Gentleman gave me notice this morning before 12 o'clock that he would seek leave to move the Adjournment of the House to discuss a specific and important matter that should have urgent consideration, namely,
"the placing of a contract worth in excess of £2 million for the reconversion of the requisitioned liner Cunard Countess in a yard outside the United Kingdom."
The hon. Gentleman has drawn our attention to a very serious matter. The House is aware that there is more than one way to discuss the matter and that an emergency debate such as is sought is by no means the only way. The House expects me to take into consideration the several matters concerned and to give no reasons for my decision.
I listened carefully and anxiously to the hon. Gentleman, but I must rule that his submission does not fall within the provisions of the Standing Order and, therefore, I cannot submit his application to the House.

Secretary of State for Employment
3.34 pm
Mr. Robert Parry: On a point of order, Mr. Speaker. Yesterday the Secretary of State for Employment, in reply to questions, evaded any possible action to save 1,000 jobs at Kraft Foods at Kirkby, but instead made a vicious and unwarranted attack on the Ford workers at Halewood. He called them strikers, although the men have been back at work for a week and one of his agencies, ACAS, is trying to resolve the recent dispute. Perhaps on reflection the right hon. Gentleman will withdraw his jibe, because if he cannot support conciliation it would be better for everyone if he were to resign.
Mr. Speaker: I have allowed the hon. Gentleman to make his point, but he must realise that it is not a point of order on which I can rule.

Televising of Select Committees
3.35 pm
Mr. Michael Latham: On a point of order, Mr. Speaker. You are the guardian of the procedures of the House. Surely it is unnecessary to bring in a Bill to allow for the televising of Select Committees. It is a matter for a vote of the House and nothing else.
Mr. Speaker: The House will make up its mind in a few minutes.
3.36 pm
Mr. Austin Mitchell: I beg to move,
That leave be given to bring in a Bill to enable select committees of both Houses of Parliament to be televised.
The purpose of my proposed Bill is to strengthen the Select Committees by allowing them to reach the public directly when they choose to do so, and to allow the House to conduct a controlled experiment with television both to review its unjustified fears about the media and to see some of the benefits that television can bring. The argument about televising the procedures of the House is long-standing, and there have been two ten-minute Bills on it during this Parliament. They have shown that opinion on it in the House is evenly divided.
The arguments against televising concentrate on changing the nature of this deliberative Chamber. I do not accept those arguments, but this Bill would sidetrack them because it applies only to Select Committees which would allow television at their discretion. I wish my Bill to be considered in that light, and not in the light of the general arguments about the televising of the proceedings in the Chamber.
Select Committees are different from the Chamber. The Chamber is a deliberative body whereas the Committees investigate. The Chamber has a general view on broad issues, but the Committees are specialised. The Chamber has a large element of the stage about it, but the Committees are serious. They hear outside experts and authorities and subject them to intensive interrogation and investigation. The Chamber is the province of all hon. Members, but Committee work is a voluntary activity and a chance to work in a different and much more rewarding way by following up specialised interests.
It was probably that difference between the Chamber and the Select Committees that led the Liaison Committee, which is made up of Committee Chairmen, to say in paragraph 87 of its first report on the functioning of the new Select Committees:
"We must place on record the conviction of most of us that the work of select committees would not be damaged, and might be considerably enhanced, if it took place with television cameras present."
I agree with that view. Select Committees are the most important and welcome development in the House in decades. I am proud to be a member of the Treasury and Civil Service Select Committeee, and it has been the most exciting and intellectually demanding part of my experience as a Member of Parliament.
I want to strengthen those Committees, and this measure would do so, first, because it removes an anomaly which was first pointed out by the Sub-Committee on Race Relations and Immigration as long ago as 1969 in its second special report—that other media can be present at public hearings but not television. That is not only an
806
invidious distinction but it creates problems, particularly when Committees meet outside the House. I am referring not to the Select Committee on Agriculture going round prodding pigs but to more serious inquiries such as the Sub-Committee on Race Relations and Immigration visiting the scene of the Bristol riots. On such occasions part of the Committee's proceedings are filmed by television, but just when the proceedings become most interesting, just when they start to hold the hearings, television is excluded. The result is that some television people can and do interview witnesses before or after they have given evidence, giving a partial and biased view of the Committee's work. That anomaly would be removed if the Committees were allowed, at their discretion, to have television cameras at their meetings.
Secondly, the presence of television cameras can and will sharpen a Committee's work, leading to better planned, better co-ordinated and better prepared questioning on the important subjects that are dealt with.
Thirdly, the presence of television cameras would strengthen Committees by drawing their work to the attention of the public—the wider audience—and interested and informed opinion. That would give Committees a firmer and stronger base which would be much more important to them than anything else possibly could be, when and if the going began to get rough and they encountered problems. There could be no firmer basis for the work of Select Committees than public interest and concern about what they are doing. Select Committees do far more than allow hon. Members to follow specialised enthusiasms and keep them off the streets. They are doing extremely important work, and that work needs to be drawn to the public's attention.
Fourthly, to televise the Committee's work would allow them to carry on the important popular role of educating the public. It would increase the amount of information on major and serious issues that is available to the public. It is invidious to create distinctions and say which Committees do the most interesting work. Not all Committees can have the drama or excitement of the Select Committee on Transport's inquiry into road maintenance. But the queen of the Committees—the Treasury and Civil Service Select Committee—has carried out major inquiries into the intellectual basis of the Government's monetary policies which it found barely existed, into the international debt crisis, and into the exchange rate. It holds regular meetings with and interrogates the Chancellor of the Exchequer, Treasury officials and the governor of the Bank of England. All that has a major effect on jobs, interest and exchange rates and the economic future of Britain. Similarly, the Select Committee on Defence created much public interest as a result of its inquiry into the media and the Falklands.
Not necessarily all hearings will be obsessive peak time television viewing in the way that some American committee hearings, such as the Watergate hearing, have been, but in all Committees there is a public or a specialised interest which can be catered for on different levels by different channels and programmes. Committees can inquire into serious issues far better than television can. Television has been forced to take up that role partly because the House has not been seen to be doing it. I see no reason why the work of interrogation and inquiry should be left to whippersnappers and amateurs on television such as Sir Robin Day when it can be done so

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much better by Members of the House with all the expertise and authority that membership of this House allows them.
The mechanics of my proposal are simple. It is better that Parliament should retain the ultimate control by creating a parliamentary television unit, as has been done successfully in Canada. That would provide fees for the outside broadcasting organisations which would decide on what basis and how they wanted to use such fees, whether to put items from Committee proceedings on news bulletins, to broadcast them live or as separate programmes, and, indeed, whether to broadcast them continuously on cable television. That decision would be up to them, but the House would retain the ultimate control. The television unit would prepare two Committee rooms for television with unobtrusive—far less obtrusive than some hon. Members—wall-mounted cameras and special lighting. Committees that wanted to hold televised hearings would be able to do so in those rooms.
Somebody such as myself who thinks that the House should be televised, as it will inevitably be at some future date, will see this proposal as a first step to that greater goal. That is the personal view of someone who believes that television must inevitably come into the Chamber if we are to be relevant to the world in which we live.
I ask the House today to consider my Bill not in that light but on its merits as something unique to the Select Committees that we have developed. The Committees are new and successful and the arguments against television in the Chamber do not apply to them. Both the Committees and television would benefit from this measure. They would be strengthened and, more important, the House would be strengthened because hon. Members will be seen to be doing what they should be doing—a serious job of inquiry in a serious and dedicated fashion. Therefore, they would be seen to be more relevant to our people and their problems than they are at present.
I commend the motion to the House and I ask the House, by its reaction today, to give a clear signal to the Government that it wants the Committees to be televised.
Mr. Teddy Taylor rose—
Mr. Speaker: Order. I have received notice from the hon. Member for Bassetlaw (Mr. Ashton) that he wishes to oppose the motion.
3.46 pm
Mr. Joseph Ashton: I have listened with great interest to the speech of my hon. Friend the Member for Grimsby (Mr. Mitchell). Perhaps he should ask himself why, if television cameras are such a good thing in what is essentially a committee of inquiry, no television cameras are allowed, for example, in the current Penlee lifeboat disaster inquiry. Why do not the courts allow the presence of cameras? I am sure that it would have been riveting television if a camera had been allowed inside the Old Bailey to film the trial of the Yorkshire Ripper. But that is not allowed in Britain because we have enough sense to realise that witnesses can be inhibited by the presence of cameras, making it much more difficult to extract information from them. On the other hand, some witnesses may become extrovert. I understand that Mr.
808
Ken Livingstone is appearing before a Select Committee at the moment, and I am sure that he would welcome the presence of cameras, as would Mr. Arthur Scargill.
What is the function of a Select Committee? Is it to achieve a considered, measured evaluation of a problem, or is it to obtain publicity for a cause or for a certain personality? I am a member of the Select Committee on Members' Interests. We are now considering professional lobbying organisations that have sprung up in the past few years. Some juicy information is now coming out. Had cameras been present, there would have been enough material to set off half a dozen investigations without waiting for the report to be published.
The television cameras would not be present all the time for every investigation. The companies would want to televise only the juicy bits. The only time that we hear broadcasts of proceedings in the House is at Prime Minister's Question Time when there is shouting, bawling and booing. That is always on the news at a quarter to six or nine o'clock. As a result the public are convinced that the House is like that all the time when it is not. We know that 99 per cent. of the time there is not such an uproar but the public has become convinced that that is what takes place because that is the controversial part that is extracted and presented.
Hon. Members have experience as members of Select Committees. We are not fools and we know when we have a good story. I was a member of the Select Committee on Nationalised Industries and visited Hong Kong. Immediately, the press asked what we were doing going on a free joyride to Hong Kong. In fact, we were considering the nationalised Cable and Wireless company which had lost a £1 million contract in Hong Kong because it had employed a crook who had fiddled a contract. The only means of cross-examining the witnesses was the Select Committee procedure. When that report was published, there were no headlines that the Committee had done a good job in finding out what had gone wrong. The Select Committee probably saved the nationalised industry a great deal of money. However, the press is interested only in instant reaction, and that is the case against my hon. Friend.
My hon. Friend referred to Watergate. Ten years ago I went to the Watergate hearings—[HON. MEMBERS: "Ah."] I went in August, paid my own fare and combined it with a holiday. I saw the televised hearings, and I assure my hon. Friends that they were a total shambles. People were crammed into the room 15 deep. Flash photography was taking place. The only thing missing was a man in a white coat selling hot dogs, popcorn and Coca-Cola. One day when I was there, Senator Sammy Ervin, the chairman, got so fed up that he said, "I am going fishing at two o'clock", shut the whole thing down and the press was in uproar. Should such an investigation into the President of the United States take place?
Is that the sort of jamboree for the cameras in which we should indulge? What about the McCarthy hearings? Senator Joe McCarthy built his rotten reputation on dragging Hollywood film stars before his televised committee so that they could plead the fifth amendment. He got all the publicity, and eventually his aide Nixon became Vice-President. That is the danger of the loophole which my hon. Friend, in his innocence, wishes to introduce in the House. Frankly, in a few years' time we

809
would regret such a move and would be angry at the way selected extracts had been misused. I hope that the House will reject the motion.
Question put, pursuant to Standing Order No. 15 (Motions for leave to bring in Bills and nominations of Select Committees at commencement of public business):—
The House divided: Ayes 153, Noes 138

Division No. 111]

[3.50 pm

AYES

Allaun, Frank

Hogg, N. (E Dunb't'nshire)

Ancram, Michael

Home Robertson, John

Archer, Rt Hon Peter

Homewood, William

Arnold, Tom

Hooley, Frank

Ashley, Rt Hon Jack

Horam, John

Boothroyd, Miss Betty

Howell, Rt Hon D.

Bottomley, Rt Hon k.(M'b'ro)

Howells, Geraint

Bray, Dr Jeremy

Hunt, David (Wirral)

Brocklebank-Fowler, C.

Janner, Hon Greville

Brown, Hugh D. (Provan)

Johnson Smith, Sir Geoffrey

Brown, Michael(Brigg & Sc'n)

Kaufman, Rt Hon Gerald

Brown, R. C. (N'castle W)

Lambie, David

Brown, Ronald W. (H'ckn'y S)

Lee, John

Brown, Ron (E'burgh, Leith)

Lester, Jim (Beeston)

Browne, John (Winchester)

Lestor, Miss Joan

Bruce-Gardyne, John

Lofthouse, Geoffrey

Buck, Antony

Lyons, Edward (Bradf'd W)

Canavan, Dennis

McCusker, H.

Clarke, Kenneth (Rushcliffe)

McElhone, Mrs Helen

Clarke.Thomas(C'b'dge, A'rie)

McGuire, Michael (Ince)

Craigen, J. M. (G'gow, M'hill)

McKay, Allen (Penistone)

Crouch, David

McKelvey, William

Cunningham, G. (Islington S)

MacKenzie, Rt Hon Gregor

Cunningham, Dr J. (W'h'n)

McNally, Thomas

Dalyell, Tam

McNamara, Kevin

Davis, Clinton (Hackney C)

McTaggart, Robert

Davis, Terry (B'ham, Stechf'd)

McWilliam, John

Deakins, Eric

Marshall, Dr Edmund (Goole)

Dewar, Donald

Marshall, Michael (Arundel)

Dickens, Geoffrey

Martin, M(G'gow S'burn)

Dobson, Frank

Mates, Michael

Dorrell, Stephen

Meyer, Sir Anthony

Douglas-Hamilton, Lord J.

Mikardo, Ian

Dover, Denshore

Miller, Dr M. S. (E Kilbride)

du Cann, Rt Hon Edward

Mitchell, Austin (Grimsby)

Dykes, Hugh

Morrison, Hon C. (Devizes)

Eastham, Ken

Morton, George

Eden, Rt Hon Sir John

Neale, Gerrard

Edwards, R. (W'hampt'n S E)

Nelson, Anthony

Eggar, Tim

O'Brien, Oswald (Darlington)

Ellis, Tom (Wrexham)

Onslow, Cranley

Emery, Sir Peter

Palmer, Arthur

English, Michael

Powell, Raymond (Ogmore)

Ennals, Rt Hon David

Price, Sir David (Eastleigh)

Faith, Mrs Sheila

Radice, Giles

Farr, John

Rees, Rt Hon M (Leeds S)

Fitt, Gerard

Rees-Davies, W. R.

Flannery, Martin

Richardson, Jo

Fookes, Miss Janet

Rifkind, Malcolm

Foster, Derek

Robertson, George

Fraser, J. (Lamb'th, N'w'd)

Roper, John

Fraser, Peter (South Angus)

Ross, Stephen (Isle of Wight)

Gardner, Sir Edward

Rost, Peter

Garel-Jones, Tristan

Sainsbury, Hon Timothy

Garrett, John (Norwich S)

Sandelson, Neville

George, Bruce

Sheldon, Rt Hon R.

Golding, John

Shersby, Michael

Gorst, John

Short, Mrs Renée

Graham, Ted

Skinner, Dennis

Greenway, Harry

Smith, Cyril (Rochdale)

Grimond, Rt Hon J.

Smith, Rt Hon J. (N Lanark)

Haselhurst, Alan

Smith, Tim (Beaconsfield)

Hattersley, Rt Hon Roy

Soley, Clive

Hawkins, Sir Paul

Spellar, John Francis (B'ham)

Hayhoe, Barney

Speller, Tony

Haynes, Frank

Stevens, Martin

Healey, Rt Hon Denis

Stewart, A.(E Renfrewshire)

Henderson, Barry

Strang, Gavin

Hogg, Hon Douglas (Gr'th'm)

Straw, Jack

810

Taylor, Mrs Ann (Bolton W)

Weetch, Ken

Thomas, Mike (Newcastle E)

Whitehead, Phillip

Townsend, Cyril D, (B'heath)

Wilson, William (C'try SE)

Varley, Rt Hon Eric G.

Wrigglesworth, Ian

Wainwright, H.(Colne V)

Wright, Sheila

Walker, B. (Perth)

Ward, John

Tellers for the Ayes:

Wardell, Gareth

Mr. George Foulkes and

Watkins, David

Mr. Alfred Dubs.

Watson, John

NOES

Adley, Robert

Latham, Michael

Alison, Rt Hon Michael

Lawrence, Ivan

Alton, David

Leadbitter, Ted

Atkins, Robert(Preston N)

Le Marchant, Spencer

Bagier, Gordon AT.

Lennox-Boyd, Hon Mark

Baker, Nicholas (N Dorset)

Lewis, Sir Kenneth (Rutland)

Barnett, Guy (Greenwich)

Litherland, Robert

Bennett, Andrew(St'kp't N)

Lyon, Alexander (York)

Berry, Hon Anthony

McCartney, Hugh

Biggs-Davison, Sir John

Macfarlane, Neil

Blaker, Peter

MacKay, John (Argyll)

Boscawen, Hon Robert

McKelvey, William

Bottomley, Peter (W'wich W)

McNair-Wilson, M. (N'bury)

Bowden, Andrew

McNair-Wilson, P. (New F'st)

Brotherton, Michael

Major, John

Budgen, Nick

Marlow, Antony

Bulmer, Esmond

Marshall, Jim (Leicester S)

Carlisle, Kenneth (Lincoln)

Marten, Rt Hon Neil

Chapman, Sydney

Mason, Rt Hon Roy

Churchill, W. S.

Mather, Carol

Clark, Sir W. (Croydon S)

Maxwell-Hyslop, Robin

Cocks, Rt Hon M. (B'stol S)

Mayhew, Patrick

Colvin, Michael

Moate, Roger

Concannon, Rt Hon J. D.

Molyneaux, James

Conlan, Bernard

Monro, Sir Hector

Cope, John

Morgan, Geraint

Cowans, Harry

Morris, Rt Hon C. (O'shaw)

Crowther, Stan

Morrison, Hon P. (Chester)

Cunliffe, Lawrence

Neubert, Michael

Dean, Joseph (Leeds West)

Ogden, Eric

Dixon, Donald

O'Halloran, Michael

Dormand, Jack

Page, Richard (SW Herts)

Eadie, Alex

Parry, Robert

Ellis, R. (NE D'bysh're)

Pollock, Alexander

Evans, loan (Aberdare)

Powell, Rt Hon J.E. (S Down)

Evans, John (Newton)

Prentice, Rt Hon Reg

Fell, Sir Anthony

Proctor, K. Harvey

Field, Frank

Renton, Tim

Fox, Marcus

Roberts, Albert (Normanton)

Glyn, Dr Alan

Roberts, Allan (Bootle)

Goodhart, Sir Philip

Rooker, J. W.

Goodlad, Alastair

Royle, Sir Anthony

Gower, Sir Raymond

Ryman, John

Grant, Sir Anthony

Shepherd, Colin (Hereford)

Grieve, Percy

Skeet, T. H. H.

Grylls, Michael

Smyth, Rev. W. M. (Belfast S)

Gummer, John Selwyn

Spearing, Nigel

Hamilton, Hon A.

Spriggs, Leslie

Hamilton, James (Bothwell)

Stallard, A. W.

Hamilton, Michael (Salisbury)

Stanbrook, Ivor

Hardy, Peter

Stoddart, David

Harrison, Rt Hon Walter

Taylor, Teddy (S'end E)

Heffer, Eric S.

Thompson, Donald

Hicks, Robert

Thorne, Stan (Preston South)

Higgins, Rt Hon Terence L.

Thornton, Malcolm

Holland, Philip (Carlton)

Townend, John (Bridlington)

Howell, Ralph (N Norfolk)

Trippier, David

Hughes, Robert (Aberdeen N)

Wainwright, E.(Dearne V)

Hughes, Roy (Newport)

Walker, Rt Hon H.(D'caster)

Irvine, RtHon Bryant Godman

Wall, Sir Patrick

John, Brynmor

Warren, Kenneth

Johnson, James (Hull West)

Wellbeloved, James

Jones, Barry (East Flint)

Wells, John (Maidstone)

Jopling, Rt Hon Michael

Welsh, Michael

Kerr, Russell

White, Frank R.

Kershaw, Sir Anthony

Whitlock, William

Kimball, Sir Marcus

Wickenden, Keith

Lang, Ian

Wilkinson, John

811

Winterton, Nicholas

Tellers for the Noes:

Wolfson, Mark

Mr. Neil Thorne and

Mr. Joseph Ashton.

Question accordingly agreed to.
Bill ordered to be brought in by Mr. Austin Mitchell, Mr. Jack Ashley, Mr. A. J. Beith, Mr. George Cunningham, Mr. Edward du Cann, Mr. Alfred Dubs, Mr. Roy Hattersley, Sir Geoffrey Johnson Smith, Mr. Christopher Price and Mr. Norman St. John-Stevas.

Televising of Select Committees
  TELEVISING OF SELECT COMMITTEES
  Mr. Austin Mitchell accordingly presented a Bill to enable select committees of both Houses of Parliament to be televised: And the same was read the First time; and ordered to be read a Second time upon Friday 22 April. [Bill 125.]
Orders of the Day

  Social Security and Housing Benefits Bill
  Order for Second Reading read.
  4.3 pm
  The Secretary of State for Social Services (Mr. Norman Fowler): I beg to move, That the Bill be now read a Second time.
  The purpose of the Bill is to change the method of uprating social security and housing benefits from the forecast method that has been used since 1976 to the historic, or actual, method of uprating. The Social Security Act 1975 requires the Government to review certain benefit levels annually for the purpose of determining whether they have retained their value in relation to the general level of prices in Great Britain. Under the Social Security and Housing Benefits Act 1982 the Government have a similar obligation in relation to the needs allowances for housing benefit.
  The Bill in no way lessens or changes those obligations. It concerns solely the uprating method and the change from a method based on forecasts of price increases to one based on actual price rises. To judge the proposal it is necessary to consider both the context of the Bill and the reasons why we have the present system.
  The context of the Bill is our central concern to protect the living standards of pensioners and others receiving social security benefits. I suggest that that means much more than the annual uprating of benefits. Protection of the living standards of, say, retired people depends also on other economic policies, of which the most important is the control of inflation. Unless inflation is controlled, pensioners' savings are eroded and the value of many occupational pensions is reduced. Therefore, it is not enough for any Government to say that they have kept national insurance pensions in line with, say, the cost of living index and to ignore the rate of price increases, because it is that rate of increase that eats into savings and means that Governments are not protecting the living standards of retired people.
  That is why it is of fundamental importance that the Government have reduced inflation to the lowest levels experienced in this country since the 1960s. It marks a decisive turn away from the position under the Labour Government, when inflation rose by 110 per cent. between 1974 and 1979. That rate of inflation is disastrous for any pensioner with any savings or without the benefit of an inflation-proof public sector pension. It is also disastrous for all other social security beneficiaries, because ultimately industry cannot cope with such a position and therefore cannot provide the wealth necessary for the nation to be able to afford adequate social provision.
  Mr. Cyril Smith: What rate of inflation do the Government forecast will be in operation in November, and what will be the percentage rate of increase in pensions for the same period?
  Mr. Fowler: I shall come to those matters. As the hon. Gentleman will know, at the time of the Budget the Chancellor forecast that the rate of inflation in November would be about 6 per cent. The increase to be expected in

  813
  May—that is the figure to which we are moving—will be about 4 or 4·25 per cent. I shall, however, return to that point as it is clearly central to the debate.
  The control of inflation is a necessary part of the context of our basic aim—to preserve the living standards of pensioners and others. There should be no dispute about that. Equally, no one would deny that the level of pensions and other social security benefits and the method by which they are increased are also of fundamental importance.
  The Government have achieved not only low inflation but an increase in pensions ahead of the increase in prices. In the four years from November 1978 to November 1982, pensions increased by 68·5 per cent. and the retail price index by 61 per cent. That is the second part of the answer to the hon. Gentleman's question. In the same period, the so-called pensioners' price index increased by 58 per cent. The Budget forecast for the five-year period up to November 1983—the period to which the hon. Gentleman refers—shows that pensions will have increased by 75 per cent. and the RPI by 70 per cent., provided that the forecasts are correct. I shall return to those figures later.
  There has been increasing concern about the method by which benefits are increased. Since 1976 we have operated on the so-called forecast method for uprating. That means basically that an estimate is made, usually at Budget time, of what the inflation rate will be in the following November. Experience since the introduction of the new method has shown just how inexact that forecast can be. In the past seven years the forecasts have been wrong five times. Sometimes there has been an overestimate of inflation and sometimes an underestimate, but the measure used to determine pensions and benefits for millions of people has been shown to be three times more likely to be wrong than right. The question obviously arises as to why we ever decided to change—
  Mr. David Ennals rose—
  Mr. Fowler: No, I wish to go on for the moment.
  The question obviously arises as to why we ever decided to change over to such a method. The answer to that question is simple: the Labour Government did it for one reason and one reason alone—to save £500 million which, in present terms, would be a saving worth over £1 billion.
  Mr. Ennals rose—
  Mr. Fowler: I will not give way. The right hon. Gentleman has just come into the House. I shall allow him to catch up with the argument and then I shall certainly give way to him.
  It is indisputable that that was the reason for that change. Both the diaries of Mrs. Castle and the memoirs of the former Chief Secretary, the right hon. Member for Heywood and Royton (Mr. Barnett), set out the unsuccessful battle that Mrs. Castle fought and the triumph of the then Chancellor of the Exchequer.
  The arithmetic of the change was also clear. The Labour Government had presided over a period of hyperinflation which reached a peak of almost 27 per cent. in August 1975. By this point, with the eye of the International Monetary Fund on them, even that Government were forced to seek policies to bring down inflation. It was then that they decided on the change in policy, for the reason that if they kept to the historic method and therefore looked back they would have to pay
  814
  more than if they looked forward and made a forecast for a period when inflation would be lower. The result was that the Labour Government, who should have paid out 21 per cent. on the historic method, paid out 15 per cent. and saved £500 million.
  When I read the Opposition amendment, which has even been signed by the right hon. Member for Leeds, East (Mr. Healey), the former Chancellor of the Exchequer, which refers to "technical adjustment" and "a hidden penalty" I am bound to say that it is a charge that comes very strangely from the Opposition. When the then Chancellor of the Exchequer came to the pensions part of his 1976 Budget he ducked the whole issue altogether. He did not even make it clear that he was changing the system. As Mrs. Castle confided to her diary and a couple of million readers of The Sunday Times:
  "All my officials' valiant efforts to make him"—
  that was the Chancellor—
  "stand up and be counted on the change from the historical to the forecasting method for the pensions uprating have failed. He skimmed over it and so got a cheer from our side for the amount of the increase—whose relevance they did not understand."
  Mr. Douglas Jay: Does it not follow from the Minister's argument that the Government are making this change because they expect inflation to rise in the future?
  Mr. Fowler: It does not. The right hon. Gentleman is incorrect. I will come to precisely that point, but the right hon. Gentleman should understand that when the Labour Government moved, they moved in such a way that eight months of inflation were ignored and taken out of the equation for ever. What will happen under the proposed system is that any inflation between May and November of this year or any subsequent year will automatically be caught in the following uprating. That is a fundamental difference.
  The fact is that the Labour Government fiddled the system, with the support of hon. Gentlemen who have since joined the SDP. They saddled the country with an unsatisfactory method of pensions increase. The forecast system was introduced for the wrong reasons and since then it has not worked. The time has come to be shot of it and instead to use an exact measure of inflation rather than a projection of what it could be, and to bring certainty to the whole process. This is what the Bill will achieve.
  Under the Bill the upraling will be based upon the actual inflation rate between May 1982 and May 1983. The reason we have chosen that 12-month figure, which will become available in mid-June, is that mid-June is the last date that will enable the Department to carry out the work of uprating and ensure that all the new benefits are paid on time. It is only following 17 June that the uprating order itself can be presented to the House and debated before the summer recess.
  Let me say at once that no one would be more pleased than I if we could reduce further the time between the making of the annual uprating statement and the upraling itself. No one wants that time gap to be wide, least of all pensioners who often understandably complain about the time between the statement and the date when the increased pensions are paid. There are two points to be made—
  Mr. J. W. Rooker: On the point the Secretary of State was making about the date in mid-June, 17 June, given that this matter is not

  815
  unimportant to the 10 million people outside the House who depend in one way or another on the social security system, may I ask what arrangements the Government have made to ensure that the increased benefits will come into payment at the right time if, on 17 June, the House is prorogued?
  Mr. Fowler: We would have time either to pass the order before the House was prorogued or immediately a new Parliament came into session. I think that would be possible. If the hon. Gentleman wishes to explore that point, I suggest that we do so at the Committee stage.
  There are two points to be made about the timing of the uprating. First, under the proposals in the Bill we are reducing the time between the uprating statement and the date of payment. Under the forecast system there was a gap of about eight months. When the Labour Government used the historic method for the upratings in April and November 1975, the upratings came into effect eight months after the index figure upon which they were based. The new arrangements will be an improvement in that we are reducing the time lag to six months on the index figure or five months from the time of announcement, although I should like to see a further improvement.
  The second point on timing is even more fundamental. This was raised by the right hon. Member for Battersea, North (Mr. Jay). When the Labour Government moved from the historic to the forecast method they ignored eight months of rapid inflation and substituted their estimate of what inflation would be in the 12 months to November 1976. The effect was that pensioners and other social security beneficiaries missed out on those eight months, which were literally lost for ever. There is no way in which they could be recovered.
  Under the proposed method there would be no gaps at all. Any increase in inflation that takes place between the end of May and November will be caught automatically in the following year's uprating. For example, if inflation in May is, as the Budget forecast suggested—although the forecast might be wrong—4·25 per cent. and inflation in November is 6 per cent., the difference of 1·75 per cent. will automatically be paid as part of the following uprating. The system can operate the other way if inflation falls rather than increases between May and November.
  This year pensioners and other beneficiaries also have the advantage of the over-estimate for inflation made in the 1982 Budget. The estimate for inflation then for the 12 months between November 1981 and November 1982 was 9 per cent., but the actual figure worked out at 6·3 per cent., resulting in a 2·7 per cent. overpayment in the current year.
  The individual will receive whatever the May figure is, retain the 2·7 per cent. and have the insurance that any increase in inflation between May and November this year will be picked up in the following uprating. Even without that last provision, as the Chancellor of the Exchequer has estimated, in the five years from November 1978 and November 1983 the RPI will have risen by 70 per cent. and pensions will have gone up by 75 per cent. If we had stuck to the forecast method and had automatically adjusted for the overshoot this year—such adjustments were an integral part of the forecast method—the payment in November would be not about 4 per cent. but 3·3 per cent.
  816
  Clause 1 amends the uprating provisions of sections 125, 126 and 126A of the Social Security Act 1975. They cover national insurance benefits, attendance allowance and invalid care allowance. The current legislation obliges the Secretary of State to carry out the statutory uprating review during the tax year preceding each November uprating. In practice the review has been carried out in March for the Budget announcement.
  The amendments defer the review to June each year. Putting back the review from March to June will move the review closer to the time of uprating, but it will still be consistent with the requirement to secure parliamentary approval for the uprating changes before the summer recess. The clause requires future increases to be based on the actual percentage rise in prices in the 12 months to the end of May each year and gives an absolute assurance that future upratings will no longer have to be adjusted to take account of past errors. The clause also applies to public service pensions.
  Clause 2 deals with the housing benefit needs allowances—the other area in which primary legislation is needed to change the method of uprating. The needs allowance is the weekly amount allowed in calculating the benefit for the housing and other benefit recipients who are not on supplementary benefit. Clause 2 makes a number of amendments to section 29 of the 1982 Act to enable the review to be done on a historic basis by reference solely to actual changes in prices and housing costs. The Secretary of State will still have to report to Parliament if he decides after review not to restore any loss in balance.
  Mr. David Alton: In the debate just before Easter we were told that one-third of people on the unified housing benefit will not receive their money because of the Government's failure to implement proposals on time. How will this affect claimants who are without the unified housing benefit and the 850,000 pensioners who are worse off as a result of the unified housing benefit scheme?
  Mr. Fowler: That will be dealt with in the reply to the debate. We have already dealt with one or two of the points raised during the earlier debate, including the Birmingham position. The hon. Gentleman overstates the problem in relation to the rest of the country.
  Clause 3 ensures that the reviews under section 125 and 126A of the Social Security Act which, but for the provisions of the Bill, would have to be made in the 1982–83 tax year will be made in June this year. The clause enables a historic review to be made under section 29 of the Social Security and Housing Benefits Bill 1982 in June this year, even if it has not by then received Royal Assent.
  The measures must be seen in the context of the other advances set out in the Budget. Not only have we found resources to pay more to pensioners than we would have under the forecasting method, but we have raised child benefit and one-parent family benefit to all-time record levels; we have ended the invalidity trap—which the Labour party never succeeded in doing—we have encouraged savings by raising again the value of the capital limits for supplementary benefit purposes; we have restored the 5 per cent. abatement on unemployment benefit; we have taken steps to assist men over 60 who have either effectively retired or who wish to retire early; and we have assisted war pensioners by introducing a new mobility allowance.

