Occupational Pensioners (Housing Benefit)

HC Deb 19 January 1984 vol 52 cc459-501

Mr. Speaker

I have selected the Government amendment.

4.9 pm

Mr. Michael Meacher (Oldham, West)

I beg to move, That this House notes that 1,333,000 occupational pensioners and others with additional income will be affected by the changes in housing benefit announced as a result of Mr. Chancellor's Autumn Statement, that the average weekly loss involved will be 80 pence per week, and that 270,000 occupational pensioners will lose housing benefit altogether; and urges Her Majesty's Government to reconsider this matter at once. There can be few, if any, precedents for an administrative measure so meanly devised, so badly prepared and so disastrously carried out as the Government's so-called housing benefit scheme, which for thousands of people would be more aptly described as a housing nightmare scheme. It hits hardest at pensioners and families on below-average earnings. It threatens family unity with regard to low-paid teenagers. It deepens poverty, which is already at a crisis level unknown in this country for 50 years. It sentences two thirds of a million of the poorest households to a poverty trap marginal tax rate of 80 per cent. and has generated an administrative shambles of enormous proportions. It has provoked fear, anxiety and hardship for thousands of people who, for the first time in their lives, face eviction or owe hundreds of pounds.

Fundamentally, this debate is about poverty. Poverty as defined by receipt of supplementary benefit has increased by no less than 70 per cent. under the Tories since 1979. If anyone wants an indictment of Tory Britain, that is it. According to the Government's own figures for supplementary benefit, 7.5 million people are now living in poverty, plus a further 1 million not claiming supplementary benefit but living below the supplementary benefit line. According to the Government themselves, therefore, almost one in six of the population in Thatcherite Britain is living in poverty and it is those people who are overwhelmingly the victims of the latest unjust, arbitrary and spiteful cuts.

The effect on pensioners will be drastic. More than 1,300,000 will be deprived of an average of 80p per week. If any hon. Member thinks that that is not a large sum, I remind the House that in the course of a year it represents about two weeks expenditure on food for the average pensioner household. Nearly 250,000 pensioners will lose more than £1.50 per week. The hardest hit will be those on occupational pensions for which they have saved all their working lives. Conservative Members will no doubt have seen the example cited by SHAC showing that a single pensioner with occupational and retirement pension amounting to £4,000 per year, paying rent of £18 and rates of £5 per week, will lose no less than £4.50 per week as a result of the Government's proposals. By any standard, that is a traumatic cut for a person on limited means for which he has saved all his life, and it is by no means an exceptional case.

Sir Kenneth Lewis (Stamford and Spalding)

There are people in my constituency and throughout the country whose earnings after tax are very little higher than that. The figure quoted from the SHAC leaflet is not a high income, but it is not a devastatingly low one for a pensioner.

Mr. Meacher

I hesitate to ask the hon. Gentleman what his income is, taking into account his private resources, but by comparison with him and most other people in the country the figure that I gave represents an abnormally low standard of living. According to the Government's own figures, 20,000 pensioners in those circumstances will lose between £4 and £5 a week. That is an outrage.

It is perhaps for that reason that Members of all parties in the House have supported the early-day motion embodied in today's motion. In this context I pay great tribute to the hon. Member for Brighton. Kemptown (Mr. Bowden) and I respect his integrity in putting down the early-day motion in the first place. The Government may be tempted, out of embarrassment, to transfer the major portion of the cuts from pensioners to low-income families, but that would be utterly unacceptable and unjust, because the non-pensioner victims of the Government's measures are already extremely hard hit.

In an analysis published a few days ago the Institute of Fiscal Studies estimates that, taking account of rates as well as rents, low-income families will lose an average of £2 per week—twice as much as the average loss for pensioners. Many will lose far more. The Child Poverty Action Group gives a far from extreme example—there are many similar cases—of a family with two children, one still at school and the other a 17-year-old living at home, in which the father has the low gross income of £135 per week and pays rates of £8 and rent of £25 per week. That is in no way an exceptional case. The Government's measures will deprive that family of £8 per week. That is scandalous by any standards.

I hope that the Secretary of State will pay attention, as my argument refutes the claim constantly made by the Government that the cuts will be concentrated on the better-off families and that the poorest will be protected because the taper changes will affect only those with incomes above the needs allowance. Ministers with incomes of £600 per week perhaps need to be reminded that the needs allowance for a single person is only £43 per week and that most people on housing benefit whose incomes exceed that sum are by no means well off.

The leaked Social Security Advisory Committee report is most enlightening on this. I hope that the House and the public will be able to study the report well before the revised regulations are published. It is utterly unacceptable to publish the report at the same time as the regulations. The leaked report states that the cuts will mean substantial losses in largely indiscriminate fashion to families who have very' low incomes indeed". Those are the words, not of the Opposition, but of the Government's own advisory committee.

The case is further strengthened by the fact that the losses are concentrated on the very people who lost most seriously as a result of the introduction of housing benefit in April last year, so let us have no more weasel words from the Government about protecting the poorest, because nothing could be further from the truth.

Mr. Tony Marlow (Northampton, North)

The hon. Gentleman would do himself some credit if he would step back from the Opposition's usual tactic of shedding crocodile tears and using statistics selectively and come clean on this. Does he realise that housing benefit costs the community about £4,000 million per year, which means more than £5 per week for the average household of four? While he is weeping all over the Floor of the House about how the money should be spent, will he tell us where it is to come from?

Ms. Clare Short (Birmingham, Ladywood)

Mortgage relief.

Mr. Meacher

If the hon. Member for Northampton, North (Mr. Marlow) will contain himself, I will tell him exactly where the money could come from if we had a Government who cared about the poor.

Under this Government, mortgage interest tax relief this year of approximately £2.5 billion will, by and large, go to the better-off half of the country, while housing aid to the poorer half of the country is now approximately one quarter or one fifth of that level.

Mr. Marlow

It is better than it was before.

Mr. Meacher

Perhaps the hon. Gentleman will take account of the extreme unfairness in the distribution of housing aid as between rich and poor— a situation which his Government have considerably worsened.

Mr. D. M. Campbell-Savours. (Workington)

Perhaps my hon. Friend will point also to the £3 billion which has been handed back in the form of capital gains tax, capital transfer tax and other tax concessions to the higher paid over the last four years. Could not that money have been better spent on poorer people?

Mr. Meacher

My hon. Friend is right. In Budget after Budget there have been massive handouts to the rich on the tax side, while on the social security side equal sums of money have been taken from the poor. That has been the story of this Government year after year, and this measure is only the culmination of that process.

The worst thing about the proposed cuts is the way in which they enormously intensify the poverty trap. The Government have expressed some concern about this issue, yet they have, nevertheless, produced this measure. For every pound that is earned above the needs allowance, 79p will be lost to tax, national insurance contributions and withdrawal of housing benefit. The Government are bringing about a fairy tale Alice-in-Wonderland situation. The Low Pay Unit has calculated that a family — a perfectly normal, unexceptionable case — claiming family income supplement and housing benefit, and paying tax and national insurance contributions, will lose £1.09p for every extra pound that it earns. That is surely the ultimate absurdity of these proposals.

The measure also exposes—and I come to the point raised by the hon. Member for Northampton, North—what is so deeply offensive to so many of us on this side, the class bias in this measure. Four years ago the Government brought down the top rate of tax for the richest people in Britain to 60 per cent. Now they are raising the rate for some of the poorest people in the country to 80 or even over 100 per cent. How can that be right? How can the Government, in Budget after Budget, justify giving huge tax handouts to the rich and then, with a measure such as this, penalising those who, by any standards, can scarcely scrape a living to survive? What is the morality of this Government? I hope that the Secretary of State will give us an answer to that fundamental question.

I shall take the point further. If the Government had been genuinely concerned to protect those on lower incomes—and here I shall answer the question posed by the hon. Member for Stamford and Spalding (Sir K. Lewis)—they could have done so while still saving a similar sum. A sum of £140 million could have been saved by restricting mortgage interest relief to the standard rate of tax, and another £60 million could have been saved, if only the Prime Minister cared about the poor as much as she cares about the well-off, by leaving the ceiling on mortgage relief unchanged. Of course, after hearing the Prime Minister at Question Time today we know that the right hon. Lady thinks that taxes are too high.

On that subject I want to quote from The Daily Telegraph — not, I think, a Socialist journal —of 25 November last year. It said that housing cuts have fallen disproportionately heavily on people with relatively low incomes who are not owner occupiers. The key sentence was: The contrast with the Government's decision earlier this year to raise the ceiling on mortgage tax relief to £30,000 is not a pretty one. I hope that Conservative right hon. and hon. Members will take into account that judgment by a deeply Conservative newspaper when they consider how they will vote.

There is yet another aspect of the proposals in the light of which a political party which prides itself on being concerned for the family, as the Tory party claims, should be shamed into withdrawing the proposals. I am referring to the damaging impact on family relationships which can be predicted following the huge rise—no less than 47 per cent. —in the contribution that is expected to be made to the household by wage-earning youngsters living at home.

I quote again from the Government's advisory committee's report, which said: It is right that non-dependants living in a beneficiary's household should be expected to make a contribution towards housing costs. I entirely agree with that. But these increases have gone beyond what is fair and realistic. It continued, There is a real danger that non-dependants will not pay. In these circumstances, the householder either has to bear the increased reduction himself or force the non-dependant to leave. I ask again: what is the morality of this Government, who cosset the rich at the expense of breaking up the families of the poor?

Mr. John Maples (Lewisham, West)

Does the hon. Gentleman not think it reasonable that a working 17-yearold should be assumed to contribute £3 towards the rent, and that a working 20-year-old should be assumed to contribute approximately £8, which is all that this amounts to?

Mr. Meacher

The Social Security Advisory Committee considered that an increase in contribution of nearly 50 per cent., which is far higher than—

Mr. Maples

The figure is £3.

Mr. Meacher

Yes, £3. The committee considered that an increase of nearly 50 per cent., which is far higher than the increase in wages of those same young persons in the recent past, was unfair and unrealistic, and I think that that is a judgment which the hon. Gentleman ought to take into account.

Finally—and I am conscious that many other hon. Members want to speak in the debate — perhaps most serious of all is the management of the scheme, or perhaps I should say the almost total mismanagement of the scheme, which must surely rank among the biggest administrative shambles ever imposed on this country.

A review of the scheme has just been published by the National Association of Citizens Advice Bureaux, based on 10,000 inquiries made to bureaux all over the country over the last year. The information thus collected offers one of the most comprehensive and damning indictments ever published of a Government measure and I hope that as many right hon. and hon. Gentlemen as possible will look at the report before they vote, because it repays careful study.

In a letter to the Secretary of State, of which I have acopy, the association said: The overall picture is one of operational defects the scale and effects of which can only be described as devastating. Bureaux have reported delays between a reduction in supplementary benefit entitlement and the eventual receipt of housing benefit of up to nine months. The report refers to numerous cases where tenants awaiting the payment of housing benefit have been issued with notices to quit and some instances where the landlord has gone so far as to send a summons. Many tenants, particularly, of course, elderly ones, are understandably unwilling to fall into arrears due to the stigma of being in debt, often for the first time, and also for the fear of eviction. The report is packed with evidence of the excessive complexity of the calculations. It points to a complete lack of interdepartmental liaison, with wrong information being given and over-eager reclamation of benefit by local authorities. Nor—and I say this to the hon. Lady the Member for Birmingham, Edgbaston (Mrs. Knight) because she raised the matter in the last debate—is this shambles being overcome. The report said: Miscalculations were legion, and this is a problem which shows no signs of abating as the pressure in many local authorities continues. There is nothing I can say, Mr. Deputy Speaker, that will more vividly illustrate the fear and the hardship that is being caused, the crassness and nonsense of what is being done, than to conclude by quoting three of the multitude of examples that are cited in the report, and with the permission of the House I shall do that.

On the first example given by the bureaux it said: We had calculated that a client, a widow with two children, should only be paying rent of around £7, rather than the £19 asked of her by the council. We then contacted the local authority, who stated that the amount suggested to our client was merely a guess. We asked that they recalculate the amount and were informed that they were unable to calculate housing benefit manually and that if we considered the calculation made by the Bureau to be correct, she should pay that, rather than the sum originally advised. In the second example the bureau stated: Private tenants are still not receiving housing benefit in this area"— that was in the middle of 1983— and many clients are getting distressed. One client aged 78 was unable to afford his diabetic diet as he insisted on paying his rent in full. The third example is that of a couple, retirement pensioners—the sort of people who are the subject of our motion — entitled to certificated housing benefit. They were on supplementary benefit and therefore not liable to pay any rent. The bureau said: They received a rent arrears statement for £93, which was incorrect. They were not informed that they were now on housing benefit, so they paid £213 out of their reduced income. I ask hon. Members to remember that we are talking about people on supplementary benefit, old-age pensioners. In the meantime they ran up a debt to the London Electricity Board of £90. The CAB wrote to the council in June to inform them of the problem and to ask for a rent refund. In August the clients"— the elderly couple— received a statement from the council saying that they were now £248 in arrears. The CAB rang the Housing Benefits Section, who confirmed that the clients were on certificated housing benefit. That meant that they were not liable to pay any rent. At the end of September"— after this had been going on for several months— the clients received a notice seeking possession of their flat.

Mr. Andrew Bowden (Brighton, Kemptown)

Name the council.

Mr. Meacher

On 31 December—[HON. MEMBERS: "Answer."] I do not know the answer.

Mr. Willie W. Hamilton (Fife, Central)

We are talking, not about a council, but about this Tory Government.

Mr. Meacher

I am conscious of the time and am anxious to conclude my remarks.

Mr. Bowden

Name the council.

Mr. Meacher

The hon. Member for Brighton, Kemptown (Mr. Bowden) will, I hope, have an opportunity to make his own speech.