  817
  In 1982–83 the Government spent £32½ billion on social security. In 1983–84 we plan to spend £34½ billion on social security. That is a £220 million addition to the figure in the public expenditure White Paper.
  Mr. Ennals: What percentage of that is due to the increase in unemployment?
  Mr. Fowler: A great deal is because we are dealing with the effects of unemployment. However, much in the uprating this year is due to the Government's deliberate policy to raise child benefit to the highest level ever—certainly to a level higher than the right hon. Member for Norwich, North (Mr. Ennals) achieved when he was responsible for these matters.
  The series of measures announced in the Budget represented the most significant programme of social security improvements in the lifetime of the present Government. It was introduced at the same time as my right hon. and learned Friend the Chancellor was able to announce real increases in the levels of tax thresholds, benefiting in particular those on lower incomes and taking 1¼million people out of tax altogether.
  Above all, the improvements show the merit of an economic policy aimed at keeping inflation under control. Both sides of the House accept that inflation not only spreads uncertainty and erodes the value of pensions and savings, but causes fear and anxiety to those approaching retirement who do not know whether the careful provision of a lifetime will be enough to secure their planned standard for retirement.
  We should remember that hyperinflation prevailed under the last Labour Government which knocked £500 million off the value of pensions. Labour's programme today is based on the same recipe. Renewed inflation on the scale experienced in the recent past would not only increase the burden on the taxpayer, but would completely undermine the value of the pledges for pensions and social security that the Labour party now give.
  Mr. Kenneth Carlisle: I agree that inflation is perhaps the greatest evil that pensioners fear because of its effect on their standards of living. Has any study been made of the effect of inflation under the last Labour Government on the value of savings and pensioners' standards of living?
  Mr. Fowler: I do not think that such a study has been made, but if inflation between 1974 and 1979 was 110 per cent., the real value of pensioners savings must have been more than halved.
  Mr. Brynmor John rose—
  Mr. Fowler: I shall give way to the hon. Gentleman in a moment. He might listen to the reply and then he can come in. What that means for the pensioner is that we should not just consider the upratings that have taken place but the level of inflation that prevailed during the period of office of the Labour Government.
  Mr. John: Taking all that at face value, the Minister has admitted previously, and I invite him to admit it again, that, despite that, the real value of the pension rose by 20 per cent. during the period of the Labour Government. Will this Government match that record?
  Mr. Fowler: I concede to the hon. Gentleman, as I have before, that the real value of the upratings rose by 20 per cent., and that is clearly more than it has over the
  818
  period of this Government. However, during that period any pensioner with savings—that is the point my hon. Friend the Member for Lincoln (Mr. Carlisle) was making—had the real value of those savings more than halved. That of course is the other part of the matter.
  There is now considerable doubt about what the Labour party is promising or whether it has worked out the cost of its proposals. That point was raised with me by the lion. Member for Birmingham, Perry Barr (Mr. Rooker) during the Budget debate. I may perhaps respond to it. The history is that on 1 March the right hon. Gentleman the Leader of the Opposition published his 12-point plan for pensioners at the time of a pensioners' delegation to the House.
  Mr. Cyril Smith: I thought that this was a Second Reading debate.
  Mr. Fowler: The hon. Gentleman must understand that the public will want to compare the policies of the major parties. I acknowledge that the hon. Gentleman does not come into this argument because his party has no policies to offer. I am trying to examine the policies of the alternative parties.
  Mr. Cyril Smith: On a point of order, Mr. Deputy Speaker. May I draw your attention to the fact that the House is dealing with the Second Reading of a Bill. Ought not the Minister to be dealing with the clauses of the Bill rather than Opposition policies?
  Mr. Deputy Speaker (Mr. Paul Dean): Order. The hon. Member is aware that during a Second Reading it is permissible to range fairly widely.
  Mr. Fowler: I would not have raised the point had it not been raised with me on a previous occasion. I am sure that the hon. Member for Rochdale (Mr. Smith) will allow me to respond briefly to what was said then. The Leader of the Opposition published his 12-point plan for pensioners at the time of a pensioners' delegation to the House. On 29 March the Leader of the Opposition launched Labour's plan, which was called "New hope for Britain". That plan contained an emergency programme of action which an incoming Labour Government would carry out immediately. The 12-point plan for pensions is not mentioned. This strange omission was noticed by The Times which seemed to experience some difficulty in finding an Opposition spokesman to explain it. Almost collectively, the Opposition Front Bench took one step backwards leaving the hon. Member for Perry Barr to do the best he could. I quote his explanation from The Times:
  "Labour's commitment to the pensioners was so strong that it went without saying, which is why it had not been said."
  Of course, the hon. Gentleman is absolutely right.
  Mr. Rooker: What is wrong with that?
  Mr. Fowler: I think that the House will want to know about all the other policies that are so strong that they have not been said.
  Mr. Rooker: The Secretary of State is plainly working hard through his brief, but lie must not misrepresent what is in a published document. The matter is clear. It is no good him raising red herrings and being wide of the mark. Answers to all these questions can be made. They will be made at the appropriate time—when the Prime Minister calls a general election.
  Mr. Fowler: I do not know about keeping to my brief, but I think that that was the worst Civil Service reply that

  819
  I have ever heard. I hope when it comes to the time the hon. Member for Perry Barr, who challenged me to place the costings of his programme in the Library, which I have—
  Mr. Rooker: The Secretary of State must not confuse the assessment of the costings of a programme and letters that he writes to me and other hon. Members in which he misunderstands the 12-point plan published by the Leader of the Opposition. The two things are not the same.
  Mr. Fowler: I think that this is all very curious. What is the difference between the 12-point plan published by the Leader of the Opposition and Labour's "New hope for Britain"? There is one good way in which the hon. Gentleman and the Opposition can satisfy all these doubts. The shadow Chancellor costs the proposals at, I believe, £500 million, according to The Times. The hon. Gentleman costs them at £3 billion. The costing that I have put forward in the Library is a minimum of between £13 billion and £15 billion.
  I ask the hon. Gentleman and the Opposition to place their costings in the Library. Let us know how they cost their plans for pensions. We have had enough of the generalised waffle that comes from the Opposition Front Bench. Let them get down to some specific policy-making and seek to explain the difference between the words and the phrases that are used in the 12-point pension plan, which promises, for example, that they will restore the earnings link for pensioners and presumably other beneficiaries at the first—
  Mr. Rooker: That is not what we are saying.
  Mr. Fowler: I am grateful for the clarification. They will only do it for pensioners.
  Mr. Rooker: No, we are not. The Minister must read what is there.
  Mrs. Jill Knight: I wonder whether my right hon. Friend is altogether wise in the request that he is making, bearing in mind the waves of shock and horror that would go through the electorate if it thought for one moment that there was the slightest possibility that it would have to foot the bill for the manifesto to which he is referring.
  Mr. Fowler: I think that it would probably be a public service. The Opposition do not seem to know what their policy is, judging from the last response.
  Mr. Ennals: The Secretary of State is implying that somehow the Leader of the Opposition's statement is not part of the policy document "New hope for Britain". It is set out point by point on page 15 of the document and given prominence. The Secretary of State just has not read it. I shall send him a copy so that he will know what the next Labour Government's policy will be.
  Mr. Fowler: I have a copy of it. I am grateful to the right hon. Gentleman. The first thing that he had better do is to send a copy to his Front Bench. It is clear that they have not read it, or if they have, they have not costed it. Perhaps they will then explain why the pension plan promises the restoration of the earnings link for pensions at the first opportunity and the "New hope for Britain" says
  820
  that that step is no longer immediate but will be taken "as soon as practicable." Why have they changed the phraseology?
  With regard to television licences, the pension plan promises unequivocally that
  "We shall give a TV licence to pensioners free of charge."
  That has become:
  "We will phase out the TV licence for pensioners during the lifetime of the Labour Government."
  A certain amount of explanation is required from the Opposition. The best way of settling this matter once and for all, and also for the benefit of the right hon. Member for Norwich, North, is for the Opposition to set out their exact proposals, cost them, publish them, and put a copy of them in the Library.
  The Government do not intend to make promises that cannot be kept. We intend to safeguard the living standards of pensioners and other people who receive social security benefits. We stand on our record. In the past four years, in spite of the worst recession for 40 years, we have succeeded in raising pensions faster than prices and in improving support for the family and other key social groups such as the disabled. We have done all that while reducing inflation to its lowest level for 13 years. That is the Government's record. The Bill is the latest stage in our strategy to give back to pensioners and those most in need the stability and security that years of inflation had stripped away. I commend it to the House.
  Mr. Deputy Speaker: I have to inform the House that Mr. Speaker has selected the amendment in the name of the Leader of the Opposition.
  4.41 pm
  Mr. Brynmor John: I beg to move, to leave out from "That" to the end of the Question and to add instead thereof:
  "this House declines to give a Second Reading to a Bill which through a technical adjustment will fail to compensate social security beneficiaries by the full amount of inflation at the November uprating, and thus impose a hidden penalty on the lowest incomes in the country."
  The House could have expected the Bill to be approached in an academic atmosphere to ascertain the most accurate method of compensating social security beneficiaries for increases in inflation. For a while I thought that that was what the Secretary of State was trying to do in his more lucid and sober moments. The importance of the Bill cannot be gainsaid. It affects all those in receipt of state benefits, not only the retired, but the unemployed, widows, invalids, supplementary beneficiaries and public service pensioners. We are talking about some 20 million people, including dependants. Therefore, the size of that population rightly dictates that the debate will be anything but an academic exercise, when the effect upon the recipients is considered.
  What is being proposed is clear enough, despite the Secretary of State's speech. It is that this November's uprating will reflect the annual rate of inflation this May. It will be announced and legislated upon some time after mid-June. It will replace the present system, by which an announcement is made at the Budget of the predicted rate of inflation to next November. The Secretary of State has sold that change with all the lack of restraint for which he is becoming famed.
  Once the Prime Minister had done her Annie Oakley bit at Prime Minister's Question Time by saying that she

  821
  would get rid of undershoot and overshoot, the Secretary of State rushed in eagerly to state that the case for the historic method was overwhelming. Today he has banged his way into town as old Doc Fowler, the itinerant medicine man, with a potion that will cure everything from dandruff to diarrhoea. Not for him is there any doubt or balancing of opinions. There is no room for any opinion other than his own. Once we have cut his cackle, is he credible? The answer is that he is not.
  The right hon. Gentleman has some justice on his side when he says that the forecast method does not always work, Sometimes, as he has said, it underestimates inflation, in which case we are obliged to make it good. Sometimes it overestimates inflation, but it does not follow from that that we are obliged to claw it back. The Labour Government in 1977 and 1978 did not claw back such an overestimate of inflation. This year, the Chancellor, as we read in The Times, has made a slightly dotty claim that the standard of living has gone up by 5 per cent. under the Conservative Government. The right hon. Member for Wanstead and Woodford (Mr. Jenkin) in opposition and in government pledged that the pensioner would share in a real rise in the nation's living standards. One would have thought that the last thing on the Government's mind would be consideration of a clawback of 2·7 per cent. on last year's estimate.
  The criticism of the Secretary of State is not therefore that there are not weaknesses in the forecast method. We recognise that there are. The real criticism is his grotesque pretence that the historic method is flawless. He said today that it is an exact measure. He went further in the press conference that he held on the day of the Chancellor's announcement, which was published to all and sundry, and of which I have a copy in case he is interested or has time to read it when he is not reading the book by my right hon. Friend the Member for Heywood and Royton (Mr. Barnett). He should read his own press announcements, although they are written in worse style. He said at the conference:
  "The historic—or actual—method avoids the possibility of forecasting error and therefore the need for later adjustment of uprating increases. It replaces doubt with certainty based on fact."
  The Secretary of State repeated that pretence today. On that day he was Don Quixote and he was hunting many giants. Unfortunately, he forgot to communicate his views to the long-suffering and much put upon Sancho Panza, the Minister of State, the hon. Member for Hornsey (Mr. Rossi). Let us compare the words that the Secretary of State used today and on that occasion with the words that the Minister of State used to the Select Committee on Social Services in December 1982. He was asked a question by the hon. Member for Macclesfield (Mr. Winterton), and said:
  "In other words, even if one went on an historical basis there was a risk of overshoot or undershoot".
  In fact, that happened. Later, the hon. Gentleman said:
  "So it is difficult in an exercise of this kind ever to get it absolutely right".
  That is certainly not what the Secretary of State was saying today. He was saying that it would be absolutely right and that there would be no trouble from now on. The Minister of State, that hapless winder up, who has not been privy to the Secretary of State's great thoughts, went further in the Committee on the Draft Statutory Sick Pay Up-rating Order 1982 on 26 January 1983, less than six weeks before the Budget. He said:
  822
  "Whichever method is used, there will be difficulties. We shall not be spot-on and make sure that in a particular 12 month period the up-rating will match the movement in prices."
  He went on to utter the immortal words:
  "All that I can say to the hon. Member for Bishop Auckland is that so far as I am aware, the Government have no intention of introducing legislation to change the basis of the historic method for other benefits. "—[Official Report, Fourth Standing Committee on Statutory Instruments, &c., 26 January 1983; c. 11.]
  The Minister for Social Security (Mr. Hugh Rossi): That is perfectly right.
  Mr. John: It may be right. That is a great tribute to the hon. Gentleman's honesty. It is a great commentary on how much the Minister of State is trusted by his Secretary of State in these matters.
  What the Minister of State said in that Committee is the perfect answer to the nonsensical certainty of the Secretary of State both today and in his press release. There is no certainty in either the historic or the forecast method. We are doing our rough and ready best. If the Secretary of State had said today that it is a fine judgment and a balancing act, and that there are weaknesses in both methods, we would have had much respect for him. Instead, he has done his itinerant medicine man act. No wonder the Secretary of State deserves the Saatchi and Saatchi prize for overseller of the year. He conceded that at best there was a rough and ready choice between two imperfect systems.
  My preference is for the forecast system because it tries to anticipate the real world in which people will be living and shopping. Retrospective compensation cannot remedy the problem because the group is not static. It is no good trying to compensate pensioners who may die before the next uprating, or those who have to live, unemployed, through a 6 per cent. rate of inflation with a 4 per cent. uprating, and who then gain employment in that period. They are never compensated for that gap, as the Secretary of State knows.
  Mr. R. A. McCrindle: Is not support for this system by the hon. Member for Pontypridd (Mr. John) in some way mitigated by the knowledge that during the period of its operation this Government and previous Governments have got it right on only two occasions out of seven?
  Mr. John: This is an important point and it is important how I approach it. My preference is for a forecast method. I concede that it is not without flaws, just as the forecast method is not without flaws. The historic method gets the forecast wrong as well. The Minister must concede that. The trouble with the debate is that the Secretary of State does not concede that. He talks about a mathematical certainty that will never occur, as he knows perfectly well if he takes any departmental advice. The root problem about all pensions—I refer not merely to retirement pensions but to all social security pensions—is not the use of the historic or the forecast method, but the long gap between the date of the announcement of the uprating and its implementation. The Opposition have always understood that the period between the Budget and November, so we were told by the Department when we were in government and by the present Government, was an irreducible minimum period for the uprating of this benefit. It has proved not to be so. This year three months is being shaved off the announcement, because it will not be made until mid-June and the implementation will be in November.

  823
  The Secretary of State recently appeared—although I notice that he was anxious to belabour the Opposition in an attempt to forget it—to be anxious about the well-being of pensioners and their confidence. He did not give a categorical assurance on this occasion, as he did previously, that the payment would be manageable in November if the exercise was not commenced until mid-June. I welcome that assurance. I have my doubts and I believe that some of his Department's staff have theirs. To fail to meet that assurance would be cruel. I hold him to that promise for the period that he remains in office.
  A longish gap between forecasting and implementation is no longer inevitable. Computerisation will solve this problem. With the aid of computers it is possible to obtain a date which is adjacent to the uprating, such as September if a November uprating date is chosen. Whatever method is used, it is possible that a very small movement between—
  Mr. Fowler: The difficulty is the weekly payment system that exists and which most pensioners appear to want. It is possible to implement a credit transfer system or monthly or quarterly payments. As long as the weekly payment system by order book is retained which most pensioners appear to want—the Rayner scrutiny committee has examined this matter—what the hon. Gentleman advocates is not possible.
  Mr. John: I am interested in that. Hitherto, supplementary benefit uprating has been done manually, which has been given as the reason for—
  Mr. Fowler rose—
  Mr. John: The Secretary of State has had his opportunity to intervene. I wish to finish my point. It is interesting to note that the Secretary of State mentioned the frequency and method of payments. He will know as do I that in the operational plan the computerisation of supplementary benefit payments is due to be introduced in 1984–85. Provided the caveat can be met at that time—I am sure that it can be met because other difficulties have been met—it will be possible to get a much closer conjunction between the announcement of a forecast or the rate of inflation and its implementation.
  Mr. Fowler: No one would be more pleased than I if that could be achieved. Progress can be made, but not immediately. By 1987 progress will have been made regarding supplementary benefits. The hon. Member for Pontypridd (Mr. John) is right in that the uprating of supplementary benefit means that there is a considerable delay. By about 1987 the Government should have cracked that problem. However, it is difficult to crack the problem of the payment of weekly benefits, if that is what pensioners want. That is a problem that successive Secretaries of State for Social Services have had to examine.
  Mr. John: With respect, that is not such an insuperable difficulty as the right hon. Gentleman states, and certainly not if there is a will to overcome it.
  Mr. Ennals: If the Secretary of State looks at the uprating on 22 July 1974, which was the first uprating of the Labour Government, there was a gap of only four months between the date of the announcement and the uprating. If the right hon. Gentleman looks at what
  824
  happened in the following year of the Labour Government, the gap was five months between 30 November and 7 April. The longest periods have been in the past three years. The upratings in 1980, 1981 and 1982 were eight months, eight and a half months and eight and a half months respectively. The periods have got longer under this Government.
  Mr. John: That was not my central point, although I understand that my right hon. Friend makes the point that a much speedier uprating is possible, as happened in the Labour Government's term of office. As is shown in the operational strategy, 1984–85 is the time for considering a change of method when computerisation means that the gap between the estimate or the historic point is close to the date of implementation. Once that happens pensioners will not be so badly affected. From what the Government have said, they are not well disposed towards that suggestion. Perhaps it should be deferred until computerisation is a more attractive possibility.
  The Government must explain why we have this Bill at this juncture. The answer is to be found in the Budget and in the surrounding figures. According to the Government, they over-provided by 2·7 per cent. and they were, therefore—this was announced to the House—considering having to claw it back. The reception that that might receive in the House and in the country generally in a possible election year deterred them from that course. Instead of abandoning that suggestion, the Government turned their ever fertile minds to how they could get it back without appearing to claw it back. The inspiration for the fraud came from the Chancellor's forecast for inflation figures. They stated for the month of May that inflation was likely to be 4 per cent., the lowest this year, and probably for many other years both past and future. The Chancellor by his Budget speech candidly conceded that inflation is likely to be running at 6 per cent. That is the figure which will be prevalent when the uprating figures are paid. Using the forecast method, the Government would have had to uprate the pension by 6 per cent. next November, because that is the forecast for inflation then. However, they found that if they could somehow use the month of lowest inflation—May—they could save themselves £500 million. In effect, they could carry out a disguised and, they hoped, unobserved clawback of 2 percentage points, of the 2·7 per cent. that they say was overpaid last year. Thus, we have had a change from the forecast method to the historic and, as a result, this Bill.
  The Secretary of State devoted several passages of his speech to the position in 1976. The sales of the book written by my right hon. Friend the Member for Heywood and Royton have been boosted to enormous proportions within the DHSS alone, and there can hardly be an official above the grade of deputy secretary who has not had it on his desk day and night for the past six months. That episode has been quoted at length. However, when the right hon. Gentleman came to the saving of £500 million, I wonder that the words did not choke him. If there is a gap of 2 per cent. between the figure for May and that for November, he is likely to pay the pensioners £580 million less than they would otherwise be entitled to if he had stuck to the forecast figure.
  On the assumption that the Minister and the Secretary of State are still on speaking terms and in the same Department, the Minister must be taken to act for the

  825
  Secretary of State, and he has admitted that he has saved £500 million by cutting the earnings link for pensions. Therefore, he will short change the pensioner by a total of £1·08 billion next November if inflation takes the path that he assumes. The right hon. Gentleman failed to quote the last sentence of that passage in the book of my right hon. Friend the Member for Heywood and Royton, which he otherwise knows by rote. I refer to the fact that there was a 20 per cent. real increase in pensions in the lifetime of the Labour Government. Taking account of all the inflation of which the Secretary of State so movingly and erroneously spoke, there was a 20 per cent. real increase in pensions in that period. As I have said, the Tories will not only be unable to emulate that at the end of their period of office, they will not even try to match it. The Secretary of State very carefully answered an earlier intervention from one of his colleagues. He did not say that inflation had eroded pensions, but the savings of those with pensions. However, that is precisely why we introduced granny bonds, which kept pace with inflation. We did that to protect such savings against inflation.
  Mrs. Knight: Is that why the Labour Government stopped the Christmas bonus?
  Mr. John: As the hon. Lady knows, the Christmas bonus was stopped and then restored by the Labour Government. Incidentally, I am glad to see that at least one wet, the hon. Member for Woolwich, West (Mr. Bottomley), has oozed his way back into the Chamber, because the wets have been singularly absent today. The Christmas bonus was stopped because there was a real increase in pensions, which was maintained at a time of economic austerity that has been surpassed only in this Government's period of office.
  Mr. Fowler rose—
  Mr. John: I shall not let the Secretary of State off the hook yet. We are discussing the effect of the Bill. Depending on the benefit that they enjoy, married couples will lose between 80p and £1·05 per week, and single people will lose between 50p and 65p a week. If the Secretary of State would stop lecturing or programming his Minister and listen to the figures, he might find out that we are talking about some of the poorest people in the land, who are being cheated of 80p to £1·05 a week, or, for single people, by between 50p and 65p a week. That might not matter to the Secretary of State and the Minister, but it matters to them, because they depend on such benefits. It is a scandal that the affair is being dressed up in this technical guise.
  The Minister bears a heavy responsibility for the next matter. The Rossi price index on supplementary benefit will incorporate a 0·7 per cent. loss of benefit relative to other benefits unless it is corrected now. I hope that the Minister will take that into account. However, under the Bill all will be losers and there will be no winners, because the rate of inflation in May will never recur.
  Mr. Rossi: I am sure that the hon. Gentleman studies the movement of figures carefully—at least he should—and he will realise that housing costs have been rising more slowly than the average of prices on the retail price index. By excluding the housing element, those on supplementary benefit would, on current form, be 1 per cent. better off.
  Mr. John: I shall certainly write to the Minister on that. [Interruption.] The Secretary of State has a low amusement threshold. He is probably the only man to laugh at his leader's jokes at a party conference. However, housing benefit was supposed to rise by 0·5 per cent. less than the RPI but the figure was, in fact, 0·2 per cent. over it. That is a difference of 0·7 per cent. I shall give the Minister further details, but that is the fact. The only consolation is that the reverse Robin Hoods who are clobbering the peasants at the behest of Maid Margaret to enable the sheriff of Surrey, East—the Chancellor—to escape have been found out. They were found out in the Budget debate, when criticism was rife in all parts of the House. I need mention only the hon. Member for Macclesfield who had the good sense to walk out on the Secretary of State's speech. Newspaper after newspaper, including The Daily Telegraph—of which the right hon. Gentleman is so inordinately fond—has seen through the ruse. That is why, although this debate could have been an academic argument, it will not be so.
  Our interests should be focused on the real world and particularly on those who are already on low incomes and who stand to lose from the Bill. At the beginning of his speech, the Secretary of State said once more that the Government did not intend to use the Bill as a clawback exercise. I have shown my preference for the forecast method, but I would not go to the stake about it. Therefore, I would advise my right hon. and hon. Friends not to vote against the Government tonight as long as the Government give us an assurance that if inflation in November turns out to be higher than inflation in May the Government will immediately move to ensure that the social security beneficiaries do not lose from the change. If the Government give that undertaking, we shall not divide the House against them.
  I should like to suggest three ways in which that might be put into practice. First, if there is—as is stated—a difference of 2 per cent. between the rate of inflation in May and December, that is the equivalent of one week's benefit. The Government could therefore pay an extra week's benefit to all the social security beneficiaries who lose under the Bill. Secondly, if that is too difficult, the Government could pay a special Christmas bonus to all beneficiaries within this category. Obviously, it would be a wider category than that for the normal recipients of the Christmas bonus, but an amount could be given that would be equal to the loss as a result of the change. Thirdly, now that the Government have cut the time for upratings, it is perfectly possible this year to have a six-monthly uprating of the benefits to compensate for that loss. So there are three ways in which we could ensure that no beneficiary on low income would lose.
  I issue a challenge to the Secretary of State. If he wishes to demolish accusations of deceit and trickery, if he wishes to be believed in his protestations, and if he wants to avoid a Division, let him give the undertaking that I have asked for—if not in the form that I have suggested, in a form devised by his Department, if it can be spared from reading political memoirs long enough to do so. I am prepared to give way to the Secretary of State now so that he may give such an assurance. Will he now intervene to tell me that, if there is a loss in November, he will ensure that the Government will make it good? Will he intervene? He shakes his head. That is what I expected. I assume that the sages of Hansard will record his refusal.

  827
  The Bill is now revealed for what it is, the disguise for a clawback, dictated by political opportunism in an election year. It has not worked. To use a technical adjustment to smuggle through a cut in the standard of living of the poorest in the land will outrage fair-minded people. In the absence of any protection for the poor from the Government, this House must provide that protection. It must record its revulsion at this devious trickery by voting for the Opposition amendment in the Lobby tonight.
  5.11 pm
  Mrs. Jill Knight: I say at once to my right hon. Friend the Secretary of State that I warmly welcome the Bill. Without question, the measure is necessary for the very good reason that the present system for calculating increases is a dud.
  Much has been said about the fact that, of the seven times that the present system has been used, it has failed to provide the right answer on five of those occasions. Moreover, the situation seems to be getting worse, because the first two were the most nearly right. The last five were getting progressively worse. In fact, the last one produced the result that was the most in error. We might have done better with tea leaves or a crystal ball. No responsible Government could continue to use a method of calculation that was so patently and obviously useless.
  The all-party Social Services Select Committee was chaired by the hon. Member for Wolverhampton, North-East (Mrs. Short), who I am sorry is not in her place.
  Mr. Ennals: I thank the hon. Lady for giving way. A meeting is taking place at this very moment of the Select Committee of which my hon. Friend the Member for Wolverhampton, North-East (Mrs. Short) is chairman. I escaped from it so that I might be here in the Chamber, but it is not fair to attack my hon. Friend for not being here when she is attending a meeting of that Committee.
  Mrs. Knight: I had no intention of attacking the hon. Lady, and if I have done so I apologise. She is interested in this matter, and I fully accept that if she is in the chair at a Select Committee meeting she cannot be in the Chamber at the same time. However, I am sure that she is with us in spirit, because it is not often that the Government follow so carefully her recommendations. Perhaps I might quote what she, as chairman, said in the report:
  "It is apparent that the system is far from perfect. An uprating system based on forecasting rates of inflation is always likely to produce overshoots or undershoots; it has done so consistently since 1978".
  That is what the hon. Lady's Select Committee said, in its wisdom, and the Government, with a readiness to listen which is part and parcel of the conduct that we always expect from them, have recognised the Committee's view. As a result, this Bill is now before the House.
  Perhaps more nonsense is talked in this House about pensions than about almost any other subject, and that is saying something. It is quite disgraceful that some Opposition Members are so keen to make political points about pensions that they make statements that worry and upset pensioners, the very people they say they are trying to help. No clearer example could exist than all the nonsense that has been talked about clawback. I know
  828
  pensioners who have been desperately worried because they foolishly believed what Opposition Members said. They really believed that something would be taken back from them when the expression "clawback" was used.
  Let me make the matter absolutely plain. It has been made plain on several occasions, but the Opposition are either so dense that they do not understand, or so determined to make a political point that they will not understand. The fact is that nothing whatever is to be taken away from pensioners. They will retain all that they have. It is nonsense to suppose that anything different will happen. To a pensioner, clawback means taking something away, but nothing whatever is to be taken away from pensioners.
  Mr. John rose—
  Mrs. Knight: No, I shall not give way at this point.
  It worries people very much that the pension they are now receiving is to be cut. That is exactly what Opposition Members are saying, and it is quite wrong. No balanced observer who looks at the facts and figures seriously can accuse the Government of not treating pensioners fairly. Pensions will be fully protected against rises in prices. We have said that time and again—it is a pledge that has been consistently upheld by this Government—and the point is made again in clause 1 which provides that
  "the sums specified … are to be reviewed by the Secretary of State in June of each year".
  Why is that? Is it because the Secretary of State does not have enough to do? No, it is because he is quite determined that pensions will be fully protected against rises in prices. If pensioners are not so protected, action will be taken. It is here in the Bill, and it is patently obvious from the way that pensioners have been treated by this Government. I am quite disgusted at the way in which the Opposition throw facts overboard in their manic and panic pursuit of the pensioners' vote.
  Reference has been made today to the Labour manifesto, where it deals with pensioners' uprating, and so on. One hon. Member said that a promise exists that pensioners will no longer have to pay television licences if there is a victory for the Labour party at the next general election. I warn the Opposition that they are playing with fire if they take the view that, just because an elderly person enjoys watching television, television should be free. Not all elderly people like to watch television. Some may like drinking gin, and some may like eating jelly babies. Is it really suggested that the Government of the day should shove crates of gin in the direction of old-age pensioners just because they like drinking it, or perhaps crates of jelly babies? It is nonsense to suppose that because there is one thing that a person on a pension likes to do, that person should be able to do it free and at the cost of the rest of the taxpayers. It is infinitely wiser to recognise that not all elderly people—or, indeed, ordinary people not of pensionable age—adore watching television. Some do not.
  It is up to the Government of the day to produce for our older people the highest pension that they can manage and then to allow them to decide how they spend it.
  Mr. Geoffrey Dickens: Does my hon. Friend accept that the proposal is in the Labour party manifesto for one reason and for one reason alone—to encourage all pensioners who watch television to vote for

  829
  the Labour party at the next general election? The Labour party is seeking dishonestly to buy votes. Does my hon. Friend agree that pensioners are not that foolish?
  Mrs. Knight: Indeed, pensioners are not that foolish. I will tell the Opposition something for nothing. When a pensioner who does not like watching television finds that his neighbour has been given extra help from the taxpayer to help him watch television, there will be an immediate demand for a quid pro quo. Many times in the past special grants have been given for special subjects and special desires and the immediate reaction from those who do not choose to spend their spare time in that way has been that something should be made available to them because they have been left out. That is why it is infinitely wiser to give pensioners the best possible pension and the best possible uprating when inflation occurs and then to leave the pensioners to spend it for themselves. The trouble with the Opposition is that they never dare to allow people to have a choice. The Conservatives do, and that is the difference. My hon. Friend the Member for Huddersfield, West (Mr. Dickens) was right in what he said.
  While I am on the subject, I am profoundly disgusted by the way old-age pensioners are manoeuvred for political reasons by Left-wing people to get into buses and to come to the House to lobby. This is done only for political advantage. I have received complaints about this matter from my constituents who have said that they have been offered £15 and a free day out in London if only they will come to the House to lobby. All of them can see their Members of Parliament in their constituencies without the hassle and trouble of coming to the House. How right my hon. Friend the Member for Huddersfield, West was when he referred to the desire and scramble for votes, a manic and panic pursuit indeed.
  It is a forlorn hope, but it would be nice if the day could dawn when we could say that Conservatives care about pensioners and increasing pensions as much as possible and the Opposition have the same view. It would be nice to have some measure of agreement instead of this constant effort to manoeuvre for political purposes.
  Clause 2 deals with housing benefits and allows for the uprating of rent and rate allowances through housing benefits. I must tell my right hon. Friend how warmly the change in the system with regard to housing benefits has been welcomed by the local authorities. Some people have received a special allowance to pay their rent but have not paid it. The number runs into thousands. Those who fail to pay the rent, especially when the money has literally been put into their hands, are cheating the ratepayer and taxpayer. I welcome the change that has come about for that reason and two others. First, it is infinitely more simple to arrange that the money should be paid straight to local authorities to pay the rent, and, secondly, it is more economic in terms of manpower.
  The amendment asks the House to reject the Bill. The Opposition are asking the House to reject the chance for pensioners to be paid more this November than would have been the case had the Government stuck to the forecast method with adjustment.
  Mr. John: Nonsense.
  Mrs. Knight: No, it is true. It is clear that that is what the Opposition are doing.
  Mr. John rose—
  Mrs. Knight: Perhaps it has burst upon the Opposition in a moment of amazement but, if the amendment were accepted and if the Bill were abandoned at this stage, pensioners would be paid less in November and would be worse off. It is thought probable that the 12-month inflation rate—[Interruption.] I have made it plain that if hon. Members wish to intervene, I will give way.
  Mr. John: The hon. Lady knows that she is being unfair. I tried to intervene earlier but she refused. If the Bill is not enacted the forecast method will be used. As the Chancellor has estimated that inflation will be 6 per cent. in November, the uprating will be by 6 per cent. If the Bill is enacted the review will be carried out in May, when the Chancellor estimates that inflation will be 4 per cent., so the uprating next November will be 4 per cent. compared with 6 per cent. by the forecast method. Even with the hon. Lady's perverted logic, how on earth can that be right?
  Mrs. Knight: I sometimes marvel at how one hon. Member can be wrong so often and so profoundly. I will try to explain to the hon. Gentleman in words of not more than one syllable that pensioners will be paid more this November than would have been the case had the Government not introduced the Bill and had stuck to the forecast method. It has been agreed across the House that the 12-month inflation rate in November will be about 6 per cent. At least we agree on that. Under the forecast method, if last year's overshoot of 2·7 per cent. had been taken into account, pensioners would have received only a 3·3 per cent. rise. On the new basis—
  Mr. John rose—
  Mrs. Knight: The hon. Gentleman must listen. On the new basis pensioners stand to gain a rise of about 4·5 per cent. There is a difference between 3·3 per cent. and 4·5 per cent. Pensioners will be better off under the proposed change whereas Mrs. Castle's change in 1976 left them more than 6 per cent. worse off. Perhaps the hon. Gentleman's memory is stuck in that groove—[Interruption.]
  Mr. John: Will the hon. Lady give way on this point?
  Mrs. Knight: I have already dealt with clawback. If the Opposition do not understand how constant reiteration of that quite misguided phrase upsets old-age pensioners, they should now understand it and stop using it.
  The Bill will improve the lot of pensioners, as Conservatives have consistently sought to do. It will jettison a system that did not help the pensioner as it should have. The amendment would torpedo a slightly better position for the pensioner. I know which system I shall choose.
  5.28 pm
  Mr. David Ennals: I wish I could say that I am delighted to follow the hon. Member for Birmingham, Edgbaston (Mrs. Knight). I follow her in Committee every Tuesday morning and Tuesday afternoon and every Thursday morning and every Thursday afternoon. To do so again today is a bit much, particularly in view of what she has just said. With regard to the point that the hon. Lady made in the final part of her speech, it is obvious that if we stuck now to the forecast method the increase would be 6 per cent. and not 4 per cent. Pensioners would, of course, be better off. The hon.

  831
  Lady's supposition was that one has to claw back every time. The figures for 1976 and 1977, about which I know a little, show our commitment then to link pension rises with earnings and prices. In 1976 there was a 1 per cent. overshoot on the short term. Did we take back that 1 per cent.? No, we did not. There was a long-term overshoot of 1½ per cent. in 1977, which was 1 per cent. in the short-term. Did we claw that back? No, we did not.
  Mr. Dickens rose—
  Mr. Ennals: No, I shall not give way until I have completed my argument. The supposition that it is necessary to damage pensioners' interests if a Government's estimate proves to be wrong is one that I cannot possibly accept.
  Mr. Dickens: The right hon. Gentleman referred to 1975 and 1976 with great glee. Does he accept that those were the very two years when the grasping Labour Government removed the Christmas bonus from the old-age pensioners?
  Mr. Ennals: The hon. Gentleman is talking about £10. I do not hold any responsibility for having removed the Christmas bonus for one year. I hold some responsibility for replacing the Christmas bonus. The hon. Gentleman's intervention was unfortunate in that respect.
  The hon. Member for Edgbaston attacked the Labour party's promise to phase out television licence fees for pensioners during the lifetime of the next Labour Government. That declaration, which appears in a document which the Secretary of State has clearly not read, is most important. For the hon. Lady to compare that promise with the serving of free gin is deplorably to lower the level of debate in the House. Surely she must know that as pensioners become older more and more of them become housebound. They are, therefore, tied to such entertainment as they can find in their homes. They become more and more dependent, not upon gin, which they cannot afford, but on television, which is their door to the world. Surely the Labour party is pursuing the right policy when it says that people in their years of retirement, especially those who are not able to get out and about as most of us are in this place—although one or two of us do not get out and about very often or very far—should not have to pay television licence fees. There was a degree of cynicism in the hon. Lady's argument when she compared that policy with the distribution of free gin. She showed an unsympathetic approach which is not typical of her general approach to the elderly.
  The Social Services Select Committee did not recommend which method of calculation should be used. I am a member of the Select Committee and I well remember the discussion that took place. As my hon. Friend the Member for Pontypridd (Mr. John) has said, we realised that there was no system that could guarantee that we would get it right. It is possible to have a system of the sort that is being introduced by the Government that guarantees that there will be a lower level of uprating in November than that to which pensioners are entitled by the application of the historic method. That is why the Government have introduced another system. It cannot be guaranteed that in November we shall get the uprating exactly right, whatever method we employ.
  832
  Of course, the Select Committee was powerfully influenced by the Minister for Social Security. When the Select Committee was taking evidence my hon. Friend the Member for Pontypridd asked the Minister
  "Does that mean that you are or are not contemplating legislation, could you tell the Committee?"
  The record reads:
  "(Mr. Rossi.) No legislation is contemplated to alter the basis."
  All right, that was not contemplated then. I shall come later to when that was contemplated.
  Mr. Dickens: When was "then"?
  Mr. Ennals: I shall refer to certain parts of the Secretary of State's speech.
  Mr. Dickens: When was "then"?
  Mr. Ennals: Dear, oh dear. I shall answer the hon. Gentleman's question a little later. I do not want to delay the House now. It was, of course, during the Select Committee's studies.
  The Secretary of State made considerable play about the great increase in the total cost of social security expenditure. He knows that the bulk of the increase has been due to the massive increase in the payments of unemployment benefit. He refused to answer when I asked him how much of the increase has been because of the rising level of unemployment. I think that he should have known the answer at the moment when I asked the question and I do not intend to repeat the question.
  Secondly, the right hon. Gentleman commented on the gap between the announcement of the uprating and the payment. When the Labour Government took office it was possible for them in only four months to introduce a substantial increase, which the pensioners needed desperately after the misery of the previous Tory Government's administration. That Labour Government inherited inflation from the Tory Government and they were able to increase pensions again in April 1975. On that occasion they took only five months to pay the increase following the announcement. That Government were paying earlier in November but when the present Government took office they decided that they would make a saving by making payments late in November. That meant, of course, that pensioners received their increase later. The period between announcement and payment was eight months in 1980, eight and a half months in 1981 and eight and a half months in 1982. Why did they increase the gap? They created a great feeling of uncertainty among pensioners.
  Mr. Rossi: The right hon. Gentleman has made great play about the four months in 1974. Perhaps he will describe to the House—he had some responsibility in those days—the enormous difficulties in which the Labour Government found themselves because they gave themselves only four months. It was an experiment that they never tried again.
  Mr. Ennals: I agree that it was extremely hard for the civil servants to implement the increase. However, the Labour Government felt that they had to introduce the increase quickly because the level of pensions that they inherited was grossly unsatisfactory. There were some difficulties but the next increase in 1975 took only five months. In the past two years it has taken eight and a half

  833
  months to implement the increase. It is no good the Secretary of State shaking his head because I have the figures before me and I know that they are accurate.
  In introducing the Bill the Government have adopted a shabby method of treating 10 million penioners and millions of other beneficiaries, who will receive in November an increase that will be significantly lower than that which they would have received if the forecasting method had been carried out. The House knows why the Government have taken this course. The right hon. Gentleman has threatened to claw back what he calls a 2·7 per cent. overpayment. Is there a pensioner who feels that he is being overpaid? I have never met him and I doubt whether any hon. Member has heard a pensioner saying that he is overpaid and is in receipt of too large a pension. I have never heard a pensioner complain that the Government are being too generous to him. I shall happily give way if the Government have found any such person. At the last minute they decided that it would be unpopular to carry through the threat of a clawback so they decided to do it by a subterfuge. The decision must have been taken at the last possible minute. I calculate that it must have been taken at the Cabinet meeting on the Tuesday of the Budget statement. If not, it must have been taken overnight. The documents that were published with the Budget statement assumed that there would be a clawback. There was no suggestion of there being a recasting of the rules of the game.
  Mr. Fowler: If the right hon. Gentleman believes what he has just said, he will believe virtually anything.
  Mr. Ennals: Can the Secretary of State explain how it was that the Treasury published figures that became available to the House at the same time as the Chancellor made his Budget statement into which the concept of clawback was written? There was no suggestion then that the rules of the game would be changed.
  Mr. Fowler: The documents were prepared, published and printed before the Budget anouncements were made.
  Mr. Ennals: How long before? Neither the Secretary of State nor the Chancellor will get away with this. The Budget papers are published only one or one and a half days beforehand. Although they do not become available until Budget day, I should have thought that they go to press the day before. There was a change on the morning of Budget day when Ministers—the Secretary of State may have been one—told the Chancellor that it would be extremely unpopular for the Government to be seen to be putting through a Bill which clawed back from pensioners what they were entitled to. The Chancellor made that decision at the last minute.
  This is the second time that the Secretary of State has changed the rules of the game. No doubt he has the support of the Chancellor. Perhaps he was told to do so. I do not know what powers he has. He did so first by abolishing the link with earnings and prices which the Opposition said at the time was shameful. That is why pensioners have not done as well under this Government as they did under the previous one.
  The second way in which the Secretary of State changed the rules was by basing the uprating on the month which is likely to show the lowest level of inflation—May. It is estimated that inflation will be 4 per cent. in November, That may be so and some economic experts
  834
  have said that it might be less. It might be 3½ per cent. but there have also been estimates such as that which I have seen in the Financial Times that by November inflation will have increased, not only to 6 per cent. as the Chancellor has estimated, but to 6½ per cent. or 7 per cent. Therefore, if the uprating, is based on the rate of inflation in May, it could be that pensioners will be awarded an increase of 2 per cent. less than the rate of inflation. Indeed, the discrepancy could be as much as 3½ per cent. Pensioners will have to bear that for the following 12 months.
  The figures that I have given are not mine but those of people who know much more than me about the likely trend of inflation in the next few months. Because some people expect an inflation rate which is higher than 6 per cent. in November, there is much pressure on the Prime Minister to cut and run and have an early election while inflation is still low.
  The Government are not introducing the Bill out of any conviction that one system is better than another. Not only did the Minister of State say that no legislation was contemplated. In 1974 the Minister for Health who was then the shadow spokesman on social security argued the case for the forecasting method as opposed to the historic method. During the Budget debate, the Secretary of State, when talking about the forecasting method, said:
  "The fact is that, since the system was introduced, it has simply not worked. The forecast has been right only twice—in 1977 and in 1979. In other words, it has been wrong in five out of the seven years that it has been used."—[Official Report, 17 March 1983; Vol. 39, c. 356.]
  He did not point out, as anyone who examines the subject can see, that there was a Conservative Government during four of the five years in which it was wrong. The problem has resulted through the Government's inability to do the arithmetic. In only one of those years was there a Labour Government. The Government cannot estimate the rate of inflation. I suspect that they may have got it wrong again this time. As a result, they have decided to change the rules of the game.
  The only reason for the Government's change of course is to avoid implementing a clawback and doing what they intended to do. The Secretary of State and the Chancellor said that they would make a cut because pensioners had been overpaid. Therefore, they intended that pensioners would be underpaid in the following year. The Government decided to do that by subterfuge.
  The hon. Member for Edgbaston said that pensioners are not easily fooled. They will see through this one. I assure her that they will realise that the motive behind writing the rules around the lowest inflation rate is a subterfuge. That is unfair to pensioners and others who will be affected. They will receive only a 3½ or 4 per cent. increase when inflation is likely to be between 6 per cent. and 7 per cent. It is a mean and petty measure.
  I notice that, in his Budget statement, the Chancellor crowed about the Government's success in looking after pensioners. He said:
  "On the basis I have described, the position for pensioners over the lifetime of this Government is this. Between the November upratings of 1978 and 1983 prices are likely to have risen by some 70 per cent. and pensions by some 75 per cent."—[Official Report, 15 March 1983; Vol. 39 c. 143–4.]
  The Chancellor's great victory was that the Government have raised pensions by 5 per cent. He did not add that the pensions will be reduced at the next uprating so that the increase may prove to be only 3 per cent. Nor

  835
  did he compare that with the Labour Government's record. During the Labour Government's term of office we increased pensioners' earnings by 20 per cent. in real terms. We shall probably find that the increase in pensions under the Labour Government was seven or eight times that which has taken place under the Conservative Government. Even if all of my estimates are wrong, the increase in pensions under this Government cannot be more than 4 per cent. I am sure that the Secretary of State or the Minister will tell me whether I am wrong.
  This is a squalid and mean little Bill. How many people will be affected by it? I know that it encompasses retirement pensions, widows' benefits, invalidity benefit, unemployment benefit, children's special allowance, attendance allowance, non-contributory invalidity pension, invalid care allowance, guardian's allowance, noncontributory retirement pensions, industrial injuries disablement benefit, industrial injuries death benefit and public service pensions. All will suffer. How many more will? What will happen to war pensioners?
  I had better state an interest in that I am a war pensioner. Will my war pension be affected by the Government's cuts? My previous attempt to elicit an immediate reply from the Minister was so unsuccessful that I shall not try again, but I hope that when he replies to the debate he will tell the House how many people will be affected by this mean, petty and despicable act and whether war pensioners, to whom we have always tried to give preference—I hope that we shall continue to do so, certainly for as long as I am alive—are also affected.
  5.50 pm
  Mr. Kenneth Carlisle: Hon. Members on both sides of the House recognise that the elderly always require special help from the Government and from the community as a whole. I am sure that that sentiment is shared generally. The elderly served their country during war time and during the world recession of the 1930s and they deserve our respect and consideration. They deserve to be dealt with in a straight and honest way, and it worries me that the Opposition's arguments tend to cause confusion and to wrap up their record in a haze of sentiment. That attitude does no good to the pensioner, who must face the reality of daily life and who wishes to be certain about his pension.
  The facts are very important to the pensioner. They have been stated by my right hon. Friend the Secretary of State, but as they are important in this debate they are worth stating again. First, under this Government, until November of this year, the retirement pension will have increased in real terms by 75 per cent. That is more than the increase in prices, which is about 70 per cent. We made a promise before the general election to maintain the value of the pension, and we have more than fulfilled that promise. We have heard, especially from the right hon. Member for Norwich, North (Mr. Ennals), the Labour party's promises to the pensioner, but the pensioner wants fulfilment of those promises. My fear is that, from the record of Labour Governments and the folly and chaos of their economic policies, they cannot fulfil those promises.
  Mr. Ennals: Will the hon. Gentleman give way?
  Mr. Carlisle: I shall not give way.
  836
  The second fact is that the present method of calculating the pension by forecasting—
  Mr. Ennals: On a point of order, Mr. Deputy Speaker. If an hon. Member refers to another hon. Member specifically, surely that Member has a right to intervene.
  Mr. Deputy Speaker (Mr. Ernest Armstrong): It is for the hon. Gentleman to decide whether he wishes to give way. I understand that he is about to do so.
  Mr. Ennals: Of course people want to hear promises. The Labour Government promised two things when they came to office in 1974. The first was that we would increase pensions greatly as quickly as possible because they were very low. The second promise was that during the lifetime of the Parliament we would ensure that the real value of the pension was linked with earnings as well as with prices. That is what we did, but it has been undermined by this Government.
  Mr. Carlisle: Before I gave way, I proposed to wait until the right hon. Gentleman had resumed his seat after being in another part of the Chamber but I was happy to do so when he rose on that occasion. As I shall show during my speech, the real worry caused to pensioners by the activities of the Labour Government was the rate of inflation. Although I am not anxious to show the present position in France, it is interesting to note how much a Socialist party can offer before a general election but how much of its policy must be changed a year after the election.
  The second fact is that the present method of calculating the pension by forecasting the rate of inflation has been wrong in five out of seven years. The right hon. Member for Norwich, North displays his ignorance by suggesting that forecasting is easy. That is a foolish assumption. Those who forecast in the oil world, and certainly those who forecast election dates, are usually wildly wrong.
  Mr. Ennals: We got it right most times.
  Mr. Carlisle: I wish that the right hon. Gentleman would contain himself. He has already made his speech.
  Failure in forecasting has caused genuine worry to pensioners. They have said to me many times, "The forecast was this, but it has not been met and I am worried about how my pension, which is based on the wrong forecast, will meet my obligations." There is no doubt that the pensioner wants security and certainty. The historic calculation of the pension restores that valuable certainty and has another advantage. When the country can afford to give a real increase to the pensioner, which we all want and which we can secure only when the economy is once again healthy, that increase can be carried out in a considered and sensible way. It will not be a hit-and-miss exercise. We can say, "Inflation increased by so much during the past year, so we shall increase pensions by as much as the inflation rate plus X". That will be a certain and secure increase. I support this Bill because it provides security.
  The third fact is that the forecasting method introduced by the Labour Government in 1976 was introduced for a cynical reason—to save money. As we know, inflation in the previous year was about 21 per cent., but after the change in method pensions were increased by only 15 per cent. What is the use of increasing pensions by a huge

  837
  amount one year and then grabbing it back the next year? That, too, destroys the security which the pensioner wishes to have.
  Mr. Alton: Does the hon. Gentleman deny that this Bill will save the Government £580 million? If he does not deny it, how does he justify it?
  Mr. Carlisle: I do not accept that. The legislation intends to give security to the pensioner so that he may know where he is. It will also fulfil our promise to increase pensions in real terms.
  In 1976, the Labour Government, by a cynical sleight of hand, kept back from the pensioners more than £500 million, which in today's terms is about £1 billion. That fact is stated clearly in Mrs. Barbara Castle's diaries. Although I hesitate to read those diaries now, that passage is certainly worth reading. Let us not forget what the Labour Government did in 1976, especially in the light of the Opposition's promises about what will happen if they are returned at the next election.
  Mr. John: Will the hon. Gentleman give way on this point?
  Mr. Carlisle: No. I have given way many times.
  Mr. John rose—
  Mr. Deputy Speaker: Order. It is for the hon. Gentleman to decide whether to give way.
  Mr. Carlisle: Other hon. Members want to speak and the hon. Gentleman has had many opportunities.
  The fourth fact that the Government must impress upon people is that, despite the real financial restraints of a world recession, despite having imposed upon ourselves the discipline of living within our means, we have substantially increased other benefits to pensioners which have been a real help and cannot be ignored. For example, we are now spending in real terms more than any other Government on heating additions for the elderly. From now on, standing charges for gas and electricity will be no more than the value of the fuel used. Mobility and attendance allowances have increased ahead of prices. In addition, those aged 60 and over who are in receipt of supplementary benefit will qualify immediately for the higher long-term rate of supplementary benefit. Those are the facts. Genuine help has been given to the elderly.
  The biggest gain of all to the pensioner is the conquest of inflation. I have no doubt that pensioners who have seen their savings destroyed by inflation have been deeply worried. In addition, there is the constant worry about how they can meet the ever increasing bills and how their occupational pension, if they have one, will keep pace with the increase in prices. How often have old-age pensioners asked hon. Members what is the use of saving and thrift? They ask why they have worked all those years to see their savings go in 100 per cent. inflation over four years.
  I was shocked by the somewhat cynical statement of the hon. Member for Pontypridd (Mr. John) that he never expected to see the rate of inflation lower than 4 per cent. again. I want to see the rate of inflation down to zero so that the pensioner may have security. I know in my heart that under a Labour Government inflation will soar and the pensioner will again see his savings destroyed.
  Mr. John: Even with his limited intelligence, the hon. Gentleman will know that there is a difference between
  838
  hope and expectation. I hope to see the Conservatives understand simple arguments; I do not expect it. I hope to see low inflation; I do not expect it under the Government.
  Mr. Carlisle: In his intervention, the hon. Gentleman does not attempt to hide what was in his speech a cynical and dangerous statement.
  When Labour Members talk about borrowing and printing to spend more than £10,000 million a year, they should bear in mind the effect of inflation on the elderly. It will be stoked up way beyond anything that has happened before. As a result of the Labour party's policy, we should see inflation of 20, 30 or 40 per cent. We all know what effect that would have on pensioners' savings and standard of life. So again I say to the pensioner: beware of glib Labour promises and easy words. They mask the horror of a minefield. High inflation has a crippling effect on the well-being and the happiness of pensioners.
  We have had a look at the facts. We have had a look at the Labour party's record and at the Government's record. We have had a look at the Labour party's promises, its economic policy and all the dangers that that holds for us. If the microscope's focus is sharpened to that reality, we shall learn that the pensioner has always done better in the long term under a Conservative Government and will always do so. We have also learnt that they have always done worse under a Labour Government and without a shadow of doubt they will suffer again should we be so unfortunate as to have another.
  As we know, the earnings rule limit has been increased to £57. However, I should like the Government to see whether they could do more about phasing out the earnings rule before the end of the Parliament. That is a worthwhile measure and one to which the Government are committed. I should also like to ask the Government about earlier retirement. I read with great admiration the excellent report of the Select Committee on Social Services on the age of retirement. As the Minister will know, it suggested an average retirement age of 63 with flexibility, giving the choice to the pensioner when he should retire between the age of 60 and 65. That was a scheme which all members of the Committee agreed was realistic and was one that Britain could afford. We should move towards that choice over the age of retirement as soon as we can, and I hope that the Government will come forward with a proposal before the general election.
  It is easy for the Opposition to promise the world to pensioners. We all want to help the pensioner, but it is no good offering promises that are difficult to fulfil. It is no good offering promises which, because of the huge cost of fulfilling them in increased inflation, take away the security that the pensioner wants. We must look at the performance of Governments towards the pensioner. This Government have been fair to the pensioner. Pensioners know what life is about. They will not be fooled. They will see the reality of the Labour party's promises and the reality of the Government's performance. The reality is that the Government have served pensioners better than Labour.
  6.6 pm
  Mr. David Alton: I am glad to follow the hon. Member for Lincoln (Mr. Carlisle). I am certain that his remarks have been made in a sincere spirit. In particular, I agree with what he said about the need for

  839
  earlier voluntary retirement and the abolition of the earnings rule—something which many hon. Members feel strongly about. I am not so sure that I agree with other of his remarks about the real effects of this legislation on the pensioner. It is very much mutton dressed up as lamb.
  The hon. Member for Pontypridd (Mr. John) was right to talk about the undertakings for which he asked from the Government as being reasonable and for that reason I want to associate myself with the amendment that he and his right hon. and hon. Friends have placed before the House. I intend to vote with the Opposition tonight, not because I want to indulge in pork barrel politics, of which there has been an element this afternoon. We can all be guilty of that, particularly as we approach a general election. However, I think that all will agree that the present system of administering the pension is profoundly unsatisfactory, as the hon. Member for Birmingham, Edgbaston (Mrs. Knight) and others have said.
  Hon. Members should not delude themselves about the effects of the Bill. I draw the attention of the House to what Age Concern England says about it. It says that
  "it is our belief that by changing in this year pensioners and other beneficiaries will lose out by 2 per cent."
  It goes on to spell out the effects and says that
  "a single pensioner will be 65p a week and a married couple f1·05 a week worse off than they would be in November if no legislation were introduced."
  That deals with the point that the hon. Member for Edgbaston made earlier. Age Concern England estimates that
  "the Government will save approximately £105 million from this manoeuvre on pensions alone in the part year 1983–84."
  That is a different figure from that given earlier by the Opposition, who talked of £580 million. I should welcome some clarification on that when the Minister replies.
  When the Secretary of State addressed the House earlier, he talked about the need to protect living standards and he rightly said that we must try to control inflation. If inflation runs rampant that inevitably has a terrible effect, not just upon pensioners, but upon everybody else. The Government are right to say that people are hurt by inflation and the Secretary of State was right to talk about the fear of inflation. But sometimes they say insufficient about the fear of unemployment. I represent an area where one employment office has 15,000 people now registered as unemployed and only 99 jobs vacant. The fear of unemployment must be taken into the Government's calculations. Fear of unemployment particularly worries people in their mid-50s who are nearing retirement. If they become redundant, the future is extremely bleak. Therefore, while the fear of inflation is important, so too is the fear of unemployment.
  The Secretary of State said that this measure does not reflect inflation between May 1982 and May 1983. That is not correct. It actually reflects inflation at May 1982. Inflation may now be running at 4 per cent., but by the time these proposals are implemented in November it may well be 6 per cent. according to the Chancellor's own figures. There will then be a gap, despite what the Secretary of State said. Indeed, the Chancellor has made it clear that there will be a gap.
  One need only look at what has happened to the unified housing benefit to see that a gap can occur.
  Mr. Rossi: I think that the hon. Gentleman misunderstood my right hon. Friend. My right hon. Friend
  840
  meant to say that if inflation in November was higher than the rate of inflation in May, that gap would be caught up automatically in the next uprating. That must occur under the historic method, but it could not happen under the forecasting method unless a specific adjustment was made. In this way, the gap is automatically closed year in, year out.
  Mr. Alton: Had the right hon. Gentleman been sincere in what he said, he would have ensured that clause 1 would enable the rate of inflation in the month of the implementation of the Bill to be taken into account. Instead, the words used are
  "in the month of June in each year".
  Mr. Mike Thomas: Does my hon. Friend recall that in his evidence to the Select Committee the Minister said that the Labour Government
  "found that the historical basis was so out of date that the pensioners and other people were losing out"?
  Mr. Alton: That is exactly what was said, and no doubt the Minister will deal with that point when he replies.
  The gap to which I have just referred is illustrated by clause 5, which deals with the unified housing benefit. When we debated this matter last summer, we were promised that it would be implemented on time. That is exactly what happened for council tenants last November. However, last Monday—the day on which private tenants were supposed to come into the scheme—about one third of private tenants did not get the benefit to which they were entitled. That figure was given by the Minister in a debate just before Easter.
  In places such as Liverpool, Leeds and the Wirral, people have not received the benefits to which they are entitled. In my own city of Liverpool, 14,000 should have qualified, although by last Monday only 7,000 had received the money. It could be late into the summer before everyone receives what he is entitled to.
  Mr. Joseph Dean: The hon. Gentleman may like to know that only last weekend a local councillor in my constituency dealt with the proposed eviction of someone who had not received the money on time, as a result of which the private landlord was taking action.
  Mr. Alton: Last July, when we debated the unified housing benefit, that is exactly the point I made in a series of interventions. Along with other hon. Members, I warned that people could be taken to court and could be evicted as a result of the Bill because a gap was allowed to occur—the very thing that hon. Members have highlighted today.
  The Bill is another in a long line of measures aimed at the most vulnerable and weakest in our society. The Government's record over the past four years makes pretty miserable reading. In 1980 they broke the link between rises in pensions and long-term benefits and increases in wages, where those had been higher than prices. In the same year, they cut the value of unemployment and invalidity benefits by 5 per cent., and only in November will that 5 per cent. cut in unemployment benefit be made good.
  In 1982, as a result of the unified housing benefit, about 2 million people were made worse off, probably to the tune of 75p a week, including 850,000 pensioners. A third of would-be claimants coming in under the private tenants' provisions were not brought into the scheme last Monday

  841
  because of the gap to which I have referred. In 1982, the Government also introduced a new index for supplementary benefits as part of the change to housing benefit, which meant that supplementary benefit went up by ½ per cent. less than other benefits last November. In 1980, they abolished the earnings-related supplement for unemployment benefit and held down the earnings rule limit for pensioners, despite their manifesto pledge, referred to by the hon. Member for Lincoln, to abolish it. In 1981, they imposed a 1 per cent. clawback of a small bonus which beneficiaries obtained in 1980 when the Government miscalculated inflation.
  All in all, savings made by the Government at the expense of the worst-off members of our community come to more than £2 billion. They affect millions of people such as one-parent and unemployed families, the sick and disabled, pensioners and the homeless—the most vulnerable and weakest groups.
  As the director of Age Concern England has said, throughout the past six months, the Government have been playing a cat and mouse game with pensioners and others. Last November, the Chancellor announced that he intended to make an adjustment to pensions and other benefits to make up for his error in estimating inflation. That decision was rightly attacked, not just by pressure groups and Opposition Members, but by more than a dozen Conservative Members. Therefore, instead of a clawback, the Chancellor or his civil servants have come up with a new way of calculating inflation for the purpose of uprating pensions and benefits.
  It is astonishing that the Secretary of State should brazenly try to pretend that no clawback is in operation. For six months, he, the Prime Minister and the Chancellor have announced that pensioners will keep their windfall increase. The reality of life for the poor is that under this Government any increase is a windfall. The Government certainly do not believe in deliberate acts of generosity.
  In fact, pensioners will keep their modest bonus only until the next uprating day in November. Pensions will then go up by 4 per cent. when, if the Chancellor's figures are anything to go by, prices will be rising by 6 per cent. Therefore, pensioners will more or less be back to where they were last November, before they received their small bonus.
  It is good to see that at least one Conservative Member has seen through what the Government are seeking to do. Speaking in the debate on the Budget, the hon. Member for Macclesfield (Mr. Winterton) said:
  "does not it appear to ordinary men and women in the street that it could be a way of obtaining the clawback that the Treasury sought to achieve, and that it is a devious way of doing so?"—[Official Report, 17 March 1983; Vol. 39, c. 358.]
  The hon. Gentleman is quite right. The Government's trick will be seen through by the British people in the months to come.
  During the same debate, my hon. Friend the Member for Truro (Mr. Penhaligon) pointed out that the fiddle being perpetrated today is matched only by the fiddle perpetrated by the Labour Government in 1976. They then changed the system to rob pensioners and others of £500 million. That was "dishonourable", as the then Secretary of State remarked in her diary entry for 14 December 1975. I suspect that after today's debate even more copies of those diaries will be sold. They have been mentioned often enough. Today's fiddle is no less dishonourable for saving only one third of that amount.
  Mr. Frank Field: Although the hon. Gentleman is right to draw attention to the action of the last Labour Government—I hope that no Labour Member will try to excuse it—
  Mr. Peter Bottomley: No one else is present.
  Mr. Field: Once again, the hon. Gentleman's sight is failing him. While no Labour Member should try to excuse that action, should it not be set in its proper context? In 1974, pensioners received the largest ever real increase in pensions since 1948. That does not excuse what the Labour Government did, but their record is slightly different from the record that we are debating today.
  Mr. Alton: The hon. Member's own record on these matters is above criticism. However, as hon. Members on both sides have already said, the same Government were responsible for the stingy act of stopping the pensioners' Christmas bonus as well. That being so, no one in the House has anything to be proud of. It is pointless for us to snipe at one another about these things. Instead, we should consider where we could go from here.
  I do not think that we should follow the plan outlined in Labour's emergency programme of action. In a report in The Times of 6 April 1983, Anthony Bevins examined the Labour party's 12-point plan. He said:
  "When Mr. Michael Foot revealed Labour's 12-point plan for pensioners last month, a pledge that nine million voters would be given their rightful share in the country's future prosperity, the package was described by some jubilant campaigners as the jewel in Labour's crown.
  Since then, however, it would appear that Mr. Peter Shore and his shadow Treasury team have devoted a good deal of energy to the tortuous task of replacing the jewel with a costume gem of some inferior paste."
  Mr. Bevins said that the proposals receive hardly a mention in the latest document. The suggested costings range between £5 billion and £30 billion. If Labour are not to be accused again of pork barrel politics, some clarification will be required before the next general election.
  Pensioners will not particularly benefit from falling mortgage rates or inflation. Only 2 per cent.—one in 50—have mortgages. There are also pensioners who will suffer from the local differences that some local authorities are encouraging. For instance, Sheffield is considering concessionary TV licences for pensioners. I approve of that, but if it is not done on a blanket basis throughout the country it will increase differentials between pensioners still further.
  This week I received a letter from the Rev. Roger Roberts of Conway. Describing the problems in Gwynedd, he said that four out of five of the district councils in that area have a half-fare pass scheme, but that his district council does not. On Merseyside, Sefton district council, which had been refusing to introduce a concessionary fares scheme only recently joined a county-wide scheme.
  There has been too much reliance on grace and favour, and too much of a patchwork quilt approach. Another example is the way in which we deal with pensioners living in hostels for the aged. I raised this matter in a debate on elderly people, which I initiated in February during the Consolidated Fund debate. I asked the Minister whether he would investigate the fact that some local authorities do not provide incontinence pads for those in hostels run by voluntary organisations, thus costing those organisations hundreds of pounds a months. After the

  843
  debate I wrote to the Minister and received a most unsatisfactory reply. I sent the reply to the new director of social services in Liverpool, and he refuted many of the points made in it. I hope, therefore, that when I write further to the Minister he will give my letter proper consideration and will realise that the memorandum of guidance which is circulated is contradictory and applies differently in different parts of the country. The same is true of the local housing programmes. Some local authorities provide adequate sheltered accommodation, and others do not. All those matters should receive the attention of any Government. They are important factors in the general treatment of pensioners. If pensioners are to be treated fairly it must be done on the basis of a national plan. The present piecemeal approach is highly unsatisfactory.
  Mrs. Knight: I have followed the hon. Gentleman's argument with great interest. Does he not recognise that some people over pensionable age are, happily, in a better financial position than others? If blanket provision is made for everyone over pensionable age, a considerable amount of taxpayers' money will go to those who do not need help. It may be better to give the limited amount of taxpayers' money that is available to those who really need it rather than to some who can quite well manage without it.
  Mr. Alton: My point is that at present these problems are tackled in an arbitrary way, with a patchwork quilt effect. Some of those who are better off receive more than others. There is a much higher concentration of elderly people in some areas than in others, but that is not reflected adequately in the rate support grant settlement or the housing investment programme, or indeed in the Bill. During the Budget debate my hon. Friend the Member for Colne Valley (Mr. Wainwright) and my right hon. Friend the Member for Glasgow, Hillhead (Mr. Jenkins) made it clear that an alliance Government would introduce full index-linking of pensions and other benefits. They would work towards integrating the tax and benefit systems to ensure that the millions who are now in, or close to, poverty would be given adequate incomes. The Bill fails to do that, and we shall therefore oppose it tonight.
  6.25 pm
  Mr. Geoffrey Dickens: I am always amused by debates such as this because the very Opposition Members who sit around the table with me in the all-party pensioners group always give the impression that they are the pensioners' friends and that we are the big bad wolf who does not care. They fail to mention their own dismal record, but they recognise that the population of the United Kingdom is an aging one and that pensioners represent a lot of votes.
  Old-age pensioners do not suffer from senile dementia. They have brains of their own. I would like to tell the House a secret. When a funeral goes past, we think to ourselves "There goes another paid-up member of the Conservative party". Elderly people have the wisdom of years, and they realise that the principles of the Conservative party made this country great. I say that with no disrespect. It is also said that elderly ladies form the backbone of the Conservative party. Long may it be so.
  If I had my way, I would force an inquiry into the provision of benefits. I would dispense with rent rebates,
  844
  rate rebates, free teeth, eye treatment, glasses, prescriptions, bus passes and television concessions. I would pay the pensioners a very good pension and let them decide how to spend the money. I would dispense with the thousands of people sitting in plush offices all over the country, with inflation-proof pensions and secretarial aids, who pay back to the pensioners the money they could have had in the first place but which they have to tell somebody all their business in order to get. In the long term, we should seriously consider the welfare state system and do some studies, because there might be a much better way of doing the job than any party has yet suggested.
  We have heard earlier about the forecasting system under the Labour Government. I refer to page 595 of Barbara Castle's diary—a page that has not yet been mentioned. Barbara Castle freely confessed that by changing to the forecasting system she gained £500 million. We also know that, in five years out of seven, the forecasts were wrong. In 1978 the forecast was low by 1·9 per cent.; in 1980 it was high by 1 per cent.; in 1981 it was low by 2 per cent.; and in 1982 it was high by 2·7 per cent. When Mrs. Castle made the change, pensioners were worse off by about 6 per cent. Allowing for correction of the overshoot of 2·7 per cent. would have produced an increase of 3·3 per cent., but we are going further. We believe that the increase will be about 4·5 per cent. The new system will take account of figures from May to May and is different from what we had in the past.
  We must deny the wicked nonsense that we have heard this afternoon. There will be no clawback of money. Pensioners need not be afraid because nobody will take money back from them. Indeed, we will give them much more. We must spell that out. The pensioners to whom I speak realise that they are not too badly off. Many of them think that those who are worst off are young couples with very young children. Some Government had to get to grips with inflation. If the Tory Government had not, where would we have ended up? As inflation stands now, people's savings are worth much more. People who had made provision for their old age did not know where they stood under the Labour Government when there was raging inflation. People who retired, thinking they had enough put by, found that their savings did not last. Some who felt they had made enough provision for their old age are depending on the social security system. This would never have happened if inflation had been properly controlled, as we have done since we took office.
  Let us hope that inflation will soon come down to zero. We must achieve zero inflation. Then when people save money it will keep its value. How many people who have taken out insurance policies for their old age have found that when the policies matured they were hardly worth the paper they were written on because of inflation? Very many. We must make people's savings worth what they thought they would be when they took out the policies.
  Let us deal with the truth. We have heard many misleading statements. As a Government we have protected and increased pensions. That was a pledge we made in our manifesto and which we maintained. Pensions have risen faster than the retail price and pensioners' price indices in the four years to November 1982. These are facts. Pensioners' top-up supplementary benefits have been raised ahead of prices. The Christmas bonus that we introduced was removed by the grasping Labour Government in 1975 and 1976. We still pay the bonus and

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  I think we always will. It is very important to a married couple to get that £20 at Christmas. I hope in the fullness of time we shall be able to raise the amount.
  The earnings rule limit has been raised from £51 to £57 per week. That was not unimportant to pensioners. The Conservative Government pay the basic heating addition automatically if people are on supplementary benefit, are over 70 or have a child under 5. Heating additions have been increased. In 1979 when we came to office the basic addition was a mere 95p. In November 1982 it was £1·90. The higher rates of £ 1·90 and £2·85 in 1979 were increased to £4·65 in November 1982. That is not bad.
  As a Government we are spending £325 million on supplementary benefit heating additions. That is more than any other Government have spent. I can see glee on the faces of hon. Members of the Liberal party and the SDP, but I remind them that if Lloyd George were alive today he would be sitting next to me. In passing, it is worth telling the House why. Hon. Members should remember the words of Lloyd George. I recall, too, the Lib-Lab pact and remind hon. Members that the Liberals have associated themselves with the Socialist rejects in the SDP. David Lloyd George said:
  "Socialism is like the sands of the desert; it gets into your eyes, nose, hair and the very air you breathe … It is all gritty with rules, regulations, orders and decrees. That is Socialism."
  Liberal Members should forget their cosy arrangement with the Socialist party and should stop attacking us. They should try to help pensioners.
  Let us move back to the subject of the debate. The gas and electricity industries have agreed that standing charges should be limited to not more than 50 per cent. of anyone's bill. It may surprise the House to learn that 1 million gas users and 2 million electricity users benefit from that. It may also surprise the House to learn that 50 per cent. of those 3 million are pensioners. So Opposition Members should not underestimate what we are doing.
  Mr. Thomas Cox: The hon. Gentleman should go and meet them.
  Mr. Dickens: I meet the pensioners. The hon. Gentleman should come to my surgery on a Friday evening. It is packed with pensioners and they get help.
  Mr. Cox: The hon. Gentleman is always interesting to listen to. He has outlined the great benefits that he says retired people have received under the Conservative Government, and I know he attends the meetings of the all-party pensioners' group. Why is it that pensioners come here when they can to put forward the need for substantial increases in all the benefits that he is saying they are doing so well on?
  Mr. Dickens: I do not profess that we are doing everything possible for pensioners—no party ever has—but we have been very fair to pensioners. We have looked after them by ensuring that pensions keep ahead of prices and inflation, as we promised. We cannot do more than that. There are many other demands.
  I have been asked why pensioners come to Westminster to lobby us. Thousands of different organisations come to Westminster to lobby Members of Parliament. They make their claim, particularly near Budget time, and they are right to do so, but we are the custodians of taxpayers' money. If we pay more for any benefit or anything in the welfare state than the nation can afford, someone has to
  846
  pick up the bill. We must always remember that. It is a responsible Government who keep their hand tightly on the purse strings.
  Benefits for the disabled have increased more than prices. Expenditure on the disabled is 9 per cent. higher in real terms under this Government than under the Labour Government.
  I have spent most of my time tonight defending the Government. Having listened to the attacks and to the myths put forward by the Opposition, I thought it deplorable that pensioners should be used in this way. People such as Airey Neave, whose memorial plaque is above the Chamber door, introduced pensions for the over 80-year-olds. We have been challenged about what happened in the 1970s, but we introduced six-month reviews whereas the Labour Government reviewed pensions only every year. We can be proud of our pensions record.
  I have enjoyed the debate, but I cannot tolerate the Opposition's myths. We care about pensioners, we are fair to them and, what is more, the pensioners know it.
  6.40 pm
  Mr. Joseph Dean: The Bill's provisions are narrow, but some speeches today have ranged wide. The hon. Member for Huddersfield, West (Mr. Dickens) confused me because I thought that he suggested that family planning and birth control were being provided for old-age pensioners. The Bill is not about general benefits or about free or concessionary bus fares. It was not a Conservative Government who first allowed local authorities to introduce concessionary fares. A Labour Government did that.
  I regret that the hon. Member for Lincoln (Mr. Carlisle) compared the conditions in France, run by a Socialist Government, with the conditions here under a Tory Government. The Socialist Government in France are grappling with adverse economic conditions, but the industrial performance in France is far better than it is here. The hon. Member for Lincoln spoke about realistic manifestos and keeping faith with the electorate. I do not remember the Prime Minister promising the electorate, when she was Leader of the Opposition, that 3½ million people would be out of work under her Government. She promised to reduce unemployment and she has created an adverse "benefit" that nobody wants and nobody expected.
  The Bill alters parts of previous legislation. Some of us predicted that the previous measure would be almost unworkable and poor because of the effect that it would have on the people whom it was supposed to benefit.
  The hon. Member for Liverpool, Edge Hill (Mr. Alton) mentioned a problem that has reared its head recently and that I am sure other hon. Members will have encountered. On Saturday I received a telephone call from a local councillor who wanted advice about an eviction case involving a private landlord. The tenant had not received his financial entitlement under legislation and as a result the landlord took action. That is one aspect that the Minister must keep under observation. The Bill deals with council house tenants, but I have yet to meet a tenant who knows how unified benefit applies to them. The scheme is confusing. Under present legislation people do not receive the benefits to which they are entitled and this Bill is even more debilitating. Some people are losing out.
  Leeds is the second biggest city outside London with about 100,000 properties under local authority control. I

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  hope that the Minister can give a copper-bottomed guarantee that any increase in inflation will be catered for as soon as possible.
  I calculate that over 40 per cent. of families in council property receive some kind of assistance. I predict that that percentage will increase. It has already increased because rents have gone up in the past three years by 120 per cent. As a result, more people need help. Many unemployed people are council house tenants who have to fall back on rent rebates or social security payments. For many people social security payments are better.
  The Chancellor of the Exchequer has said that he expects inflation to increase by the autumn. In the run-up to a general election a Chancellor would not say in the House that he expects inflation to rise unless he was convinced of it. He would not overstate an adverse case when preparing for a general election. Perhaps the Chancellor's prediction is conservative. If he is wrong, it will be because his assessment is too low. Factors are emerging, internationally and nationally, that will prevent inflation being kept as low as it is and which may escalate it dramatically.
  Let us remember the behaviour of petrol companies in the past few weeks. They cannot put 14 per cent. on a gallon of petrol without that showing in the cost of living index in the next few weeks. Whenever the price of oil by the barrel is reduced it is the signal for the petrol companies here to increase the price. As was said in the House on Monday, the whole issue is a contradiction. I always believed that a reduction in the price of a raw material should lead to a reduction in the cost of the finished product. The opposite seems to be true of oil.
  The prices of petrol and other commodities affect the cost of living index and have a dramatic effect because they go across the board, covering delivery of merchandise and even travel to work. Most people do not have a car for luxury these days but because it is necessary. People often have to travel too far to find a job or to go to work to use a bike, as suggested by the Secretary of State for Employment.
  Mr. Alton: Does the hon. Gentleman agree that the people who will suffer most from any increase in inflation will inevitably be the poorest—the elderly people who will have massive heating bills because they have to stay at home? That is why many of the figures bandied about earlier by the Secretary of State are wrong.
  Mr. Dean: The hon. Gentleman is correct. The priority should be to help the elderly. People are living longer because of the advances in medical science, and that process will increase. In five or 10 years' time we shall be faced with a big increase in the numbers of elderly and retired people who will need care from society. This type of measure will act against them.
  Unless the Minister can give an undertaking that if there is a substantial increase in the cost of living while the Bill is on the statute book benefits will be raised, 50,000 families in Leeds will lose substantial amounts of money, that they can ill afford to lose, within the next few months. People who pay the full rent to local authorities are not affected by these proposals. Private sector tenants and owner-occupiers are also involved. A short while ago, the Government said that one of their successes was the reduction in mortgage rates. We are hearing noises now
  848
  from those who run the building societies—a type of early warning—that they cannot hold the rate at the present level and there will be an increase shortly. Unemployed owner-occupiers will lose unless the Minister can give the undertaking.
  In Leeds, 50,000 families will be adversely affected financially unless the undertaking is given, and the same could probably be said for Liverpool, Sheffield and wherever people live in council houses. Private sector tenants and owner-occupiers at present receiving housing benefit will also be affected adversely unless the undertaking is given.
  The hon. Member for Lincoln said that the Government kept their promises. In 1980 the Government cut unemployment benefit and, under pressure from the Opposition and, to their credit, from many of their Back Benchers, they were forced to restore those cuts. Undertaking after undertaking was given but it has taken three years for them to be honoured. Has that anything to do with it being election year? The Labour party is being accused of making promises that it will not carry out. The 5 per cent. cut in unemployment benefit is being restored but for three years many people suffered and had money taken from them which they should have received.
  The hon. Member for Huddersfield, West talked about the hearse going along the road. Unless one deals justly with the problem of the elderly without delay some will go along the road in a hearse. People die, and they will die knowing that they have not had a fair deal from the Government. I hope that the House will support the amendment.
  Mr. Deputy Speaker (Mr. Paul Dean): Mr. McCrindle.
  Mr. Mike Thomas: On a point of order, Mr. Deputy Speaker. It may be an oversight, but it is surely not normal practice within the House that those who have listened to the debate from the outset should find themselves disadvantaged subsequently by those who have arrived suddenly and who have not heard any of the opening speeches and have played no serious part in the debate until presumably a Whip has fetched them from some other part of the House.
  Mr. Deputy Speaker: The hon. Member has been in the House long enough to know that the Chair has a difficult job calling speakers. We do our best and we have, perhaps, a more careful eye on the movements of hon. Members than those who come and go.
  Mr. Thomas: Further to that point of order, Mr. Deputy Speaker. You misunderstand my point. I have not come and gone. I have been present throughout the debate. Others have come and gone and some have simply come very late indeed.
  Mr. Deputy Speaker: I realise that the hon. Member has been here. I know that he is hoping to catch my eye. It would be better if he did not push his luck.
  6.55 pm
  Mr. R. A. McCrindle: I am not sure whether the hon. Member for Newcastle upon Tyne, East (Mr. Thomas) was seeking to refer to me because I had just been called. Although I have been in and out of the Chamber to attend to matters outside, I yield to no one in the number of occasions on which I have