Conservative Members must accept that this problem is squarely one for them. Any Government who cut down the rate support grant by the extent to which this Government have done and who restrict local authority manpower in the way that they have cannot then complain that the manpower is not available properly to carry out these activities.

Mr. Bowden

In the context of what the hon. Gentleman has said, it is vital that he names the council concerned, because clearly there is gross inefficiency within that council's department dealing wth these matters. We must know the name of the council. Will he please tell us?

Mr. Meacher

I greatly respect the hon. Gentleman's integrity. [HON. MEMBERS: "Answer."] I do not know the name of the council. Dozens of examples are given in the report from which I have quoted and in no case is the council named. I am sure that inquiries of the bureaux would reveal the name of the council, should hon. Members wish to pursue the matter. In any event, I repeat that in no way can Conservative Members offload responsibility for this on to the local authorities. It is not the fault of the authorities because they do not have the qualified manpower, the money or the rate support grant to do the job properly.

On 31 December The Economist, not exactly a Labour journal, urged the Government to drop this ham-fisted saving. On 6 January The Times, also not exactly a Labour newspaper, concluded that the Government could do well to think again. The Social Security Advisory Committee, the Government's own advisory body, stated: We join all those who have made representations to us in deploring these cuts, which we believe will have an unduly harsh effect on many individuals. In the light of those representations, which go right across the political spectrum, I strongly urge the Government to display judgment and magnanimity in this matter, to withdraw these ill-advised, unjust and damaging proposals and to think again.

4.35 pm

The Secretary of State for Social Services (Mr. Norman Fowler)

I beg to move, to leave out from "House" to the end of the Question and to add instead thereof: notes that even after the changes in housing benefits announced as a result of the Chancellor's Autumn Statement, expenditure on social security benefits, including housing benefits, will continue to rise in real terms in 1984–85; considers that the greatest help Her Majesty's Government can give occupational pensioners and all social security beneficiaries is to conquer inflation; and congratulates the Government on the substantial progress made in bringing inflation down to the lowest levels for 15 years. I wish at the outset to make clear the position on the proposed reductions in housing benefit. As the House will know, the proposals made after the Chancellor's autumn statement were referred to the Social Security Advisory Committee, to which the hon. Member for Oldham, West (Mr. Meacher) referred. That committee has reported to me in the last two weeks and I am currently considering its proposals. Obviously I wish to study carefully what the committee has said, and I shall be publishing the report, together with the Government's response on the matter, in the next few weeks.

I am anxious to make it clear at the outset also that the Government are not inflexible on the proposals. As well as considering the views of the advisory committee, we shall take into account what is being said in this debate about the proposed changes. I thought it right to make that position clear at the beginning of the debate. I shall come shortly to the areas of consideration, but first there are two initial points I should make because they go to the heart of the debate.

First, we must recognise the background against which we are debating housing benefit, and it is not the background as stated by the hon. Member for Oldham, West. It is that social security spending next year is expected to run at about £37 billion, which is 29 per cent. of the planned total of public expenditure. We expect it to be almost £1 billion higher than assumed in last year's public expenditure White Paper, and that is even after allowing for the savings that we want to achieve in the social security budget.

The second point I wish to emphasise is that the Government have already announced that provision has been taken within our spending plans for all weekly benefits to be uprated next November in line with prices, not only the pledged benefits but the unpledged ones also, such as supplementary benefit and unemployment benefit. By any standards the Government are spending a vast amount of money on social security provision—

Mr. Willie W. Hamilton

The right hon. Gentleman means on the dole queues.

Mr. Fowler

—and I entirely defend our doing that, but it is also important to understand where that money is going. Although obviously the increase in unemployment in recent years accounts for some of that increase, about half of the social security budget goes to the elderly.

In 1979 we pledged that the value of pensions would be raised in line with inflation. Between November 1978 and November 1983 the basic retirement pension was increased by 74.6 per cent., while the retail price index rose by 68.8 per cetn. At the same time we have taken a whole range of other steps to help the elderly, such as the increase in capital limits for supplementary pensioners and help with heating costs. This support has been given at a time when the numbers of people receiving the pension in this country have risen by 600,000, from 8.5 million in 1978–79 to over 9 million today. Thus, no one should be in any doubt about the commitment of this Government to the interests of the pensioner and to the interests of the elderly. It is a commitment that is underlined by the inquiry into the provision for retirement that is getting under way, but above all it is underlined by the other economic policies that the Government are carrying out, which I shall come to.

Mr. David Winnick (Walsall, North)

The right hon. Gentleman said that the Government will review the position. There is nothing about "review" or "consider" in the amendment to which he is speaking. If he is genuine about considering the position, why has he refused to accept the motion that is in identical terms to that tabled by his hon. Friend the Member for Brighton, Kemptown (Mr. Bowden)? Surely, if the right hon. Gentleman wants his hon. Friends to vote for his amendment, he will have to offer proof of a more genuine commitment.

Mr. Fowler

I shall deal with the consideration that the Government are prepared to give to this matter. I thought that it was right at the outset to make it clear to the House that the proposals that we have put forward are not inflexible.

The aim of the Government has been to achieve economic stability, and the control of public spending is clearly vital to that. It is also vital, especially for pensioners, that inflation is curbed. The fact is that inflation is now down to levels that we have not experienced since the 1960s. That fact is welcomed by millions of pensioners, and it points to a fundamental difference between the two parties. The position of the occupational pensioners is new ground for the Opposition Front Bench. I do not remember it having raised their position previously, and for good reason. In their motion the Opposition criticise the average loss of 80p for pensioners from the proposed changes in housing benefit. But it is revealing to compare that with the scale of losses that their economic policies had on occupational pensions and savings during their previous period of Government. That illustrates precisely what happens when the alternative economic policies advocated by the hon. Member for Oldham, West are put into effect. During the previous Labour Government, prices rose by more than 110 per cent.

Mr. Winnick

How is it working?

Mr. Fowler

If the hon. Gentleman reads the motion, he will realise that we are talking about the occupational pensioner. That meant that an occupational pensioner receiving a fixed £10 a week pension in February 1974 found that his £10 was worth just £4.71 in May 1979— a loss not of 80p but of £5.29 a week or 53 per cent. in just over five years. Even taking account of the fact that the real value of the state retirement pension rose by 20 per cent. between 1974 and 1979, that loss still stood at £3.80 a week. That was the cruel effect of inflationary policies on the income of pensioners. But that is not the full story. The effects on capital were devastating. A pensioner with savings of £5,000 in February 1974 found those savings to be worth £2,355 by May 1979.

Mr. Frank Dobson (Holborn and St. Pancras)

How many such pensioners were there?

Mr. Fowler

Since the hon. Gentleman's party was in Government, many fewer regrettably. As the hon. Member for Oldham, West complains, let him complain of the social evils of inflation and declare himself committed to an anti-inflationary policy. The fact is that any party that is concerned about social policy, that is concerned about living standards and that wants to see industry able to sustain our social programmes, such as housing benefit, must be concerned about economic policy. The Government have increased the aid going through the social security system at a time of recession but, at the same time, we have taken the action necessary to combat inflation and, therefore, to protect the interests not only of pensioners but of all beneficiaries.

Ms. Clare Short

Much stress has been laid upon the way in which occupational pensioners lost from inflation. We all regret that. We thought progress was being made when granny bonds were invented so that such people could be protected from inflation. Is the Secretary of State trying to argue that as that group lost out in the past because of inflation it justifies him deliberately cutting its income now?

Mr. Fowler

The hon. Lady has missed the point. I am glad that she understands the importance of the effect of inflation upon our living standards, especially upon those of the elderly. As that fact is crucial—and it is recognised by the hon. Lady, if not by her Front Bench — it is essential to implement a policy with anti-inflationary goals. There is no point in adopting a policy that will have the effect of destroying anti-inflationary policies.

When the hon. Member for Oldham, West refers to the effects of the poverty trap, there is no point in seeking to argue that we should increase public spending and, at the same time, reduce taxation. If tax reductions are to be made—I agree with those who argue that the burden of income tax still falls on incomes that are far too low down the scale, and there is no question about that—we must take control of public spending. It cannot be argued that the social security budget, which makes up 29 per cent. of public spending, should be exempt from any consideration of change, particularly when what we are considering is not a cut in overall spending but a reduction in the rate of increase.

Mr. Ivor Stanbrook (Orpington)

My right hon. Friend is expressing the overall position accurately. No Conservative Member will doubt that the Government have done well for pensioners and in dealing with inflation. However, individual cases have the most effect. Is my right hon. Friend aware that people on occupational pensions sometimes, although they do not reveal the fact, are among those who suffer worst in the community? Is he also aware that the proposed changes, according to those who know about the position in my constituency, will most probably hurt those people? Surely those are the people whom we should protect.

Mr. Fowler

I have the strongest sympathy for what my hon. Friend has said. He is also referring to the cumulative effect of several of the changes upon the income of the occupational pensioner. I hope that I shall be able to satisfy my hon. Friend about that.

It was against this background that we considered the position of housing benefit. On the principle of housing benefit — I think that the hon. Member for Oldham, West was considerably less than fair about this— the reasons for the change were straightforward and widely supported.

Mr. Dobson

Who by?

Mr. Fowler

There is no point in looking longingly back on the system that was replaced as if it was an ideal world from which we moved. That is absurd.

Mr. Frank Field (Birkenhead)

Name one supporter.

Mr. Fowler

Professor David Donnison is certainly one who argued that case. There is no point in looking back on the system that has been replaced as if it was in some way a forgotten world. The fact is that we had two systems—the local authority system and the supplementary benefit system. That meant a range of problems for all kinds of people. There was, for example, the "better-off' problem. In 1979, not under our system but the old system, to which now, apparently, the Opposition Front Bench is so attached, it was estimated that 300,000 people on the local authority scheme would have been better-off had they transferred, but they did not have the necessary information.

The hon. Member for Oldham, West knows that the take-up was low, particularly among private tenants. By bringing the administration of the two schemes together and unifying it, it is unquestionable that the take-up of the benefit has increased substantially. When my hon. Friend the Minister for Social Security replies he will report to the House on the discussions that he has had with local authorities. However, the reports that are coming back now, as opposed to those of six or nine months ago on which the letter of the advice bureaux was mainly based, show that the scheme has settled down in the majority of instances and is beginning to achieve its objectives.

It is important that the House understands that the real cost of standard benefit—benefit paid to those not in receipt of supplementary benefit—has increased from less than £132 million in 1972–73 to over £1,330 million this year, a 140 per cent. real increase. If the benefit paid to supplementary benefit claimants is included, the total cost next year will amount to about £3.75 billion, which will be an increase over this year's £3.5 billion. Nearly 6.9 million households — one in three — receive housing benefit. Even after the proposed changes, 6.3 million will continue to receive that benefit.

Mr. Bernard Conlan (Gateshead, East)

rose—

Mr. Fowler

No, I shall not give way.

The benefit goes to one in three households and it extends to higher up the income scale than any other means-tested benefit. For example, a two-child family with one earner paying average rent and rates will still qualify for housing benefit on an income of £6,700 a year. If the same couple paid rent of £28 a week and rates of £9.30 a week, they would continue to qualify with earnings of £8,500 a year.

Many households are paying tax with one hand and receiving social benefits with the other. In 1982—

Mr. Terry Lewis (Worsley)

rose—

Mr. Fowler

No, I shall not give way.

In 1982, 60 per cent. of those receiving standard housing benefit were paying tax, and 300,000 families among those receiving housing benefit were paying income tax averaging £7.40 a week while receiving housing benefit averaging £5.10 a week. A further 600,000 people were paying higher taxes than that while still receiving housing benefit. Our aim must be—

Mr. Conlan

rose—

Mr. Fowler

—to move away from this financial merry-go-round towards a system that will allow people to keep more of their own money and enable the state to concentrate its help on those who really need it.

Mr. Terry Lewis

rose—

Mr. Fowler

I have made it clear that I shall not give way again. I have given way on several occasions. I want to make as short a speech as possible to enable the maximum number of hon. Members to participate in the debate.

The Government's long-term strategy will continue to be the reduction of the burden of taxation on incomes. We wish to reinforce the importance to the low paid of increases of tax thresholds. In the most recent Budget of my right hon. Friend the Chancellor of the Exchequer, personal allowances were increased again, and this year they are 6 per cent. higher in real terms than when the Government came to power. It is essential that that progress is maintained. If we are to succeed in achieving that aim, we must make the best use of available resources and concentrate them where they are needed most.

It has been our aim to concentrate housing benefit resources on those who most need help, and that is what our proposals are designed to do. As they stand, they represent a reduction of about 4 per cent. in the help with housing costs, expenditure on which is still rising. I shall be dealing with the details of the proposed changes when we come to debate the regulations.

The hon. Member for Oldham, West referred to non-dependant deductions. There is widespread agreement that dependants living in a beneficiary's household should make a contribution towards their housing costs. I think that that was accepted by the hon. Gentleman. We are proposing that non-dependants—many of whom will be in well-paid jobs— should be expected to make a slightly higher contribution to their housing costs. Average adult earnings are now £170 a week and non-dependants will now be expected to contribute an extra £1.65 towards the cost of rent and rates. On average, male 18 to 20-year-olds earn £95 and females earn £78.20. Similar average earnings for 16 to 17-year-olds are £61 and £55.70.

Mr. Frank Field

This does not come within the motion.

Mr. Fowler

The hon. Member for Oldham, West referred to these matters and the hon. Member for Birkenhead (Mr. Field) should listen to the case that is advanced from the Opposition Front Bench.

Mr. Campbell-Savours

rose—

Mr. Fowler

No, I shall not give way.

Mr. Dobson

The Minister does not want to lose his place.

Mr. Fowler

The taper changes and minimum payments proposals will affect only those with incomes above the needs allowance, who will lose benefit at a higher rate for each £1 of additional income.