  849
  contributed to debates on this subject, nor am I prepared to apologise to any other hon. Member for my continuing interest in the subject and dedication to pensioners.
  The hon. Member for Leeds, West (Mr. Dean) said that this was a comparatively simple Bill. We have listened to wide-ranging contributions. Although the hon. Gentleman said that his speech would not range widely, he moved into the, no doubt interesting, subject of petrol prices. I shall try to do better and make a rather less rumbustious speech than that of my hon. Friend the Member for Huddersfield, West (Mr. Dickens), possibly a less erudite speech than that of the Secretary of State, a less wide-ranging speech than that of my hon. Friend the Member for Birmingham, Edgbaston (Mrs. Knight), but conceivably a speech which directs its attention to the relatively simple matter to which we are asked to address ourselves.
  The purpose of the Bill is no more and no less than to revert to the historic method of uprating pensions and national insurance benefits. We are not introducing some Machiavellian device. We are simply reverting to a system that prevailed for a considerable time until it was changed in 1976. I do not underestimate the importance of the Bill or its controversial nature. In election year it is probably inevitable that a great deal of party controversy, which in an ideal world we could do without, will revolve around the detail of the Bill.
  Conceding that it is an important and controversial Bill, I do not see why it should be thought to be so much more controversial now to change back to a system which has been hallowed by time than it was to change the system in 1976. I want to acquit Mrs. Barbara Castle of all the motives which have been suggested as the reasons for the action that was taken when it was taken by the previous Labour Government and to look at the background of what has happened since the introduction of the present forecasting method.
  In 1976, the Labour Government changed from the historic basis, under which increases are based on actual price increases, to the forecasting method whereby benefits are based on the estimated rise in prices or earnings. We have now been using the second system sufficiently long to be able to form a judgment upon it. Try as I may to be charitable, it is an undeniable fact that since 1976 there has been a succession of inaccurate forecasts. As a result there has been among pensioners and other beneficiaries some bewilderment and confusion about what they could expect on the next uprating, which I cannot believe was intended to be or should have been part of the change of system.
  As I mentioned earlier in an intervention, the fact is that out of the seven years during which the system has applied we have got it right on only two occasions. I do not know what high marks are in the opinion of other hon. Members, but a system that has got it wrong in five out of seven years does not merit high marks from me.
  Therefore, I am prepared to agree with the proposal enshrined in the Bill. When we talk about paying the pensioners too much or an increase that turns out to be too high, we run the risk of being misunderstood outside the House. In all conscience, most of us would like to give the pensioners a better deal than successive Governments have given them over the years. However, on the basis of the system introduced in 1976 there has been, to use a more neutral word—although one that I equally dislike—an overshoot here and an undershoot there. Therefore, it is
  850
  surely right to examine whether we have been as successful with the new system as those who introduced it hoped we would.
  I have reached the conclusion that it has become increasingly difficult to defend the system. What is more, I am struck by the fact that since the Government stated in the Budget that they intended to move back to the former system there has been comparatively little criticism outside the House. I am on the mailing list, as I suspect many other hon. Members are, of a sizeable number of charities, many of which look after the aged. I am not suggesting that they have welcomed the system with open arms, but I am struck by the number that appear to be prepared to welcome the return of the former system in principle, although, not surprisingly, they go on to express some regret about the timing of the introduction. It is the easiest thing in the world to say that it is the right system to introduce, but the wrong time to introduce it. It is when we ask people who make those observations what would be the right time to introduce it that we are frequently greeted by a deafening silence.
  Not just hon. Members have criticised the present method of calculating upratings. Many people feel that we are not sufficiently concerned about pensioners who do not know where they stand in relation to a forecasting system. In short, the present system has few admirers. As the House has been reminded, even the Select Committee on Social Services was moved to say that the system was far from perfect.
  We now have a massive opportunity to move to a system that is more comprehensible to the recipients and not necessarily less fair in the long term than the system of forecasting and which, leaving aside the fair point about the right time to introduce the system, is likely to be a far better way of doing things than the way in which we have been doing them since 1976.
  Mr. Field: I agree with the hon. Gentleman's argument. Does he accept that, if we want to agree about the change, that is a greater reason why there should be no clawback in the changeover?
  Mr. McCrindle: This is not the usual excuse. Shortly I shall come to what is emotively called the clawback. I promise the hon. Gentleman that I shall not forget his point. We have to face up to that matter if we are recommending the change back to the historic system.
  First, I should like to outline a few thoughts about the link with average earnings, which was the basis of the system that applied hitherto. The House will remember that the National Insurance Act 1974 linked national insurance pensions and other long-term benefits to the movements of prices or earnings, whichever was more favourable. The arguments have been rehearsed too frequently for me to wish to weary hon. Members by repeating them. I think that most hon. Members will concede that the earnings link was proved to be too expensive in the economic circumstances that confronted both the Labour Government and the present Conservative Government. Therefore, there was a movement towards relating the increases in pensions to prices only.
  The abolition of the earnings link, although there was much emotion and controversy when it was put through the House as the Social Security (No. 2) Act 1980, is now seen as a method of simplifying the structure of our system. There will be years when the pensioners would have done

  851
  better if the increases had been related to earnings rather than to prices. One has to concede that. But I wonder whether hon. Members will agree with me that, thanks to the simplicity that a system such as as the one that we are discussing should bring to pensions and the relief of anxiety that may result among elderly people, it will be seen in retrospect to have been a better move than some people conceded when we introduced the change in the Social Security (No. 2) Act 1980.
  Mr. Mike Thomas: I am having a little difficulty in following the hon. Gentleman's argument. I understand that the Labour Government did not suggest that they would remove the earnings link after the 1979 election nor did the Conservative party in its manifesto pledge itself to removing the earnings link. The only certainly that the removal of the earnings link has given to the pensioner is that pensioners' standards of living will not rise in line with those of everyone else in the community.
  Mr. McCrindle: I shall come to the relationship between the standard of living of the pensioner and that of the rest of us. I shall deal with the hon. Gentleman's specific points because, unlike other hon. Members, I prefer to answer interventions.
  I am not suggesting that the Labour Government said that they would take such a line. The hon. Gentleman was correct to assume that. Nor am I saying that one would find it written in bold letters in the 1979 Conservative manifesto. Uncharacteristically, the hon. Gentleman is perhaps missing what I felt was a basic argument. In return for what many people saw as the sacrifice of the earnings link, we now have in the Bill simplicity and ability to understand what will happen, on the part of the pensioners, which may be a gain rather than the loss that many of us were told would be the result of implementing the Social Security (No. 2) Act 1980.
  Mr. Mike Thomas rose—
  Mr. McCrindle: I know that the hon. Gentleman wishes to catch your eye, Mr. Deputy Speaker. Perhaps it would be better if I were to finish my speech in a reasonable time rather than let the hon. Gentleman make his point now. I contend that the abolition of the earnings link, which is not part of the Bill but which it is not possible entirely to escape from, has in retrospect proved to be a perfectly sensible and overdue measure.
  I deal now with the point about relating the increase in retirement pensions to the increase in earnings. I shall be making a prediction shortly, but between November 1978 and November 1982 retirement pensions rose by 68·5 per cent. I apologise if I am boring the House by repetition, but that is important. That figure was not only significantly higher than the rise in prices in the same period of 61 per cent. but slightly higher than the rise in average earnings of 68·3 per cent. I do not claim that a 0·2 per cent. increase in pensions above that of average earnings is a major achievement. However, I do contend that when the undertaking was given, in the Conservative election manifesto to which the hon. Member for Newcastle upon Tyne, East (Mr. Thomas) referred, that the Government would at least maintain the position of pensioners vis-a-vis others who were earning, they have done that without the automatic tie to either earnings or prices to which I have referred.
  Mr. Mike Thomas: That is only because—the hon. Gentleman now confesses the fact which his Front Bench colleagues perhaps wisely did not dare to do—the economic performance of this Government has been so abysmal that wages have risen only minimally. If there was any real expansion in the country, the pensioners would immediately fall behind.
  Mr. McCrindle: It is tempting to follow the hon. Member down a line which may have something to do with the Bill but which really is a red herring. I prefer instead to revert to the proposals in the Bill. The uprating statement will be issued in June and it will be based on a review of the general level of prices for the 12 months ending 31 May. The Bill guarantees that benefits will rise by an amount equivalent to the rise in prices during that period.
  I wish to compare the two systems which, rightly, have been at the heart of this debate, and about which there has been some confusion and some deliberate misunderstanding. Pensioners will be paid more this November than would have been the case if the Government had stuck to the forecasting method with adjustment. The words "with adjustment" have not, surprisingly, been challenged. I have no hesitation in repeating what I have just said. Pensioners will be paid more this November than would have been the case if the Government had stuck to the forecasting method with adjustment.
  It is thought probable that in November the 12-month inflation rate will be about 6 per cent. Under the existing forecasting method, there was an overshoot of 2·7 per cent. last year. If that overshoot had been taken into account, pensioners would have been entitled to receive an increase of only 3·3 per cent. On the new basis, however, pensioners stand to gain a rise of about 4·5 per cent.
  I appreciate that it is possible to do almost anything with statistics, but these are factual statements and, provided that the two words to which I have made reference are included, they are not challengeable. I notice they have not been challenged by the Opposition. Pensioners will thus still be better off under the proposed change, whereas the change made during Mrs. Castle's period of office in 1976 left them about 6 per cent. worse off.
  I find the Labour party's approach to this problem difficult to understand. If the Opposition's amendment were to be carried, the forecasting basis introduced in 1976 would remain. If that is correct, the amendment has been moved on the supposition that the pensioners would therefore be better off. That is the case only if hon. Members presuppose that there will be no clawback. If the forecasting system remains the clawback system is entitled to be used. That is a matter for the Government. If the proposition put forward by the Opposition and the amendment they moved were carried, the result would not necessarily be that which they have suggested to the House.
  I turn to the Government's treatment of pensioners. I listened to the extravagant remarks of my hon. Friend the Member for Huddersfield, West. I endorse them to the extent that the Opposition's assumption that all compassion for the pensioners and concern for their welfare reposes solely on the Opposition Benches is not only untrue but positively offensive to those hon. Members who have spent a long time pressing the

  853
  Government, frequently against their wishes, to do the best they can in the economic circumstances that prevailed. My considered judgment is that, looking back on the past four years, the Government have discharged their undertaking well. I am convinced that they will continue to do so. Accordingly, I recommend the Bill to the House.
  7.17 pm
  Mr. Frank Field: I am pleased to speak after the hon. Member for Brentwood and Ongar (Mr. McCrindle). If I say that his speech would have been a fitting contribution from the Secretary of State, I trust that that will in no way damage his prospects. I am sorry that the Secretary of State was not present in the Chamber to learn from the hon. Gentleman.
  I wish to comment on one issue raised by the hon. Member for Huddersfield, West (Mr. Dickens) in the grand tour upon which he took hon. Members.
  Mr. Barry Sheerman: Where is he?
  Mr. Field: My hon. Friend asks where he is. I dare say he has gone to talk to Lloyd George and have a bevy with him. The hon. Member for Huddersfield, West said that the Government had to choose, and he listed his priorities. He listed the group in the greatest need as being families with children. One rarely hears in the Chamber or outside when hon. Members are debating the needs of pensioners anybody brave enough to put families with children before pensioners. I was pleased that he did so.
  The Secretary of State for Social Services, in a poor speech, reviewed some of the good things that the Government have done. As this is the first opportunity I have had in the House to comment on some of those measures, I shall comment in the way that he did. I believe that the change that the Government are making which will spring people from the invalidity trap is a welcome move. The Government have every right to try to claim whatever credit they can for that.
  Hon. Members will know that about 100,000 of our constituents who draw invalidity benefits can never qualify for the long-term supplementary benefit rate because the invalidity payments disqualify them from claiming the ordinary or short-term supplementary benefit rate and thereby qualify for the long-term rate. The measure the Government are bringing forward on this point is to allow beneficiaries to qualify for the long-term rate, and this will make a substantial difference to their income. I welcome that.
  The Secretary of State commented on the Government's record on child benefits. The Government have every right to claim that child benefit will be increased in real terms. When examining some of the other policies the Government have pursued, my fear was that not only would child benefit be frozen in money terms but the scheme might have been dismantled. Credit is due to those on the Government Benches and those elsewhere in the Conservative party who fought for its maintenance and the real increase.
  However, before they get carried away like the Secretary of State and claim too much, they should put the matter into a longer term perspective. It is true that child benefit will be increased in real terms at the next uprating. However, it is important to realise that when child benefit
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  was introduced, the previous Labour Government injected £1·5 billion into the scheme. The Government are therefore, making a real increase on that substantial base. Historically, the level of child support has been based on the value of child tax allowances in the old family allowance system. Child benefit needs to be increased to £9 or £10 per week per child to return to the real value of family support in the 1950s. The Government can claim some credit on child benefit, but there is a long way to go before they can claim that the system is generous and adequate.
  The Secretary of State claimed two other successes for the Government. One was that the Government were to stop beating the unemployed and would repay them the 5 per cent. reduction in their benefit which should never have been made in the first place. If that is thought to be to their credit, the Government are welcome to it. The Government also claim that tax thresholds have been increased in real terms. This is a particularly important issue for the low-paid. I accept that they have been increased in real terms provided that one does not begin the calculation at the commencement of this Parliament. Every one of our constituents earning less than five times average earnings pays more in tax under this Government than they did under the previous Government. When there are a few things that the Government can claim as real achievements, it is a pity that they should soil their record by raising issues for which they can claim no credit.
  Like the hon. Member for Brentwood and Ongar, I wish to direct my remarks to the Bill. I welcome the return to the historic basis for increasing benefits. I do not, however, do so for the reason put forward by the hon. Gentleman, that somehow pensioners and other beneficiaries will understand what we are doing only if we use the historic basis. Hon. Members should not underestimate the intelligence of their constituents. That argument was used against one of the Budgets of the previous Labour Government. The then Chancellor of the Exchequer offered wage earners more substantial increases in tax thresholds if they would accept lower wage increases. Many hon. Members on both sides of the House said that their constituents would never understand what the hell was being offered them. The Gallup poll showed that the Chancellor of the Exchequer had to make only two broadcasts before most of our constituents understood what a good deal he was offering. We should not advocate this change therefore on the basis that we represent large numbers of zombies. Our constituents are well able to understand the situation.
  My reason for supporting such a change in principle is that, providing one uses the right period for the calculation, one can get it right. I say "right" slightly hesitantly because some of my right hon. Friends who are not in the Chamber now said that it was impossible to get it right. Yet if one has all the information from the retail price index, I cannot see that it is impossible for someone to add up the index each month and to come to the correct conclusion. The change can offer certainty in calculating correctly the increase in benefit rates.
  The hon. Member for Brentwood and Ongar said that the change is so important that we should try to gain all-party support for it. I agree with that. However, we shall only win all-party support for this move if everybody believes that the change is above board and that there is no hidden or not so hidden clawbacks. The charge made by the Opposition concerns the fact that there was an

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  overshoot in last year's calculation. Inflation fell more sharply than the Government had anticipated. As a result of the way in which the Government are calculating for the first time on an historic basis, there will be a clawback of almost 2 per cent. When the Government are making a move that should command the full support of the House, it is a pity that they should wish to mar their case for something less than £200 million.
  So I support the return to the historic method provided that two conditions are fulfilled. First, that nobody this year should be made any worse off than they thought they would be. Clearly many pensioners will feel that they have been cheated, as, indeed, they will be unless the Government agree to the proposal of my hon. Friend the Member for Pontypridd (Mr. John). The second proviso is that we move from a 12-month period of reviewing benefits if inflation begins to rise appreciably.
  I return to the point made by my hon. Friend the Member for Pontypridd. A very good time to make this change would have been when the whole benefit system had been computerised so that benefits could be reviewed quickly if the Government's policy on containing inflation had become less successful than they had anticipated.
  To sum up, the change to the historic method is a good move, yet if we make this change we should not make anyone worse off. At present that condition is not being fulfilled. In addition, if we move into a period of rising prices once again, hon. Members on both sides should push hard to obtain a six-monthly increase in pensions instead of the present 12-monthly review.
  Let us examine the Government's priorities. Earlier, I said that the Government would save less than £200 million from the clawback. Some people will say that this is a large sum. I wish to remind the House and the country of one other aspect of the Government's record. In their first Budget in 1979 tax cuts were given to the higher rate taxpayers, or to what most of us would call the surtax payers, amounting to £1,590 million. That involved 4 per cent. of the population. Over £1·5 billion was shovelled into the pockets of the very rich. Those tax cuts will continue each year until the Government reverse that policy. The very rich in our society have therefore received £6 billion in tax cuts. The Government have introduced a measure to save £200 million from pensioners. However, hon. Members should consider how this shows up the Government's priorities. During the life of this Parliament £6 billion can be found for the very fat cats in our society while £200 million is to be clawed back from the pensioners. Roll on July.
  7.27 pm
  Mr. Michael Brown: It is a great privilege to follow the hon. Member for Birkenhead (Mr. Field). In a measured speech he criticised constructively the Government. I take his point that the change to the historic analysis for the purpose of estimating pension increases depends on an inflation rate that is continually moderate. However, I am sure that the Government and all Conservative Members recognise that the battle against inflation does not stop just because we have reached the magic figure of 5 or 6 per cent.; it goes on. Nevertheless, there would be cause for concern if there were any prospect of a rise in the rate of inflation in the longer term after November.
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  I hope that the hon. Gentleman, and indeed the House, will accept that inflation has been the Government's greatest concern and that its control is necessary if we are to improve the lot of pensioners and the unemployed. For us, inflation is public enemy number one. Nevertheless, what the hon. Gentleman says is valid if one considers the change to the system that is proposed in the Bill. Surely, in the light of the excellent speech that he made, the hon. Gentleman has a duty at least to abstain this evening. No doubt he will reach his own decision when the Division bell rings later.
  Mr. Field: I shall certainly not abstain. It is in the Government's hand not to force a vote tonight, because they can give an undertaking that pensioners will not be made worse off. What is important is that some Government Members, whichever party is in power, vote against their own Government when that Government are wrong. Tonight we hope that some Conservative Members will vote against the Government if, for example, we move to the new method, inflation takes off, and we are still saddled with a 12-month review.
  Mr. Brown: I note what the hon. Gentleman says.
  My right hon. and learned Friend the Chancellor of the Exchequer has publicly acknowledged that the rate of inflation in November will probably not follow the trend of the past three or four months. Nevertheless, the Government are entitled to be judged according to their record on inflation. If there were any sign that the Government intended to move away from their central theme of dealing with the problem of inflation, I would accept what the hon. Gentleman says. I note what he says about getting the timing right. It is a matter on which he took issue with one or two of his right hon. and hon. Friends this evening.
  We can spend time in comparing the record of the forecasting way of analysing future rises for pensions and the historic way of making a change. A number of hon. Gentlemen have done so. I agree with the statistics that have been produced by my hon. Friends. However, I shall not go down that road.
  This debate affords us the opportunity—hon. Members of all parties have taken it, and I shall, too—of considering the plight of pensioners generally and how well off they are after four years of this Government, compared with their position when previous Administrations left office, and the prospect for pensioners in the event of a change of Administration. It is perfectly right to consider the lot of pensioners generally on this occasion.
  I agree with my hon. Friend the Member for Brentwood and Ongar (Mr. McCrindle), who felt that the Government were entitled to say that, taking the election manifesto commitment of the Conservative party in 1979 as it affects pensioners today, they could be acquitted of the charge made by Opposition Members, and in particular by Labour Members, that we have let pensioners down. The hon. Member for Newcastle upon Tyne, East (Mr. Thomas) wanted to challenge my hon. Friend who said that not only had pensions been maintained, and indeed increased, when set against the general level of prices, but that—to some extent by coincidence, and perhaps to some extent by luck—the pension increases had kept roughly in line with the rise in earnings. The hon. Gentleman challenged that statement. Perhaps he would care to clarify that.
  Mr. Mike Thomas: As the hon. Gentleman asks me to clarify the matter, I shall do so. I did not challenge the figures, although I cannot speak for their accuracy. They sound about right. I said that that had taken place only because of the appalling economic performance of the Government, who have allowed wages to rise so little during the period. If we came out of the recession with a reasonable recovery in wages, the standard of living of pensioners would rapidly fall behind.
  Mr. Brown: I did not misunderstand the hon. Gentleman. The Chancellor of the Exchequer and all the independent forecasts that have been made by the CBI and industrial bodies say that people in work are much better off today compared with 1979, that the increase in wages has far outstripped the rise in prices, even with the economic difficulties of the past three or four years, and that there has been a real increase in the standard of living of people in work.
  Mr. Mike Thomas: Not a big one.
  Mr. Brown: The point has been made consistently by my right hon. and learned Friend the Chancellor of the Exchequer in his battles against inflation that there has not been sufficient productivity to match the increase in earnings and standard of living during the past three or four years. If the rate of increase of pensions has managed to keep pace with the increase of earnings, against that background, that is surely a credit to the Government.
  Mr. Mike Thomas: I am saying that one of the disadvantages of the present system is that if wages move ahead of prices substantially, because the Government have severed the earnings link, pensioners' standard of living will not rise in line with everyone else's.
  Mr. Brown: We are doing this point to death. What I say stands. The fact is that, over the past three or four years, people in work have had a rising standard of living, set against the general world economic recession and the problems of this country's economy. If pensions have matched that, it is a credit to the Government.
  Mr. Rooker: Before this dies—incidentally, I apologise for missing the speech of the hon. Member for Brentwood and Ongar (Mr. McCrindle)—perhaps I might blow a breath of life into it. If what the hon. Member for Brigg and Scunthorpe (Mr. Brown) says about the rise in earnings is correct, how is it that the Under-Secretary of State for Health and Social Security admitted to the House on 18 November last year that, because the Government broke away from earnings in linking pensions, in the last financial year, 1982–83, they saved £500 million of pensions and long-term benefits? That is a cut for pensioners, and it does not square with the hon. Gentleman's assertion that there has been no difference in the change of earnings and prices.
  Mr. Brown: I confess that I am not an expert on detailed matters of social security, and I am sure that my hon. Friend and his colleagues can answer matters of detail. As a Back-Bench Member, I can only judge on the general view as I perceive it. I judge from the lack of hue and cry in the country, which the hon. Gentleman and his colleagues predicted after the Budget this year, that, on the whole, pensioners feel that the Government have kept faith with them. That is how I, as a Back Bencher and as one who is not as experienced as either the hon. Member for
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  Birmingham, Perry Barr (Mr. Rooker) or my hon. Friends the Ministers on the details of social security matters and pensions, judge the situation.
  May I, as a Back-Bench Member without detailed expertise, say how I shall judge Labour's 12-point pension plan, and how I believe pensioners will judge it. We have been told today that pensioners are not stupid and that they, being perhaps the oldest and wisest in the country, have been round the circuit of deals for pensioners and blueprints for pensioners that emerge from Opposition parties just before elections. Pensioners are not stupid, and they will ask the simple question, "How will it be paid for?" They will not be bought off by the reply, "Oh well, you as a pensioner will not pay the price. You will derive the benefit. Those who are more able to bear the cost will pay." Pensioners will pay, as a result of inflation.
  Pensioners will not be protected from the burdens that the Opposition will foist on the British economy. The record of the Labour party when in government was one of raging inflation created because too heavy a burden was being placed on the nation in the mid-1970s when it could ill afford such financial burdens. Pensioners were not protected by the Labour party then, and I see no reason why they are any more likely to be protected in the future.
  The Labour party's 12-point programme for pensioners is a blueprint for buying 9 million valuable and important votes. Those votes are crucial in the marginal constituencies. They are crucial when a party is devoid of other policies and when it has to get down to the nitty-gritty, pork barrel politics that sometimes, in the 1950s and 1960s, bought Governments victories. That is not the way nowadays, and I am sure that pensioners who were working 10 or 20 years ago and experienced the problems of the economy then will be wise when they consider the Labour party's document.
  Pensioners are entitled to examine the record of the Labour Government between 1974 and 1979 and that of the Conservative Government between 1979 and 1983, to judge on the basis of what was the rate of inflation at the start of each Administration compared with the rate at the end of each Administration and to ask by how much over those four or five years prices had risen and whether the value of their pensions had been protected.
  I am privileged to be young enough to have two hale and hearty grandparents on my mother's side. My grandfather retired about 20 years ago and he and my grandmother are aged 85 and 81 respectively. They retired on average earnings in the early 1960s. They are typical pensioners. They retired when my grandfather was 65, with a little money put aside. They retired to a small bungalow in the south of England, having moved from London, and, like many other pensioners from the 1960s, they made a small profit on the sale of their house which they wanted to invest. They hoped that investment, coupled with what they hoped would be a reasonable deal for the pensioners from whatever Government were in power, would see them through the rest of their days. They are still hale and hearty and are able to go about their daily business with nothing other than a weather eye for my mother and father and myself. Between 1970 and 1980, they saw the value of their pensions eroded because of the enemy of inflation. More importantly, that small amount of money on which they thought they would be able to live when they invested it was not able to give them the supplement to their old-age pension because inflation, public enemy number one, had eroded their savings.

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  On the occasional Sunday when I am not in my constituency and I have the opportunity to have a cup of tea with my grandparents, they tell me that they judge the success of the Conservative Government not simply on having kept faith on pensions but on the fact that at last their savings are worth something and at last, when they have a little spare change to invest, they are able to live on some of the earnings because the value of their savings is protected. It is the saver, the old-age pensioner, brought up in the true traditions of the earlier part of this century, who puts a small amount of money by for his pension and sells a bigger house so that he can retire to the coast, or wherever it may be, who nowadays looks to those savings to see him through. From 1975 to 1979 when my grandparents were in their seventies, they were worrying about how they would survive if the good Lord gave them the years that he has done. Now, in the early 1980s, they can look forward, as long as their health is good, to the prospect of living for many more years.
  Mr. J. F. Pawsey: Does my hon. Friend agree that one of the reasons why his grandparents are enjoying excellent health is that the Government have put more resources into the National Health Service? Does he agree that a 6 per cent. increase in real terms in spending on the National Health Service is much appreciated by people of the age of my hon. Friend's grandparents? I am sure that my hon. Friend's grandparents are taking advantage of the National Health Service facilities. We should all give thanks for them. We have a caring and compassionate Government who, quite properly, are safeguarding pensioners. Before my hon. Friend sits down, will he say a few words about how the National Health Service has been protected by the Government to the advantage of pensioners?
  Mr. Brown: My family and my grandparents would agree with my hon. Friend. While his point may not quite have been in order, it is well taken. Any Member of Parliament, whether he is a grandson in Parliament or a son in Parliament, away from the pressures of his constituents and away from the electoral pressures of pensioners, who visits his family is likely to have his ear bent if they are anything like the traditional family. He will be given a piece of their mind if they believe that they have the ear of someone with influence in Parliament.
  My grandparents tell me that their financial resources are reasonably stable. They rely heavily on the value of their pension being protected. I assure my hon. Friend that I would soon get it in the neck from my grandparents if they felt that I or the Conservative Government were letting them down. My conversations with my family are typical of any conversation that I might have with electors in my constituency.
  The hon. Member for Liverpool, Edge Hill (Mr. Alton) referred to the great care that we all have to exercise before one side of the House enters into a slanging match about what the other side of the House has done. Those words come well from the hon. Member for Edge Hill because his party has blood on its hands with regard to any criticisms that it might make of the Labour Administration in the mid and late 1970s. If the Liberal party truly wants to show its concern for pensioners, its record must be judged against the backcloth that it participated in sustaining a Government who did much to harm the value
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  of the pension and pensioners' savings. If we take the Liberal party support for the Labour Government in the late 1970s as an indication of what the Liberal party thinks on pensions, woe betide pensioners if ever the Liberal party is in partnership with any other Government party.
  For the excellent reasons advanced by the hon. Member for Birkenhead, I believe that it was right to introduce this Bill. It will solve the difficulties, inaccuracies and problems of the forecast analysis. I take the hon. Gentleman's point that the success of the legislation will depend upon the ability of the Government to support it by a continuing attack on inflation. I am assured that that point is well seized by all hon. Members, particularly Ministers, on the Conservative Benches. As many of my hon. Friends have said, the evidence for reverting to a precise system where people know where they stand is overwhelming. As my hon. Friends have said, with the forecast method, we have managed to get the sums right in only two years out of seven. On five occasions we got it wrong. As my hon. Friend the Member for Brentwood and Ongar said, on that basis alone the Government are entitled to bring forward the machinery of the Bill.
  The Government are committed to dealing with inflation in this Parliament and in future. That in turn has clear implications for the value of pensions and the value of pensioners' savings. Against that background, my right hon. and hon. Friends are entitled to invite the House to give the Bill a Second Reading.
  7.50 pm
  Mr. Mike Thomas: I hope that the hon. Member for Brigg and Scunthorpe (Mr. Brown) will forgive me if I do not seek to take up his remarks in precise detail. On balance, I agree with the hon. Member for Birkenhead (Mr. Field).
  I believe that it is probably right to return to the historic system of uprating pensions and other benefits. The Government's motives are at least as suspect as those of the previous Labour Government when they changed the forecast system in 1975. The hon. Member for Pontypridd (Mr. John) was commendably retiring about that and perhaps Conservative Members will feel that I should be, too. However, when the Secretary of State started to refer to the literary works of my former colleagues my suspicions were aroused about his motives. Before he embarked on that section of his speech, I thought, given the present state of the Conservative and Labour parties, that the only thing that he was likely to have in common with the right hon. Member for Heywood and Royton (Mr. Barnett) was the likelihood of difficulty in being reselected for his parliamentary seat. I now discern that they both have a similar financial turn of mind.
  The change that the Government are proposing is designed to save money. Its purpose is to advantage the Government and to disadvantage benefit recipients. Whatever we say about clawback, for example, the fundamental reason why the Bill is before the House is to save the Secretary of State from the embarrassment of trying, shortly before an election, to claw back money from pensioners which they feel entitled to receive. That is the Government's real motive and that somewhat diminishes my enthusiasm on this occasion for a return to the historic system.
  If I had any doubt about the Government's motive, the choice of May as the month in which the review will take place, and as the basis on which the uprating will be

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  made—May 1983 when inflation will probably be at its lowest rate for more than a decade and when, on the Government's admission, it is soon after likely to rise again—it is confirmed by the transparent nature of the Government's approach.
  This is a mean and niggardly Bill. It will advance demands in the short term for a twice-yearly uprating. If inflation starts to take off again, it will necessitate a twice-yearly uprating. It will accelerate demand for a wholesale reform of the pension and benefit system.
  I agree again with the hon. Member for Birkenhead that it might have been preferable to have delayed change until the computer system had been able to make it possible to implement change more rapidly than we are told is possible now. I have some doubts about the "administrative complications" that are always thrown in our faces. However, the minimum that the Government could have done this year would be to add their estimate in May of the May-November inflation rate to the uprating increase. It seems that the Minister for Social Security was absolutely right when he said on 7 February:
  "The difficulty with a historic method is that one is basing the increase on past rises in prices. If there is rapidly accelerating inflation, there is an appreciable time lag for the pensioners before the pension is put right to take account of the rise in prices which has taken place."—[Official Report, 7 February 1983; Vol. 36, c. 827.]
  That seems to be the most legitimate criticism of the historic system. If a rapidly accelerating inflation rate is not one that will rise in two or three months by 50 per cent. from 4 per cent. to 6 per cent., or possibly by more to about 7 per cent., I do not know what a rapidly accelerating inflation rate is. That is not my forecast but that of the Chancellor of the Exchequer.
  There is no chance of the Government making such a concession. We have already seen the Secretary of State contemptuously shaking his head at the suggestion. I suppose that we should not be surprised because we know the Government's record. They cut the earnings link for pensions and they now propose the measures that are contained in the Bill. Their record on unemployment benefit reflects an interesting parallel, which is the time-lag problem. They cheated the unemployed out of 5 per cent. of their benefits for 16 months and have still failed to do the most obviously helpful thing for the long-term unemployed, which is to put the 1 million—a figure that is to the Government's eternal shame—who have been unemployed for more than one year on to the long-term supplementary benefit rate. I suppose that by their deeds we shall know them.
  The truth is that there is no one in the Government who really understands what it is like to live on the old-age pension or supplementary benefit. The Bill reflects the absence of any generosity on the Government's part. It reflects the Government's essential meanness of spirit. We shall vote against it. We regret that the Government have not introduced the minimal improvements that would have enabled us to vote for them.
  7.56 pm
  Mr. Peter Bottomley: The alliance and the Labour party are concerned about the consequences that would follow from reintroducing the historic method of calculation if there were runaway inflation, and that is because members of both parties have read their proposed manifestos. The greatest danger facing pensioners and the entire economy is a dramatic
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  reacceleration of inflation. To that extent they are right, on their terms, to be concerned about the reintroduction of the historic method of calculating pension increases. Until the hon. Member for Birmingham, Perry Barr (Mr. Rooker) is able to convince himself that there will not be a massive increase in inflation, he will be right to vote against the Government tonight.
  Pensioners will benefit from the implementation of the historic method if inflation falls but they will he harmed quite considerably if inflation increases by not merely two percentage points over two or three months but if it rises from an average of 4 per cent. to 6 per cent. to 14 to 16 per cent., or even 24 to 26 per cent. That is the real danger that pensioners face on my estimate—it is not only mine—from the likely consequence of the Labour party's economic programme—a penalty of massive inflation.
  Pensioners suffer heavily from inflation as do those who are earning their pensions. It is in the interests of virtually everyone in Britain to make his or her individual decisions so as to bring about a reduction in inflation and to consider more carefully the promises of political parties at election time, be it a general election or local election.
  Many pensioners and others in London have to pay rates to the GLC. My constituents have to pay rates to the Greenwich council. They learn the consequences of the voting in the area when they receive rate demands and when more and more Left-wing politicians have control of spending and taxing decisions. I have received a number of letters from pensioners in my constituency. The authors claim that the increase in pensions and the benefit of increased tax allowances have been completely wiped out by the 30 per cent. rate increase in the London borough of Greenwich. Constituents have sent me their rate bills for this year and have compared them with rate demands three years ago, before Ken Livingstone took control of county hall and the GLC.
  Labour party supporters and others realise that the consequence of the Labour party's plans is a dramatic rise in the cost of living. They understand that the party's policies will lead to greater impositions being placed upon them by local government. In national terms, they are equally aware of the consequences of the Labour party's proposed economic programme. Many pensioners will be well advised to consider carefully whether the historic or the prospective estimate of inflation will be better for them. They will be well advised to vote Conservative purely in self-interest. I am aware that most pensioners' votes are based on issues other than their direct interests. However, it must be made plain that we are likely to have a Division because alliance and Labour Members are formulating economic programmes that will penalise pensioners even if we retain the forecast method for calculating pension increases.
  The issue goes beyond the State retirement pension. Most people who retire now, and many more people who will retire in future, will have the benefit of a second pension scheme. Moreover a growing number of people will receive the benefit of investments and savings that they have put by outside formal pension schemes. That prospective income, which they hope to enjoy when they retire, is also severely damaged by inflation. Some such people might be looking to a total income after retirement of, say, £4,000 a year and they will not be desperately impressed by a political party that says that it will ensure