Mr. Campbell-Savours

On a point of order, Mr. Deputy Speaker. Will you ask the Minister to refer back to his brief and to re-read the part that deals with—

Mr. Deputy Speaker (Mr. Ernest Armstrong)

Order. The hon. Gentleman knows that that is not a matter for me.

Mr. Fowler

That shows the superficiality of the Opposition's interest in these matters. Current minimum payments are to be retained for all those on supplementary benefit. We propose to increase them to £1 for rent and 50p for rates for those not in receipt of supplementary benefit. It does not make administrative sense for local authorities to pay out very small amounts of benefit.

We propose to introduce changes to the high-rent scheme. Some authorities can provide extra help to claimants who are not on supplementary benefit if local average rents are above the national threshold. The threshold was set at about 150 per cent. of average rents in 1972, but over the years has declined to the present level. We are seeking to make the threshold more realistic.

The hon. Member for Oldham, West talked about the effect of these changes and it is important that the House understands it. The great majority of claimants—over 4 million of them—will be unaffected by the taper and minima payment changes. Of the 2.2 million claimants who are so affected by the taper and by the minima payment changes, about half will lose less than 50p. The Government share the concern of the House to give more pensioners adequate financial support and protection. About two thirds of pensioners will be unaffected by taper and minima payment changes. No pensioner non-dependants will be affected by the changes and the 1 million plus pensioners who gained an average of £1 a week on the introduction of housing benefit will be almost unaffected by the changes. All pensioners will have the advantage of the special addition to the needs allowance, which was introduced by the Government last year. It should be emphasised again that for families with children—

Mr. Terry Lewis

rose—

Mr. Fowler

I shall not give way. I hope that the hon. Gentleman will excuse me for not doing so.

For families with children, there will be a £1 increase in the addition to the needs allowance for each child from next April. That will help about 500,000 poor families.

I accept the argument that the proposed changes— this is the point that has been fairly made by my hon. Friend the Member for Orpington (Mr. Stanbrook) — might have a cumulative affect upon some households. The effect has been overstated because it has often been ignored that the main component in the cumulative effect is the increase in the non-dependant deductions. I do not believe that there is any good reason why those increases should make householders worse off. The overall direction of the changes is right.

Mr. Conlan

rose—

Mr. Fowler

No, I am not giving way.

The changes rein back the growth in housing costs while continuing to concentrate help on those most in need. I shall examine carefully the arguments put to me about the cumulative effects, particularly the immediate effects upon particular households. Before laying the regulations I shall want to be sure that we have made full allowance for this aspect. If it seems that the proposed changes might affect some households too harshly, especially in the shorter term, I shall be ready to consider modifying them. I hope that that is absolutely clear.

Mr. Meacher

I am grateful for what the right hon. Gentleman has said. When he says that he is prepared to modify the effect of some of the cuts on certain persons, does he mean that he will reduce the overall amount of the cutbacks to ensure that the scheme will not cost more than £230 million or that he will redistribute it on to other shoulders? The latter is wholly unacceptable.

Mr. Fowler

In regard to the overall savings in the social security budget, those savings will have to be made. We shall consider the points made in the debate and by the Social Security Advisory Committee about the impact upon housing benefit. The decisions that have been announced have not been set in concrete; there is scope for change in the proposals as they affect individuals. I should like to make that clear.

In making changes in housing benefit, as in social security policy as a whole, the Government have a duty to balance their responsibilities to the taxpayer and to those in genuine need of support. When we lay the orders before the House I hope it will conclude that we have struck the balance fairly. In the past Labour Governments have lurched from promises and excessive spending to high inflation and emergency cutbacks. This Government have proved their support for pensioners by raising pensions ahead of prices. Above all, we have reduced inflation and we are holding it down to the benefit of all on low incomes. It is in that context that our proposals to control the expansion in housing benefit should be judged, and it is in that context that the House should reject the motion moved by the Opposition.

5.3 pm

Mr. Brynmor John (Pontypridd)

I hope to follow the Secretary of State as little as possible, mainly because he studiously avoided talking about the housing benefit scheme until he reached the last part of his remarks. He rightly said that the social security programme cannot hope to be exempt from change. We agree. But the housing benefit scheme was a change in the social security programme brought about not two years ago. Therefore, the right hon. Gentleman cannot get away with the idea that it has been stultified for years.

He has said that people were in favour of a unified system and once again he quoted Donnison. He is seriously misleading the House because Professor Donnison has made it clear time and again that he did not favour a unified benefit unless it had an injection of further money. What we see in the scheme is a no cost shambles which Professor Donnison disapproves of and which we all disapprove of. No one disapproves of the concept. The trouble is that the right hon. Gentleman has besmirched the concept by the pinch-penny way in which he has introduced it.

The right hon. Gentleman has talked about capital. Let me bring him back to the point. We are talking not about people who have the opportunity of great capital accretions but about those who are eligible for housing benefit. They are amongst the least well off in the country. The Minister has said that some pensioners will not lose anything but he cannot point to anyone who will gain from the proposed change in the regulations. Either they will stay where they are or, in over 3 million households, they will lose money. It is because of the losses under the scheme that the debate is so important.

The motion refers to 1.3 million pensioner households which will lose an average of 80p per week. I apologise for repeating what is in the motion, but it is necessary to do so because the Secretary of State certainly did not refer either to the motion or to the scheme. He talked about a scheme which will take away from those who have a little income in addition to their basic pension 80p per week in housing benefit.

I understand that the Minister is a Lancastrian; his accent sometimes betrays that. I thought that thrift was something of which Lancastrians approved. If the Government clobber occupational pensioners in this way, they will create a pensions trap. If a person pays into a firm's pension scheme to earn a little more pension, he will be hit because he will be ineligible for housing benefit. So much for the party that approves of thrift and saving.

Mr. Conlan

It is not merely the recipients of occupational pensions who will be worse off as a result of the changes. Durham miners have traditionally arranged for their retired colleagues to receive a coal allowance because of the work that they did in the industry. Because of smoke control schemes brought in by successive Governments which prevent them burning coal, these pensioners get a payment in lieu of a coal allowance. That payment, which on average in the Durham area is about £3 a week, is deemed as income and affects the allowances under the housing benefit scheme.

Mr. John

I have had experience of what my hon. Friend has said.

We are talking about millions of households which will lose money. Ministers who were preaching the virtues of this scheme two years ago did not know who would win and who would lose. They did not reveal any figures. Either they knew and suppressed the information—I do not think that was so—or they were totally ignorant of the effects of the scheme when they introduced it. They not only sold a pig in a poke to the House but they bred that pig. They hatched a scheme whose effects they knew nothing about. To judge by the way the Secretary of State is talking to his deposed Minister of State, the chances of his learning anything in the next few minutes are not greatly increased.

Ministers have foisted on the country a scheme deficient in administration and haphazard in its effects. Over 3 million households will be affected by the latest changes in the rules. Over 2 million households will be affected by the taper changes. That means that people will lose money. When money is taken out of people's pockets, it does not matter to them whether the rate of inflation is going up or down. Once the money is taken away, it cannot be spent. It means a lowering of their standard of living. It is as bad as if the Minister had allowed inflation to increase by an equivalent amount. As my hon. Friend the Member for Oldham, West (Mr. Meacher) said, that is equivalent to two weeks' food money for a pensioner family. For most of us, that sum would not be an insuperable loss, although our wives might disagree, but for a pensioner household which budgets carefully the sudden and unexpected loss of two weeks' food money in the next year will be terrible.

I support the motion as much for what it does not say as for what it does. I regret that the terms of the motion are so narrow, because there will be losers outside the occupational schemes. Here I come back to what my hon. Friend the Member for Gateshead, East (Mr. Conlan) said. Under the taper arrangements alone, some 550,000 households of people in work will lose as a result of the changes, and 70,000 of those households will lose over £3 a week, which is a considerable loss of income. The hon. Member for Stamford and Spalding (Sir K. Lewis), who was so concerned about the low paid but who has now deserted us, would have done well to stay and listen to this. That loss of £3 will considerably affect the standard of living of these people. In addition, there is the non-dependants' deduction. The Secretary of State, in his press release and again this afternoon, misled the House by carefully sliding over all the facts. He has said, "Is it not reasonable that non-dependants in a household who are working should contribute towards the household expenses? Is it not true that non-dependants who are receiving supplementary benefit will not be affected?", as if those are the only two categories involved. I am not in the game of playing one category of beneficiaries off against the other.

The Secretary of State, both this afternoon and in his press release on the scheme, did not reveal that disabled teenagers who have no supplementary benefit above their invalidity benefit or their non-contributory invalidity pension are also deemed to have paid £3.10, or £2.65 or £1.65, according to their aid, extra towards the household expenses. It is a complete misconception, and a deception, to say that it is only working non-dependants who will have some of their benefits clawed back by this scheme.

Mr. Fowler

I accept the force of what the hon. Member has just said, and that is one of the groups to which we shall pay special attention in our consideration of the scheme.

Mr. John

That is fine, but we know that if this group benefits from this marvellous scheme there is still the £233 million savings to be made, which means that someone else will suffer. I welcome the decision to re-examine this scheme, but the right hon. Gentleman should do so with a view to cutting the savings to include these people rather than shift the savings to some other group.

Let me remind the right hon. Gentleman about what he is doing to disabled non-dependants. If they are in receipt of non-contributory invalidity pension, he is expecting them to contribute the equivalent of over 40 per cent. of their weekly income to household expenses. He is telling them that they are deemed to give to their parents 40 per cent. of their total weekly income from the benefit, and if their parents refuse to take the money they suffer accordingly.

The right hon. Gentleman has talked a lot about real benefits under this Government, but the real value of the invalidity benefit — these figures were given by the Under-Secretary of State in answer to a written question by me today—between 1979 and now has dropped by £1 a week for a single person. Nevertheless, that single person, who has received in real terms £1 less, is expected to contribute up to 25 per cent. of what he is receiving every week towards the household. That is grotesquely unfair, and one of the reasons why I hope that the motion is passed is that it will force the Government not only to examine the plight of sectional interests but to re-examine the whole of this wretched scheme, so badly introduced and thought out, and to look at the SSAC report.

When the Secretary of State said that the social security budget need not be sacrosanct, he ignored two factors. One is that since 1979 housing expenditure under this Government has more than halved so that rent and; fates have gone up in every area. The Government are having to shell out in extra housing benefit because they have forced local authorities to increase rents and rates. Secondly, there are more claimants for state benefits now than ever before. There is not only the unemployment benefit but the supplementary benefit for the long-term unemployed.

When we talk about the real increase, we must talk about the quality of the benefit received. The quality of the benefit received by housing beneficiaries as a result of this change in the regulations has been changed so that many people lose and nobody gains. That is why the regulations should be scrapped forthwith and the right hon. Gentleman should consider whether he can devise a system that is fairer to many of the most disadvantaged and to the 40,000 households under needs allowance that are losing as a result of the regulations.

If the right hon. Gentleman thinks that that is fair, and the reason why we increased the mortgage interest threshold to £30,000, and if he thinks that that is working equity between two groups of people, his idea of equity is grossly distorted. I call upon every hon. Member to remember the realities, which are that the Government are acting to make millions of people worse off as a result of these changes. They should be forced to take the regulations away and bring hack new and more just ones.

5.17 pm

Mrs. Jill Knight (Birmingham, Edgbaston)

The theory behind what the Government have done is right. The system, as it is intended to work, is simpler and avoids administrative waste, which is a serious matter—1 know of no one who is helped by administrative waste. The system surmounts the problem that had become serious whereby a growing number of people simply pocketed and spent the rent money handed to them. There is no question about it. I know of the great difficulties of some local authorities where rents remained unpaid although the money had been paid to the tenants for the bill to be met. That deprived the rate funds, and thus ordinary ratepayers, in every city where it happened. We have forgotten that that is one of the major reasons why the Government introduced this provision.

Such an abuse also deprived the private landlords of their rights to collect rent from their tenants. I hope that no Labour Member has any feeling against private landlords, many of whom have honourably put a little money into private property to get a little income in addition to their pensions when they became older. They were seriously harmed by these unscrupulous people who, having received the money to pay the rent, did not pay it over.

The welfare state started with excellent intentions, and much of it is excellent in operation today, but we must consider whether it is becoming an albatross around the necks of the British people. I, like every other hon. Member, want care and help for people who need it. Those are the people that I want to help, but I do not want to make help available for people who are well able to help themselves. When I read that almost half of the population of Britain currently receives housing benefit, I begin to wonder how long the situation can go on.

The hon. Member for Oldham, West (Mr. Meacher) drew our attention to one or two cases. I should like to draw attention to one or two other cases—for instance, a family in which the father and one son or daughter at work may easily have a total household income of £11,000 a year and still qualify for a rebate of £2.47 on rent and rates of £27 a week. There are other cases, too. I know of another case involving an income of £15,000 a year and the people in the house still qualifying for housing benefit. That cannot possibly be right.

In my opinion, there are two major reasons why that is wrong. If Labour Members think that that is so funny, I can only say that they have a very odd idea of the way in which public money should be managed. It is wrong on two major grounds to give benefit to people who do not need it. The first is that the money comes from all the rest of the people in the country, many of whom will be less well off than the beneficiaries.

Mr. Harry Cowans (Tyne Bridge)

rose—

Mrs. Knight

I am trying to be brief. The hon. Gentleman can seek to make his own speech when I have finished.

Secondly, it is surely true that no country's economy can survive if half of its citizens are living on handouts from the other half. That is simply not an economically viable proposition.