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  that one third of that income increases by two percentage points if the consequence is that the other £2,500 loses half of its value within five years.
  I caution all pensioners against the promises of any political party. They are likely to get a better deal from a Government who are willing to talk openly about their programme and the consequences of their actions. There is much talk of a hidden clawback in these proposals. Nothing is hidden. It is perfectly clear to hon. Members and people outside that the consequences of moving towards the historical method and the choice about making the decision about increases in June will mean a pension increase over a two-year period that is higher than the rate of inflation in that time. It is true that, if the pension increase is taken over one year, it will be less than the rate of inflation. Most pensioners are prepared to consider the consequences of a two-year period and to judge a Government by what has happened during the lifetime of a Parliament.
  As many of my hon. Friends have said—there might yet be some Opposition Members who still acknowledge it—pensioners have benefited from the guarantee that the state retirement pension will be kept in line with prices. In fact, they are slightly ahead of prices. If we start to discuss the loss that has arisen from the cancellation of the link with earnings or prices, whichever is the higher, we get into all sorts of complications. A case can be made for a return to that system but it is not nearly as strong as the loss that was calculated when the Labour party changed from the historic to the prospective method.
  We should put the debate into a wider context than that of the increase year 1983–84. People want to see what is likely to happen in 1984–85 and beyond. I hope that we shall eventually be able to eliminate inflation. That is one of the ways in which to regain economic prosperity. That would make it possible to generate an increase in real wealth. We should put the arrangements that we are making into the context of what I call the family perspective or the family life cycle. We know that, as the second pension scheme system matures, many more pensioners will have a higher standard of living than is now the case. Moreover, because about 70 per cent. of people in their thirties own their own homes, many of the costs that pensioners now face will not be faced by succeeding generations of pensioners in 20 or 30 years' time.
  When 80 per cent. of retired people have paid off their major housing costs voluntarily during their working life by buying their home, we must ask ourselves how fast we want the value of pensions to increase in real terms in competition with other demands during working life. I am talking not about demands on Government but about shifting resources upwards and downwards in the family life cycle.
  It is possible to borrow £30,000 and get tax relief at marginal rates of tax. It is possible, for example, for two young people with reasonably good jobs to borrow £30,000 and pay that loan off over 25 years. That is very nice. I am on record as opposing the increase in mortgage interest relief, although my opportunities for voting against that type of thing are limited. The Government are crazy to do that. There is no sensible justification for the increase in logic, or in terms of monetary policy, or in terms of sensible Tory philosophy. I hope that we shall
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  eliminate the mortgage interest relief system as it stands. I remind the House, and especially senior civil servants and Treasury officials who get more benefit from it than most others, and certainly get more benefit from it than they do from child benefit, that a system that encourages people to have mortgages for as long as possible and to extend and increase them when they get a salary increase is perverse. There is no justification for it. The justification is to concentrate resources when people need them for housing help during family formation. The idea is to transfer resources through pensions and child benefit at two important times to ensure that people have resources which they cannot earn, both when they have passed retirement age and stopped work and before they reach working age. That means pensions and child benefit.
  During the past 30 years, successive Governments have doubled the value of the old-age pension in real terms and yet the level of child benefit and child income support is still lower than it was in 1955. We should examine the consequences of that type of crazy tax and benefit system in the context of this Bill, analyse tax benefits and the family life cycle and try to work towards a better system.
  I had hoped that the alliance would help in that regard. Unfortunately, it seems to have swallowed the suggestions of Dick Taverne and the Institute of Fiscal Studies, which proposed almost everything except an increase in child benefit. I thought that that was not too bad because, a week later, when the alliance had a chance to vote for an increase in child benefit it leapt aboard.
  There is a slight problem with the alliance. It is not quite sure in which direction it is facing on any issue. Perhaps that is why it is so often absent from the House, as is the case now. There are not many alliance hon. Members. I shall say no more about that because I did not want to make a provocative speech. Because of that, I should like to say that I look forward with keen anticipation to hearing what the hon. Member for Stockport, North (Mr. Bennett) has to say. He is one of those Labour Members who puts in the homework on these issues, although I may not agree with everything that he says. Not only is he the best Labour Back Bencher in the House at the moment,, he is the only Labour Back Bencher in the House at the moment.
  We face the problem of whether it is right to offer to pensioners the type of promises that the economy cannot support in the short term. There has been a brief advertisement for Anthony Bevins' recent article in The Times, which examined the various draft election promises on pensions made by Labour party Front Bench spokesmen, such as the hon. Member for Perry Barr.
  If pensioners take that short-term promise of prosperity, they will end up with the type of economy that will be disastrous not only for them but for the whole country. I wholly agree with the Government's decision to return to the historic method. I do not think that I should fall out too dramatically with the amounts of adjustment that the changeover has openly included. I would probably have left pensioners with half of the overshoot from last year's overestimate of inflation. We are dealing with 1 per cent. of the state retirement pension. It is not critical. The critical thing is to develop the type of economy in which we can generate an extra 3 per cent. in national wealth each year and ensure that pensioners get a share of that wealth. The way in which to ensure that pensioners get a share is to ensure that hon. Members are always concerned with the real interests of pensioners, which includes the

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  value—the increased value where possible—of the state retirement pension. Merely keeping the link with prices or earnings, whichever is the higher, is not the way in which to do it. That provides an automatic ratchet that winds up the apparent value of state retirement pension in such a way that even a Labour Government were forced to break the link. I do not know whether the cancellation of the Christmas bonus for two years was part of that process, but it is better to ensure that we keep the link with prices and that we take an annual opportunity to persuade the Government, where we believe that it is right—the Government often do not need to be persuaded—that there should be a real increase in the state retirement pension. But it should be a conscious decision.
  Had the Government said "We shall make no adjustment", they would have been accused of electioneering, and the pensioners' view would have been "If the Government are promising that now, we shall have a general election and they are likely to make the same promises and take the same action as, sadly, the Labour Government did in their last year of office before they were rejected by the electorate." It is much better for the Government to try to ensure that, during a Parliament, a share in the increased national wealth should go to pensioners. However, that is likely to happen as a consequence of having economic policies that drive inflation back towards zero, not of making extravagant promises that build up people's hopes but then dash them again.
  8.10 pm
  Mr. Andrew F. Bennett: The hon. Member for Woolwich, West (Mr. Bottomley) seemed to believe that in the not-too-distant future earnings-related pensions would play a greater part in our system and that pensioners would be much better off. I give him the firm warning that the sad fact is that many people will not qualify for the new earnings-related pensions because they are unemployed. That is only one worry about the new scheme.
  The hon. Gentleman was enthusiastic about the idea of examining incomes throughout the life cycle. There are some attractions in that approach, but the hon. Gentleman must be careful about comparing today's children with today's pensioners. I do not object to his comparing one child with another and following them throughout their lives. However, if he wishes to compare today's children with today's pensioners he must look back at the struggle that most of today's pensioners had—
  Mr. Peter Bottomley: I follow the hon. Gentleman's point, and I am sorry that I did not put across my point more clearly. I take a great deal of stick in my constituency for battling for pensioners and am often asked, "Why are you trying to protect them so much?" I recognise that pensioners have put up with worse conditions than others, but it is important to follow people through their life cycle and to make changes in advance. With mortgages one needs 20 years' warning, and with pensions one needs 40 years.
  Mr. Bennett: I accept that, but today's pensioners have had much difficulty in their lives and they deserve some recognition of that. The hon. Gentleman seems to be part of the cut and run school of the Conservative party who are increasingly vocal in saying, "We are almost
  866
  certain that the lowest inflation rate will be in May. It will be announced in June, so that is the time to have an election because we have built an entire edifice around reducing the inflation rate, whatever the cost." They say that, ignoring the fact that everyone knows that inflation will then begin to rise.
  I apologise to the House for not being present to hear the opening speeches, but I had to attend a meeting of the Select Committee on Social Services. Members of a Select Committee have a problem when both the Committee and the House are debating similar topics on the same day. Earlier today we heard a proposal to televise Select Committee hearings, and the House must consider that carefully. There is already considerable pressure on hon. Members to attend Select Committee meetings rather than to listen to an entire debate on the Floor of the House, and if Select Committees were televised, but the House was not, the problem would become even worse.
  I was especially disappointed that during the two hours for which the Select Committee sat today we spent all our time debating the health aspects of the Government's public expenditure and did not debate social security, because I wished to ask a key question about social security public expenditure. The Government announced in their supplementary Budget expenditure statement last autumn that they would save an estimated £180 million—the so-called clawback. Perhaps the Minister can tell me now how much he expects to save as a result of this measure.
  Will it still be £180 million, although it will be achieved not by clawback but by this mean and squalid measure? The reaction of the press and some Conservative Back-Bench members to the original proposal was such that the Government recognised that it was unacceptable, so they have had to dress it up and give it a new name. However, the real test is whether, in their public expenditure estimates, they still expect to save £180 million. The figures would appear to show that that is the case.
  If that is the saving that the Government expect, we can spell out clearly what it will mean. The single retirement pensioner will be 65p worse off and a retired couple will be £1·05 worse off. The single person who receives the long-term supplementary benefit will be 65p worse off and a couple will be £1·05 worse off. Child benefit for children aged 16 and 17 will be 30p less, for those aged between 11 and 15 it will be 25p less, for those aged under 11 it will be 20p less, and there will be a corresponding reduction in unemployment benefit.
  That is a depressing picture. The Government try to justify it by saying that the Labour Government did exactly the same. It is likely that that argument will be developed, but it is not helpful in politics to say, "Yah-boo, you did the same thing." The question is whether it was right in the first place. I do not believe that the change was right when the Labour Government introduced it, but it must be measured against what the Labour Government did for pensions and for most other benefits. Under the Labour Goverment pensions increased in real terms by 20 per cent. The Government must tell us, especially if they are heading for a June election, by how much pensions will have increased in real terms during their period in office. They will say that conditions have been very difficult, but we must measure those difficulties against what they have done for others. If conditions are difficult, how could they find £1·5 billion in tax cuts for the well off? As my hon.

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  Friend the Member for Birkenhead (Mr. Field) said, it has been estimated that the Government have given away £6 billion to the well off, but very little to pensioners.
  The hon. Member for Huddersfield, West (Mr. Dickens) went to great lengths to say that he was fully in touch with pensioners, but I wonder how many pensioner households he has visited. There is a disturbing difference between meeting pensioners on the street and looking carefully at some of their households, especially those who have been hard up for most of their lives. They live in considerable poverty. The present pension is just about enough to enable a pensioner to get by if the majority of capital items were purchased while the pensioner was working. But if one enters old age in poverty, one is stuck in poverty, with this pension, for the rest of one's life. There is no reserve in the pension to buy major items of household equipment, major items of clothing and furnishings or to carry out major repairs. That is the reality. We should be talking about how we can increase the basic pension so that those people can enjoy a decent standard of living in old age.
  In an area such as Stockport many people do not enjoy an adequate standard of living in their old age. There is also much bitterness about the way in which the different measures that the Government have proposed have weighed heavily on pensioners. When I went out canvassing last night a lady from Haughton Green said that her first grouse was that her husband, who had worked hard and contributed to a work's pension, was taxed. She pointed out that not only had their pensions not risen as much as they had hoped but that they had to apply for housing benefit and then receive back in housing benefit the money that they were paying in tax. They thought that that was somewhat ridiculous. Over the past three years not only have they not seen their pension increase as much as they would have liked but they have seen their council rent increase much more than they wanted. Even taking housing benefit into account, they worked out that they were losers by 70p, and because they might also lose other benefits they could be up to £1 or £2 worse off.
  Mr. Pawsey: Does the hon. Gentleman agree that the majority of pensioners enjoy rent and rate rebates from local authorities so that the increases in the rents to which he has referred probably do not bear so heavily because of the safeguards that are built into the system?
  Mr. Bennett: I am sure that the hon. Gentleman will have followed the progress through Parliament of the housing benefit legislation which is now being implemented. He will know that those people who are receiving a pension and superannuation are often caught by the Government's savings in the introduction of the housing benefits scheme. Of course, the Government gave the guarantee that they would not penalise anybody by more than 70p a week. There are many people who are caught in that trap. Their rents go up and then they find that they lose 70p as a result of the introduction of the housing benefit scheme.
  Another group of people who previously received heating benefit when they had a heating charge combined with their rents have lost about £1·65. There are a quite distinct group of people who have lost out as a result of
  868
  the Government's introduction of the housing benefit provisions. The other argument that I must put forward relates to fuel bills but I shall say more about that later.
  Another point that pensioners regularly make to me is why they have to wait so long. They have a legitimate argument. If the Germans, Belgians and other Europeans can have rapid upratings, why cannot we in Britain? The reason that is always given is that there is not the money. If there was the will to give rapid upratings, it would be perfectly possible to design such a scheme. The Government say that they cannot make the calculations sufficiently quickly, but they could make the Christmas bonus the variable factor. They could easily do the uprating five months in advance and, if they found that their calculation was wrong, if they had not got the inflation figure right, they could make the Christmas bonus that variable factor which restores to people the money that is available. If the Government have the will, upratings can be made much more quickly. How will the Government do the uprating this time? Will it involve the issue of second books to individuals? That often causes a great deal of confusion. Perhaps the Minister will say a little more about that when he replies.
  As I understand it, pensions will increase as a result of the May retail price index but supplementary benefit will go up as a result of the May retail price index without the housing element in it. It has now been estimated that that probably means that supplementary benefit will go up slightly more than pensions. If that is correct, it means that an increasing number of pensioners will qualify for supplementary benefit this autumn, but that they will qualify for a small amount. I welcome the fact that they will have some more money, but I am worried that because that amount will be small and that many will only just qualify to receive supplementary benefit they will not realise that they are entitled to it and therefore will not apply. They will have applied for supplementary benefit some time during this part of the year and will have been told that they are not entitled to it when, come November, they will qualify. I hope that the Government will give an undertaking that any pensioners who ask about supplementary benefit before November will be reminded after November that they might qualify because of the changing relationship between pensions and supplementary benefit.
  I fear that there will be another take-up problem which the Government should be considering carefully. They should not be giving people marginal increases in supplementary benefit which they do not claim. They should ensure that people get the money. A simple way would be to ensure that pensions rose by the same amount as supplementary benefit and that they both rose by the higher amount. The Government will accept that there is a major problem with take-up in Britain. I deplore the fact that the Government have not carried out a survey into take-up since 1979. Although they have reluctantly paid lip service in the end to various take-up campaigns by local authorities, the Government do not really hammer home and encourage take-up.
  I had intended to berate the Minister for not replying to a letter that I sent to him on 21 February in which I drew attention to a study on pensioners' heating costs that was carried out by Age Concern in Stockport. On my way into the Chamber I called at the message board and was able to pick up his reply. I thank him for that fairly comprehensive reply, though I am a little disappointed that

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  it has taken him since 21 February to make it. I am sure that Age Concern in Stockport will be pleased to hear the Minister's detailed comments on its study. It will also be rather disappointed by the letter's content. I am particularly anxious about the last paragraph, in which he points out that the Department has now done a great deal to pay those people in Stockport who have under-floor electric heating the new estate rate. I admit that the Department has done that, but I wrote to the Department in September last year asking it to check how many pensioners and others in receipt of benefit in Stockport were entitled to that estate rate. I wrote about five letters which were always courteously replied to, sometimes saying that the local office was dealing with it and sometimes that the regional office in Manchester was dealing with it. We were told that the local authority had been asked to identify all those who had under-floor heating and that the electricity board had been asked for estimates of the bill.
  Eventually it was announced in February that it accepted that over 1,000 dwellings would qualify. When I asked when they qualified I was told that the Secretary of State had signed the certificate that they qualified from February. Why should they not have qualified from September when I first raised the matter? That was when the Department first became aware of it and it would have been much more help to pensioners in Stockport with these high heating costs if that had happened. The local authority dwellings having been identified, the Department is now busily trying to identify those of the housing associations. I do not blame the Department for taking a long time over the administration but I am a little worried when the Minister claims credit for it in his letter, particularly when he was not generous enough to backdate it to September when the issue was first raised rather than February when his officials after a long time finally came to their conclusions.
  The Under-Secretary of State for Health and Social Security (Mr. Tony Newton): The regulation was virtually unworkable until we sorted it out last year. It took a lot of time to sort out and it certainly took more time than we would have wished to identify all the estates. But unless we had acted—this I think we can legitimately claim credit for—we would have been stuck with a virtually unworkable regulation, with nobody in Stockport getting help.
  Mr. Bennett: I am not sure why the Government did not deal with this when they revised the supplementary benefit regulations in 1980. Having created the difficulty, it now seems that they are claiming credit for solving it. Having accepted that there was a difficulty, why did the Government not give the people of Stockport the benefit six months earlier when the issue was first raised? Equally, why are the Government not doing more to encourage insulation? It is some consolation to get extra money to pay the bills, but most people would like to consume less electricity, and proper insulation would make a great difference.
  This is a mean and disappointing measure. Most pensioners in Stockport will feel that they have not had a fair deal. They remember when the Government gave tax handouts to the well-off. In fact, the Government are bringing comfort to the rich but oppression to the poor. It is time that we got rid of them.
  8.30 pm
  Mr. Harry Greenway: The concluding remarks of the hon. Member for Stockport, North (Mr. Bennett) do not stand up to close scrutiny. It was totally unworthy of the hon. Gentleman to suggest that the Government have attacked the poor and supported the rich.
  Like every other hon. Member, I have my share of pensioners in my constituency, including six centenarians, one of whom is a lady of 105. She keeps me well briefed on her lifelong problems and achievements, and particuarly on her current problems. She is always cheerful. When I ask why she has achieved such longevity, she always replies "I have never had anything to worry about. I have always worked hard and successfully and have had an adequate living, as I do now, but most particuarly I have lived a long time because I have never had anything to do with men." My relationship with her has been gentle, but suitably close, and I hope that I have been of support. I certainly seek to be.
  She has a friend called Jenny, who is 103. She lives in sheltered accommodation and is particularly pleased with the 5p television licence that she has only recently been able to obtain as a result of Government action—[Interruption.] As the hon. Member for Birmingham, Perry Barr (Mr. Rooker), who is interrupting me from a sedentary position, will know, that concession has recently been extended to other categories. I am sure that by his nodding the hon. Gentleman is welcoming that fact.
  Mr. Rooker: Of course I am.
  Mr. GreenwayI am not making any false claim.
  Mr. Rooker: I apologise for intervening, but the hon. Gentleman was giving the impression that Jenny had just benefited from this 5p concession, whereas she had always benefited from that concession, which has existed for a long time. It has now been extended to other categories. The hon. Gentleman seemed to link the two, thus giving a false impression, which I know he would not want to do.
  Mr. Greenway: Indeed not. Lady Bracknell took exception to dentists who gave a false impression, and I agree with what she said.
  Jenny has only recently obtained a concessionary licence because she has only recently moved into sheltered accommodation. I was in no way seeking to mislead the House.
  All my centenarians and pensioners have been particularly damaged by the high rate rises forced on them by the Labour-controlled GLC—150 per cent. over two years. Some people are protected by rate rebates against these vicious rises, but many pensioners are suffering greatly because they do not gain from the lower cost of travel, which it is said those rate rises have partly achieved. That is because they already have travel passes. They are especially damaged because the high rate rises contribute to a higher rate of inflation, higher prices and more expensive services. I lay that squarely at the door of the Left-wing GLC.
  The hon. Member for Stockport, North said that the old-age pension does not allow pensioners to buy clothing or other capital items. However, I have been able to achieve for a number of pensioners—and ethers on

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  supplementary benefit—allowances to buy clothing, bedding and all sorts of important capital items. What the hon. Gentleman says, therefore, is in no sense true.
  The hon. Member for Stockport, North referred to the work of Select Committees. I and the other members of the Select Committee on Education, Science and Arts recently visited France. We looked mainly at education and training, but I was able to take some interest in the Socialist millenium. I was shocked to find that no family allowance is paid in France to parents of persistent truants. If children repeatedly truant from school and their parents do not respond to a stiff letter from the authorities or to various other sanctions, the family benefit is withheld.
  Mr. Pawsey: That is an interesting point. It is a powerful argument for retaining the present system of discipline within our schools and allowing each school to decide whether or not to use corporal punishment.
  Mr. Greenway: I appreciate my hon. Friend's point.
  Mr. Deputy Speaker (Mr. Bernard Weatherill): Order. The hon. Gentleman would go a little wide if he were to follow that argument.
  Mr. Greenway: I take your point, Mr. Deputy Speaker.
  Mr. Peter Bottomley: I am sure that my hon. Friend will recognise that there is a difference between the way in which the French pay the retirement pension and the way in which they pay child benefit. Child benefit is paid through local organisations, which can keep some of the funds back and use them to promote bodies such as Family Forum. I hope that the Minister will copy the French in one respect—by making more funds available to family organisations, which may help to bring in a better deal for pensioners and may help parents to look after their children as well as control them.
  I am sure that my hon. Friend will have noticed another distinction between France and this country. Certainly those of his constituents who are over 100 years old will be aware of it. In France, most benefits are paid by credit transfer. The Labour party would get rid of payment by weekly order books, but many hon. Members wish to protect both pensioners and sub-post offices. We should therefore be wary of adopting some apparently constructive arguments if we want to retain the weekly payments while bringing in a more administratively efficient system for those who could be paid at longer intervals.
  Mr. John: That was a better speech than the hon. Member's earlier speech.
  Mr. Greenway: I am grateful for my hon. Friend's intervention and I agree with his point. I echo the tribute paid from the Opposition Front Bench.
  My Select Committee looked at the formation professionelle, where we saw teenagers being trained. It is the equivalent of our own youth opportunities scheme. The results of that scheme affect French men and women throughout their lives and into old age because in Socialist France, if a person fails to gain any qualification either at school or through the formation professionelle, he will not receive unemployment benefit—or rather, he will not receive supplementary benefit if he is out of work. Unemployment benefit as such does not exist in France.
  872
  That came as a great shock to me. I am sure that our Government will not follow the French Socialists' example, and if we ever have another Labour Government I hope that they will not do so either.
  I read in a newspaper recently that the cost of the Labour party's promises to the electorate so far has been estimated at £40 billion.
  Mr. John: Will the hon. Gentleman give way?
  Mr. Greenway: No, I will not give way.
  Mr. John: Was not the figure £14 billion?
  Mr. Deputy Speaker: Order. The hon. Gentleman is not giving way.
  Mr. Greenway: The figure that I saw was £40 billion. If it were £14 billion, that would be high enough. I have seen various costings ranging between those figures. It is certainly not less than £14 billion.
  Mr. John: It must be.
  Mr. Greenway: It is suggested that that would mean a 12p increase in the standard rate of income tax.
  Mr. John: Will the hon. Gentleman give way?
  Mr. Greenway: No, I must press on.
  We should move towards a principle of non-subsidy, whereby old-age pensioners are financially independent. The pension should be adequate in its own terms so that pensioners do not have to look for subsidised holidays and the like, which is demeaning, unfair and unpleasant.
  If the hon. Member for Pontypridd (Mr. John) will be brief, I will give way to him now.
  Mr. John: I am grateful to the hon. Gentleman. I was beginning to think that he was a total abstainer so far as I was concerned. Is he aware that my costing of our pensions programme was one third of the lowest estimate given by the Secretary of State? The Secretary of State referred to a figure between £10 billion and £20 billion. The figure that the hon. Member for Ealing, North (Mr. Greenway) saw was even more fanciful. The Chief Secretary to the Treasury suggested a figure between £15 billion and £25 billion. In other words, the geniuses of the Government Front Bench have costed our programme at anything from £10 billion to £25 billion, so they are scarcely in a position to boast about their arithmetic.
  Mr. Greenway rose—
  Mr. Deputy Speaker: Order. It may help the hon. Gentleman if I tell him that the Front Bench speeches will begin at 9 o'clock and two other hon. Members wish to take part in the debate before then.
  Mr. Greenway: I am grateful for that information, Mr. Deputy Speaker. It had not been made clear to me earlier. In that case I will leave the figure suggested by the hon. Member for Pontypridd to stand or fall, but I have certainly seen some very high costings for the broad Labour party programme. The Labour party will have to face that and not try to dodge it.
  The value of the pension has been more than maintained by the Conservative Government. That has been said repeatedly in the debate and it must not be forgotten. The value to pensioners of low inflation is beyond price. Pensioners who are dependent upon both pensions and savings are helped by low inflation. On inflation, the Government have a record that is appreciably better than that of their predecessor.

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  Early in my teaching career, 25 or more years ago, I met very elderly former teachers who were living on fixed pensions and savings. Because of inflation they were in penury, although it was a slow process in those days. The message to society is that if we were to return to the high inflation which Labour policies would bring, people's savings would lose their purchasing power very quickly and the value of their pensions would be depressed to zero. They could not return to the standard of living that they have enjoyed under this Government. Opposition Members who are muttering as I speak and who do not like this point must face up to what inflation does to pensions. The programme that the Labour party recently launched would certainly fuel inflation.
  8.47 pm
  Mr. Allen McKay: Inflation and the cost of living mean different things to different people; it depends upon the base from which one starts and how one determines the cost of living. Pensioners in my constituency determine their cost of living on what they can buy when they go to the shop—the cost of milk, bread, eggs and bacon. They consider what they need to keep their heads above water.
  This is a narrow Bill, although we may discuss many things. It is dear to the hearts of hon. Members on this side of the House because nothing smarts our consciences more than the attacks on social welfare benefits during the past four years. The attacks have been small, but they have been sustained over a long period. If they had all come at the same time, there would probably have been a revolution when people realised what had happened to the working class, to pensioners and to those in receipt of welfare benefits. The Minister said that he wanted to protect the standard of living, but many things which have happened over the past four years must be looked at. The earnings-related supplement has gone. It was a traumatic experience when many people suffered the first shock of unemployment which has been caused mainly by the Government's policies.
  The Government are trying to put through their policies deceitfully with this Bill. It would have been more becoming for them to be more open. Everyone knew that they wanted to claw back the 2 per cent., 2·3 per cent., 2·7 per cent. or whatever it was. It would have been better if they had been honest and above board about it.
  We are approaching an election and the Government are trying to cover up. That is unpalatable and will not go down well with the electorate. The hon. Member for Macclesfield (Mr. Winterton) was right to suggest that we should continue with the present system and give notice that we shall move to a new system next year. That would be honest and above board. Everyone knows that the Government sought to claw back 2·7 per cent. and that at the last moment they decided to operate a new method of calculation involving a historical calculation rather than forecasting. That gave them the 2·7 per cent. and 9 million pensioners are being deceived by the Government.
  The Government claim that they want to protect living standards. If that is so, why do they insist on a £3,500 cut-off level when they know that many people who are made redundant because of their policies receive well above that and cannot qualify for supplementary benefit until they have spent that part of their savings? That is what happens under a Government who profess to encourage saving. The Government are compelling people to spend savings put
  874
  aside for retirement and redundancy money. Anyone with an occupational pension over a certain sum is taxed pound for pound. That is the action not of a Government who protect standards of living, but of a Government who protect their own interests.
  Budgets in the last four years have given to those who earn most and taken from those who earn least. Close examination shows why. The country earns £14·4 billion a year from North sea oil. We spend £17 billion a year on welfare benefits. We know that North sea oil will run out some time and that the Government must ask how the money can be replaced. If the Government decide to spend £10 billion on Trident and to give back money to people earning the most in the hope that they will invest—although money is pouring out faster than ever—in Britain, the only solution is to cut spending on public education and social services, squeeze the councils. The Government are taking from the recipients of welfare benefits.
  If the Government were more honest and forthcoming people would believe them. The Government are calling on local authorities to protect the people who the Government promised to protect. My local authority has provided old people's dwellings round a centre so that residents can take advantage of concessionary fuel, free television licences and the council's cheap bus fares. Pensioners in London are treated differently from pensioners in the north.
  The hon. Member for Birmingham, Edgbaston (Mrs. Knight) talked about shovelling gin. She owes an apology to the country's 10 million pensioners because she debased the people who gave her the standard of living that she now enjoys. She owes an apology if for no other reason than that pensioners drink whisky, if they drink anything, I am glad to say.
  Some hon. Members say that pensioners do not want cheap television licences. They should look at their postbags to understand what is happening. A scheme recently accepted in Sheffield brings 8,000 pensioners into a cheap television licence scheme.
  I introduced a ten-minute Bill on 26 October which attracted 187 votes. The House will have a chance to vote on the Bill again on Tuesday because I shall continue to bring it back until the anomalies have been corrected.
  The Government should look at their policies. They are not protecting the welfare beneficiaries; they take from them continually. I believe that at the next election the Government will find that their policies have caught up with them.
  8.55 pm
  Mr. J. F. Pawsey: It is always a pleasure to follow the hon. Member for Penistone (Mr. McKay) who spoke with his usual sincerity and developed some interesting arguments. I shall not follow them all. He mentioned education, but he should remember that the only real cut is that which has been made voluntarily by families having fewer children. School rolls are falling but the pupil-teacher ratio has never been better. The per capita spending in schools is at its highest.
  It has been a thoughful debate with many helpful contributions. I have listened to the last eight speeches. It is significant that six of them favoured a return to the historic method of uprating. The hon. Member for Birkenhead (Mr. Field) referred, as I think did the hon. Member for Stockport, North (Mr. Bennett), to tax cuts

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  for those on higher incomes. Surely both hon. Members understand that those taxes have been cut so that entrepreneurs can develop the nation's wealth, create work and develop jobs so that the number of unemployed people will fall. That is why the Government have taken such courageous decisions.
  The hon. Member for Birkenhead referred to a six-month review, but that only becomes important if we live in an age of rising inflation. One of the benefits that the Government have bestowed is the realistic control of inflation, which is now running at about 5 per cent.
  I listened with some interest to my hon. Friend the Member for Brigg and Scunthorpe (Mr. Brown) and the tale that he told about his grandparents. I was careless enough to lose all of mine, and my six sons have but one grandparent—a gentleman of 82 who enjoys somewhat poor health. That is why I mentioned the importance of the National Health Service during my intervention in my hon. Friend's speech.
  Unfortunately, my hon. Friend the Member for Woolwich, West (Mr. Bottomley) is not in his place. We shall soon enjoy having two for the price of one. I look forward to contributions from his alter ego when she eventually arrives in this place.
  The hon. Member for Stockport, North said that he was busy canvassing in his constituency last night like the assiduous Member that I know him to be. I was doing the same, but I suspect that we came to rather different conclusions as the result of our work. I have been assured by one of my hon. Friends that there is no saving to the Government from the Bill, which might perhaps reassure the hon. Member for Stockport, North.
  Mr. Andrew F. Bennett: I did not suggest that there was any saving to the Government. I said that there was a loss to many pensioners.
  Mr. Pawsey: The housing benefit part of the Bill was brought before the House not to save money but rather to achieve fairer shares. I am sure that the hon. Gentleman will agree that it is important to have fair shares for all. I believe that that is a slogan that should unite both sides of the House.
  My hon. Friend the Member for Ealing, North (Mr. Greenway) mentioned some of the elderly ladies in his constituency. We have three centenarians only in Rugby. I do not want any comparison to be made between Ealing, North and Rugby because I am sure that Rugby is just as healthy as my hon. Friend's constituency. I hope that we shall have five centenarians in time. I was extremely impressed by his knowledge of French and his French pronunciation. We may perhaps one day see him on the Council of Europe where I am sure that his knowledge will prove invaluable.
  My hon. Friend the Member for Woolwich, West referred in an interesting intervention to post offices. By coincidence, I was at my new post office in Rugby today. I discovered from the postmaster that he anticipated a 12 per cent. drop in counter turnover as a result of changes in legislation. I say in all seriousness that that matter should cause us all a great deal of concern.
  I welcome the return to the historic method of uprating pensions and social security benefits, because the present system is grossly inaccurate. It is so much in error that it has nothing to commend it. It has only twice been right in
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  seven years. I should like to quote some words of my right hon. Friend the Secretary of State, which make good reading. I am delighted to see him in his place, so that he can be reminded of what he said, which was:
  "it has been wrong in five out of the seven years that it has been used. In 1978 the forecast was 1·9 per cent. too little. In the spring of 1980 the forecast was 1 per cent. too high. In 1981 it turned out to be 2 per cent. too low. In 1982 it was 2·7 per cent. too much."—[Official Report, 17 March 1983; Vol. 39, c. 356.]
  What sort of system can it be to have such gross inaccuracies? Is it any way in which to run a country or a pension system? It is not so much a rule of thumb as a rule of error. It is not so much an estimate as a look at the entrails. We are in the age of the computer, but I suspect that even the Saxons could get two guesses right out of seven. Were I a betting man, I think that I could get even two bets right out of seven.
  To get the debate into perspective, we should look at the background to pensions. My right hon. Friend the Prime Minister said that we should inflation proof pensions. That promise has been kept. My right hon. Friend usually says what she means and means what she says. Pensions have been kept ahead of prices. The pension is now worth more in real terms than it was in 1979. From May 1979 to November 1982 earnings increased by 59·4 per cent., but pensions went up by 68·5 per cent.
  It is also fair to say that my right hon. and hon. Friends have done more for pensioners than any Government. Among other things, the earnings rule limit has been raised from £51 to £57. Perhaps that is not good enough. More could be done and I am sure that more will be done.
  All in all, I believe that my right hon. and hon. Friends have done much of which they can be proud. I have no doubt that we shall hear many references to what has been done during the wind-up speech. I have every confidence that the Minister of State will reassure hon. Members, who will join him in the Lobby when we vote.
  9.3 pm
  Mr. J. W. Rooker: I feel sorry for the hon. Member for Rugby (Mr. Pawsey) because his speech has been curtailed, but in the brief time that was available to him he managed to make a mini windup speech. I am not sure how the Minister of State will take that.
  Before I come to the main thrust of my remarks, I should like to make a couple of preliminary points, first, to assist the Minister, and, secondly, because they are important, although they are about the city that I help to represent. In his speech the Secretary of State of his own volition referred to housing benefit. He referred to the debate on the regulations late one night three weeks ago, when matters concerning Birmingham were raised by my hon. Friend the Member for Birmingham, Stechford (Mr. Davis), who was supported by me. The Secretary of State said, almost as a throw-away, that he had solved the problem. We should be grateful to know about that by letter or through a statement. Neither of us has received any information. We should like to know whether Birmingham council has received any new money. It needs about £750,000. Has the council received new money to get over the problem of a double week's rent collection? My constituents, including 80-year-old women, are being harassed to pay an extra week's rent by non-existent rent collectors. We disbanded rent collectors

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  years ago. The departments have been sending officials round the houses. The Opposition would like clarification on that point as soon as possible.
  I repeat the offer made by my hon. Friend the Member for Pontypridd (Mr. John). At 10 o'clock there need be no vote on this Bill. The Opposition say that in all sincerity because the argument as to what the calculation will be could be academic. However, it is not academic to those on the losing side. Will the Government ensure—it can easily be done—that no one will lose this year because of the technicalities of the changeover? They can ensure that by saying that they will pay a 6 per cent. increase in benefits in November if that is the inflation rate. By June, when the Government possess the May figure, they will have a better idea of what the November figure will be. If they do not wish to do that, they could pay an extra week's benefit, because that is roughly what a 2 per cent. difference in benefits means. It is the loss of one week's benefit during the course of a year. The Government could pay an extra week's benefit on top of the Christmas bonus. If the Government do not like that, a procedure that is not so fast but nevertheless acceptable would be to bring forward another uprating in the early months of next year to make up for that shortfall. There are three ways round the problem. If the Minister accepts one of those options, or comes forward with another formula that his Department has concocted during the day, he has the assurance that the Labour party will not divide the House.
  The Rossi price index was mentioned early in the debate. The Minister whose name is attached to the index, which was invented last year, did not seem fully to understand what my hon. Friend the Member for Pontypridd said. The Minister will remember that during the passage of the Social Security and Housing Benefits Bill, which legislated for the housing benefit system, it was estimated that the retail price index minus housing would increase by 0·5 per cent. less than the retail price index in general in November 1982. However, it actually rose by 0·2 per cent. more than the annual RPI. There is a gap of 0·7 per cent.
  Supplementary benefit, instead of being increased by 0·5 per cent. less than other benefits, should have been increased by 0·2 per cent. more than other benefits. The Labour party believes that at the very least the 0·5 per cent. should be added back this year. Bearing in mind the logical way that the Rossi price index operates, it is arguable that the full adjustment of 0·7 per cent. should be made. I am quite happy to give the Minister that in writing as it is something which is not easy to explain across the Dispatch Box.
  Most hon. Members have referred almost exclusively—except when they were learning about the French system of child benefit payments or lack of them because of truancy — to pensioners. It is true that the majority of people in this country who depend for their total income on the social security system are pensioners. Hon. Members must not forget the 3 million people who are on the dole. I am talking about a person who loses his or her job and will receive £25 a week income in unemployment benefit. A married couple receives £41 a week unemployment pay. The House has been told that average earnings are £160 a week. I am talking not just about the pensioners but the unemployed and the disabled. The whole spectrum, counting dependants, amounts to the best part of half the population of the country. Were the
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  time available, or the scope of the Bill such, the Labour party would wish to raise many matters about the income support levels to the various groups of people affected.
  The Government are the only one in modern times—my limited experience in the House is nine years—who have to introduce primary legislation to stop social security benefits rising, as they would have done without such legislation. I cannot recall a time since the last war when a Government have had to introduce a Bill to prevent an increase that would otherwise have occurred. There was so-called "over-provision"—the Chancellor of the Exchequer's phrase—in November 1976 and 1977 tinder the forecasting system. That system did not work in the majority of years, but that is not to say that people suffered. In 1976 and 1977 the forecast was higher than the rate of inflation at the end of the day. There was no clawback Bill in 1977 or 1978 to get back the so-called over-provision in 1976 and 1977.
  However, when in November 1980 social security benefits, pensions and the whole lot were seen to rise by 1p in the pound more than the rate in inflation at the outturn, the Government introduced in 1981 a special Bill which had one purpose and one alone—to take that 1p in the pound off the November 1981 increase. They introduced primary legislation then and they are doing so again. We have another special Bill which will affect benefit levels in November this year in a detrimental way. However much the hon. Member for Birmingham, Edgbaston (Mrs. Knight) may try to argue against that, it cannot be refuted. Indeed, the hon. Member for Woolwich, West (Mr. Bottomley) said that 1 per cent. did not really matter. However, when the Government cut 1 per cent. off benefits in 1981 he voted when there was a three-line Whip. That 1 per cent. was important enough then for a three-line Whip and for us to oppose it.
  The issue would not be so contentious if people did not lose as a result in the year of the changeover. In addition, if the gap between the increased rate of benefit and the payment was not so long, the argument between the two sides of the House would diminish. Hon. Members, like me, only quote the bits they want to quote. However, paragraph 35 of the report of the Social Services Committee—House of Commons Paper 123—states:
  "We recommend that in developing its operational strategy the Department bear in mind the considerable advantages that would accrue from the possibility of swifter and more frequent uprating."
  We want to know what the Government intend to do about that. In some ways the hon. Member for Macclesfield (Mr. Winterton) has been like a shadow over the debate. Several hon. Members have quoted him because of his great walk-out during the Secretary of State's speech. Indeed, I bumped into the hon. Gentleman twice today in the photocopying room. On both occasions I was photocopying his words, so he knows that I intended to refer to him. On 15 December 1982 the hon. Gentleman told the Minister in the Select Committee that the Conservative party's manifesto had twice included pledges to have more frequent upratings of social security benefits. However, nothing has ever come of that. The arguments against more frequent upratings have diminished considerably.
  Ministers in both Labour and Conservative Governments have repeatedly told the House and the country why they need a minimum of six to seven months to carry out the uprating. The facts are given in

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  considerable and helpful detail in the Library briefing prepared for the Bill. Nevertheless, it appears at this late date that we do not need six to seven months after all. In the four upratings under this Government the average delay between announcement and uprating has been seven and a half months. The six upratings in the four and a half years of the Labour Government saw an average delay of 5·7 months. That is almost two months less in terms of average delay between announcement and payment. So, despite the use of computers in the national insurance part of the system, the delay has increased in recent years.
  As late as December of last year, Ministers were saying that much time was still needed. However, as a result of the policy of mass unemployment that has been followed by this Government and the increased numbers of people being means-tested, there is an increased work load compared with previous years. Nevertheless, the Government suddenly say "We do not need to do anything until 17 June, and we can make all the payments by the date in November." We need some assurances on that matter, if only because between May 1979 and the end of last year there has been a 22 per cent. increase in the ratio of means-tested supplementary benefit claimants, compared with the local staff in DHSS offices who have to make the calculations. There has been a massive increase in their work load, and they have to do the work in the shorter time between June and November this year. We need assurances—we need them now and in Committee next week—about what the Government have done to get agreements with their staff, notwithstanding the problems in local offices in recent months. We need to know whether arrangements have been made for overtime work in offices. We need to know what procedures are being adopted. Is it correct, as my hon. Friend the Member for Stockport, North (Mr. Bennett) asked, that second order books will need to be issued in order to make the dates?
  I come back to the matter that I raised in an intervention. What happens if the House is prorogued in June? What assurances will be given, and what procedures will be set in motion if this House is not sitting on 17 June, the day on which the May retail price index comes out, and the starting date for changing the books of millions of beneficiaries before November? If the Prime Minister cuts and runs in June—the sooner the better, as far as I am concerned—the Government must make sure that the administrative machinery is set in motion so that those who are dependent on social security payments do not suffer as a result of that action.
  The Government have tied the mechanism to one date, 17 June. That is when everyone will know what the increase in pensions will be in November, because I understand that that is the date of publication of the May retail price index. That date is already known. If the House is not sitting, there will be difficulties for the people who will be operating the system without parliamentary approval. That is not a scare. I am simply pointing out the consequence of what the Government may do.
  Various views have been expressed about whether the Government have taken the correct course. I mentioned the hon. Member for Macclesfield. I shall not quote what he said in full, but he said on 17 March that he would accept what the Government were doing, but that he would
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  have preferred them to announce it the year before so that it did not appear that the Government were operating in "a devious way". He went on:
  "Would not it have been more honest to have introduced the new method—which I fully support—next year? In those circumstances, Conservative Members could say 'We could have done a good thing'."—[0fficial Report, 17 March 1983; Vol. 39, c. 358.]
  The Secretary of State said that he was grateful for his hon. Friend's remarks. The hon. Gentleman then walked from the Chamber.
  However, the matter goes beyond that, because back in June 1976, a year that has dominated part of our debate because of what happened in terms of the change, the then Opposition social security spokesman, the present Minister for Health, the hon. and learned Member for Rushcliffe (Mr. Clarke), said on 24 June:
  "Would the Minster not accept that it would be possible to have respect for a Government who said that, because of economic strictures, they would have to cut £500 million off the anticipated uprating and that they could not abide by the commitment which my hon. Friend the Member for Wells (Mr. Boscawen) spelled out and which had been made by former Ministers? What is not acceptable is what the Minister tried to do in his opening speech—that is, to pretend that there was no real change".—[0fficial Report, 24 June 1976; Vol. 913, c. 2012.]
  I accept that he was attacking my hon. Friends in Government. There is no argument about that. Nevertheless, this Bill is brought before the House only to save the Government money, some this year and a lot next year. If that were not the case, the logic of the Government's argument would mean that the Bill should have been before the House last year, not this. They are introducing it because of the arguments about the clawback. In answering questions to the Select Committee on Social Services, the Minister for Social Security said:
  "In other words, even if one went on a historical basis there was a risk of overshoot or undershoot, and in fact that did happen."
  If it happened in the past, it will happen in the future. In a more recent Consolidated Fund debate, the Minister for Social Security said:
  "The difficulty with a historic method is that one is basing the increases on past rises in prices. If there is rapidly accelerating inflation … "—
  inflation will rise this year from 4 per cent. to 6 per cent., which is a 50 per cent. increase between May and November. The Secretary of State winces, but that is a difference of 2 per cent. and a difference of a week's benefit. The Minister for Social Security continued:
  "That is the difficulty with that method."—[Official Report, 7 February 1983; Vol. 36, c. 827.]
  The Prime Minister sought to remind the House that I said that I was in favour of a change—I think that I am on record as referring to this only once but I stand to be corrected if I am on record somewhere else—because of what I said in Committe on the Social Security and Housing Benefits Bill on 22 December 1981 at c. 186. We were debating the new sick pay scheme covering eight weeks' maximum income, which has just been introduced, not long-term income support such as retirement pensions.
  There is a world of difference between a maximum of eight weeks' support in respect of sick pay and the total lifetime support of the pension system. Following the Minister's announcement about how the Government would operate statutory sick pay on the historic system, what I said was sensible in view of the problems that they had had. The other difference is that the sick pay increases

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  will not now come in November when all the other social security changes take place. Because of the tax system, they must come about in April.
  It will always be necessary for the Government to announce the sick pay increases—so that employers know and so that codes can be changed—in November, December or January before they come into force in the April when the national insurance rates are changed. There is a difference between the debate in Committee in December 1981 and the debate taking place today. I do not retract the remarks I made then about the point of principle. As I have already said, if any of our offers are accepted, we will not divide the House.
  In a press release on the day after the Budget the Secretary of State said:
  "I shall be introducing a Bill immediately to restore the historic basis of uprating social security benefits."
  The historic basis was never actually legislated for. No Act of Parliament laid down the historic or forecast methods. As the courts judged, under the Social Security Act 1975, it is almost within the whim of Ministers to decide which basis is used. For the Secretary of State to imply that he is returning to a legalistic form that existed under the Labour Government is not strictly accurate. The Labour Government used the forecast method before they used the historic method, and then they went back to the forecast method. There were two changes during that period.
  During the debate many hon. Members have rightly reminded the House that the greatest cut in what the pension would have been under the Government if they had left matters alone when then came into power was the removal of the earnings link. The 1975 Act, which linked pensions with prices or earnings, whichever was the higher, was changed by the Government. On their own admission pensioners have lost over £500 million a year as a consequence.
  The issue goes beyond that because the Government Actuary has warned that if the Government continue with their policy of increasing pensions only in line with prices and keeping the national insurance upper and lower earnings limits fixed to the pension, they will in future be increasing the upper and lower earnings limits only in line with prices. The Government Actuary has warned the House and the Government that if they do not stop that policy and introduce amending legislation they will, in effect, change the Social Security Act 1975 "beyond all recognition". That is the statement that the Actuary makes in paragraph 613 of his first quinquennial report in July.
  Those in their thirties and forties who are paying into a state pension scheme for an earnings-related additional pension will suffer catastrophically if the Government do not stop what they are doing. The Government stand charged with setting in motion changes in social security benefits which have had a knock-on effect into long-term pension policy for those who are now at work and whose pensions are still a generation away.
  The system left under the 1975 pensions Act—it is sometimes referred to as the Brian O'Malley Act—would have created a pension package of a basic pension plus the additional earnings-related pension of about one third average earnings of a single person and about one half for a couple at the time of retirement. That would have applied to those who had worked for 20 years from 1978, when the scheme started, to 1998, when it will come to fruition. Those who retired after that date would have been entitled to use the best 20 years. The Labour party and the House
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  can be justly proud of that system. It would have given automatically a decent non-means-tested income earned throughout a working life through the pay-as-you-go system. That would have been the provision for millions of our people.
  The then Conservative Opposition did not oppose the 1975 legislation, which was designed to provide the framework for a decent pension programme and policy after the problems of the Joseph years, the plans of Richard Crossman and all the other to-ing and fro-ing that caused havoc to pension policy. The Government have not attempted to change the 1975 legislation but other changes that they have introduced have undermined the earrings-related pension programme. The Government are shortchanging millions of people to the extent that the Government Actuary states in his report. In paragraph 1.4 of his conclusions he states:
  "If flat-rate benefits too were operated over a long period at a lower rate than earnings, for example in line with prices or at some intermediate rate between earnings and prices, the increase in the standard contribution rate would be less steep and might even not increase at all depending on how big was the difference between earnings and benefit increases. In that event, the basic benefit rates would in due course"—
  we are talking about basic pensions for today's working people—
  "become very much lower than at present compared with the level of earnings, even if the purchasing power … had been maintained".
  In 1981, the basic pension for a single person was about 21 per cent. of average earnings. That will drop to about 14 per cent. of average earnings as a result of what the Government have already done. Although pensions being tied to prices might look good for electioneering slogans, it is catastrophic for people who are now aged between 30 and 50 who believe that they are paying into a scheme that will provide them with a decent pension. That will produce major problems in the future.
  I have taken a couple of minutes longer than intended because the hon. Member for Rugby (Mr. Pawsey) stole a little of my time. I should like to deal with the Prime Minister's recent arithmetical juggling. On 17 March, in a long reply to my right hon. Friend the Leader of the Opposition, she said:
  "If pensioners' demands were to be accepted it would mean an increase in the weekly national insurance contribution of £20 a week for the man with average earnings."—[Official Report, 17 March 1983; Vol. 39, c. 346.]
  That was repeated throughout the country. The Prime Minister seemed to think that the National Pensioners Convention plan was exactly the same as my right hon. Friend the Leader of the Opposition's 12-point plan when, in fact, it is substantially different. It was suggested that Labour's plan would cost a man on average earnings £20 a week. I wrote to the Prime Minister because that figure is incorrect. I asked her how she arrived at it and whether she had assumed that the employee would pay all of the national insurance increases from now on. I also asked how she had split it. She wrote to me a couple of days ago and said:
  "For a man on average earnings, (presently £165 a week) this would mean an increase of £20 per week in the total contribution; exactly the figure I gave in the House. I did not split the figure between employers and employees. However the split is made, the cost ultimately falls on the working population".
  If that is the case, we might as well abolish national insurance contribuions now and stick it all on employees. It is a smear for the Prime Minister to try to claim—
  Mr. Fowler: No, it is not.
  Mr. Rooker: Oh, yes it is. The Prime Minister said that the pensioners' demands would mean an increase of £20 a week in national insurance contributions by a man on average earnings. It would not. First, it would not be £20 a week and, secondly, the employer would pay by far the greater share. That is not the same as saying that the employee would pay.
  The Opposition do not accept the £20 figure anyway. I do not want to be unfairly critical of the Secretary of State but the estimate—it may not be his own—of the cost of the plan was £10 billion to £20 billion. The Chief Secretary to the Treasury then ran it from £15 billion to £25 billion. Today, the hon. Member for Ealing, North (Mr. Greenway) mentioned £40 billion. That might be a misprint. Conservative Members have estimates ranging from £10 billion to £40 billion when my hon. Friend the Member for Pontypridd, who is in charge of these matters, has said in a statement for public consumption that the Leader of the Opposition's 12-point plan, read as it is published rather than as the Secretary of State and the Prime Minister wish to interpret it, will cost one third of the Secretary of State's lowest estimate. His lowest estimate was £10 billion. If he does not know what one third of £10 billion is, he is in real trouble in his job.
  Mr. Fowler: The hon. Gentleman must concede that there is much public interest in the Labour party's proposals. Does he now agree with my suggestion that he should place in the House of Commons Library the costs of the plan and the details of how it has been worked out in the same way as he invited me to publish my costings of his proposals?
  Mr. Rooker: Yes, at the appropriate time. The Government are rattled because of the firm commitment in Labour party documents to restore the link with earnings and prices.
  Mr. Fowler: There appears to be some confusion on the Opposition Front Bench about how far that pledge goes. Does it apply only to pensioners?
  Mr. Rooker: A plan for pensioners is a plan for pensioners—
  Mr. Mike Thomas: He does not know.
  Mr. Rooker: It is no good the Secretary of State trying to suggest that there will be a knock-on effect throughout the social security system.
  Mr. Thomas: Is it only pensioners?
  Mr. Rooker: That document is in the Library. We intend to have the same formula for the entire social security system so that there is no differentiation between long-term and short-term benefits as there used to be. That is the point about which the hon. Member for Newcastle upon Tyne, East (Mr. Thomas) is getting so up tight. We shall restore what pensioners have lost as a result of the break with earnings. That is a published figure—£1·45 a week for a single person and £2·25 a week for a couple. As soon as it is practicable to put through an order, that is what a Labour Government will do.
  9.37 pm
  The Minister for Social Security (Mr. Hugh Rossi): First, may I dispose of the point about Birmingham. My right hon. Friend the Secretary of State will write to the
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  hon. Member for Birmingham, Perry Barr (Mr. Rooker) in a few days' time about that matter, so I need not take up the House's time now.
  This has been an interesting debate because of the display of contradiction, disarray and ambivalence on the Opposition Benches, especially on the Front Bench. My right hon. Friend has already drawn attention to the contradictions between the Labour party's 12-point pension plan and the document "New Hope for Britain". We have just noted the embarrassment of the hon. Member for Perry Barr about the costing of the 12-point plan. That was brought out by my hon. Friend the Member for Ealing, North (Mr. Greenway). However, it may help the House if I draw its attention to the letter of 29 March written by my right hon. Friend to the hon. Member for Perry Barr which gives the Government's costings of the 12-point plan. The letter should be studied carefully because it gives a formal costing for each pledge. I shall not detain the House by reciting the entire letter, but the relevant paragraph states:
  "As you will see then I have been rather generous to you in costing the plan at between £10 and £20 billion—the minimum cost would appear to be £13 to £15 billion—and that leaves out any cost for pledges 7 and 8."
  My right hon. Friend goes on to talk about the additional five pledges that the hon. Member for Pontypridd (Mr. John) found it necessary to give during the Darlington by-election. About that my right hon. Friend the Secretary of State said:
  "That adds to the social security budget by over £1½ billion per annum".
  That is the magnitude of the bill.
  Mr. John: We say in pledge 7:
  "We shall introduce a pension schemes Act which will more adequately protect occupational pensioners from the effects of inflation".
  The right hon. Gentleman says that that would cost the Government hundreds of millions of pounds. He knows that protection for private occupational pension schemes will come from the pension payers themselves.
  Mr. Rossi: That is interesting: the Government are getting someone else to inflation-proof the pensions. The hon. Gentleman has made a false point, because, even assuming that he intends to impose the cost of pledge 7 upon the private sector, it still does not detract from the fact that the cost of the other pledges comes to between £13 billion and £15 billion. In his letter my right hon. Friend says that it comes to £13 billion to £15 billion, leaving out any cost for pledges 7 and 8. On top of that we have the £1·5 billion for the additional five Darlington pledges. We have not been told where that money will come from.
  The hon. Member for Perry Barr has taken my right hon. Friend the Prime Minister to task for suggesting that payments of between £13 billion and £15 billion have to be found from national insurance contributions. In her letter to the hon. Gentleman my right hon. Friend said that, even allowing for the 13 per cent. Treasury subvention to the national insurance fund in respect of this additional liability, £20 per week national insurance contributions would still have to be charged upon the average national wage. That is precisely what my right hon. Friend meant when she answered that question in the House.
  Of course, the hon. Gentleman is trying to split hairs and play with words. What my right hon. Friend meant is clear and she has made it perfectly clear in her letter to the

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  hon. Gentleman in saying that the cost will have to be borne presumably in part by the employer and in part by the employee. Even if it is paid half and half, £10 per week is still a lot of money to the employee and to add £10 per week in overheads to each job would have a serious effect upon Britain's industry and commerce.
  Mr. Mike Thomas rose—
  Mr. Rossi: I have little time left.
  An interesting contradiction arose among Labour Members out of a question that was asked about the restoration of the earnings link and whether that applied only to pensions or to other benefits as well. I noted the reply of the hon. Member for Perry Barr a few moments ago, but, because I found it a curious occurrence, I made a note that at the time the question was asked the hon. Member for Crewe (Mrs. Dunwoody), who is no longer in her place, said "No, it does not", while the hon. Member for Perry Barr said "Yes, it does". If that is not a matter of disarray on the Labour Benches, I should like to know what is. Such contradiction and ambivalence extend to whether we have a forecast or historic method of uprating. That is the subject matter of the Bill.
  During the Budget debate the hon. Member for Pontypridd did not say that he opposed the historic method. In the Committee that considered statutory sick pay, to which the hon. Member for Perry Barr has already referred, I formed the impression that both were inclined to the idea of a historic method. The hon. Member for Perry Barr went so far as to say that he thought it was sensible. It was true that it related to a different benefit over a different period, but at that time I argued the advantages of the historic method to remove from us all the difficulties that Governments have faced over the years in trying to forecast the uprating. It was in that context—on the principle of forecast or historic—that the hon. Member for Perry Barr said that it was sensible. For the purposes of this debate, he has found it necessary to adopt a slightly different attitude and to justify the remark that he made in Committee that encouraged me to believe that we should pursue the historic method of uprating for benefit.
  The hon. Member for Pontypridd said that he was hoping for an academic debate. But today, on balance, he said that he preferred the forecasting method. Is he really serious about that, or is he merely a devil's advocate in the academic debate on the methodology that he would like to have? So far as I could gather, no Opposition Back Bencher really supports the forecast method. From what my hon. Friend for Brentwood and Ongar (Mr. McCrindle) said, it seems that no one outside supports the principle of the forecasting method which, as has been said time and again, has been wrong five times out of seven. How can one really place reliance on a method which, in the light of experience, has shown itself to be wrong so consistently? Use of such a method causes great uncertainty and worry. Every year there must be consideration of an adjustment one way or the other, and difficult forecasts must be made.
  If hon. Members are guided by the light of experience and adopt a flexible and open-minded attitude, they must admit that the forecasting method, introduced in 1976 for questionable reasons, has not succeeded. It has failed the country, including pensioners and everyone in receipt of social security benefits.
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  As for the historic method, the hon. Member for Pontypridd quoted comments that I made in evidence to the Select Committee on Social Services as well as in a subsequent debate. I was asked which was the preferred method, and at that time no decision had been taken, nor could it have been.
  In my evidence to the Select Committee I referred to the advantages and disadvantages of both methods. The historic method has some disadvantages, although it does not have the grave disadvantages of the forecasting method. If there happens to be a gap in time between the announcement of the uprating and its implementation, the historic method based upon past actual figures may well not serve the purpose for which it is intended if there is inflation in the meanwhile. That was the real difficulty, and it was to that point that I directed my evidence to the Select Committee.
  The real difficulty that the Labour Government ran into was that they were dealing with the hysterical method—I meant to say the historical method, but it became hysterical for them in many ways—at a time when they were presiding over the most rampant inflation that this country has ever had, rising to 30 per cent. In times of hyper-inflation the historic method will not serve, for any Government, the purpose for which it is intended. That is why the Labour Government had to change the method. The present Government, by their will and by their record, have shown that they intend to, and will, bring down inflation. That is a totally different context in which to use the historical method. There are bound to be hiccups from time to time, but with the historic method those hiccups will inevitably be caught up in the next round of uprating.
  Mr. John: I am interested in the debate about the historic and the forecasting method. I prefer the forecasting method, but I would not go to the stake for it. Will the hon. Gentleman pledge that no one will lose this year as a result of the change to the historic method? If he will do so, he can avoid a Division on Second Reading.
  Mr. Rossi: The hon. Gentleman knows better than to ask such a question. These matters are dealt with in a way that precludes my making such an undertaking. I can assure the House, however, that if there is a gap between the rate of inflation and the payment that is made, it will be closed as a matter of course at the next uprating in the following year.
  I have been asked how much will be saved. The Budget statement shows that we have improved on the public expenditure White Paper, published as recently as February, by £220 million. We are not saving money. We are adding to our public expenditure.
  Mr. Field: Who is it going to?
  Mr. Rossi: It is going in improved benefit and also in pensions. We have more than kept our pledge to maintain pensions in line with prices. Assumptions about 6 per cent. and 4 per cent. have been bandied about the Chamber. By next November, pensions will have increased by approximately 75 per cent. as against inflation of 70 per cent. over the same period.
  By this measure, the Government have sought to achieve stability in the uprating of benefits. As well as that, we have made improvements as a result of our Budget changes. We have not done any of this by subterfuge. We made our intention perfectly clear from the outset. We

  887
  made statements about the 6 per cent. and the 4·5 per cent. That is clear for all to see. That is quite different from the underhand way in which the Labour Chancellor of the Exchequer saved £500 million in 1976.
  Reference has been made to possible administrative difficulties in terms of the gap between the announcement and the uprating and to what has happened in the past. The right hon. Member for Norwich, North (Mr. Ennals) said that in 1974 it was possible to uprate in four months, but, although I challenged him, he did not mention the resulting difficulties in late payment of pensions and problems within the Department. The same difficulties were encountered after the 1974 election when a five-month period was achieved. The experience of those two attempts was such that the Labour Government never tried again and moved to a seven-month period. That has been compared with the eight-month periods in the past two years, but they were entirely due to the date of the Budget and the need to make an uprating statement immediately after an early Budget.
  We have been asked what difficulties stand in the way of a further improvement. They are that the majority of beneficiaries, including 8 million retirement pensioners, are paid weekly by means of an order book which covers their weekly entitlement for up to 20 weeks, or 26 weeks for supplementary benefit. Order books covering the uprating week therefore go out several months before the uprating. It would be possible, of course, to change to another system. Rayner suggested direct payments through bank accounts on a monthly basis. A much shorter timescale for uprating would then be possible.
  But our pensioners do not wish to be paid in any way other than through order books with weekly payment slips. So long as that is their wish, they will be paid in that way, and so long as they are paid in that way it is logistically impossible to foreshorten the period needed to deal with these matters administratively. This year, some beneficiaries will have to receive two order books because it was too late to include the increase with the routine issue of the main order book. That will inevitably mean extra work in local offices, but I am sure that the staff will rally to the problem as they always do and work the necessary overtime to ensure that the books are delivered on time.
  The hon. Member for Pontypridd asked about housing benefit. It is true that at the time of the November 1982 uprating the RPI less housing costs was marginally lower than the RPI including housing costs. To the extent that supplementary benefit depended on the former, beneficiaries received 0·5 per cent. less than they would have received if the housing costs had been included, but that is in the context of their receiving 2 per cent. above the rate of inflation in any case. I can assure the hon. Gentleman that a change has taken place inasmuch as housing costs have been moving much more slowly than the rest of the figures in the retail price index. Therefore, the figure is now the reverse of what it was in November 1982. Supplementary pensioners will be better off under the new system.
  As I have not time to answer the remaining questions, I commend the Bill to the House.
  Question put, That the amendment be made:—
  The House divided: Ayes 207, Noes 270.

  Division No. 112]

  [10 pm

  AYES

  Abse, Leo

  Harman, Harriet (Peckham)

  Adams, Allen

  Harrison, Rt Hon Walter

  Allaun, Frank

  Hattersley, Rt Hon Roy

  Alton, David

  Haynes, Frank

  Anderson, Donald

  Healey, Rt Hon Denis

  Archer, Rt Hon Peter

  Heffer, Eric S.

  Ashley, Rt Hon Jack

  Hogg, N. (E Dunb't'nshire)

  Ashton, Joe

  Holland, S. (L'b'th, Vauxh'll)

  Atkinson, N.(H'gey,)

  Home Robertson, John

  Bagier, Gordon A.T.

  Homewood, William

  Barnett, Guy (Greenwich)

  Hooley, Frank

  Benn, Rt Hon Tony

  Horam, John

  Bennett, Andrew (St'kp't N)

  Howell, Rt Hon D.

  Bidwell, Sydney

  Howells, Geraint

  Boothroyd, Miss Betty

  Hoyle, Douglas

  Bottomley, Rt Hon A.(M'b'ro)

  Hudson Davies, Gwilym E.

  Bray, Dr Jeremy

  Hughes, Mark (Durham)

  Brown, Hugh D. (Provan)

  Hughes, Robert (Aberdeen N)

  Brown, R. C. (N'castle W)

  Hughes, Roy (Newport)

  Brown, Ronald W. (H'ckn'y S)

  Hughes, Simon (Bermondsey)

  Brown, Ron (E'burgh, Leith)

  Janner, Hon Greville

  Buchan, Norman

  Jay, Rt Hon Douglas

  Callaghan, Rt Hon J.

  John, Brynmor

  Callaghan, Jim (Midd't'n & P)

  Johnson, James (Hull West)

  Campbell, Ian

  Johnston, Russell (Inverness)

  Canavan, Dennis

  Jones, Barry (East Flint)

  Cant, R. B.

  Kaufman, Rt Hon Gerald

  Carmichael, Neil

  Kerr, Russell

  Clarke, Thomas (C'b'dge, A'rie)

  Kilroy-Silk, Robert

  Cocks, Rt Hon M. (B'stol S)

  Lambie, David

  Coleman, Donald

  Leadbitter, Ted

  Concannon, Rt Hon J. D.

  Leighton, Ronald

  Conlan, Bernard

  Lestor, Miss Joan

  Cowans, Harry

  Litherland, Robert

  Cox, T. (W'dsw'th, Toot'g)

  Lofthouse, Geoffrey

  Craigen, J. M. (G'gow, M'hill)

  Lyon, Alexander (York)

  Crowther, Stan

  Lyons, Edward (Bradf'd W)

  Cunliffe, Lawrence

  Mabon, Rt Hon Dr J. Dickson

  Cunningham, G. (Islington S)

  McElhone, Mrs Helen

  Cunningham, Dr J. (W'h'n)

  McKay, Allen (Penistone)

  Dalyell, Tam

  McKelvey, William

  Davies, Rt Hon Denzil (L'lli)

  MacKenzie, Rt Hon Gregor

  Davis, Clinton (Hackney C)

  McNally, Thomas

  Davis, Terry (B'ham, Stechf'd)

  McNamara, Kevin

  Deakins, Eric

  McTaggart, Robert

  Dean, Joseph (Leeds West)

  McWilliam, John

  Dewar, Donald

  Magee, Bryan

  Dixon, Donald

  Marshall, Dr Edmund (Goole)

  Dobson, Frank

  Marshall, Jim (Leicester S)

  Dormand, Jack

  Martin, M(G'gow S'burn)

  Dubs, Alfred

  Mason, Rt Hon Roy

  Dunnett, Jack

  Mikardo, Ian

  Dunwoody, Hon Mrs G.

  Millan, Rt Hon Bruce

  Eadie, Alex

  Miller, DrM. S. (E Kilbride)

  Eastham, Ken

  Mitchell, Austin (Grimsby)

  Edwards, R. (W'hampt'n S E)

  Mitchell, R. C. (Soton Itchen)

  Ellis, R. (NE D'bysh're)

  Morris, Rt Hon C. (O'shaw)

  Ellis, Tom (Wrexham)

  Oakes, Rt Hon Gordon

  Ennals, Rt Hon David

  O'Brien, Oswald (Darlington)

  Evans, Ioan (Aberdare)

  Ogden, Eric

  Evans, John (Newton)

  O'Halloran, Michael

  Field, Frank

  O'Neill, Martin

  Flannery, Martin

  Orme, Rt Hon Stanley

  Fletcher, L. R. (Ilkeston)

  Palmer, Arthur

  Foot, Rt Hon Michael

  Parry, Robert

  Ford, Ben

  Penhaligon, David

  Foster, Derek

  Powell, Raymond (Ogmore)

  Foulkes, George

  Race, Reg

  Fraser, J. (Lamb'th, N'w'd)

  Radice, Giles

  Freud, Clement

  Rees, Rt Hon M (Leeds S)

  Garrett, John (Norwich S)

  Richardson, Jo

  George, Bruce

  Roberts, Albert (Normanton)

  Gilbert, Rt Hon Dr John

  Roberts, Allan (Bootle)

  Ginsburg, David

  Roberts, Ernest (Hackney N)

  Golding, John

  Roberts, Gwilym (Cannock)

  Graham, Ted

  Robertson, George

  Hamilton, James (Bothwell)

  Robinson, G. (Coventry NW)

  Hardy, Peter

  Rooker, J. W.

  889

  Roper, John

  Varley, Rt Hon Eric G.

  Ross, Ernest (Dundee West)

  Wainwright, E.(Dearne V)

  Ross, Stephen (Isle of Wight)

  Wainwright, R.(Colne V)

  Rowlands, Ted

  Walker, Rt Hon H.(D'caster)

  Ryman, John

  Wardell, Gareth

  Sandelson, Neville

  Watkins, David

  Sever, John

  Weetch, Ken

  Sheldon, Rt Hon R.

  Wellbeloved, James

  Shore, Rt Hon Peter

  Welsh, Michael

  Short, Mrs Renee

  White, Frank R.

  Silkin, Rt Hon S. C. (Dulwich)

  White, J. (G'gow Pollok)

  Silverman, Julius

  Whitehead, Phillip

  Skinner, Dennis

  Whitlock, William

  Smith, Cyril (Rochdale)

  Wigley, Dafydd

  Smith, Rt Hon J. (N Lanark)

  Willey, Rt Hon Frederick

  Soley, Clive

  Williams, Rt Hon Mrs(Crosby)

  Spellar, John Francis (B'ham)

  Wilson, Gordon (Dundee E)

  Spriggs, Leslie

  Wilson, William (C'try SE)

  Stallard, A. W.

  Winnick, David

  Stoddart, David

  Woolmer, Kenneth

  Strang, Gavin

  Wrigglesworth, Ian

  Straw, Jack

  Wright, Sheila

  Summerskill, Hon Dr Shirley

  Young, David (Bolton E)

  Taylor, Mrs Ann (Bolton W)

  Thomas, Jeffrey (Abertillery)

  Tellers for the Ayes:

  Thomas, Mike (Newcastle E)

  Mr. Hugh McCartney and

  Thomas, Dr R.(Carmarthen)

  Mr. George Morton.

  Thorne, Stan (Preston South)

  NOES

  Adley, Robert

  Dorrell, Stephen

  Aitken, Jonathan

  Douglas-Hamilton, Lord J.

  Alison, Rt Hon Michael

  Dover, Denshore

  Ancram, Michael

  du Cann, Rt Hon Edward

  Arnold, Tom

  Dunn, Robert (Dartford)

  Aspinwall, Jack

  Durant, Tony

  Atkins, Rt Hon H.(S'thorne)

  Dykes, Hugh

  Atkins, Robert(Preston N)

  Eden, Rt Hon Sir John

  Atkinson, David (B'm'th,E)

  Edwards, Rt Hon N. (P'broke)

  Baker, Kenneth (St.M'bone)

  Eggar, Tim

  Baker, Nicholas (N Dorset)

  Emery, Sir Peter

  Bendall, Vivian

  Eyre, Reginald

  Benyon, Thomas (A'don)

  Fairbairn, Nicholas

  Berry, Hon Anthony

  Fairgrieve, Sir Russell

  Best, Keith

  Faith, Mrs Sheila

  Bevan, David Gilroy

  Farr, John

  Blaker, Peter

  Fell, Sir Anthony

  Bonsor, Sir Nicholas

  Fenner, Mrs Peggy

  Bottomley, Peter (W'wich W)

  Finsberg, Geoffrey

  Bowden, Andrew

  Fisher, Sir Nigel

  Boyson, Dr Rhodes

  Fletcher, A. (Ed'nb'gh N)

  Braine, Sir Bernard

  Fookes, Miss Janet

  Bright, Graham

  Forman, Nigel

  Brinton, Tim

  Fowler, Rt Hon Norman

  Brittan, Rt. Hon. Leon

  Fox, Marcus

  Brooke, Hon Peter

  Fraser, Rt Hon Sir Hugh

  Brotherton, Michael

  Fraser, Peter (South Angus)

  Brown, Michael(Brigg & Sc'n)

  Gardiner, George (Reigate)

  Browne, John (Winchester)

  Gardner, Sir Edward

  Bruce-Gardyne, John

  Garel-Jones, Tristan

  Bryan, Sir Paul

  Gilmour, Rt Hon Sir Ian

  Buchanan-Smith, Rt. Hon. A.

  Glyn, Dr Alan

  Buck, Antony

  Goodhart, Sir Philip

  Budgen, Nick

  Goodlad, Alastair

  Bulmer, Esmond

  Gorst, John

  Butler, Hon Adam

  Gow, Ian

  Carlisle, John (Luton West)

  Gower, Sir Raymond

  Carlisle, Kenneth (Lincoln)

  Grant, Sir Anthony

  Carlisle, Rt Hon M. (R'c'n)

  Gray, Rt Hon Hamish

  Chalker, Mrs. Lynda

  Greenway, Harry

  Chapman, Sydney

  Grieve, Percy

  Churchill, W. S.

  Griffiths, E.(B'y'St. Edm'ds)

  Clark, Sir W. (Croydon S)

  Griffiths, Peter (Portsm'th N)

  Clarke, Kenneth (Rushcliffe)

  Grist, Ian

  Clegg, Sir Walter

  Grylls, Michael

  Colvin, Michael

  Gummer, John Selwyn

  Cope, John

  Hamilton, Hon A.

  Cranborne, Viscount

  Hamilton, Michael (Salisbury)

  Crouch, David

  Hampson, Dr Keith

  Dickens, Geoffrey

  Hannam, John

  890

  Haselhurst, Alan

  Neubert, Michael

  Hastings, Stephen

  Newton, Tony

  Havers, Rt Hon Sir Michael

  Nott, Rt Hon Sir John

  Hawkins, Sir Paul

  Onslow, Cranley

  Hawksley, Warren

  Oppenheim, Rt Hon Mrs S.

  Hayhoe, Barney

  Osborn, John

  Heddle, John

  Page, Richard (SW Herts)

  Henderson, Barry

  Parkinson, Rt Hon Cecil

  Heseltine, Rt Hon Michael

  Parris, Matthew

  Hicks, Robert

  Patten, Christopher (Bath)

  Higgins, Rt Hon Terence L.

  Pattie, Geoffrey

  Hogg, Hon Douglas (Gr'th'm)

  Pawsey, James

  Holland, Philip (Carlton)

  Percival, Sir Ian

  Hooson, Tom

  Peyton, Rt Hon John

  Howe, Rt Hon Sir Geoffrey

  Pink, R. Bonner

  Howell, Rt Hon D. (G'ldf'd)

  Pollock, Alexander

  Howell, Ralph (N Norfolk)

  Prentice, Rt Hon Reg

  Hunt, David (Wirral)

  Price, C. (Lewisham W)

  Hunt, John (Ravensbourne)

  Price, Sir David (Eastleigh)

  Hurd, Rt Hon Douglas

  Prior, Rt Hon James

  Irvine, RtHon Bryant Godman

  Proctor, K. Harvey

  Irving, Charles (Cheltenham)

  Raison, Rt Hon Timothy

  Jessel, Toby

  Rathbone, Tim

  Johnson Smith, Sir Geoffrey

  Rees, Peter (Dover and Deal)

  Jopling, Rt Hon Michael

  Rees-Davies, W. R.

  Joseph, Rt Hon Sir Keith

  Renton, Tim

  Kaberry, Sir Donald

  Rhodes James, Robert

  Kershaw, Sir Anthony

  Ridley, Hon Nicholas

  Kimball, Sir Marcus

  Ridsdale, Sir Julian

  Kitson, Sir Timothy

  Rifkind, Malcolm

  Knight, Mrs Jill

  Rossi, Hugh

  Knox, David

  Rost, Peter

  Lamont, Norman

  Royle, Sir Anthony

  Lang, Ian

  Sainsbury, Hon Timothy

  Langford-Holt, Sir John

  St. John-Stevas, Rt Hon N.

  Latham, Michael

  Scott, Nicholas

  Lawrence, Ivan

  Shaw, Giles (Pudsey)

  Lawson, Rt Hon Nigel

  Shelton, William (Streatham)

  Lee, John

  Shepherd, Colin (Hereford)

  Le Marchant, Spencer

  Shepherd, Richard

  Lennox-Boyd, Hon Mark

  Shersby, Michael

  Lester, Jim (Beeston)

  Silvester, Fred

  Lewis, Sir Kenneth (Rutland)

  Sims, Roger

  Lloyd, Peter (Fareham)

  Skeet, T. H. H.

  Loveridge, John

  Smith, Tim (Beaconsfield)

  Luce, Richard

  Speller, Tony

  Lyell, Nicholas

  Spicer, Jim (West Dorset)

  McCrindle, Robert

  Spicer, Michael (S Worcs)

  Macfarlane, Neil

  Sproat, Iain

  MacGregor, John

  Stanbrook, Ivor

  Mac Kay, John (Argyll)

  Stanley, John

  Macmillan, Rt Hon M.

  Steen, Anthony

  McNair-Wilson, M. (N'bury)

  Stevens, Martin

  McNair-Wilson, P. (New Fst)

  Stewart, A.(E Renfrewshire)

  Madel, David

  Stewart, Ian (Hitchin)

  Major, John

  Stradling Thomas, J.

  Marland, Paul

  Tapsell, Peter

  Marlow, Antony

  Taylor, Teddy (S'end E)

  Marshall, Michael (Arundel)

  Tebbit, Rt Hon Norman

  Marten, Rt Hon Neil

  Temple-Morris, Peter

  Mates, Michael

  Thatcher, Rt Hon Mrs M.