The Government's action on housing benefit is entirely right in theory. However, I am unhappy about the way that it is working out in practice. My right hon. Friend knows how I feel, and we have discussed the matter. I am very concerned about pensioners who are in difficulties because the scheme is not working as smoothly as was originally intended. I was appalled to hear that some of the cases cited by the hon. Member for Oldham, West had never been brought to the attention of a Member of Parliament. Cases have been brought to me about hardship as a result of the way the scheme is working, and I immediately set about sorting out the problems, as I am sure all hon. Members have done. If cases are brought to the attention of hon. Members, they will be resolved, but I am worried about the number of cases that have been put to me.

One of my constituents, who has three children, and whose income is only £61 a week, fears that his income is dropping by just over 90p a week. That may not seem a lot to some of us, but it seems an awful lot to him. [HON. MEMBERS: "Oh."] I am concerned about these matters.

I hope that my right hon. Friend will look long and hard, not at the theory of what he seeks to do—he will get the support of both my hon. Friends and myself on the theory—but at the way in which the scheme is working out. That is causing great concern on the Conservative Benches. We are anxious to support my right hon. Friend, but it is our duty to bring to his attention cases where the arrangements need an overhaul. I beg him to take a long hard look at the whole system.

5.24 pm

Mr. Charles Kennedy (Ross, Cromarty and Skye)

One of the most revealing insights of any society is the attitude that it adopts to its poorest and weakest members. Frankly, the speech of the hon. Member for Birmingham, Edgbaston (Mrs. Knight) was extremely disturbing, if it represents present Conservative thought about the weakest members of society, when she described the welfare state as an albatross. There are problems with the working of the welfare state. One of the greatest problems involves take-up, in that not enough people benefit who are entitled to benefit. However, that is a criticism not of the principle itself, but of the way in which it is practised. It is disgraceful that the hon. Lady should describe the welfare state as an albatross, when it is there to help the weakest members of society.

Mrs. Knight

The hon. Gentleman did not listen properly to what I said. The fact is that we cannot afford to help the people who need our help most if we continue to support, with public money, people and households with incomes of £15,000 or 11,000. The hon. Gentleman must face that fact.

Mr. Kennedy

Surely the truth is that we cannot afford to help the poorest and weakest in society because so much state expenditure goes on the ridiculous levels of unemployment, generated by the economic policies of this Government. That is why we cannot afford to help them. That is the disgrace that should be changed. The money which the Government find to purchase a costly and dangerous Trident missile programme could be better channelled into helping the poor people of our country.

I wish to relate my remarks, in particular, to pensioners. The Prime Minister often says that the greatest service that can be done for them is to keep down inflation. Clearly that helps pensioners, and, as was pointed out earlier in an intervention, it is something that any sensible person would support, but the Secretary of State must surely realise that pensioners will suffer a double blow as a result of these changes. Age Concern, when talking about the estimated drop of £1.52 in rent and 43p in rate benefits, said that there appears to be an official incomprehension of the significance of such an amount to poor households. It has been estimated that the average drop in annual income that pensioners will suffer amounts to about two weeks spending on food. It is as basic as that. Is it not a disgrace, as we head towards the end of the 20th century, in the country which created a welfare state which is the envy of many other nations, that we are now introducing a measure which amounts to two weeks' food provision for old people? It is a disgusting state of affairs.

The second blow that pensioners will suffer was revealed in a written answer from the Department of the Environment. It made it clear that those pensioners who will no longer be entitled to housing benefit as a result of today's changes will in future qualify only for 66 per cent. home insulation grants, rather than the 90 per cent. for which they are now eligible. I give the Secretary of State credit where credit is due. He said that there could be modifications. However, he is not in charge of the Department of the Environment, and there is no sign of any modifications being made.

Mr. Cowans

The hon. Gentleman should not say that the Secretary of State cannot do anything. The reduction has come about because pensioners are to lose housing benefit. The Secretary of State can do something immediately about that by altering the scheme and enabling them still to claim housing benefit and get the 90 per cent. grant.

Mr. Kennedy

I thank the hon. Member for Tyne Bridge (Mr. Cowans) for his intervention. It seems that my generosity to the Secretary of State was ill founded. I am happy to be corrected in that constructive fashion.

Conveniently, the Government appear unwilling to give figures for the number of pensioners living in uninsulated homes. As was revealed in exchanges in years gone by, initiated by the hon. Member for Oldham, West (Mr. Meacher) once he had left the Government, they do not do so because of the severe embarrassment which would be caused to any Government, irrespective of their political colour.

There is no doubt that pensioners are suffering a double blow as a result of what the Government are doing in legislation. I hope, therefore, that they will at least find it possible to support the ten-minute Bill introduced yesterday, which I hope will come before the House as a private Member's Bill later in this Session. It stands in the name of my hon. Friend the Member for Woolwich (Mr. Cartwright) and seeks to abolish standing charges from gas and electricity bills for pensioners. That would be a step forward and perhaps the Government will be able to give it positive support when it comes before the House.

The Low Pay Unit, in anticipation of the autumn statement by the Chancellor, issued a paper called "Deepening the Poverty Trap" and, like the Institute of Fiscal Studies this week, it has highlighted how this measure will deepen that poverty trap and also deepen the unemployment trap. In other words, this is a retrograde step. It does nothing at all to improve the lot of those who are suffering badly as a result of the economic policies being pursued by the Treasury.

It is indeed sad that the Government cannot find it in their hearts, when their case is presented at the Dispatch Box, to do something positive and give some measure of hope and practical support to those people. The Government are judged by their attitude to the poorest and weakest in society. What we are seeing today is what we have seen since 1979—the poorest and weakest being given a very low priority.

The hon. Member for Oldham, West quoted from The Times and the Daily Telegraph. I should like to quote from The Guardian, which I think the Government will accept is a fairly objective newspaper. I am sure that the Secretary of State accepts it, because The Guardian frequently embarrasses him by printing the facts, for which many right hon. and hon. Members of the Opposition are grateful, because there is complete reticence on the Treasury Bench when it comes to giving us the facts. This is the political reality. The financial reality for millions of hard-up households, The Guardian said on 28 November 1983, will be hardship, in some cases acute. And the electoral consequence of all this may be more than the Government has bargained for. There may not be unanimity on the Opposition side of the House as to who should benefit from those electoral consequences, but let us hope that when they become clear and when the Government are the victims the result will be that the new administration, no matter what their political complexion, will give greater priority to the alleviation of poverty. A first step towards that would be a reversal of the policy which the Secretary of State has expounded today. It is wrong, selfish and arrogant, in that it fails to give sufficient support to those in our society who most need it. The welfare state is something to be proud of, to improve, not something to try to constrain and render inoperative by measures such as this.

On behalf of the SDP and the Liberal party, I offer complete support for the motion.

5.33 pm

Mr. Andrew Bowden (Brighton, Kemptown)

I hope that the hon. Member for Ross, Cromarty and Skye (Mr. Kennedy) will forgive me if I do not deal in any detail with the points that he raised, but in passing I should like to say that I was surprised at the critical comments that he made about defence expenditure. If he consults the leader of his party, he may find that his leader is anxious for the country to be properly defended.

Mr. Kennedy

The hon. Gentleman is absolutely right. The leader, like the members, of our party does wish the country to be properly defended, but we made it clear during the election campaign that Trident would be not part of our defence policy.

Mr. Bowden

At the risk of being called out of order, I must say that there is no way of defending this country properly without spending a great deal of money, no matter how it is spent.

Last autumn the Chancellor acted to control expenditure limits which were well in excess of previously agreed figures. As a result, Departments of State were asked to find additional reductions in expenditure to bring their budgets back to the original figures. The Department of Health and Social Security declared that as its share of cutting back—not below the original figures, but on the increase—it would find reductions of £230 million in housing benefit. Because of the position that the Chancellor faced at that time, it was right that he took rapid action.

What I suspect—and this is no criticism of my right hon. Friend—is that when it was decided to cut back on housing benefit to that degree at that time the full effect of such action on pensioners and others was not realised. As a result of a significant number of parliamentary questions tabled by myself and others from both sides of the House a picture emerged about which the Secretary of State and the Minister of State are, I know, deeply unhappy.

It is on one particular area that we are concentrating our attention today, namely those pensioners who receive a small occupational pension or who have some other limited income. I believe that this group is rather exceptional. A large part of its members' working lives was spent during the war and in the years immediately afterwards when it became increasingly difficult to earn sufficient money either to gain a reasonable occupational pension or to put sufficient savings away with which to supplement the state retirement pension. During that time they paid tax like everybody else. As a group they were determined to do everything possible to ensure that in their retirement they would be independent of any additional help from either the state or their families.

They then found that Governments—some more than others — had created a situation where inflation had destroyed the value of their occupational pensions. Inflation rates of 20 per cent. to nearly 30 per cent. when many of these people were in employment totally undermined the occupational pension and the value of what they expected to receive at the end of their working lives. Governments have a responsibility for that. Without doubt, in the terms of the amendment, the major priority must be the defeat of inflation, but, because Governments destroyed the value of those occupational pensions, they were under an obligation to go at least some way towards making up the loss of purchasing value of those pensions, and one of the ways in which that was done was through the housing benefit.

It deeply worries me when we talk about an average of 80p. It goes much further than that. About 340,000 pensioners who are between only £10 and £20 a week above the needs allowance will lose more than £1. People in this group have seen the value of their occupational pensions undermined because it must not be forgotten that, unlike the state pension, the vast majority of occupational pensions were once inflation-proof, though they might contain scope for some minor adjustments.

The occupational pensions of many of these people were destroyed. A high percentage of them pay tax. Are we really suggesting that we should hit them even harder by removing a significant part of their housing benefit? Another 210,000 people will lose £1.50 or more a week. As I have said, I regard housing benefit as a means by which the Government have done a little to recompense people for having undermined their occupational pensions.

I thank the hon. Member for Oldham, West (Mr. Meacher) for the kind things that he said about me. I am not sure that they have done me a great deal of good, but I thank him nevertheless. He raised a startling case, of which I shall briefly remind the House. Tenants who were not liable to pay any rent got into heavy arrears—£248 — and were then served with a notice to seek possession. I entirely understand that the hon. Gentleman was not able to name the council involved. I do not know its name, but if any right hon. or hon. Member does it would be most helpful for the House to know it. If such a case in Brighton came to my notice, I should be in the chief executive's office the following day wanting to know what on earth was going on, and wanting an explanation for such scandalous behaviour. Perhaps the hon. Member for Birmingham, Ladywood (Ms. Short) knows the name of the council. Will she tell us?

Ms. Clare Short

I must apologise to the hon. Gentleman, because I do not know the name of the council to which he has referred. However, in Birmingham there are many people who have got into arrears because the council will not pay their benefit and have therefore been given or threatened with receipt of notices to quit. I have been made aware of some such cases and know that my colleagues in Birmingham have had similar experiences. The problem which the hon. Gentleman describes is common in Birmingham.

Mr. Bowden

The local authority in Brighton has had considerable problems, and there have been many serious delays, but there has never been a case such as those which the hon. Lady and the hon. Member for Oldham, West have mentioned. I am sure that any right hon. or hon. Member who was presented with such a case by a constituent would be in the council's offices within 24 hours demanding action, apologies and withdrawal of the notice to quit and would severely reprimand the responsible officials. [HON. MEMBERS: "Which party is in power in Birmingham?"] I am not in the least concerned about which party controls that council. If they have not already done so, the various citizens advice bureaux have a duty to inform the local Member for Parliament of what is happening and to reveal the name of the authority. If the local Member of Parliament concerned is present he should get to his feet now, with, of course, your permission Mr. Speaker. It is an absolute scandal that a family should be subjected to such treatment.

The case wich the hon. Member for Oldham, West raised illustrates the point that the housing benefit scheme has created much hardship. It has put many pensioners into circumstances in which they have never been before—in debt. We should not forget that we are discussing a generation for which never being in debt is a matter of personal and family pride. Unfortunately, not quite so many people believe in that principle today. Like, I am sure, most other hon. Members, I have seen people in my advice surgery and received letters from people who are desperately unhappy about being in debt. If we make major alterations such as are proposed, it is inevitable that, next April or May, the system, which is now just over the worst—I admit that there are still black spots—will be thrown into chaos again. The result of that chaos will be more pensioners and others being in the circumstances which have been described. That is unacceptable to me and to many other hon. Members. I hope that my right hon. Friend will examine the matter carefully.

I welcome what my right hon. Friend said. I entirely accept his undertaking to examine the scheme to assess what modifications can be made. However, I want him to go further. I want him to exclude occupational pensioners, for the reasons that I have outlined. The House and the nation owes those people a debt. Such a step is one way in which it might be partially repaid.

I intend to vote for the Oppositon motion, which was tabled as an early-day motion last year. I intend also to abstain on the amendment, although it is brilliantly worded. I congratulate my right hon. Friend on that. Unless there are major changes to the proposed new regulations, I believe that my right hon. Friend will discover that many of my colleagues will find it extremely difficult to support them when they are debated in the House.

5.46 pm

Ms. Clare Short (Birmingham, Ladywood)

I welcome the opportunity to debate this extremely important issue at a more reasonable time—the previous opportunity was at 4 am during the debate on the Consolidated Fund Bill.

Last night I attended a meeting in a part of my constituency where a high proportion of the population live in council rented accommodation. During the discussion the threatened cut in housing benefit was mentioned, as was the chaos that has been experienced in Birmingham. It was chaos and many people suffered from it in the way which so shocked the hon. Member for Brighton, Kemptown (Mr. Bowden).

People at the meeting expressed fear that many poor people will lose money that they cannot afford to lose, and that there will be a return of the chaos that affects everyone who is part of the housing benefit scheme. We also discussed the threatened closure of the Dudley road advice centre, which has done an enormous amount of work to help people with their DHSS claims and with problems associated with the chaos of housing benefit. It appears that that advice centre will not be there when the scheme is thrown back into chaos. We also mentioned the threatened closure of the Ladywood school and the Handsworth new road school. Someone at the back of the hall said: "The truth is, you know, they just do not care about us, the Conservative Government and the Conservative-controlled Birmingham council. They do not care about people around here. They have put up our rents and they have taken away our jobs." The central part of my constituency suffers the highest level of unemployment in Birmingham — 47.7 per cent. The person at the meeting continued: "They take away our advice centres, they cut our benefit and they are taking away our schools." That is true.