  Maude, Rt Hon Sir Angus

  Thomas, Rt Hon Peter

  Mawby, Ray

  Thompson, Donald

  Mawhinney, Dr Brian

  Thorne, Neil (Ilford South)

  Maxwell-Hyslop, Robin

  Thornton, Malcolm

  Mayhew, Patrick

  Townend, John (Bridlington)

  Mellor, David

  Townsend, Cyril D, (B'heath)

  Meyer, Sir Anthony

  Trippier, David

  Miller, Hal (B'grove)

  van Straubenzee, Sir W.

  Mills, Iain (Meriden)

  Vaughan, Dr Gerard

  Mills, Sir Peter (West Devon)

  Waddington, David

  Mitchell, David (Basingstoke)

  Waldegrave, Hon William

  Moate, Roger

  Walker, Rt Hon P.(W'cester)

  Monro, Sir Hector

  Walker, B. (Perth)

  Moore, John

  Walker-Smith, Rt Hon Sir D.

  Morgan, Geraint

  Wall, Sir Patrick

  Morrison, Hon C. (Devizes)

  Walters, Dennis

  Morrison, Hon P. (Chester)

  Ward, John

  Neale, Gerrard

  Warren, Kenneth

  Nelson, Anthony

  Watson, John

  891

  Wells, Bowen

  Winterton, Nicholas

  Wells, John (Maidstone)

  Wolfson, Mark

  Wheeler, John

  Young, Sir George (Acton)

  Whitney, Raymond

  Younger, Rt Hon George

  Wickenden, Keith

  Wiggin, Jerry

  Tellers for the Noes:

  Wilkinson, John

  Mr. Carol Mather and

  Williams, D.(Montgomery)

  Mr. Robert Boscawen.

  Question accordingly negatived.
  Main Question put forthwith pursuant to Standing Order No. 41 (Amendment on Second or Third Reading), and agreed to.
  Bill accordingly read a Second time.
  Bill committed to a Committee of the Whole House.—[Mr. Major.]
  Committee tomorrow.

Closed Shop
10.14 pm
The Secretary of State for Employment (Mr. Norman Tebbit): I beg to move,
That the draft Code of Practice on Closed Shop Agreements and Arrangements, which was laid before this House on 2nd March, be approved.
The draft code of practice before us tonight is a revised version of the one that the House approved about two and a half years ago. At that time the House also approved the code on picketing. The fact that no changes have been found necessary to that code is of itself an answer to those who claimed that the Employment Act 1980 would be defied. I am not sure whether even the right hon. Member for Chesterfield (Mr. Varley) and his colleagues will include a commitment to the flying picket and the disorders of the Grunwick picket line in their election manifesto.
The revision of the closed shop code is needed for two reasons. First, the code has to be amended to take account of the changes brought about by the Employment Act 1982. As a result, section B, which explains the main provision of the law, has been extensively revised and there are consequential amendmente elsewhere. The second reason why the code needs revision is that, unfortunately, the closed shop is continuing to cause substantial injustice to individuals.
I know that among those who yell "conscription" at the mention of the youth training scheme, let alone the youth training scheme in the armed services, there are those who have no qualms about the conscription of the closed shop. I regret to say that abuse of the closed shop is still rampant.
On 22 September last a number of unions sought to force their members to strike without consultation, without ballots, without votes and without any democratic process whatsoever. Few of those unions behaved worse than the National Graphical Association, which threatened its own members with fines and even expulsion if they did not obey the strike call. Some 30,000 NGA members defied the bullies and stayed at work. Let the NGA members speak for themselves:
"For the first time in 35 years' membership I came face to face with union bully boy tactics ordering me to throw aside my conscience, walk away from my job, dishonour my contract of employment, break the law—all in the cause of confronting a democratically elected Government."
That was said by one letter writer to the NGA's journal. Another said:
"I would like the National Council to explain to the ordinary members what gives them the right to call us out on strike without a ballot, or even consultation of the rank and file members."
Another of those letter writers said in his own union's journal:
"Why is it that once some of our union officials get elected they seem to feel they have the divine right to dictate and impose their own views—on the members they represent—instead of representing the views of the members as they are elected to do?"
Of course, the answer is simple. They were able to do it because of the closed shop. Those are just some of the letters published in the NGA journal, which had to admit that letters had poured in on that subject.
Mr. John Evans: All three letters.
Mr. Tebbit: Is the hon. Gentleman going to challenge me on the number of letters that went into the NGA's journal?
Mr. Evans: Three out of 30,000.
Mr. Tebbit: The hon. Gentleman is talking absolute arrant nonsense. The NGA journal did not say how many letters, but it said it was forced to publish some. More than three were published because many letters had come into its offices.
Mr. K. J. Woolmer: How many?
Mr. Tebbit: I do not know. The hon. Member for Batley and Morley (Mr. Woolmer) will have to ask the editors of the NGA journal. The journal says: "Massive support". That was how Print reported the NGA's role on the day of action. The headline in their own journal is "Goodbye to Freedom". It was goodbye to the freedom of their own members. I have here some of the letters that were published.
Mr. Ivan Lawrence: In case my right hon. Friend thinks that only the NGA has been behaving in that way, is he aware that 25 representatives of the Transport and General Workers Union, some of them lifelong Socialists and shop stewards, came into the offices of the Burton Conservative association begging me[Interruption]—to ask the Secretary of State for Employment to take action against the closed shop, which was destroying their trade unionism because they had been forced either to stay out on strike when they had not been balloted, or had been fined for disobeying the requirements of their union shop stewards?
Mr. Tebbit: My hon. and learned Friend describes the position well. The amount of noise, the shouting, the yelling and the abuse that comes from Opposition Members when they are faced with the facts is interesting. It is characteristic of the kind of union meetings which we all too often see on the television screens in our own homes.
The hon. Member for Dunbartonshire, Central (Mr. McCartney), who is a Whip, chooses to shout abuse as well. If he wishes to make a speech, he may well catch Mr. Deputy Speaker's eye.
Mr. Frank Haynes: Did not the Secretary of State ever do that? He was one of the worst.
Mr. Tebbit: There could be no better illustration of the intolerance and the detestation of the democratic process than what is happening this evening—[Interruption.] Many union members suffered discrimination during that dispute. I know that about 30,000 NGA members defied the strike call that day. No one can say how many of the 30,000 have been summoned to union disciplinary proceedings.
Mr. Ron Leighton: Why cannot the right hon. Gentleman say that?
Mr. Tebbit: Because the union has not released the figures.
Mr. Leighton: There are not any.
Mr. Tebbit: The hon. Member for Newham, North-East (Mr. Leighton) says that there are none. There were attempts, as he knows, and the NGA had to write to its branches warning then that they could be running into serious trouble if they did take action.
Mr. Leighton: Not one.
Mr. Tebbit: The hon. Member claims that not one has been penalised. It is known that 30,000 members were
894
threatened by their own union before the strike was called and told that they would be subjected to disciplinary processes.
Last year there was the ill-fated railway strike that damaged not only British Rail but the trade unions as well. The National Union of Railwaymen has taken action against 12,000 of its own members.
In doing so, it has sparked off the formation of a rival union. Indeed, ASLEF imposed penalties of £10 a day on trade unionists who went to work. The Civil and Public Services Association and the Post Office Engineering Union have taken action against members who have been refusing to take part in protests against the privatisation of British Telecom.
Mr. Leighton: Is the Secretary of State in favour of that new railway union, and would he recognise it?
Mr. Tebbit: It is not for me to say. I am not the industrial relations manager of British Rail. There is no reason why I should say which unions should be recognised by British Rail, and it would not be appropriate for me to do so.
Mr. Leighton: The Secretary of State may speak in the House, but his words carry outside it. Is the right hon. Gentleman encouraging a splinter union? Does he think that that is good for industrial relations?
Mr. Tebbit: It was the punishment of 12,000 NUR members that sparked off the union's formation. II was nothing that I have done. It is merely an interesting situation that has been created by the NUR.
Mr. Leighton: The right hon. Gentleman has not answered the question.
Mr. Tebbit: I know that I have not answered the hon. Gentleman's question and I am not going to, because it is not for me to answer.
Mr. Leighton: Why did the right hon. Gentleman raise the issue if he is not going to answer it?
Mr. Tebbit: This is a new version of debating. The hon. Gentleman asks why I asked his question and then did not answer it. I know that the hon. Gentleman would be disappointed if I did not refer briefly to Sandwell. However, I shall do so only briefly. Professor Gennard has set out the appalling facts of Sandwell with great clarity in chapter seven of his most interesting and valuable report.
Mr. Harold Walker: The Secretary of State has referred to a passage from the Gennard report. Why was he not prepared to make it available to hon. Members?
Mr. Tebbit: The right hon. Gentleman is wrong, because it is available to hon. Members. I have placed a copy in the Library.
Mr. John Evans: When? How many copies?
Mr. Tebbit: How many copies does the hon. Gentleman want to read? I must tell the hon. Gentleman first that there is also a photocopying machine in the Library and secondly—
Mr. Leighton: On a point or order, Mr. Deputy Speaker. When I or my secretary use the photocopying machine we see an inscription on top which refers us to

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a ruling of Mr. Speaker. I think that it refers to the fact that we can make photocopies only of so many pages. I understand that the scholarly and thorough report of Professor Gennard consists of more than 300 pages. May I have your assurance, Mr. Deputy Speaker, that hon. Members can use the photocopying facilities in the House to copy more than 300 pages of the report commissioned by the Secretary of State, which he is not prepared to print?
Mr. Deputy Speaker (Mr. Paul Dean): The hon. Gentleman has made his point, but it is not a point of order for me. However, I find it difficult to hear what the Secretary of State is saying.
Mr. Tebbit: Of course, I would not presume to judge whether that was a point of order for you, Mr. Deputy Speaker, but I must tell the hon. Member for Newham, North-East that he is quite wrong. The regulation of the House concerns the number of copies of each page which may be taken. I think that he can take 12 copies of each of the 350-odd pages.
So the hon. Gentleman can happily occupy himself providing them for his hon. Friends as well.
Mr. Leighton rose—
Mr. Tebbit: I cannot give way as this is a short debate.
Mr. Leighton rose—
Mr. Tebbit: If the hon. Gentleman would stop shouting, the debate could proceed more easily.
My second point to the hon. Gentleman is that I understand that Professor Gennard will be publishing his work in book form as well before too long.
Mr. Peter Hardy: We can all buy it.
Mr. Tebbit: That is absolutely right, and the hon. Gentleman does receive certain allowances and emoluments for his work as a Member of Parliament.
Finally I must tell the hon. Member for Newham, North-East that I did not commission the inquiry. It was commissioned during the time of the Labour Government.
Mr. Leighton: The Secretary of State is relying on it. He is frightened to publish it.
Mr. Tebbit: The hon. Gentleman is talking rubbish.
If I had threatened that 30,000 NGA members might be hauled before the courts for taking part in an unlawful dispute or if the courts had fined ASLEF members for going on strike or had taken action against 12,000 NUR members, there would have been screams about provocation and Fascism, complaints to the ILO and references to the United Nations charter and probably to holy writ, too. But those trials, those fines and those penalties were levied by trade unions against their own conscript members in closed shops. I come to the House not to drag—
Several Hon. Members rose—
Mr. Deputy Speaker: Order. It is clear that the Minister is not giving way.
Mr. Leighton: Which fines?
Mr. Tebbit: The fines on the ASLEF members.
Mr. Leighton: We are talking about the NGA.
Mr. Tebbit: It would be in the interests of the House if we had a slightly more orderly debate.
Those trials, those fines and those penalties were levied by trade unions against their own conscript members in closed shops. I have come to the House today not to bring in the law to drag trade unionists to court to be charged, convicted and punished but to free them from those very risks.
I turn to the detailed changes in the code, which is designed to protect trade unionists and other workers against these abuses. I remind the House that, as is our practice, this revised code has been the subject of consultation and the response to that consultation has been favourable. The consultation process was carried out with all of the public. The trade unions were invited to comment in detail. As hon. Members will see, we have strengthened the provisions to protect trade unionists who refuse to take industrial action. First, we have added a new provision to make it clear that disciplinary action should not be taken where there are reasonable grounds for believing that the industrial action was unlawful. Secondly, the new code sets out a list of circumstances in which unions should not discipline members who refuse to take industrial action. The most important of these circumstances are where there has been no ballot, where the action is unlawful or in breach of a procedure agreement or where the action constitutes a serious risk to public safety and health. Who would believe that unions should be free to fine and expel members who refuse to take industrial action in such Circumstances?
Mr. Eric S. Heifer: You seem to be doing it very well in the Tory party.
Mr. Tebbit: It seems that there is no one in the House who would want unions to fine or expel members in such circumstances. I am glad that there is such broad agreement.
Mr. Leighton rose—
Mr. Tebbit: This guidance is more than just words on a page—
Mr. Leighton: Will the right hon. Gentleman give way?
Mr. Tebbit: It is linked to the right—[Interruption.]
Mr. Deputy Speaker: Order. I must ask the hon. Member for Newham, North-East (Mr. Leighton) to restrain himself. It seems clear that the Minister is not giving way.
Mr. Leighton rose—
Mr. Deputy Speaker: Mr. Secretary Tebbit.
Mr. Tebbit rose—
Mr. Ioan Evans: On a point of order, Mr. Deputy Speaker. My hon. Friend the Member for Newham, North-East (Mr. Leighton) and the House generally were challenged by the Secretary of State, who said, in effect "Is there anyone in the House who is prepared to say that a trade union has a democratic right, if it decides by a democratic decision"—
Mr. Deputy Speaker: Order. The hon. Gentleman knows that that is a point of argument and not a point of order for the Chair.
Mr. Tebbit: This guidance is more than just words on a page. It is linked to the right, in section 4 of the

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Employment Act 1980, of a trade union member not to be unreasonably expelled from his union in a closed shop. As the House will know, the 1980 Act does not define what is to be regarded as unreasonable expulsion. However, it makes clear that in determining whether an expulsion was unreasonable or not a tribunal must always take the code into account wherever it is relevant. The new provisions in the code will mean that union members who complain to industrial tribunals that they have been unreasonably expelled for refusing to take part in industrial action will have the protection of the law if there has been no secret ballot, or if the action was unlawful or if any of the other circumstances that are in paragraph 61 apply. That, I believe, will be a powerful incentive to trade unions not to take such action in the first place.
The changes in paragraph 61 are undoubtedly the most important changes to the existing code. However, other aspects of the code's guidance have been strengthened where appropriate. For example, in the light of the experience at Sandwell, we have strengthened paragraph 39 so that the code now makes it clear that either party can terminate a closed shop agreement by giving specified notice, and this notice should not exceed three months. Paragraph 39 also provides that, notwithstanding any period of notice specified in a agreement, a closed shop should cease to have effect immediately if it is approved in a ballot in accordance with the statutory requirements that we have laid down. All these changes are designed to ensure that closed shops, where they exist, operate by consent and not by coercion.
The revision of the code is only one part of the process that we set in motion with the 1980 Act. It is the process of safeguarding those who are forced to work in a closed shop. The law on the closed shop which we inherited from the Labour Administration provided no safeguards apart from narrowly defined grounds of religious objection. It was that legislation that led to the railwaymen's action in the European Court of Human Rights, yet the right hon. Member for Chesterfield and his party pretend that that judgment never happened. If elected, they now propose, I understand, to revert to the 1976 legislation, despite the fact that the court's judgment, as Professor Gennard says in his report,
"did appear to show that between 1976 and 1980 the legislation on dismissals for non-union membership in a closed shop situation had been a clear contravention of the European Convention of Human Rights".
Mr. Leighton: Why cannot we have a copy of the report?
Mr. Tebbit: I do not think that the hon. Gentleman would be capable of making good use of it—
Mr. Leighton: Perhaps other hon. Members might be able to do so.
Mr. Tebbit: Although he might be able to make better use of it tomorrow.
I hope that the right hon. Member for Chesterfield will tell us whether his party now accepts the judgment of the European court, and if so why, nevertheless it has proposed to return to the law of 1976. I shall happily give way to the right hon. Gentleman.
This code, like the 1982 Act before it, does not prevent closed shops from continuing to operate if they have the support of the overwhelming majority of their members and if they are operated flexibly, tolerantly and decently.
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The code cannot teach tolerance to the intolerant, but by explaining the law in clear and simple terms and by laying down minimum standards that must be observed, it will protect many trade unionists and other workers against the injustice and intolerance that has been associated for many years with the abuses of the closed shop.
10.40 pm
Mr. Eric G. Varley: I do not think that the most charitable hon. Member can say that the Secretary of State has contributed much to good industrial relations in the 25 minutes that he has spent at the Disatch Box. When he calls for orderly debate I immediately think of the years that he spent before 1979 sitting below the Gangway, and of him having graduated to some academy of good parliamentary behaviour. He is in no position to lecture any Opposition Member about how to behave in debate. He was in the good bovver boy persuasive manner today which we have all come to expect of him.
All the photocopying nonsense and the irrelevances have been trotted out. It is obvious that Conservative Members have taken the lead from the Secretary of State. They are not remotely interested in industrial relations. They are interested only in being spiteful and vindictive about the British trade union movement. They have come in for a bit of fun and to find out what mud slinging abuse we shall get from this semi house-trained polecat.
I say that just to show that if that is the type of debate which hon. Members wart, they can have it. Everyone can do it, but it is not at all effective. We are told that this is the right hon. Gentleman who will some time be the Secretary of State for the Home Department. God help Britain if the Secretary of State for Employment is in charge of hanging and flogging here. He could then use his talents to the full.
I shall now deal with the debate and whether anything that the Secretary of State said contributed to good industrial relations. He commented on the Gennard report. They were snide comments that met with approval from Conservative Members. He asked why we do not use the photocopying machine, and the rest of it. That is a dereliction of duty. The Secretary of State has a responsibility to the House.
The honour of the Minister of State is at stake. Time and again the Minister of State gave the impression in Committee that once the report was produced it would be made freely available. By that we meant that it should be printed and made available to every hon. Member. The right hon. Gentleman knows that that is not the case. Placing one copy in the Library does not fulfil any obligation. If every hon. Member present wanted a copy, they could not have one.
I telephoned the Department and was told that I could have a copy on loan provided that I returned it in due course. The Department can have it back in due course, but it will take a long time to read. In any event, it is not as good as the right hon. Gentleman suggested. It is a good piece of research. It is all on the one hand and on the other hand, but if the Secretary of State quoted Ciennard in defence of what he advanced today with regard, for example, to strikes over the introduction of a closed shop, he would find that page 221 shows that in the 20 years from 1962 to 1981 there were 85 stoppages and only 27,000 workers took part. About 24 million people have

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been gainfully employed during that time. However, the Secretary of State does not want hon. Members to study the report and has restricted its circulation.
Tonight we are debating the Secretary of State's latest little attack on the British trade union movement. The code of practice is a tiny measure when taken alongside the dangerous primary legislation of the Employment Acts 1980 and 1982, but it is a step in the Government's attack on free trade unionism. The practical effect of the Secretary of State's codes—I use the words "Secretary of State's codes" because they are not ACAS codes—remains obscure. The provisions are enforceable only indirectly. Failure to observe any provision of the code would not in itself render a person liable to court proceedings, but the codes are admissible in evidence before a court, and industrial tribuanl or the central arbitration committee.
I do not know whether the Secretary of State's codes—both the forerunner to the one before us tonight and the one on picketing—have played any significant part in industrial relations. This code will be much more relevant after 1 November 1984, when nearly all the existing union membership agreements will not count as approved, to use the language of the legislation. Despite his bluster, this fearless Secretary of State for Employment does not wish to test his 1982 legislation on closed shops this side of a general election. he has admitted that and has said, "Let us not disturb it at the moment. Let us see if we can catch the general election. Then we shall implement it and take care of any trouble that may arise from it." Despite all the cheers that he receives, he is really a coward. He says that he wishes to test this legislation, but we all know that he will not allow it to be tested before a general election.
The TUC's attitude to the code was made abundantly clear, at some length, to the Select Committee on Employment on 9 February. The congress believes that the Secretary of State's principal aims are to place further obstacles in the way of effective trade union organisation, to encourage non-trade unionism and to challenge the procedures of some unions. Trade union leaders are now so convinced of the Secretary of State's malevolence towards them that they will not even talk to him. I do not know whether he is proud of that fact, or whether he likes it, but he complains occasionally that they will not talk to him. Every time that they have gone to see him, as far as I know, they have been met with a stream of abuse similar to that which we hear in the House. Who can blame trade union leaders for not wishing to talk to him?
The Secretary of State knows that the trade unions will never reconcile themselves to this legislation or to the code of practice. They will continue to campaign against it, and will maintain their internal procedures, such as the Bridlington principles, if necessary in defiance of the law. They will boycott ballots on union membership agreements—
Mr. Tebbit rose—
Mr. Varley: I am not giving way to the Secretary of State. It is not worth it.
Mr. Tebbit rose—
Mr. Varley: I am usually willing to give way to the right hon. Gentleman, but he spoke for 25 minutes, with
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scant regard for anything concerning industrial relations, so I shall not give way to him tonight—not until he treats the House with much more respect.
As I was saying—[Interruption.] It is no good the Secretary of State's shouting. He had better learn that he is not pushing around civil servants in the Department of Employment or shouting at trade union leaders in Caxton House, but talking to the House of Commons; and it is about time that he was responsible to the House of Commons, too.
The trade unions will boycott ballots and union membership agreements. They will withdraw their members from tribunals in cases involving union membership agreements. But the scepticism is not confined to the trade unions. Employers' associations, too, question the code's value. The Institute of Personnel Management, the country's leading management organisation on industrial relations, is also opposed to the way in 'which the Government have gone about this business. That body is opposed to periodic reviews of the closed shop on the basis that it will result in further complications and would worsen industrial relations.
About the code of practice the Institute of Personnel Management said:
"The Code, in stressing the rights of an individual employee, has tended to over-simplify the highly complex industrial situation. Why, for instance, should the sentence of the original Code (para. 37) which recognised 'the interests of the individuals as well as unions and employers' be changed (para. 49 Revised Code) to 'the interests of individuals' only? The problem of multi-union situations have been given insufficient weight. The freedom to choose whether to become a trade union member or not needs to be distiguished from the freedom to join any union."
There is lots more of that. The principal organisation dealing with personnel management is saying that the Secretary of State is not right in his conclusion.
The fact must be faced that the Government have slowly but quite deliberately set about reducing the effectiveness and influence of working people organised through trade unions. Their philosophy is quite simple. It embraces the notion that the market works better with weak or ineffective trade unions. Gone are the days when successive Tory Ministers of Labour would call in the Trades Union Congress for consultation on a basis equal to that of employers' associations. On the contrary, as I have already said, the Secretary of State takes a studious delight in insulting the elected representatives of workers every time he opens his mouth.
For the time being it suits the Government to keep the TUC representatives on the councils of ACAS, on the Health and Safety Commission, on the Manpower Services Commission and on the National Economic Development Council. Neither the Secretary of State nor any of his right hon. and hon. Friends will be heard at this stage saying that they would like them off. But we know that those very trade union leaders are unwelcome visitors to No. 10 Downing street and the Treasury, and we know, too, that they have been driven out of the Department of Employment.
Ironically, it has not been the legislation of 1980 or 1982 or the code of practice that has reduced trade unions' influence. The one reason above all others for the diminution of their influence is that it is the Government's unique achievement to turn the country into a depressed area, afflicted by mass unemployment. So the code of

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practice and the Acts from which it derives have much more to do with trade union influence if and when the economy ever recovers from the slump.
The Secretary of State peppered his speech with the rights of individuals and minorities. Individual rights are important but we shall not take any lectures from him about them. The meanest of all measures was initiated only two months after the Government took office when, after a short debate, again on a statutory instrument which was approved, hundreds of thousands of individuals were robbed of the right to go to industrial tribunals to appeal against unfair dismissal. Again, it was the same Secretary of State who only a few months ago, talking about individual rights, took away the rights provided under the fair wages resolution. Only two or three weeks ago it was the same Secretary of State who twisted the arms of the wages councils to reduce by £1·4 a week the wages of workers' with a gross pay of about £60 a week. This bold, strong Secretary of State for Employment concerned about individual rights—this £700 a week Secretary—had the brass neck to tell wages councils paying non-union members £60 a week that they must have their wages reduced by £1·24. Therefore, we shall not take lectures from him about individual rights.
The tragic thing about this code of practice and the motivation for this legislation is that, slowly and systematically, the unions are being forced into a wholly defensive, dangerous and negative position. The stage is being set for bitter conflict which will damage the whole nation unless the Government come to terms with moder, free trade unionism.
The position of the individual worker is still very weak in relation to his employer. The financial strength and colossal power of the trans-national company is enormous compared with that of the individual employee. Workers can improve and protect their standards only through combined organisation.
Of course there are sincere people who have deeply-held and genuine conscientious, and in some cases religious, objections to belonging to a trade union. They have rights too. But as the Department of Employment discovered for itself after specially-commissioned independent research, individuals who fall into that conscientious category have in the overwhelming majority of cases, in agreement with management and trade unions, been able to keep their jobs.
There is the other side of the argument. Anyone who has worked on the factory floor knows of the deep resentment to the free rider—the man or woman who takes all the benefits of trade unionism but does not contribute a penny to the organisation. In fact, there is some resentment to the free rider in other areas of society. It extends well beyond the trade union movement.
This code of practice has little to do with improving industrial relations. It has more to do with undermining stable industrial relations practices. We may never know how effective, ineffective or divisive the legislation is. It may be swept off the statute book before too long.
The real art of government in industrial relations is to try to get trade unions to use their power and influence—they do have power—in the service of the whole community. I do not know any union member who does not want to work for a successful firm or in a respected, worthwhile community service. However, few men and women can look to their firms and regard the
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future as secure. Trade unions must be seen not just as one part of the collective bargaining process but as part of our wider democracy.
If the whip of unemployment is applied hard enough, or if the Law Lords are set on to them, the trade unions may look ineffective for a while, but such a policy cannot last.
It is the easiest thing in the world to introduce a Bill, bludgeon it through Committee, guillotine it and get it on the statute book, but that does not necessarily improve industrial relations and the Secretary of State knows it. We shall overcome the formidable problems facing the country only by talking to the trade unions. The right hon. Gentleman does not want that, which is why he laughs. He does not want to improve industrial relations, because it does not suit his book.
About 14 months ago, Mr. Pat Lowry, the chairman of ACAS, gave the Shell lecture on industrial relations, and asked how the alienation factor in industry could be reduced. He answered:
"Certainly, not by new laws or by industrial relations policies based on little more than the fear of unemployment … the emerging school of 'Macho Management' (at least in the extreme way it tends to be characterised) offers little by way of long-term solution. Industrial relations will certainly not thrive on the basis that 'Vengeance is mine'."
Every time the Secretary of State opens his mouth about industrial relations, that phrase goes through my head. "Vengeance is mine" shrieks out every time the Secretary of State speaks about the trade union movement. That is why we shall vote against the code.
11 pm
Mr. Tim Renton: Having listened to the speech of the right hon. Member for Chesterfield (Mr. Varley), many hon. Members on both sides of the House will feel a sense of acute depression. Boring, sterile and divisive—those are the words that come immediately to mind. The speech was reminiscent of the futile argument that the right hon. Gentleman and other Opposition Members indulged in during the Committee stage of the Employment Bill last year. Most of the hours available to the Committee were spent in expanded—to put it politely—discussion of clause 1, which dealt with the retrospective rights of, at most, 400 people—
Mr. Leighton: It was because of the Gennard report.
Mr. Renton: I shall refer to the Gennard report. Discussion of the rights of 400 people to retrospective damages for dismissal in the 1970s meant that we lost any possibility of real discussion of the following clauses, which were of far more importance than clause 1 to the trade union movement.
In some of his jovial interruptions, the hon. Member for Newham, North-East (Mi. Leighton) kept asking where was Professor Gennard's report. Professor Gennard's report has been available for a long time to anyone who wants it. I understand that every member of the Select Committee on Employment was issued with a copy of it.
Mr. Leighton: No.
Mr. Jim Craigenrose—
Mr. Renton: I shall finish my sentence.
Mr. Craigen: On a point of order, Mr. Deputy Speaker. I received a copy of the Gennard report.
Mr. Deputy Speaker: The hon. Gentleman has made his point.
Mr. Renton: The hon. Gentleman makes my point for me.
Mr. Craigen: I am not certain whether the other members of the Committee received a copy of the report. All members of Parliament should receive copies.
Mr. Deputy Speaker: That is a point of information, and the hon. Gentleman has now made it.
Mr. Renton: The hon. Member for Newham, North-East, who was a friendly opponent of mine in Committee on the Employment Bill, knows very well that he could have got a copy of the Gennard report if he had wanted one. To waste time in this short debate making points about the non-availability of the Gennard report is to indulge, as the right hon. Member for Chesterfield, has done, in futile argument. The new code on the closed shop provides matter for serious discussion. There are points to be made about matters that are far more important than the availability or non-availability of the Gennard report, as the hon. Gentleman knows full well. I feel sorry for the hon. Gentleman. I had never thought of him as a man deprived of his rights, but, if he is, copies of the Gennard report will no doubt fall on him tomorrow like manna from heaven.
I believe that the code on the closed shop is of considerable importance. I welcome it because it is helpful in elucidating the points made in the 1982 Act but, as in the case of any code of practice, there are important questions to be answered. I do not believe that anyone in the House at the moment knows exactly how the codes of practice will work or what is their status in law. I hope that the Minister will deal with these questions when he replies. There may be confusion as to what is law and what is advice.
Section C, entitled
"Practical guidance on closed shop agreements and arrangements",
makes various suggestions as to what should be contained in a written closed shop agreement. Paragraph 39(v) suggests that it should
"provide that an employee will not be dismissed if expelled from his union for refusal to take part in industrial action".
I am sure that all Conservative Members agree that that is an excellent sentiment, but is it law? Points of that kind deserve to be examined far more closely.
Like the Institute of Personnel Management, I greatly welcome this elucidation of the principles of the Employment Act 1982. I agree with the institute that the new parts of the code are a useful guide to management and trade unions, but I foresee a danger that those who have to operate the code will not know which parts of it are law and which are merely advice. It is very complicated. Perhaps my right hon. Friend the Secretary of State will be able to clarify this when he replies to the debate.
Codes have not so far been widely tested before tribunals or in courts of law. It is therefore fair to ask how persuasive my right hon. Friend the Secretary of State thinks that they will be when admitted as evidence. Will they be regarded in the same way as precedents? Will they have the same force as the ACAS disciplinary code? As we all know, any employer would do well to consider that code carefully before dismissing someone because he
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knows that the code will be seriously regarded if the case is taken to an industrial tribunal. In the Minister's judgment, will the same apply in the case of closed shop agreements?
To me, those points are far more relevant to the code of practice on the closed shop, which is a major departure, than the points raised by the right hon. Member for Chesterfield and the hon. Member for Newham, North-East.
Both in the Chamber and in Committee the closed shop seems to be regarded as a virility symbol, notably by Labour Members. Opposition Members with union connections do not consider sufficiently seriously what is happening in law because they are carried away by their emotions. In saying that, I declare an interest not just as a member of APEX but as president of the Conservative trade unionists. [Interruption.] I know that that always provokes a Pavlovian cheer from the Opposition, and I am delighted that that is so, but I remind them that the Conservative trade unionists are a growing body of people while some of the organisations that they represent are declining rather rapidly.
When, from 1984, 80 per cent. of those in closed shops have to vote for the continuation of those closed shops, the question whether the employee membership wish those closed shops to continue or not will really be put to the test. That will be the testing time.
I am amazed that hon. Members have not discussed that point more. That is the issue. It is easy for them to get worked up about the closed shop and the code of practice. It is worth reminding Opposition Members that we are one of the few countries in the European Community that has closed shop arrangements and that most other EC countries do not have closed shop arrangements to anything like the same extent. In West Germany, Italy and the Netherlands, for example, the closed shop arrangement is barely countenanced in law. The same applies to the United States where under the right to work at least 20 states ban closed shop arrangements. So we are out of touch with modern practice.
When the 80 per cent. rule comes into play there will be an opportunity for hon. Members to judge whether the closed shops are working in the interests of employees. That is the profound question: do closed shops exist for the protection of union members and employees, or simply to further the power of union officials? That is the key question. From 1984 that will be put to the test in the ballots and we shall be able to find out—
Mr. Tebbit: I hate to have to correct my hon. Friend, but it is important to say that the 1984 date is not the starting date for the ballots. That is the deadline by which the ballots must have been made, otherwise the closed shops will be unprotected.
Mr. Renton: I would have expected my right hon. Friend to correct me on that. I take his point fully; it is the latest date at which the ballots have to take place. It is at that stage that we shall learn whether most employees really believe that closed shops are working in their interests. It is to that that Opposition Members who, like myself, are members of trade unions should be directing their attention rather than to whether they have obtained a Copy of the Gennard report.
11.12 pm
Mr. Tom McNally: Anybody who was concerned that the cause of the so-called British disease was our failure to come to terms with industrial relations will have been slightly depressed by the opening of the debate, as the hon. Member for Mid-Sussex (Mr. Renton) said. Both Front Benches tend to see these matters as virility symbols; they think that they are expected to go through certain forms for the benefit of their supporters. The Secretary of State in some of his more extravagant language did nothing to give us confidence that in introducing these codes of practice he is trying to foster good relations. I urge him to try to keep the old Adam under control and to remember that he has wider responsibilities than pleasing the backwoodsmen in the Tory party on this matter.
Equally, the right hon. Member for Chesterfield (Mr. Varley) again seemed only to offer, should he ever hold office again, to sign a blank cheque for what the trade union movement wants. That is no way forward either. It is dangerous for his party to appear only to want to do that.
Given the tenor of the Secretary of State's speech, it is worth emphasising that these guidelines do not abolish the closed shop. He tried to give the impression that he was slaying the dragon and that it would soon be dead at his feet. He is not destroying the closed shop.
Yesterday I obtained a copy of Professor Gennard's report. I can understand why the Secretary of State does not want to legislate abolishing the close shop. Professor Gennard said that the majority of closed shops were the result of peaceful negotiations, aimed at promoting stable industrial relations and formed on the basis of an existing high voluntary membership. He said that most closed shops safeguarded the individual.
The professor said that the compulsory membership of closed shops boosted TUC membership by about 8 per cent. We are talking about an institution covering 4½ million workers which is thought by many employers to promote good relations.
Mr. Tebbit: Will the hon. Gentleman give way?
Mr. McNally: I would rather not, since the Secretary of State made a long speech earlier.
Mr. Tebbit: The hon. Gentleman misrepresents what I said. In my closing remarks I said that the code, like the 1982 Act, does not prevent closed shops from continuing to operate if they have the support of the overwhelming majority of their members.
Mr. McNally: The Secretary of State always puts in a saving clause for future quotation. I was talking about his speech as a whole, together with comments to other audiences. The right hon. Gentleman sometimes makes it difficult for us to go along with what he says.
We shall support the Government this evening. The Opposition have probably done enough damage to their case by their farmyard antics in front of the Secretary of State. They should pause to wonder why 40 per cent. of trade unionists voted Conservative at the last election. Was it not because successive Labour Governments have tried to reform the trade union movement and have come up against the vested interests that make the noise tonight? That vested interest disallows the Opposition from contributing to a solution to our industrial relations problems. That is why so many trade unionists have no
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confidence that the Labour Opposition would contribute to a strengthened trade union movement. The movement: will not be strengthened by a Labour party willing to sign any blank cheque put before it.
The movement will serve itself better by winning members on the basis of benefits and service rather than on the basis on coercion. Nothing in the proposals should be regarded as destroying the trade union movement, but some provisions may build platforms for malcontents to stand upon. The Secretary of State should beware that in the code of conduct he does not encourage union splits.
Since Donovan we have tried to encourage a rationalisation of the trade union movement. The Secretary of State should not encourage the splitting up of unions in the code of conduct because that will cause problems. High compensation levels are unrealistic. High approval percentages are dangerous because an artificially high hurdle may lead to resentment. A trigger that is too easy to pull for consultation by ballots could cause problems in the future.
Mr. Leighton: The hon. Gentleman is both for and against.
Mr. McNally: We are not both for and against. Trade unions should see in opinion poll after opinion poll the way that union members are voting. There is ample evidence that trade unionists are worried about the power that is in trade union hands and the way that it is being used. The Opposition do not argue for the strengthening of the trade union movement as a constructive and democratic institution by defending every abuse and every vested interest to the last ditch.
I want to see a strong trade union movement that wins members because it has the workers' confidence. I want to see a democratic trade union movement so that the members have control of it. That is what we are committed to and that is what so many members of the official Opposition are afraid to put to the test. Ballots will not always produce the result that Conservative Members imagine. The secret ballot gave us Mr. Scargill and he stands with that strength behind him. However, how many of those hon. Members, for example, the hon. Member for Bolsover (Mr. Skinner), who is not here, who have backed every attempt by Mr. Scargill to take his members out on strike, have found that they are grossly out of touch with the thinking of the miners?
Mr. George Foulkes: The miners' union is the most democratic union.
Mr. McNally: If that is so, let other unions follow that one in implementing consultations with its members.
We shall not go along with the official Opposition in backing every vested interest in the trade union movement. We want a democratic trade union movement that would be invited to take its proper place in the consultations to determine the country's economic and social policy priorities.
We shall work for a strong democratic trade union movement and we shall see what this code of practice contributes to that end.
11.22 pm
Mr. Peter Lloyd: I am glad that the hon. Member for Stockport, South (Mr. McNally), with, I hope, all his party, has made up his mind that he will vote for this code. What has stnick me about the debate is the

907
extraordinary lack of confidence of Opposition Members. If the closed shop were so appreciated and liked by union members this code—as is the case with large parts of the 1980 and 1982 Acts—would be a dead letter and November 1984 would arrive with a cascade of votes in favour of continuing the closed shop.
The Opposition take the attitude that they do because they do not believe that that will happen. The TUC is not even going to campaign to win the votes. It is trying to prevent votes being taken. I think that is the best comment that we could have of how the Opposition feel that the closed shop is regarded by union members.
I welcome the code, as I believe all Conservative Members do. I believe that it is sensible to set out the law and to show how it should be kept. The code will be needed by managers and employees, not just to read for their general information, but for the occasions when they need to know what it contains and when it is impractical to go to the complexities of the statute.
However, I remain uncomfortable, as does my hon. Friend the Member for Mid-Sussex (Mr. Renton) about the quasi-statutory status of the code. Surely it is not necessary to say in the Act that the codes can be taken into account if the tribunal thinks that they are relevant. Surely the tribunals are allowed to take into account any evidence, including the codes if they regard them as relevant. I do not understand, nor, I suspect, do many other hon. Members, precisely what their legal status is. Perhaps we shall learn from my hon. Friend the Member for Wolverhampton, South-West (Mr. Budgen), to whom I am about to give way.
Mr. Nick Budgen: Surely the principal reason for embarrassment is that this document has, as my hon. Friend says, a quasi-legislative effect, but there is no possiblity of amendment or of considering the matter in detail. We have either to take it or leave it.
Mr. Lloyd: That is absolutely right. I hope that we shall take it, although I should like the codes to be differently constructed.
I shall take one example, in paragraph 62, which states:
"disciplinary action should not be taken or threatened by a union against a member on the ground that he has crossed a picket line which it had not authorised".
Supposing that a union organiser made such a disciplinary threat. Would he be acting unlawfully? Would the person against whom the threat was made know that he had protection in law? I suspect that he would not. The mixture of guidance about the law and advice on good practice is confusing. There will be too many occasions when, after reading the code, those who want clarification and want to know where they stand will not know.
Mr. John Gorst: Will my hon. Friend go a little further in his reservation about the code of practice, following what my hon. Friend the Member for Wolverhampton, South-West (Mr. Budgen) said, and remark that this is the fifth occasion in this Parliament when the Select Committee on Employment has been asked to look at a code of practice? Does he agree that that practice is growing, certainly with regard to this subject, and ought to be diminished?
Mr. Lloyd: My hon. Friend is right. I agree with him. The House has heard him and noted his point, as, I hope, has my right hon. Friend the Secretary of State.
Opposition Members were complaining that they had not read the Gennard report. I know that some of them have because I heard some of them comment on it. The hon. Member for Stockport, South referred to the closed shop. He said that legislation did not appear to be needed because the closed shop seemed to be widely accepted. Of course, it is widely accepted. It is a fact of life. Closed shops were created by agreement between employers and trade unions. No wonder they are accepted as part of the landscape. However, that does not mean that they are a popular part of the landscape.
The hon. Gentleman said that the closed shop does not cause problems for many people, but Gennard makes it clear that some 490 employees have been dismissed because of the closed shop since 1970. Conservative Members find it incomprehensible that Opposition Members think it proper that dismissed employees should be able to apply to a tribunal to argue the justice or otherwise of their dismissal over any matter of dismissal except when it involves a union and the closed shop or expulsion from a union. I see no justice in that.
A much better argument from Gennard why legislation is not necessary is that the evidence shows that the closed shop contains the seeds of its own destruction, with its tendency towards restrictive practice and inflexibility. Despite what is said about it being the means that enables management and unions to come together to work out more efficient working practices it has, certainly in the older industries, promoted a transfer of jobs to much less strongly organised trade union sectors, and alternative ways of getting the same jobs done. Work has passed from the industries where the closed shop is strongest. The closed shop has succeeded in reducing employment in those areas.
The most obvious effect of the closed shop is that it leaves the members feeling that they have no choice in the matter. It may be, as Gennard states, that unions are often lenient when disciplining their members. In many respects, members might not have to worry about disciplinary action being taken against them. The average member does not appreciate that, and cannot easily make that calculation. He assumes that he has no choice. The code confirms that he is wise to do so.
Paragraph 61 on page 20 states when disciplinary action should not be taken. If the average member examined those circumstances, he would find few that fitted him. He may come to (d) and say to himself "This should apply because there has been no ballot to affirm the industrial action. "Someone may remind the members that the draft code of practice is not a list of laws but a code of practice. It is the Government's opinion of what good practice ought to be. The member will say to himself, unless he is a hero or peculiarly obstinate, "I had better take the safe course", and does so.
The only way in which a really just position can be reached for the average union member is by the House legislating that dismissal for non-union membership is ipso facto unfair, whatever the circumstance. Whatever Opposition Members have tried to pretend, the Employment Act 1980, the Employment Act 1982 and these codes come nowhere near that. It would be much better if they did. That would suit not merely the union members but the unions themselves. I am constantly

909
amazed by Opposition Members who simply do not appreciate that if they rely solely on the loyalty of their members and their own ability to attract them into the respective union, they would stay much closer to their members than they do, and would be more effective and stronger than they actually are. Much of the criticism that the unions have attracted during the past few years would evaporate if they relied entirely on freely given loyalty.
Mr. Cyril Smith: Is the hon. Member for Fareham (Mr. Lloyd) aware that in the debate on the Employment Act 1980 the hon. Member for Hendon, North (Mr. Gorst) and I moved and seconded an amendment to make the closed shop illegal and that it was his party's members on the Committee who voted against it?
Mr. Lloyd: Yes, I think I do remember that. The objective of the hon. Member for Rochdale (Mr. Smith) is right and it is I suspect shared by the Government. The question is the means and the speed with which one moves towards it. I have no complaint that the Government are moving at a set and sedate pace towards that goal and are making changes that are acceptable and practical as the time arises.
It is no coincidence that the unions fell in public esteem when the closed shop was gaining in strength.
Several Hon. Members rose—
Mr. Deputy Speaker: Before I call the next hon. Member, it would be helpful if I remind the House that the debate is due to end at 11·45 pm. The Minister is hoping to catch my eye to reply to the debate.
Mr. David Winnick: The hon. Member for Mid-Sussex (Mr. Renton) informed us that he was the president of the Conservative trade unionists. Should not he inform the House of his substantial directorships, which are listed in the Register of Interests? Is he not guilty of misleading the House?
Mr. Deputy Speaker: It is customary for interests to be declared, but it is up to each hon. Member to decide whether and how to do so.
11.34 pm
Mr. Michael Martin: I listened with interest to the hon. Member for Stockport, South (Mr. McNally), the spokesman for the Social Democrats. The speech was typical. He began by condemning and criticising the Government and then told us that his party would go into the Lobby to support the Government.
I was a member of the Standing Committee that discussed the Employment Bill. To the credit of the Liberal spokesman, the hon. Member for Rochdale (Mr. Smith), his attendance at our sittings was excellent. He sat through our late night sittings on the Bill. However, the attendance of the Social Democrats was absolutely deplorable, to say the least. It ill becomes any Social Democrat Member to lecture us in the Chamber on industrial relations, when the Social Democrats had an opportunity to speak up on the Bill that mattered.
The 80 per cent. ruling is nonsense. If we applied that ruling to ourselves, no hon. Member that I know of would be elected to the House. Therefore, we are applying standards to closed shops and trade unionists that we do not apply to ourselves. That is the type of hypocrisy that
910
we are used to from the Secretary of State. Not enough thought has been given to our sub-contracting industries. An employer and his trade unions might be quite happy with the closed shop. However, a sub-contractor who employs non-union labour could arrive on the scene, and all hell might be let loose as a result. Therefore, good industrial relations could easily be destroyed as a result of the code of conduct.
The Secretary of State and the Social Democrat spokesman, the hon. Member for Stockport, South, mentioned the role of the full-time officer. The theme has always been the same—no full time officer should be able to dictate to the members. Anyone who knows anything about full-time officers, knows that they carry out the instructions of the membership. When negotiating with full-time officers, many employers ask them, "Why cannot you do this or that with your members". In other words, the employer is always looking for more power on the part of the trade union officer. Therefore, the Government and employers cannot have it both ways. On the one hand they want the trade union officer to exert more authority, but on the other, they say that no full-time officer should be allowed to bring anyone out on strike.
The other myth is that the Government apparently think that as a result of the code of conduct and the legislation, closed shops will somehow disappear. Closed shops existed before we had legislation on them. They will exist whether or not there is legislation or codes of conduct. Anyone who thinks otherwise knows nothing about industrial relations. The hon. Member for Mid-Sussex mentioned the United States of America. He does not know much about the trade union movement there if he thinks that they do not have closed shops because they are outlawed. I would be very offended if I thought that the Secretary of State was suggesting that people with deeply-held religious convictions had any problem in closed shops.
When I worked in a closed shop—a closed shop agreed between the employer and the men—I worked with people who had deeply held religious convictions. They were never discriminated against. Anyone with a deeply held religious conviction received the respect of the men with whom they worked. I served my apprenticeship on Clydeside where there is a good record of trade unionism. I know of the respect given to men with deeply held religious convictions. I hope that the Secretary of State is not suggesting that there is such discrimination.
The trade unions will come down heavily on the chancers. There will be a great many chancers because the Secretary of State has made it possible for every rag-tag and bobtail to claim that he or she is being victimised. Strathlyde regional council has an appeals committee to determine whether people have deeply held religious convictions. One character came before the committee claiming that he had a deeply held religious conviction. When he was asked about that deeply held religious conviction he stated that he used to go to church. He could not name the church. Ater a while it was discovered that he went to Sunday school when he was six years old, and that was his deeply held religious conviction. That is the type of character that the code and the attitude of the Secretary of State for Employment will bring forward.
I was involved in the trade union movement as a shop steward. I have been involved as a full-time officer, and I am still involved. Nothing beats good industrial relations on the shop floor between people who know their industry

911
and know at first hand what they are talking about. We must ensure that industrial relations come not from the House of Commons but from the shop floor, from the people involved in the industry. I keep hearing mention of the NGA and the print unions. I have never been involved in the print unions so I do not know a great deal about them, but I do know that, even if a workshop abolishes its closed shop, the print workers in that shop will still keep their membership because they will need it to ensure that they can find employment with another employer. That is one example of where the Secretary of State for Employment will not be able to do what he wants, which is to destroy the trade union movement. Every time he comes up with a measure to try to destroy the trade union movement, the working people of this country will become stronger.
11.44 pm
Mr. Tebbit: I shall not reply to the abuse from the right hon. Member for Chesterfield (Mr. Varley). I think that he will regret his speech when he reads it in the morning.
My hon. Friends the Members for Mid-Sussex (Mr. Renton) and Fareham (Mr. Lloyd) raised points concerning the relationship between the law and the code. It is clear; indeed, some writers have commented on how clear it is. Section B of the code refers to the law and sections C, D, and E are practical guidance. The Employment Act 1980 gives individuals a general right not to be unreasonably expelled or excluded from union membership but lays down that it is for industrial tribunals to determine what is unreasonable in each particular case, taking into account equity and the merits of the case. The Act was framed in that way because it would have been impossible to provide in legislation for each and every circumstance where a union's activity was to be regarded as unreasonable, and to have set out in law only some such circumstances would have invited tribunals to find the union's action in all other cases reasonable—[Interruption.] I am sorry that my accent upsets some Labour Members
Mr. Foulkes: It is not only your accent; it is everything about you.
Mr. Tebbit: I left school when I was 16 and I did not have a university education.
Mr. Foulkes: Every inch of your being upsets us.
Mr. Tebbit: I left school when I was 16, and I would not deride the accent of the hon. Member for South Ayrshire (Mr. Foulkes).
Mr. Foulkes: You are a horrible little man.
Mr. Tebbit: The problem is avoided by spelling out specific guidance in a code, guidance which a tribunal must take into account whenever it may find it relevant.
It being one and a half hours after commencement of proceedings on the motion, MR. DEPUTY SPEAKER put the Question, pursuant to Standing Order No. 3 (Exempted business):—
The House divided: Ayes 273, Noes 168.

Division No. 113]

[11.45 pm

AYES

Adley, Robert

Ancram, Michael

Alison, Rt Hon Michael

Arnold, Tom

Alton, David

Aspinwall, Jack

912

Atkins, Rt Hon H.(S'thorne)

Gower, Sir Raymond

Atkins, Robert(Preston N)

Grant, Sir Anthony

Atkinson, David (B'm'th,E)

Gray, Rt Hon Hamish

Baker, Kenneth(St,M'bone)

Greenway, Harry

Baker, Nicholas (N Dorset)

Grieve, Percy

Bendall, Vivian

Griffiths, E.(B'ySt. Edm'ds)

Benyon, Thomas (A'don)

Griffiths, Peter (Portsm'th N)

Berry, Hon Anthony

Grist, Ian

Best, Keith

Grylls, Michael

Bevan, David Gilroy

Gummer, John Selwyn

Blaker, Peter

Hamilton, Hon A.

Bonsor, Sir Nicholas

Hamilton, Michael (Salisbury)

Bottomley, Peter (W'wich W)

Hampson, Dr Keith

Bowden, Andrew

Hannam,John

Boyson, Dr Rhodes

Haselhurst, Alan

Braine, Sir Bernard

Hastings, Stephen

Bright, Graham

Havers, Rt Hon Sir Michael

Brinton, Tim

Hawkins, Sir Paul

Brittan, Rt. Hon. Leon

Hawksley, Warren

Brooke, Hon Peter

Hayhoe, Barney

Brown, Michael (Brigg & Sc'n)

Heddle, John

Browne, John (Winchester)

Henderson, Barry

Bruce-Gardyne, John

Heseltine, Rt Hon Michael

Bryan, Sir Paul

Higgins, Rt Hon Terence L.

Buchanan-Smith, Rt. Hon. A.

Hogg, Hon Douglas (Gr'th'm)

Buck, Antony

Holland, Philip (Carlton)

Budgen, Nick

Hooson, Tom

Bulmer, Esmond

Horam, John

Butler, Hon Adam

Howe, Rt Hon Sir Geoffrey

Carlisle, John (Luton West)

Howell, Rt Hon D. (G'ldfd)

Carlisle, Kenneth (Lincoln)

Howell, Ralph (N Norfolk)

Carlisle, Rt Hon M. (R'c'n)

Howells, Geraint

Chalker, Mrs. Lynda

Hughes, Simon (Bermondsey)

Chapman, Sydney

Hunt, David (Wirral)

Churchill, W. S.

Hunt, John (Ravensbourne)

Clark, Sir W. (Croydon S)

Hurd, Rt Hon Douglas

Clarke, Kenneth (Rushcliffe)

Irvine, RtHon Bryant Godman

Clegg, Sir Walter

Irving, Charles (Cheltenham)

Colvin, Michael

Jessel, Toby

Cope, John

Johnson Smith, Sir Geoffrey

Cranborne, Viscount

Jopling, Rt Hon Michael

Crouch, David

Joseph, Rt Hon Sir Keith

Dickens, Geoffrey

Kimball, Sir Marcus

Dorrell, Stephen

Kitson, Sir Timothy

Douglas-Hamilton, Lord J.

Knight, Mrs Jill

Dover, Denshore

Knox, David

du Cann, Rt Hon Edward

Lamont, Norman

Dunn, Robert (Dartford)

Lang, Ian

Durant, Tony

Langford-Holt, Sir John

Dykes, Hugh

Latham, Michael

Eden, Rt Hon Sir John

Lawrence, Ivan

Edwards, Rt Hon N. (P'broke)

Lawson, Rt Hon Nigel

Eggar, Tim

Lee, John

Emery, Sir Peter

Lennox-Boyd, Hon Mark

Eyre, Reginald

Lester, Jim (Beeston)

Fairbairn, Nicholas

Lewis, Sir Kenneth (Rutland)

Fairgrieve, Sir Russell

Lloyd, Peter (Fareham)

Faith, Mrs Sheila

Loveridge, John

Farr, John

Luce, Richard

Fell, Sir Anthony

Lyell, Nicholas

Fenner, Mrs Peggy

Lyons, Edward (Bradf'd W)

Finsberg, Geoffrey

McCrindle, Robert

Fisher, Sir Nigel

Macfarlane, Neil

Fletcher, A. (Ed'nb'gh N)

MacGregor, John

Fookes, Miss Janet

MacKay, John (Argyll)

Forman, Nigel

Macmillan, Rt Hon M.

Fowler, Rt Hon Norman

McNair-Wilson, M. (N'bury)

Fox, Marcus

McNair-Wilson, P. (New F'st)

Fraser, Rt Hon Sir Hugh

McNally, Thomas

Fraser, Peter (South Angus)

Madel, David

Freud, Clement

Major, John

Gardiner, George (Reigate)

Marland, Paul

Gardner, Sir Edward

Marlow, Antony

Garel-Jones, Tristan

Marshall, Michael (Arundel)

Gilmour, Rt Hon Sir Ian

Marten, Rt Hon Neil

Glyn, Dr Alan

Mates, Michael

Goodhart, Sir Philip

Maude, Rt Hon Sir Angus

Goodlad, Alastair

Mawby, Ray

Gorst, John

Mawhinney, Dr Brian

Gow, Ian

Maxwell-Hyslop, Robin

913

Mayhew, Patrick

Silvester, Fred

Mellor, David

Sims, Roger

Meyer, Sir Anthony

Skeet, T. H. H.

Miller, Hal (B'grove)

Smith, Cyril (Rochdale)

Mills, Iain (Meriden)

Smith, Tim (Beaconsfield)

Mills, Sir Peter (West Devon)

Speller, Tony

Mitchell, David (Basingstoke)

Spicer, Jim (West Dorset)

Moate, Roger

Spicer, Michael (S Worcs)

Monro, Sir Hector

Sproat, Iain

Moore, John

Stanbrook, Ivor

Morgan, Geraint

Stanley, John

Morrison, Hon C. (Devizes)

Steen, Anthony

Morrison, Hon P. (Chester)

Stevens, Martin

Neale, Gerrard

Stewart, A.(E Renfrewshire)

Nelson, Anthony

Stewart, Ian (Hitchin)

Neubert, Michael

Stradling Thomas, J.

Newton, Tony

Tapsell, Peter

Onslow, Cranley

Taylor, Teddy (S'end E)

Oppenheim, Rt Hon Mrs S.

Tebbit, Rt Hon Norman

Osborn, John

Thomas, Rt Hon Peter

Page, Richard (SW Herts)

Thompson, Donald

Parkinson, Rt Hon Cecil

Thome, Neil (Ilford South)

Parris, Matthew

Thornton, Malcolm

Patten, Christopher (Bath)

Townend, John (Bridlington)

Pattie, Geoffrey

Townsend, Cyril D, (B'heath)

Pawsey, James

Trippier, David

Penhaligon, David

van Straubenzee, Sir W.

Percival, Sir Ian

Vaughan, Dr Gerard

Pink, R. Bonner

Waddington, David

Pollock, Alexander

Waldegrave, Hon William

Prentice, Rt Hon Reg

Walker, B. (Perth)

Price, Sir David (Eastleigh)

Walker-Smith, Rt Hon Sir D.

Prior, Rt Hon James

Wall, Sir Patrick

Proctor, K. Harvey

Walters, Dennis

Raison, Rt Hon Timothy

Ward, John

Rathbone, Tim

Warren, Kenneth

Rees, Peter (Dover and Deal)

Watson, John

Rees-Davies, W. R.

Wells, Bowen

Renton, Tim

Wells, John (Maidstone)

Rhodes James, Robert

Wheeler, John

Ridley, Hon Nicholas

Whitney, Raymond

Ridsdale, Sir Julian

Wickenden, Keith

Roper, John

Wiggin, Jerry

Ross, Stephen (Isle of Wight)

Wilkinson, John

Rossi, Hugh

Williams, D.(Montgomery)

Rost, Peter

Williams, Rt Hon Mrs(Crosby)

Royle, Sir Anthony

Winterton, Nicholas

Sainsbury, Hon Timothy

Wolfson, Mark

St. John-Stevas, Rt Hon N.

Wrigglesworth, Ian

Sandelson, Neville

Young, Sir George (Acton)

Scott, Nicholas

Younger, Rt Hon George

Shaw, Giles (Pudsey)

Shelton, William (Streatham)

Tellers for the Ayes:

Shepherd, Colin (Hereford)

Mr. Carol Mather and

Shepherd, Richard

Mr. Robert Boscawen.

Shersby, Michael

NOES

Abse, Leo

Buchan, Norman

Adams, Allen

Callaghan, Jim (Midd't'n & P)

Allaun, Frank

Campbell, Ian

Anderson, Donald

Canavan, Dennis

Archer, Rt Hon Peter

Cant, R. B.

Ashley, Rt Hon Jack

Carmichael, Neil

Ashton, Joe

Clarke, Thomas(C'b'dge, A'rie)

Atkinson, H.(H'gey,)

Cocks, Rt Hon M. (B'stol S)

Bagier, Gordon AT.

Coleman, Donald

Barnett, Guy (Greenwich)

Concannon, Rt Hon J. D.

Benn, Rt Hon Tony

Conlan, Bernard

Bennett, Andrew(St'kp't N)

Cowans, Harry

Bidwell, Sydney

Cox, T. (W'dsw'th, Toot'g)

Boothroyd, Miss Betty

Craigen, J. M. (G'gow, M'hill)

Bray, Dr Jeremy

Crowther, Stan

Brown, Hugh D. (Provan)

Cunliffe, Lawrence

Brown, R. C. (N'castle W)

Cunningham, Dr J. (W'h'n)

Brown, Ron (E'burgh, Leith)

Dalyell, Tarn

914

Davis, Clinton (Hackney C)

Mason, Rt Hon Roy

Davis, Terry (B'ham, Stechf'd)

Mikardo, Ian

Deakins, Eric

Millan, Rt Hon Bruce

Dean, Joseph (Leeds West)

Miller, Dr M. S. (E Kilbride)

Dewar, Donald

Mitchell, Austin (Grimsby)

Dixon, Donald

Morris, Rt Hon C. (O'shaw)

Dobson, Frank

Oakes, Rt Hon Gordon

Dormand, Jack

O'Brien, Oswald (Darlington)

Dubs, Alfred

O'Halloran, Michael

Dunnett, Jack

O'Neill, Martin

Dunwoody, Hon Mrs G.

Palmer, Arthur

Eadie, Alex

Parry, Robert

Eastham, Ken

Powell, Raymond (Ogrnore)

Edwards, R. (W'hampt'n S E)

Race, Reg

Ellis, R. (NE D'bysh're)

Radice, Giles

Ennals, Rt Hon David

Rees, Rt Hon M (Leeds S)

Evans, loan (Aberdare)

Richardson, Jo

Evans, John (Newton)

Roberts, Albert (Normanton)

Field, Frank

Roberts, Allan (Bootle)

Flannery, Martin

Roberts, Ernest (Hackney N)

Foster, Derek

Roberts, Gwilym (Cannock)

Foulkes, George

Robertson, George

Garrett, John (Norwich S)

Robinson, G. (Coventry NW)

George, Bruce

Rooker, J. W.

Gilbert, Rt Hon Dr John

Ross, Ernest (Dundee West)

Golding, John

Rowlands, Ted

Graham, Ted

Sever, John

Hamilton, James (Bothwell)

Sheldon, Rt Hon R.

Hardy, Peter

Shore, Rt Hon Peter

Harman, Harriet (Peckham)

Short, Mrs Renée

Harrison, Rt Hon Walter

Silkin, Rt Hon S. C. (Dulwich)

Hattersley, Rt Hon Roy

Silverman, Julius

Haynes, Frank

Skinner, Dennis

Heffer, Eric S.

Smith, Rt Hon J. (N Lanark)

Hogg, N. (E Dunb't'nshire)

Soley, Clive

Home Robertson, John

Spearing, Nigel

Homewood, William

Spellar, John Francis (B'ham)

Hooley, Frank

Spriggs, Leslie

Howell, Rt Hon D.

Stallard, A. W.

Hoyle, Douglas

Stoddart, David

Hughes, Mark (Durham)

Strang, Gavin

Hughes, Robert (Aberdeen N)

Straw, Jack

Hughes, Roy (Newport)

Summerskill, Hon Dr Shirley

Janner, Hon Greville

Taylor, Mrs Ann (Bolton W)

Jay, Rt Hon Douglas

Thomas, Dr R.(Carmarthen)

John, Brynmor

Thorne, Stan (Preston South)

Johnson, James (Hull West)

Varley, Rt Hon Eric G.

Jones, Barry (East Flint)

Wainwright, E.(Dearne V)

Kaufman, Rt Hon Gerald

Walker, Rt Hon H.(D'caster)

Kerr, Russell

Warded, Gareth

Kilroy-Silk, Robert

Watkins, David

Lambie, David

Welsh, Michael

Leadbitter, Ted

White, Frank R.

Leighton, Ronald

White, J. (G'gow Pollok)

Lestor, Miss Joan

Whitehead, Phillip

Litherland, Robert

Whitlock, William

Lofthouse, Geoffrey

Wigley, Dafydd

Lyon, Alexander (York)

Willey, Rt Hon Frederick

McCartney, Hugh

Wilson, Gordon (Dundee E)

McElhone, Mrs Helen

Wilson, William (C'try SE)

McKelvey, William

Winnick, David

MacKenzie, Rt Hon Gregor

Woolmer, Kenneth

McNamara, Kevin

Wright, Sheila

McTaggart, Robert

Young, David (Bolton E)

McWilliam, John

Marshall, Dr Edmund (Goole)

Tellers for the Noes:

Marshall, Jim (Leicester S)

Mr. George Morton and

Martin, (G'gow S'burn)

Mr. Allen McKay.

Question accordingly agreed to.
Resolved,
That the draft Code of Practice on Closed Shop Agreements and Arrangements, which was laid before this House on 2nd March, be approved.

Agricultural Tenancies
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Cope.]
11.57 pm
Mr. Nicholas Winterton: I welcome the opportunity to draw to the attention of the House matters that are of deep concern to my constituency of Macclesfield and Congleton and that will be of interest in all constituencies with a substantial rural element. I refer to the threat to our rural communities and to the need for change in agricultural tenancies. The agricultural landlord and tenant system, which has been the basis of our farming system for centuries, has since the beginning of this century declined quickly, to the great detriment of rural life. It will continue to do so unless legislation is introduced to reverse the trend.
Early in this century, about 80 per cent. of farm land was held under tenancy. By 1976, that figure was down to only 45 per cent. and now it is only 38 per cent. The Northfield committee predicted in 1979 that, if present trends continued, the size of the letting sector would be half that figure by the year 2020. That decline in tenanted land has happened because landowners are unwilling to let their land to tenants who, under the Agriculture (Miscellaneous Provisions) Act 1976, can hold that land for three generations. There are also fiscal disincentives to letting land.
What happens is that landowners take their farm in hand or, if they relet, it is usually—understandably in the circumstances—to an established farmer rather than to a first time tenant. As a result, young people, the seed corn of future fanning in the United Kingdom, who wish to go into farming, are unable to do so. The agriculture ladder which should provide, and I want to see provide, mobility within the industry, is irretrievably blocked. Rents, which are inevitably influenced by the scarcity of tenancies, are increased to unrealistic and unecomonic levels.
All that has greatly contributed to the trend whereby farmers or farmowners amalgamate neighbouring farms with their own, either buying up someone else's or taking in hand their own and selling off the second farmhouse. That is having an extremely detrimental effect on the local communities in Britain, as well as preventing young people from starting up in farming. The sold-off farmhouse—if I may describe it as such—is often bought by commuters with no personal interest in the local or rural community into which they move. Frequently such farms are run by a farm manager, especially, as is increasingly the case, when they are bought by a firm or pension fund, for example. The manager is only doing his job, perhaps in some cases not for very long, unlike the tenant fanner who is a permanent member of the local society with a real stake in the land that is fanned.
Thus increasingly land is owned by absentee landlords in many areas of Britain, particularly, I believe, that represented by my hon. Friend the Member for Norfolk, South-West (Sir P. Hawkins), whom I am delighted to see. Those in agriculture who have a deep interest in the land and in the stability and prosperity of rural communities are acutely aware of this problem.
Therefore, the National Farmers Union and the Country Landowners Association have produced a joint document calling on the Government urgently to implement legislation to stop this trend. They point out that there are
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two main reasons for the refusal of many landowners to let land on traditional tenancies in recent years. First, there is the discriminatory treatment of agricultural landlords under fiscal legislation, and, secondly, the natural disinclination on the part of landowners to grant a tenancy when, under the Agriculture (Miscellaneous Provisions) Act 1976, it could last for three generations. I speak with some knowledge of that Act as I was a member of the Standing Committee which considered that measure when it was proceeding through the House.
When the Labour Government introduced the succession clauses in Committee they were warned what would happen and our warnings have come true with a vengeance. The CLA and the NFU have welcomed the Chancellor of the Exchequer's proposals on fiscal inhibition to letting which will bring some alleviation of the burden of capital taxation in respect of tenanted farms. They recognise that that is a positive step in the right direction.
With respect to the succession of tenancies, the NFU and CLA agreement suggests that, though the 1976 legislation should continue to apply to tenancies already in existence, the possibility of statutory succession should not apply to new lettings granted after the new legislation has passed through the House. But—and I emphasise this—such lettings should continue to be made with full security of tenure under agricultural holdings legislation for the life of the tenant. The NFU and the CLA warn—I emphasise that word for my hon. Friend the Minister—that if those measures are not taken urgently as a package
"the further decline and demise of the landlord/tenant system in agriculture is inevitable."
The president of the NFU, Sir Richard Butler, has also warned that failure to legislate on agricultural holdings in the present Parliament could well lead to nationalisation of all tenanted farm land under a future Labour Government. To that the farmers' union is totally opposed.
I seek from my hon. Friend the Parliamentary Secretary an assurance that legislation will be introduced early in the new Session of a new Parliament under a Conservative Government. I want a further assurance that a commitment to such legislation will be included in our election manifesto, but it may be necessary to spell this out clearly during the election campaign.
The Government ought immediately to heed these warnings from people who are farming the land throughout the United Kingdom. It may be necessary to do more to prevent the amalgamation of farms which does not result solely from an unwillingness to let, otherwise in a few generations there will be only a small number of very large farms. The answer to preventing this trend could lie in taxation. Such a suggestion does not come easily from a Conservative Member of Parliament. Tax incentives could be introduced which would make it financially advantageous for a landlord to let farms individually and provide disincentives to amalgamation.
Capital taxation could be introduced as a disincentive to buying second farms, selling off the second farmhouse and splitting up very large farms when passed on to the next generation.
These proposition are vital to the future of rural life and the success of farming. Such measures would not affect large traditional estates, where in many cases one farm is farmed by the owner and the rest by tenant farmers. Such estates—certainly in Macclesfield and Congleton, in my area of Cheshire—are usually beneficial to rural life.

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Indeed, they have been threatened by the rise of owner-occupiers who have increasingly large, single farms of hundreds of acres in numerous cases and thousands of acres in a limited number of cases.
This is a vital issue that is of great importance to farming, to the NFU, to the Country Landowners Association and to all who have a deep interest in rural life. Action is necessary now, not tomorrow, to preserve the stability of our rural communities.
12.7 am
The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mrs. Peggy Fenner): I am most grateful to my hon. Friend the Member for Macclesfield (Mr. Winterton) for raising this topic and giving the House the opportunity to consider a most important matter. I know of the concerned care that my hon. Friend takes in the problems of rural communities, and I have listened with great interest to what he said about the effect of the present agricultural tenancy legislation on these communities.
I am sure that my hon. Friend will agree that the relationship between landlord and tenant defined in the agricultural holdings legislation has served British agriculture well over the years. However, he has rightly highlighted the fact that there has been a gradual decline in the tenanted sector over a large number of years. I can assure my hon. Friend that the Government share his concern over this decline, which has affected the hopes and aspirations of those, particularly the young, who have been trained by our excellent agriculture colleges and who have much to offer the nation and the rural communities in ability, enthusiasm and innovatory ideas.
Far too many of these people who, as my hon. Friend rightly said, represent the seedcorn for the future prosperity of the industry have found their opportunities to enter farming on their own account restricted through the shortage of new lettings. Many factors have contributed to the decline in the tenanted sector, and not all of them can be influenced by Government policy. Nevertheless, I and my colleagues have been carefully considering the possible ways of infusing new life into the sector. My hon. Friend referred to fiscal influences. Taxation is one factor that influences a landowner in his decision either to let his land or to take it in hand when the opportunity arises. My right hon. and learned Friend the Chancellor of the Exchequer took a significant step towards bringing the tax treatment of landowners and owner-occupiers into alignment in the 1981 Finance Act by introducing the capital transfer tax agricultural relief at 20 per cent. for tenanted agricultural land. The facility to pay tax on an interest-free instalment basis was also extended to tenanted land, and as a result the CTT burden on such land was broadly equated with that on owner-occupied land.
Those changes were warmly welcomed by all sectors of the farming community. In his latest Budget Statement, the Chancellor outlined his intention to increase the agricultural relief on tenanted land to 30 per cent. as a further measure to help reduce the decline of the tenanted sector. He also announced proposals that would allow those tenant farmers who are required to live on their farm to purchase a house off the farm with the benefit of tax relief on the mortgage. Finally, he proposed a facility that would allow farmers to pay CTT in interest-free instalments over 10 years, rather than eight as at present.
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All those proposed changes were equally warmly welcomed by all sectors of the farming community. They are clear evidence of the Government's recognition of the need to tackle the problem of the decline in the tenanted sector, and they have provided a positive fiscal encouragement to the letting of agricultural land.
The implications of institutions purchasing large areas of land can be exaggerated. The Northfield committee found no evidence to substantiate claims that they were bad landlords, and its research suggests that the total holdings of the larger institutions amount to only some 2·5 per cent. of the area under crops and grass in Britain. Furthermore—this will please my hon. Friends—more than 70 per cent. of that land is let. The larger institutions are, in fact, seeking to increase tenancies.
Sir Paul Hawkins: That may be true in much of Great Britain, but in the eastern areas very large holdings have been taken in hand by pension funds. The Coal Board is farming 10,000 acres in Norfolk. The Hillcourt, Velcourt, and Hill Samuel estates run to 20,000, 30,000 or 40,000 acres. All that land is in hand, and there is not a head of livestock on it. There is the Vauxhall pension fund too. The Northfield report advised that pension funds should take farmland in hand only in exceptional circumstances, but the eastern counties are suffering greatly and I hope that something can be done.
Mrs. Fenner: When I said that the total holdings amounted to only 2·5 per cent. of agricultural land I realised that in my hon. Friend's area the proportion was rather higher, due to the nature of the land and the crops that can be grown there.
In addition to the fiscal encouragement, the other major factor influencing the decisions of landowners on whether to let their land is that raised by my hon. Friend the Member for Macclesfield today—the agricultural tenancy legislation. We have been considering what changes could be introduced to this legislation to provide greater incentives to landowners to let their land. Throughout our consideration we have had uppermost in our minds the need to achieve a consensus within the industry and to avoid introducing any changes which might prove to be short-lived.
As the House will know, my right hon. Friend the Minister of Agriculture, Fisheries and Food asked the NFU and CLA to turn their minds to possible ways of improving the tenancy legislation that would be acceptable to both sides of the industry. After what I know were long and difficult discussions they were able to put forward proposals, some of which my hon. Friend has commended today. I am sure that lasting and effective changes can be introduced only with the agreement and co-operation of all in the industry. Inevitably, the package proposed by the NFU and CLA represented a compromise between their varying interests. It was regrettable that the Opposition were unable to recognise that the compromise set out in the package was in the best interests of the farming industry as a whole.
Nevertheless, my right hon. Friend the Minister of Agriculture, Fisheries and Food has frequently made it clear that he welcomes the initiative taken by the NFU and the CLA. He regrets that it was not possible to find time for legislation on this topic in the current Session of Parliament and has said that it would be his wish to legislate on the basis of the NFU-CLA package at the

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earliest opportunity. I hope that my hon. Friend will accept those statements by the Minister as an indication of the importance that the Government attach to the problem.
Inevitably, in discussions of a subject of such great importance, we have received a wide range of views from many different people and organisations. Many of these have echoed the concern expressed by my hon. Friend today about the effects that the reduction in the number of tenant farmers has on the rural community. They have stressed the vital part these farmers, many of whom are relatively small family farmers, play in the fabric and life of the countryside. I can assure the House that the Government are equally concerned about this matter. I hope that today's debate has shown how determined we are to find the right solutions to the difficulties faced by the rural communities.
Mr. Nicholas Winterton: I am most encouraged by the remarks of my hon. Friend the Parliamentary Secretary,
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who has clearly given considerable thought to this subject. Will she go as far as I requested, and give an assurance to those Conservative Members who take this matter extremely seriously, to the effect that there will be legislation at a very early stage of the next Parliament, when a Conservative Government will be in power, and that a commitment to such legislation will be written into the Conservative party manifesto?
Mrs. Fenner: I can but reiterate the commitment of my right hon. Friend the Minister that he wishes to legislate on the basis of the NFU-CLA package at the earliest opportunity. I can give no commitment on a manifesto that does not yet exist, but I hope that the expressed wish of my right hon. Friend to legislate at the earliest opportunity will be sufficient reassurance and commitment for my hon. Friend.
Question put and agreed to.
Adjourned accordingly at eighteen minutes past Twelve o' clock.