I do not believe that Conservative Members know what is going on in the poorer areas of the country. If they do know what is happening, that is shocking. I represent the area in which I grew up. It was never rich, but when my generation left school we could all expect to get a job. Of the most recent bunch of school leavers in Handsworth, only one in 134 can expect to get a job. Although adult unemployment stands at 47.7 per cent, jobs hardly exist for young people.

The area's poverty can be seen as one walks around the streets. One can see it in people's clothes. It is possible to see the misery and the strain of families in advice bureaux such as those run by Members of Parliament. It is shocking and getting worse all the time. On top of that, the Government intend to take more away.

Last Sunday I listened carefully to the Prime Minister, who attempted to explain to Brian Walden, who once represented the constituency of Birmingham, Ladywood but who has now forgotten our problems, why she has failed to keep the two major promises on which this and her previous Government were elected. They were to cut taxes and public expenditure. Clearly, she does not understand what is wrong, for she will never fulfil those promises unless she cuts unemployment. Unemployment has increased, the tax intake has decreased, and massive costs are involved in keeping people in the dole queue. Therefore, to keep public expenditure stable, the Prime Minister seeks to withdraw public services.

The cause of the problem is a failed economic policy. The experiment is not working. For goodness sake, let us have change so that areas such as the one that I represent can have hope. The Prime Minister promised during the programme to strain to cut taxation and public expenditure further. That is the justification given for such proposals. Instead, she and the Secretary of State for Social Services should promise to strain to cut unemployment. Then we would have the resources for a decent welfare state and to take proper care of all our people.

The Government do not seem to care about the people about whom we are talking. They constantly boast that they are encouraging home ownership, but they do not understand that some people must, and always will, live in rented accommodation. Those people are worthy of respect, compassion and humanity from the Government. Pensioners will never be able to buy their own houses; nor will single parents, young people or the unemployed. It is not good enough for the Government to write off 'that group of people. First the Government took away their livelihood and then the Government cut the benefits on which they rely.

The Government told the House which groups would pay for the cuts. They are the least well off. It is true that people on supplementary benefit are the poorest, and that they will not suffer this time, but all hon. Members have heard calls from Tory Members for cuts in supplementary benefit. Those calls have gone away for the time being, but no doubt they will return. That group will not suffer, but the next group up—some of the poorest people in Britain, but not those on supplementary benefit—which consists of occupational pensioners, the few young people who are in work, though often on low wages, the 18 to 20-year-olds who are unemployed and the low paid, will. The Government claim to be concerned about the poverty trap, yet with the proposals they are deliberately and seriously deepening it.

Earlier in the debate Conservative Members challenged the Opposition to say from where the money was to come if not from these cuts. The Government seek to justify 'the cuts, yet in the Budget they gave away additional money in mortgage tax relief. The hon. Member for Birmingham, Edgbaston (Mrs. Knight) told us that the welfare state was an albatross, and seemed completely unconcerned that billions of pounds were given away in mortgage tax relief. There is no justification for that.

As my hon. Friend the Member for Oldham, West (Mr. Meacher) said, all hon. Members are in favour of the principle of unified housing benefit, but to call the scheme that—it was introduced in such a mean-minded way with insufficient resources for administering it—and to say that it is desirable, is unworthy.

When the Government introduced the current housing benefit scheme many poor families lost. We should remind ourselves of the figures. Some 400,000 people who previously received help with rent and rates lost the benefit that they used to receive. More than 2 million people received less than they did previously. As a result of the Chancellor's autumn statement, even more poor families will lose. To save £230 million the Government estimate that a further 540,000 people will cease to receive any help whatsoever, 270,000 of whom are pensioners and 270,000 low-paid earners. About 2,170,000 people will lose their benefits and become poorer. About half of them are pensioners and half a million are families with children. According to the Institute of Fiscal Studies, the real figure for those who will lose under the proposal is 4.5 million. That figure is bigger than the 2 million quoted by the Government because 2 million people who are entitled to claim under the scheme do not do so.

The Government told the House that the average loss would be 80p per household. It will vary from as little as that to as much as £13.75. For families living in poverty even £1 is a great deal, yet one family can lose as much as £13.75. On top of the increased poverty, the whole scheme will undoubtedly be thrown back into chaos. Therefore, all those who will not suffer from the loss of income, will suffer through the maladministration of the scheme.

I appeal sincerely to the Government to think again. It is neither courageous nor resolute to go on doing the wrong thing, but stubborn, stupid and cruel. It is not good enough. I appeal to Conservative Members when they vote tonight to think of the sort of people who live in Ladywood. Those people are not unworthy and cannot be written off. They want to work and to have decent lives and houses. The Government have taken away their chance to work, among other things, and these cuts will be a further blow. If Conservative Members care for these people at all, they should vote against the amendment.

5.57 pm

Mr. Tony Baldry (Banbury)

Before considering the future, it is necessary to consider the present. Banbury is served by a sensible district council with committed council officers. It has an active citizen's advice bureau, staffed by sensible, intelligent and caring people. Neither the Cherwell district council staff nor the Banbury CAB volunteers have a particular axe to grind, and they approach matters with common sense, judgment, straightforward thinking and plain speaking.

The clear message that I have received from all those involved closely with housing benefits in Banbury and north Oxfordshire in the past months is that there is a consensus of concern that the housing benefit scheme is in a mess. Instead of introducing a unified, simplified scheme for rent and rate rebates, we have brought about a housing benefit scheme which may be more comprehensive, but which is certainly not more comprehensible. It is incomprehensible to those who administer it and to those whom it is intended to assist. It may even be incomprehensible to some of those at the DHSS offices at the Elephant and Castle. As the The Times said on 6 January: What has been perturbing is the trickle of calculations showing that neither Ministers nor officials knew accurately the results of the changes they were proposing. As yesterday's report from the National Association of Citizens Advice Bureaux made clear, the present scheme is practically unworkable.

In the event, there seem to have been no advantages from the introduction of housing benefit. Any savings in DHSS staff levels as a result of the change have been offset in staff recruited by district councils, and any minimal overall reduction has been achieved only by local authorities having to administer housing benefit with inadequate staff and insufficient resources. Without ensuring adequate administrative groundwork it was inevitable that implementing, at nil cost, a major reform of the overlap between local authority rent and rate rebates and DHSS payments for housing costs would end in tears. Judging from all the evidence, that is what has happened.

We now need an urgent rethink of the whole scheme. There must be research to ensure a full and fair system to provide adequate help with housing costs for those truly in need. It is no good saying that the proposed changes in housing benefit will affect only the better off. The better off should not receive housing benefit in any event; but with a scheme as complex as the present one, the suspicion is that those who will be affected by the changes are not the better off in absolute terms, but those who are slightly better off than, for example, single pensioners or those receiving supplementary benefit.

I have always understood it to be an essential and fundamental principle of Conservatism that while we hope to erect ladders up which people may climb, we shall always ensure a floor below which no one shall fall. However, if the system of housing benefit is so complex that no one can see the floor, there is a danger that a change will inadvertently cause people to fall below it, that unfairness may be caused between groups of beneficiaries, and that the problem of the poverty trap will be intensified. We need a long-term constructive approach to the problems of the poor and the low paid.

I have always believed that further research on a system of negative income tax would produce dividends. The need for a thorough review is illustrated by the fact that about 60 per cent. of current recipients of housing benefit pay income tax, and one in 10 of those presently receiving housing benefit pay income tax of more than £15 a week. Little wonder that there is confusion, with such a Rabelaisian relationship between tax and benefits. Little wonder that the poverty trap becomes greater when nearly two thirds of those who receive housing benefit must pay income tax. Either people have an overall income that is so low that they need assistance with their housing costs, in which case why are they paying income tax, or people's earnings are so high that they qualify for income tax, in which case why are they receiving housing benefit? One can only hope that the difficulties experienced during the past four months will bring about a thorough review to ensure that only those truly in need receive adequate assistance.

We also need remedial action in the short term, such as the publication of leaflets explaining each housing benefit so that it can be easily understood by prospective claimants, and the design of more easily understandable housing benefit application forms, which can be adapted by local authorities according to their local circumstances.

Although I accept everything that my hon. Friend the Member for Brighton, Kemptown (Mr. Bowden) said about Members of Parliament intervening with their local authorities when they come across difficult cases, one of my worries during the past few months—I am sure that I am not the only hon. Member who has been worried about it — is that even well-ordered local authorities, such as Cherwell district council, have so many queries that often the intervention of a Member of Parliament succeeds only in taking a query from the bottom of the pile and putting it on the top.

What of the future and the proposed regulations to take account of the £230 million savings in housing benefit announced in the autumn statement of my right hon. Friend the Chancellor of the Exchequer? There can be no objection to the Government wishing to reduce the overall cost of housing benefit. As housing benefit reaches further up the income scale than does any other benefit in the social security system, there may be good grounds for reducing the eligibility of some recipients. There can be no objection to grown-up children aged over 18, living at home and earning the average male wage of £95 a week, or the average female wage of £78.20 a week, being asked to contribute about £8.20 a week out of their earnings to the family kitty. That is perfectly reasonable.

However, it is worrying that some people will be brought into the poverty trap as low-paid workers and lose an increasingly large proportion in tax or reduced benefit of every extra pound that they earn. The Institute of Fiscal Studies estimated that there would be an increase of about 150,000 of those on low incomes who, as a result of the proposed changes, will lose more than 75p of every new pound earned. That is higher than the marginal tax rates on the highest incomes, and is completely inconsistent with the Conservative party's desire to tackle the unemployment trap.

Many of us will be interested to hear what steps the Government intend to take to tackle the poverty trap in the immediate future, and to help those who are climbing the ladder of low-paid employment. The social security advisory committee estimates that about 38,000 families below the needs allowance will lose. I hope that when the regulations are laid, the Government can demonstrate beyond peradventure that the savings that they intend to make will not intensify the poverty trap and will not affect those on low incomes or those below the needs allowance.

One recognises that nearly every social security benefit has increased in real terms since the Conservative party came to office, and the greatest help that we can give to social security beneficiaries is to continue the fight against inflation. One recognises how much has been achieved under the leadership of those proposing the amendment to the motion. All the more reason for now ensuring a rational system of housing benefits and of ensuring that the April changes do not cause injustice or hardship.

6.5 pm

Mr. A. Cecil Walker (Belfast, North)

Northern Ireland Members are also deeply worried about the plight of those senior citizens who will be deprived of all, or a substantial proportion of, housing benefit because they receive occupational pensions. I appreciate that Ulster will be shielded from some of the effects until later, but the effects will eventually be felt.

It is generally admitted that there will be a considerable saving in the administrative cost of the new housing benefits scheme. If that is the case, why deprive the most disadvantaged by introducing a system with a loser element? Those who lose will he better-off—that is the term used—recipients of housing benefit. Nevertheless, they are recognised by the Government as being sufficiently impoverished to be in need of assistance with their housing costs.

There is much anxiety in Northern Ireland about rent rebating at source. I heard what the hon. Member for Birmingham, Edgbaston (Mrs. Knight) said about this, but in Northern Ireland the system is considered to impose unnecessary interference with the right of individuals to organise their financial policies. It is especially offensive to those who, despite poverty, regularly meet their rent obligations. The erosion of individual liberties which rebating at source implies is demeaning and degrading, since it is generally accepted that adequate legal and administrative arrangements are in force to deal with the problem, including, where necessary, the application of rent direct.

The Government should be aware of the problems of those who float off supplementary benefit. Many of those people are pensioners, who will have great difficulty in understanding the present scheme. I hope that the Government will ensure that those who float off supplementary benefit are fully informed of the benefits to which they are still entitled.

I should mention the differential between certificated cases and standard cases. Certificated cases are among the most needy, and it is appropriate that administrative regulations should ensure their efficient service and protection from bureaucratic error. It is also appropriate to accord similar protection to standard cases. The small additional cost of introducing such procedures would be more than justified and would be good administrative practice.

6.10 pm

Mrs. Edwina Currie (Derbyshire, South)

We have heard a moving speech from the hon. Member for Birmingham, Ladywood (Ms. Short). It does the House no harm to hear about the pain and difficulty experienced in some of the worst parts of our inner cities, however untypical those areas may be. I am sorry that the hon. Lady is not present to hear what I have to say.

Over the years, a substantial programme of inner city partnership has been created between the local councils and the Government to alleviate such difficulties. The city council which the hon. Lady so readily accused of not caring has just agreed— as I mentioned to the Prime Minister this afternoon — to reduce its rates for the second time. The rates of all ratepayers in that city, including business ratepayers, are now among the lowest in the country. That fact will attract business, industry and employment. In that city, as in many others, Conservatives have cared in a very practical way. They have done substantially more than make moving speeches.

This time last year it was my miserable lot to administer the housing benefit scheme in Birmingham. If I have any grey hairs at all, that is why. The principles of the scheme were excellent. The first was that, instead of going from the DHSS to the tenants to be passed on to the council housing department, the money should go direct. One link should be cut out. That was excellent, because rent arrears had amounted to about 10 per cent. of the total rent roll. In many London boroughs, rent roll arrears stood at 30, 40 or 50 per cent. One cannot run a department when the money is not coming in. The second principle was that an attempt should be made to unite the different schemes; the scheme was originally called the unified housing benefit scheme. The different rebates, rent allowances and so on should be put together.

I am puzzled about why we got into such a muddle I think that there were several reasons, some of which were specific to Birmingham while others were more general. The timetable was far too short. That has been recognised by the Department and the timetables have been extended. Some details were not well thought out. For instance, the start date should have been 15 or 22 November. Some authorities collected rents in arrear and others in advance, but that was not clear until afterwards, which was rather late for many tenants. There was also the failure to include water and sewage rates. A large number of people in my constituency now have rent books in which they pay to the local council £20 or 85p a week for their water and sewage rates. That is plain silly. The costs of collection must amount to more than that. It must be possible to put that right.

Most of the difficulties were caused by the wider scheme introduced in April because, I suspect, instead of reducing the number of linkages, we increased it. Instead of going from the DHSS to the tenant and then to the housing association, the money now goes from the DHSS to the local authority and then to the housing association, and the tenant is somewhere in the middle. The greater the number of linkages, the easier it is to lose the files. The greater the number of bureaucracies involved, the worse the situation can become.

Furthermore, in many big cities the DHSS has failed to respond quickly enough to the changes required. It takes about six months to respond to an uprating in rent, rates or allowances. In Birmingham, the DHSS was always about six months behind. I introduced a rent increase in October 1982. There had been a rate cut in April 1982. There was also a benefit uprating in November 1982. That is three changes in six months. I was told that the DHSS had the biggest computer in Europe, but at times I seriously wondered whether it had been plugged in. The delay, added to the effects of strikes in DHSS offices in Birmingham and elsewhere, made life very difficult.

A year such as I experienced would persuade anyone who was in favour of switching from rates to a system of local income tax to change his mind. The sheer administrative pain of changing from one system to another would be too great. There would be 20 million households changing over from one system to another, and a computer at the Inland Revenue that might or might not be working.

The scheme is now settling down very well. Whatever letters may have gone out—the matter was discussed in Birmingham council last week—there has not been a single eviction resulting from the working of the scheme. However, I am sure that some people are still going to the citizens advice bureau with glib stories about their difficulties. Some tenants are still refusing to accept responsibility for arrears built up before the scheme became operative. Those arrears are their responsibility, and I have very little sympathy for them.

My hon. Friend the Member for Birmingham, Edgbaston (Mrs. Knight) mentioned one or two cases. Let us take the case of a couple, with two young children, receiving child benefit. If the husband's income was the only income and he was picking up £10,000 a year—that would be a typical case in my constituency—and if the rates bill was £11 a week — that is typical too because Derbyshire rates are something chronic—that household would qualify for housing benefit. Yet a family with £10,000 a year is not badly off.

I hate to use notes, Mr. Speaker, but the matter is so complicated that I have to do so. Let us take the case of a man earning £100 a week, with a wife, and two sons each of whom also earns £100 a week. Perhaps the three of them work in British Rail in Derby or in Melbourne Engineering. The family would have a total income of £15,000 a year but they would probably qualify for a fairly substantial rebate, even if they were paying £28 a week in rent and rates. That family, with three incomes and three tax allowances against earned income, would be a darned sight better off than many hon. Members. If we cannot claim to be poor, that family cannot do so either. It is wrong that they should be entitled to claim rebates.

Those examples were produced by the Conservative research department but I also have one from SHAC, the Shelter housing aid centre. SHAC states that each of the changes recently introduced can have a serious financial effect. It continues: Where however 3 or 4 coincide, as they do in the following … example, the results are truly shocking. Here is the example: A family with 3 children, 2 at school, one (aged 18) living at home, with a total income of £160 a week, living in an area which currently has a high rent area authorisation, and paying £36 a week rent, £12 a week rates. That family will lose benefit—and this is the highest case that can be found—of £13.75 a week.

I have made some inquiries of those of my hon. Friends who are estate agents or who are involved with building societies and banks. I asked them what they would do if someone said to them, "I want to buy a house. I can afford £36 a week, not counting rates, and my total income is £160 a week. What can I have?" I have been told that such a person could have a mortgage of £20,000. In my constituency, he could probably buy two houses. I deplore the fact that such a family should qualify for benefit.

Those aged from 18 to 20 and in work will be expected to pay the full adult contribution rather than £1.60 and £3.95 as at present. They will be expected to contribute £8.20 to the household income. I used to be a university landlady. As such, I received advice from Birmingham university, the polytechnic and one or two other institutions. Landladies are advised to charge students—and remember that students pick up less than £40 a week —£20 or £25 a week, and to make sure that there is a meter in their room and that they pay for their gas and electricity on top.

In the opinion of the university, that is what it costs to keep a healthy 19-year-old student who is probably eating one out of house and home, as all mine did. However, the DHSS is asking young people to contribute only £8.20 a week. We should not cry crocodile tears because of that.

There are many occupational pensioners in my constituency. They may have worked for British Rail, the National Coal Board or Rolls-Royce. On the whole, they are not among the substantially well-off occupational pensioners. There seems to be a growing tendency to take occupational pensions into account as if they were earnings. As far as I can tell, that began with the Social Security (No. 2) Act 1980. The ratings introduced nearly three years ago, in April 1981, have not been increased since then. Ministers may well want to consider that.

That Act referred to unemployment benefit, but at that time the debate centred on the fact that many occupational pensioners who had reached the age of 60—everybody talked about bank managers—had effectively retired. It was said, therefore, that the benefit that they were receiving should be calculated as if they had retired. As Conservatives, we should be as generous as possible with occupational pensions, on the principle that if Mr. Bloggs has paid into a fund and can look after himself the state does not have to look after him. We should actively encourage that sort of thing.

I believe that, as far as possible, we should relieveoccupational pensioners of income tax. I know that that would cost a lot of money and that it is unlikely to happen, but I see it as a principle that should be put into action.[Interruption.] I shall not help the Opposition in any way. The Labour party's interest in this important subject, which affects millions of our constituents, is shown by the fact that for long periods there have been no more than six Opposition Members in the Chamber.[Interruption.] It is the Labour party's motion. Indeed, I may well inadvertently have included in that figure one or two Northern Ireland Members. If I have done so, I apologise.

Mr. Willie W. Hamilton

rose—

Mrs. Currie

I shall not give way.

Two thirds of all households will not be affected by the housing benefit changes introduced as a result of the autumn statement. For those affected, the average figure will be less than £1 and the figure for half of them will be less than 50p. Most pensioners will not be affected at all. Even the statistics from Age Concern show that. Most of those affected will lose only pennies, and that should be stated very clearly. In many cases they will be better off under this scheme than they were even in 1982–83.

I am absolutely certain that if the Opposition had introduced and implemented the housing benefit scheme they would have made a far worse mess of it. On that ground alone, I am happy to oppose the motion.

6.22 pm

Mr. Sean Hughes (Knowsley, South)

Like my hon. Friend the Member for Birmingham, Ladywood (Ms. Short), I, too, listened to the Prime Minister's interview on "Weekend World" last Sunday. We had to listen to her assuring us that living standards had risen under this Government. This week we were assured of the same rising optimism by The Standard. In my borough of Knowsley, talk of an improvement in living standards or about the imminence of economic recovery would be considered proof of insanity. The plight of people in areas such as mine will be made much worse by the proposed changes in housing benefit.

In his written reply on 17 November 1983, the Secretary of State for Social Services said that for housing benefit recipients, the changes in current arrangements will be concentrated generally on the relatively better-off households".—[Official Report, 17 November 1983; Vol. 48, c. 574.] "Relatively better off"—but to whom? Certainly not to the Secretary of State or the Conservative party. The Secretary of State is establishing gradations of poverty in areas such as mine.

As hon. Members on both sides of the House have said, a week does not go by that we do not receive representations from constituents about the existing anomalies in the housing benefit system. People have found themselves in rent arrears for the first time in their lives because of the bungled way in which the system has been introduced. The scheme has produced confusion, fear and anger since it was first introduced. Now that is to be exacerbated.

The changes will reduce the benefit payable to nearly 6,500 claimants in the borough of Knowsley, because of the changes in the tapers above the needs allowance. In his opening remarks, the Secretary of State stressed his concern, and that of the Government, for the plight of pensioners. The number of claimants affected in my borough are 3,427 council tenants, over half of whom are pensioners; 2,380 owner occupiers, over half of whom are pensioners; and 639 private tenants, over two thirds of whom are pensioners. No wonder the Government advisory committee deplored those cuts in the words used by my hon. Friend the Member for Oldham, West (Mr. Meacher).

In my borough not only will 6,446 claimants be adversely affected as I have described, but up to a further 6,500 claimants may be affected, as their benefits could be reduced because of changes in the non-dependant deductions. I shall comment briefly on the non-dependant deductions, which I consider to be particularly mean-minded and harsh. Until now, a 16 or 17-year-old was not counted against the housing benefit, but as from April—if these miserly proposals go through—he or she will be expected to contribute £3.10. How in heaven's name does that square with the Government's repeated claims about the need to prevent the frustration and lack of purpose among the young?

My borough is faced with the staggering figure of 62 per cent. for youth unemployment. In 1983 only 10 per cent. of our school leavers found permanent jobs. The unemployed young people of my constituency will see these deductions as further evidence that the Government at worst do not care and at best do not understand. The Government live in a world of their own.

As Paul Lewis of Youth Aid stated: The decision to make poor parents dependent on teenage children is an alarming new application of family policy. We are now moving towards a situation where the state, rather than recognising its responsibility to alleviate poverty, simply asks the poor to share their poverty with other members of their families. We do not just have the unemployment of the 1930s. We are getting the hated family means test too. That is not an exaggeration. Even the leaked Social Security Advisory Committee report recognised that young low paid teenagers would need to be evicted from council houses if parents wished to keep some housing benefit because of the cuts.

Is that the sort of action that the Prime Minister told us last Sunday was so much in tune with how people feel — because of what they feel in their pockets? Increasingly, because of such proposals, if my constituents feel anything in their pockets, they have someone else's trousers on.

6.28 pm

Sir Hugh Rossi (Hornsey and Wood Green)

I share many of the anxieties that have been expressed on both sides of the House about the fact that so soon after the introduction of the scheme the Government have found it necessary to make changes. It is a matter of regret that that has been found necessary.

I am very conscious of the fact that local authorities, which have struggled to assimilate a vast scheme involving about 5 million assessments of individual circumstances, now find that the rules are being changed again, and that they now have to take on board new elements and make fresh calculations. I can see that that will cause them problems. However, we should not lose our sense of proportion. Some of the criticisms that have been made were quite uncalled for.

Some two years were spent in negotiation and close and detailed discussion with the local authorities before the scheme came into effect in November 1982. It came into effect in two phases — in November 1982 and April 1983—to suit the requests and requirements of the local authorities. In addition, the Department undertook to pay, and has been paying, all reasonable expenses incurred by the local authorities in engaging additional staff to deal with the extra work involved, in training staff, and in the provision and buying of computers for those local authorities which did not have them.

Everything possible was done to assist the local authorities, but one must accept that in such a gigantic scheme, with 5 million people involved, there are bound to be administrative mistakes. Those mistakes highlight themselves and are brought to our attention.

Mr. Simon Hughes

Will the hon. Gentleman give way?

Sir H. Rossi

No, because time is short.

What my right hon. Friend the Secretary of State has said is important. There has been a significant increase in the take-up of housing benefit. When we had two schemes running in parallel, we suspected that people were ignorant of their rights and, consequently, that many people entitled to benefit did not receive it. It must be a matter of gratification that the take-up of benefit has increased.

There are two consequences of that increase. First, local authorities may not have made administrative provision for the increase and therefore have run into difficulties. Secondly, the scheme's cost, which was originally pitched on a nil cost basis, has increased beyond expectation. If the figures that I have worked out are correct, the scheme is costing about £550 million more than anticipated. The Government are seeking ways in which to reduce that £550 million excess by about £270 million. I ask my right hon. Friend, when he is seeking to make an adjustment of that excess, to bear three points in mind. He was good enough to say that he would reconsider the scheme's detail.

First, I should like my right hon. Friend to ensure that no one whose income is below the needs allowance loses anything because of the changes. That must be an absolute prerequisite. Secondly, will he look at the minima that are being suggested? When a person is being paid small sums by, for example, the rent allowance, administrative costs can far outweigh the sums being paid out. Nevertheless, a loss of up to £1 a week in rent allowance is a bit too much to ask of our poorer families and the figure should be pitched much lower. When I had responsibility for this matter, I came to the conclusion that 20p a week was about the right figure below which it was not worth while making payment. Perhaps that was an incorrect judgment and we might have a higher level of 50p a week but 99p is too much to ask poor families to forgo.

Thirdly, I ask my right hon. Friend to take account of 16 and 17-year-olds. Given their place on the labour market, there is scarcely a family in the land in which a 16 or 17-year-old, even though he or she is bringing in some income, is not a burden, a liability and an expense. When the original scheme came in, I tried to ensure that 16 and 17-year-olds did not affect family benefit levels. A change is now being proposed. I hope that my right hon. Friend will return to the original concept, look at the matter again and make a further change to his proposed changes to the scheme.

6.33 pm

Mr. Ernie Roberts (Hackney, North and Stoke Newington)

The housing benefit scheme is based on the philosophy of the workhouse—to keep benefits down to starvation level. That has not worried the Government but it has worried those who support the Government. The housing benefit scheme is so bad that the Government pile the whole measure onto the backs of the local authorities. The housing benefit cuts of about £230 million will be operated by local authorities which will be blamed for the increased rates that will follow. The Tory Government have caused considerable suffering to those entitled to housing benefit by forcing these schemes on local authority administrations to allow the DHSS to sack staff.

Conservative Members have asked questions about the local authorities that are to blame for bad operation of the housing benefit scheme. The housing director responsible for administering the scheme in Hackney gave reasons for the difficulties in administration. He stated: Early notification from the DHSS was that 20,000 cases would transfer to the authority. Accordingly, staff and accommodation were provided based on the numbers indicated. In the event 25,000 cases have already been transferred and an additional 500 new cases and 500 changes of circumstances or cessation are being notified each week. The staff have and are co-operating fully by working weekends and evenings but clearly were unable to cope. The problem has, in fact, been enhanced by the additional cases virtually all being in the private sector, the most difficult and time consuming to deal with. Those are some of the difficulties arising from the scheme that is being forced upon local authorities such as Hackney.

The Secretary of State and other hon. Members will have noticed the early-day motions that were put on the Order Paper on 6 December 1983. One referred to the housing benefit of occupational pensioners and noted that 1,330,000 occupational pensioners and others with additional income will be affected by the changes in housing benefit". Another significant early-day motion followed on the Order Paper under the heading "Unclaimed Supplementary Benefit". A large number of hon. Members listed on the Order Paper pointed out that the total amount of supplementary benefit unclaimed by persons entitled to it rose from £355 million in 1979 to £760 million in 1981, and that 1,390,000 people who were eligible for the benefit in the latter year failed to claim it at any one time. The confusion caused by the housing benefit scheme drives people into the position of not knowing their rights. They are denied the right to the assistance that they require.

Hackney citizens, whom I represent, live in probably the most poverty-stricken borough in the country, but they will be further damaged by the housing benefit cuts. Already I have received numerous complaints about the existing scheme from a number of people who have been given notice to quit because their rents have not been paid. Some of them have endeavoured to pay their rents out of their meagre incomes.

Conservative Members have complained about the cost of the welfare state. Some say that we cannot afford the poor, but in the area that I represent the poor say that they cannot afford the rates. The poor are poor because the rich are rich; that is self-evident. Conservative Members ought to understand that people are poor because the wealth to which they are entitled has been taken from them by the wealthy. Those who have wealth crow about it and then attack the poor for not being able to face up to their responsibilities. That is why people are poor, and the more often that is said the better. People are rich only because wealth has been taken from others who are entitled to it.

Britain is a rich country, despite all the nonsense that has been said this afternoon. The Government have £130,000 million in their purse. What do they do with it? It is misspent. The problem lies in the way that the money is distributed and spent. The way in which the Government spend that money is the prime cause of inflation. I do not have time to explain that now, but if any Conservative Members are interested in my explaining it to them I shall show them that Government expenditure is the main cause of inflation.

This scheme and the Government's action have caused problems for the people of Hackney. The director of finance in the borough of Hackney states: The problem is made much worse by the impact of increases in rents and rates. As you know, largely because of Government penalties Hackney is facing rate increases on the basis of current projected expenditure levels of between 42 per cent, and 61 per cent., assuming at the same time that rents to council tenants are increased by 75p. The table attached shows the impact on a range of individual tenants. Whilst the total outgoings of the average tenant not in receipt of benefit will increase by between 20 per cent. and 30 per cent., those in receipt of benefit whose income is above the needs allowance will be facing increases of between 23 per cent. and 39 per cent. (and extrapolating from the examples even higher where income is higher). There are no rich people in Hackney. He concludes: it is Hackney Council who will be blamed, not the Government. That is the Government tactic of passing the problem over to the local authorities.

6.40 pm

Mr. Max Madden (Bradford, West)

The Government have become notorious for promising the people one thing and giving them the opposite. Their record is not so much cock-up after cock-up, as today's Daily Mirror suggests, as a catalogue of deception, betrayal and broken election promises. In successive general elections the people have been told that if they vote Tory their taxes will be cut, but we all know what has actually happened.

In the first year of the Tory Government the number of millionaires in this country increased by 1,200. The total tax paid by the top 1 per cent, decreased, while that paid by the bottom 25 per cent. rose. The people were asked to vote Tory to slash public expenditure, but the cosy fireside chat with Brian Walden on Sunday made it clear that the opposite had happened. Public expenditure now accounts for a higher proportion of the country's wealth than when the Conservatives came to office, due to the doubling of unemployment and the massive increases in military expenditure. The people, and especially the pensioners, were asked to vote Tory to protect their interests, but the Government's record on pensions has been deplorable and further attacks are being made on them through the proposed reductions in housing benefit.

I cite the case brought to the notice of a London Labour Member by an official of a housing trust which provides special sheltered accommodation for 1,000 tenants, 85 per cent. of whom are on housing benefit, including those living on the Oldfield estate at Chalk Farm. A similar situation applies for many other housing associations. This is the reality that seems to come as such a surprise to Conservative Members.

The official writes: We have already experienced difficulties with the arrangements which came into effect last April when tenants' arrears went up three-fold, largely because of the changes in the administration of the payments on Housing Benefits. Many of our tenants became almost sick with worry at the arrears which built up through no fault of their own and we found that some of them would forgo a proper diet rather than be in arrears. Many experienced a sense of shame because of difficulties which were no responsibility of theirs. The situation which we see arriving on the 1st April could be worse as not only are the Council's Housing Benefits section having to implement even more complicated formulae, but also a Housing Benefit cut of around £4 per week will in many instances form a substantial proportion of the money they would otherwise expend on food. He concludes: from the feedback which we have received to date we are left in no doubt that there is a mood of despair prevalent where the situation is understood. Old people in particular have no buffer with which to absorb a reduction in their income, and too much time to worry about where the next meal is coming from. That is the reality of Britain today for many pensioners, and we invite Conservative Members to address themselves to it. Ministers have struggled to combat criticism of the proposed cuts by claiming that the cuts rest not on the worst off but on the better-off sections of the community. That is not true. The people being hit hardest are on 60 to 70 per cent. of average earnings.

Ministers have also sought to argue that the increase in housing benefit is so enormous that it must be tackled, but that increase does not mean that the scheme is more generous. It reflects the enormous increase in unemployment and the substantial sums previously treated as supplementary benefit, which now come within the housing benefit scheme. The increased expenditure on standard benefit also reflects the enormous increase in council rents and local authority rates as a direct result of Government policies — first, the coercion of council tenants into buying their homes and, secondly, the substantial cuts in rate support grant.

This mean, nasty plan to cut housing benefit has brought a tide of opposition. The Secretary of State today gave the impression that there were some supporters of the proposed cuts, but I understand that 130 organisations sent in critical reactions to the Government's Social Security Advisory Committee, which in turn submitted a highly critical report to the Government. It said that pensioners would lose the cash equivalent of two weeks retirement pension and stated: We join all those who have made representations to us in deploring these cuts, which we believe will have an unduly harsh effect on many individuals". The local authorities strongly oppose the cuts. A senior official of the Association of Metropolitan Authorities said: This confirms the appalling picture we believed existed as a result of these cuts. They must be withdrawn. We have heard a great deal about the iniquities of housing benefit going to people whom Conservative Members regard as well off, but we hear very little about the public subsidies to people on substantially higher incomes by way of mortgage interest relief. Those subsidies have increased by 50 per cent. in the past 10 years and 500 per cent. in the past 20 years.

We have rightly heard a great deal today about the effect of the cuts on the poverty trap in creating marginal tax rates of 80 per cent. The cuts are an attack on poor people, including many pensioners. They intensify and deepen the poverty trap. They deter people from saving to provide additional pensions. They increase adminsitrative burdens and costs for local authorities. We urge the Minister of State to go further than the Secretary of State. We urge the Government to withdraw the cuts completely and to undertake a comprehensive review of the housing benefit scheme. We are not in the business of redistributing poverty among the poor. If the Government think that they can buy off the Opposition by helping pensioners at the expense of the unemployed, they should know that any such attempt will be rigorously resisted by Labour Members.

I urge Conservative Members, whether they be "Thatcher's no men" or the 100 who signed early-day motion 318, to join us in opposing these mean and nasty cuts which hit the worst-off sections of our community. The right hon. Member for Old Bexley and Sidcup (Mr. Heath), who has had a busy week, told Sir Robin Day yesterday on "The World At One": There are many of us in the party who recognise it always has in the past been a party in which people had their say and influenced events … The responsibility lies on us to continue that tradition. We are not going to be hacks and lackeys and just pushed here and pushed there. We are going to express our views and we will act accordingly in the House of Commons, and that is our duty to our party, to our constituents and to the people in the country as a whole". I invite the right hon. Member for Old Bexley and Sidcup, "Thatcher's no men" and other Conservative Members who see the reality of the cuts and their effect on many of the poorest sections of the community, to join us in opposing the Government's proposals and warning the Government that if they bring back a botched-up scheme in a few days' time which merely shifts the burdens without reducing them we shall continue vigorously to oppose them.

6.50 pm

The Minister for Social Security (Dr. Rhodes Boyson)

The last time I rose to reply to a debate on housing benefits was on the Consolidated Fund Bill at 6.14 in the morning, and there were not as many hon. Members present then as there are today. The hon. Member for Bradford, West (Mr. Madden) and the hon. Member for Birmingham, Ladywood (Ms. Short) were present, and thus we had a trinity at least upon our evening service on that occasion.

Reference has been made to the effect that there is no sense of heart, compassion or feeling on this side of the House. Let us look at the record of the Government on social security. Social security expenditure now is 25 per cent. up in real terms in four and a half years. Even allowing for increased numbers on unemployment and supplementary benefit and 600,000 more pensioners than there were in 1979, almost every benefit is higher in real terms than it was when we came into office. One-parent benefit is the highest ever, and child benefit is at its peak. On the handicapped, we are spending 21 per cent. more in real terms now than when we came in 1979. With reference to the pensioners, as my right hon. Friend said at the beginning of the debate, between November 1978 and November 1983 the pension has been increased by 74.6 per cent. and the retail price index has gone up by 68.8 per cent. In other words, the purchasing power of the pension is higher than when we came into office.

Reference was also made to heating. Heating additions in 1978–79 were £124 million. Heating additions in 1983–84 will be £350 million, £100 million more in real terms than when we came into office. It was this Government that made any person on supplementary benefit at the age of 70 automatically eligible for a heating allowance. That was done not by the co-called compassion lobby opposite, but by this Government out of the real money with which they were dealing.

Mr. Archy Kirkwood (Roxburgh and Berwickshire)

The Minister says the Government have been generous in the past. Does he not accept that £230 million is a flea bite in the social security budget? This saving is not worth the candle. I put it to him as objectively as I can, leaving aside the emotion. Has he not learnt the lesson that the system is so complicated that he cannot make changes in it any more without having ramifications elsewhere that cannot be estimated easily?

Dr. Boyson

The contention of the hon. Member that £230 million is a flea bite will ensure that the Liberals do not get a flea bite from this side of the House after the next general election.

The expenditure in 1984–85, after allowing for the changes on housing benefits, is £1 billion more on social security than was in last year's public expenditure White Paper, so no hon. Member can say that no expenditure is being made by this side of the House.

On the question of the housing benefits with which we are dealing, we looked at housing benefits because they go further up the income scale than any other means tested benefits. We have ensured that most supplementary pensioners are not affected at all.

Reference was made by my hon. Friend the Member for Hornsey and Wood Green (Mr. Rossi)—a concern felt, I know, by other of my hon. Friends—to those below the needs allowance. That is one of the other matters we shall look at. As my right hon. Friend said, the position of those on supplementary benefits is clear.

People on supplementary benefits are not affected. Only the changes to the high rents and the minima will affect people below the needs allowance. Nobody can say that when we came in we said, "Let's take money from those with the least money." We said, "Who needs most help?" We took the money away from those higher up when considering these benefits.

Standard benefits, as my right hon. Friend said, have gone up 140 per cent. in real terms in the past 10 years. The number of local authority tenants receiving standard benefits has gone up from 1 million to 1.4 million in five years. There has been a continuous increase.

One third of households in the country are now receiving housing benefit. Approximately 38 or 39 per cent. of the population of the country are now living in households receiving household benefits. One hon. Member from this side of the House, and my hon. Friend in his intervention, referred to the fact that the present cost of housing benefits on average is £4 in tax on every household in the country.

The expenditure on housing benefits is running ahead of the original estimate for 1983–84, which was £3.3 billion. In the light of the November 1983 uprating, we had to take supplementary provision to cover an estimated expenditure of £3.5 billion, and it is likely that we shall have to take further provision next month because of increases beyond that.

My right hon. Friend said that we will look at everything that has been said and that includes all the suggestions put forward on housing benefits. My right hon. Friend and I have read the Social Security Advisory Committee report, and have looked at it carefully. Hon Members will have the assistance of our comments on it when it is published at the time the regulations are laid.

It is as well to remind the House that, after I met the local authority leaders last October, we announced our intention to bring in about 25 variations to make the scheme easier to carry out, variations that have cost us between £3 million and £4 million, but which we are glad to do at the request of the local authorities. Whatever has been said in the House today about what local authorities have done on housing benefits, I believe that the vast majority of local authorities have done their best to implement the scheme. The information coming in—and I met the local authorities only three weeks ago—is that it is now largely turning over. Indeed, the Association of Metropolitan Authorities said that the housing benefit scheme has recently moved into a more stable position and that local authorities are now generally beginning to cope with the new scheme.

We will take note of what has been said in the debate, and we will consider what has been said by the National Association of Citizens Advice Bureaux. We read their material yesterday. One must say that most of that material covers the first three months of last year when the new system was just beginning.

My right hon. Friend said in his speech: I shall examine carefully the arguments put to me about the cumulative effects upon particular households. Before laying the regulations I shall want to be sure that we have made full allowance for this aspect. If it seems that the proposed changes might affect some households too harshly, especially in the shorter term, I shall be ready to consider modifying them.

We must keep expenditure under control or inflation will destroy the savings of occupational pensioners and the value of their non-indexed pensions, as happened under the last Labour Government, to the concern of my right hon. and hon. Friends, but with little or no concern to hon. Members on the Opposition Front Bench.

Question put, That the original words stand part of the Question:—

The House divided: Ayes, 198; Noes, 330.

Division No. 130]	[7.00 pm
AYES
Anderson, Donald	Davies, Ronald (Caerphilly)
Archer, Rt Hon Peter	Davis, Terry (B'ham, H'ge H'l)
Ashley, Rt Hon Jack	Deakins, Eric
Ashton, Joe	Dewar, Donald
Atkinson, N. (Tottenham)	Dixon, Donald
Bagier, Gordon A. T.	Dobson, Frank
Banks, Tony (Newham NW)	Dormand, Jack
Barnett, Guy	Douglas, Dick
Barren, Kevin	Dubs, Alfred
Beckett, Mrs Margaret	Dunwoody, Hon Mrs G.
Beggs, Roy	Eadie, Alex
Bell, Stuart	Eastham, Ken
Bennett, A. (Dent'n & Red'sh)	Edwards, R. (W'hampt'n SE)
Bermingham, Gerald	Ellis, Raymond
Bidwell, Sydney	Evans, loan (Cynon Valley)
Boothroyd, Miss Betty	Evans, John (St. Helens N)
Bowden, A. (Brighton K'to'n)	Fatchett, Derek
Boyes, Roland	Faulds, Andrew
Bray, Dr Jeremy	Field, Frank (Birkenhead)
Brown, Hugh D. (Provan)	Fields, T. (L'pool Broad Gn)
Brown, N. (N'c'tle-u-Tyne E)	Fisher, Mark
Brown, Ron (E'burgh, Leith)	Flannery, Martin
Callaghan, Rt Hon J.	Foot, Rt Hon Michael
Callaghan, Jim (Heyw'd & M)	Forrester, John
Campbell, Ian	Foster, Derek
Campbell-Savours, Dale	Foulkes, George
Carlile, Alexander (Montg'y)	Fraser, J. (Norwood)
Carter-Jones, Lewis	Freeson, Rt Hon Reginald
Cartwright, John	Fry, Peter
Clark, Dr David (S Shields)	Garrett, W. E.
Clarke, Thomas	Gilbert, Rt Hon Dr John
Clay, Robert	Golding, John
Cocks, Rt Hon M. (Bristol S.)	Gould, Bryan
Cohen, Harry	Hamilton, James (M'well N)
Coleman, Donald	Hamilton, W. W. (Central Fife)
Concannon, Rt Hon J. D.	Harman, Ms Harriet
Conlan, Bernard	Harrison, Rt Hon Walter
Cook, Frank (Stockton North)	Hattersley, Rt Hon Roy
Cook, Robin F. (Livingston)	Haynes, Frank
Corbyn, Jeremy	Heffer, Eric S.
Cowans, Harry	Hogg, N. (C'nauld & Kilsyth)
Cox, Thomas (Tooting)	Holland, Stuart (Vauxhall)
Craigen, J. M.	Home Robertson, John
Crowther, Stan	Howell, Rt Hon D. (S'heath)
Cunningham, Dr John	Howells, Geraint
Davies, Rt Hon Denzil (L'lli)	Hoyle, Douglas

Hughes, Mark (Durham)	Parry, Robert
Hughes, Robert (Aberdeen N)	Patchett, Terry
Hughes, Roy (Newport East)	Pavitt, Laurie
Hughes, Sean (Knowsley S)	Pendry, Tom
Janner, Hon Greville	Pike, Peter
Jenkins, Rt Hon Roy (Hillh'd)	Powell, Rt Hon J. E. (S Down)
John, Brynmor	Powell, Raymond (Ogmore)
Jones, Barry (Alyn & Deeside)	Prescott, John
Kaufman, Rt Hon Gerald	Randall, Stuart
Kennedy, Charles	Redmond, M.
Kilfedder, James A.	Rees, Rt Hon M. (Leeds S)
Kilroy-Silk, Robert	Richardson, Ms Jo
Kinnock, Rt Hon Neil	Roberts, Ernest (Hackney N)
Kirkwood, Archibald	Robertson, George
Lambie, David	Robinson, G. (Coventy NW)
Lamond, James	Robinson, P. (Belfast E)
Leadbitter, Ted	Rogers, Allan
Leighton, Ronald	Rooker, J. W.
Lewis, Ron (Carlisle)	Ross, Ernest (Dundee W)
Lewis, Terence (Worsley)	Rowlands, Ted
Litherland, Robert	Ryman, John
Lloyd, Tony (Stretford)	Sedgemore, Brian
Lofthouse, Geoffrey	Sheerman, Barry
Loyden, Edward	Sheldon, Rt Hon R.
McCartney, Hugh	Shore, Rt Hon Peter
McCrea, Rev William	Short, Ms Clare (Ladywood)
McCusker, Harold	Short, Mrs R.(W'hampfn NE)
McDonald, Dr Oonagh	Skinner, Dennis
McGuire, Michael	Smith, C.(Isl'ton S & F'bury)
McKelvey, William	Smith, Rt Hon J. (M'kl'ds E)
Mackenzie, Rt Hon Gregor	Smyth, Rev W. M. (Belfast S)
McNamara, Kevin	Snape, Peter
McTaggart, Robert	Stewart, Rt Hon D. (W Isles)
Madden, Max	Stott, Roger
Maginnis, Ken	Straw, Jack
Marek, Dr John	Thomas, Dafydd (Merioneth)
Marshall, David (Shettleston)	Thompson, J. (Wansbeck)
Martin, Michael	Thorne, Stan (Preston)
Mason, Rt Hon Roy	Tinn, James
Maxton, John	Torney, Tom
Maynard, Miss Joan	Walker, Cecil (Belfast N)
Meacher, Michael	Wardell, Gareth (Gower)
Michie, William	Wareing, Robert
Mikardo, Ian	Weetch, Ken
Millan, Rt Hon Bruce	White, James
Molyneaux, Rt Hon James	Wigley, Dafydd
Morris, Rt Hon A. (W'shawe)	Williams, Rt Hon A.
Morris, Rt Hon J. (Aberavon)	Wilson, Gordon
Nellist, David	Winnick, David
Nicholson, J.	Woodall, Alec
Oakes, Rt Hon Gordon	Young, David (Bolton SE)
O'Brien, William
O'Neill, Martin	Tellers for the Ayes:
Paisley, Rev Ian	Mr. John McWilliam and
Park, George	Mr. Allen McKay.
NOES
Adley, Robert	Bonsor, Sir Nicholas
Aitken, Jonathan	Bottomley, Peter
Alexander, Richard	Bowden, Gerald (Dulwich)
Alison, Rt Hon Michael	Boyson, Dr Rhodes
Amess, David	Brandon-Bravo, Martin
Ancram, Michael	Bright, Graham
Arnold, Tom	Brinton, Tim
Ashby, David	Brittan, Rt Hon Leon
Aspinwall, Jack	Brooke, Hon Peter
Atkins, Rt Hon Sir H.	Bruinvels, Peter
Atkins, Robert (South Ribble)	Bryan, Sir Paul
Baker, Kenneth (Mole Valley)	Buchanan-Smith, Rt Hon A.
Baker, Nicholas (N Dorset)	Buck, Sir Antony
Banks, Robert (Harrogate)	Budgen, Nick
Batiste, Spencer	Bulmer, Esmond
Bellingham, Henry	Burt, Alistair
Bendall, Vivian	Butcher, John
Benyon, William	Butler, Hon Adam
Berry, Sir Anthony	Butterfill, John
Bevan, David Gilroy	Carlisle, John (N Luton)
Biffen, Rt Hon John	Carlisle, Kenneth (Lincoln)
Biggs-Davison, Sir John	Carttiss, Michael
Body, Richard	Chalker, Mrs Lynda

Chapman, Sydney	Heathcoat-Amory, David
Churchill, W. S.	Henderson, Barry
Clark, Hon A. (Plym'th S'n)	Hickmet, Richard
Clark, Dr Michael (Rochford)	Higgins, Rt Hon Terence L.
Clark, Sir W. (Croydon S)	Hill, James
Clarke Kenneth (Rushcliffe)	Hind, Kenneth
Clegg, Sir Walter	Hirst, Michael
Cockeram, Eric	Hogg, Hon Douglas (Gr'th'm)
Colvin, Michael	Holland, Sir Philip (Gedling)
Conway, Derek	Holt, Richard
Coombs, Simon	Hooson, Tom
Cope, John	Hordern, Peter
Cormack, Patrick	Howard, Michael
Corrie, John	Howarth, Alan (Stratf'd-on-A)
Couchman, James	Howarth, Gerald (Cannock)
Cranborne, Viscount	Howell, Ralph (N Norfolk)
Critchley, Julian	Hubbard-Miles, Peter
Crouch, David	Hunt, David (Wirral)
Currie, Mrs Edwina	Hunt, John (Ravensbourne)
Dickens, Geoffrey	Hunter, Andrew
Dorrell, Stephen	Hurd, Rt Hon Douglas
Douglas-Hamilton, Lord J.	Jessel, Toby
Dover, Denshore	Johnson-Smith, Sir Geoffrey
du Cann, Rt Hon Edward	Jones, Gwilym (Cardiff N)
Dunn, Robert	Jones, Robert (W Herts)
Durant, Tony	Jopling, Rt Hon Michael
Edwards, Rt Hon N. (P'broke)	Joseph, Rt Hon Sir Keith
Eggar, Tim	Key, Robert
Emery, Sir Peter	King, Roger (B'ham N'field)
Evennett, David	King, Rt Hon Tom
Eyre, Reginald	Knight, Gregory (Derby N)
Fallon, Michael	Knight, Mrs Jill (Edgbaston)
Farr, John	Knowles, Michael
Favell, Anthony	Knox, David
Fenner, Mrs Peggy	Lamont, Norman
Finsberg, Geoffrey	Lang, Ian
Fletcher, Alexander	Latham, Michael
Fookes, Miss Janet	Lawler, Geoffrey
Forman, Nigel	Lawson, Rt Hon Nigel
Forsyth, Michael (Stirling)	Lee, John (Pendle)
Forth, Eric	Leigh, Edward (Gainsbor'gh)
Fowler, Rt Hon Norman	Lennox-Boyd, Hon Mark
Fox, Marcus	Lewis, Sir Kenneth (Stamf'd)
Franks, Cecil	Lightbown, David
Fraser, Peter (Angus East)	Lilley, Peter
Freeman, Roger	Lloyd, Ian (Havant)
Gale, Roger	Lloyd, Peter, (Fareham)
Galley, Roy	Lord, Michael
Gardiner, George (Reigate)	Luce, Richard
Gardner, Sir Edward (Fylde)	Lyell, Nicholas
Garel-Jones, Tristan	McCrindle, Robert
Gilmour, Rt Hon Sir Ian	McCurley, Mrs Anna
Glyn, Dr Alan	Macfarlane, Neil
Goodlad, Alastair	MacGregor, John
Gorst, John	MacKay, Andrew (Berkshire)
Gow, Ian	MacKay, John (Argyll & Bute)
Gower, Sir Raymond	Maclean, David John.
Grant, Sir Anthony	Macmillan, Rt Hon M.
Greenway, Harry	McNair-Wilson, P. (New F'st)
Gregory, Conal	McQuarrie, Albert
Griffiths, E. (B'y St Edm'ds)	Major, John
Griffiths, Peter (Portsm'th N)	Malins, Humfrey
Ground, Patrick	Malone, Gerald
Grylls, Michael	Maples, John
Gummer, John Selwyn	Marland, Paul
Hamilton, Hon A. (Epsom)	Marlow, Antony
Hamilton, Neil (Tatton)	Marshall, Michael (Arundel)
Hanley, Jeremy	Mates, Michael
Hannam, John	Maude, Francis
Hargreaves, Kenneth	Mawhinney, Dr Brian
Harris, David	Maxwell-Hyslop, Robin
Harvey, Robert	Mayhew, Sir Patrick
Haselhurst, Alan	Mellor, David
Havers, Rt Hon Sir Michael	Merchant, Piers
Hawkins, C. (High Peak)	Miller, Hal (B'grove)
Hawksley, Warren	Mills, Iain (Meriden)
Hayes, J.	Mills, Sir Peter (West Devon)
Hayhoe, Barney	Miscampbell, Norman
Hayward, Robert	Mitchell, David (NW Hants)
Heath, Rt Hon Edward	Moate, Roger

Monro, Sir Hector	Speller, Tony
Montgomery, Fergus	Spence, John
Moore, John	Spencer, D.
Morrison, Hon C. (Devizes)	Spicer, Jim (W Dorset)
Morrison, Hon P. (Chester)	Spicer, Michael (S Worcs)
Moynihan, Hon C.	Squire, Robin
Mudd, David	Stanley, John
Murphy, Christopher	Steen, Anthony
Neale, Gerrard	Stern, Michael
Needham, Richard	Stevens, Lewis (Nuneaton)
Nelson, Anthony	Stevens, Martin (Fulham)
Neubert, Michael	Stewart, Allan (Eastwood)
Newton, Tony	Stewart, Andrew (Sherwood)
Nicholls, Patrick	Stewart, Ian (N Hertf'dshire)
Normanton, Tom	Stokes, John
Norris, Steven	Stradling Thomas, J.
Onslow, Cranley	Sumberg, David
Oppenheim, Philip	Tapsell, Peter
Ottaway, Richard	Taylor, Teddy (S'end E)
Page, John (Harrow W)	Tebbit, Rt Hon Norman
Page, Richard (Herts SW)	Temple-Morris, Peter
Parkinson, Rt Hon Cecil	Terlezki, Stefan
Parris, Matthew	Thatcher, Rt Hon Mrs M.
Patten, John (Oxford)	Thompson, Donald (Calder V)
Pattie, Geoffrey	Thompson, Patrick (N'ich N)
Pawsey, James	Thorne, Neil (Ilford S)
Peacock, Mrs Elizabeth	Thornton, Malcolm
Percival, Rt Hon Sir Ian	Thurnham, Peter
Pink, R. Bonner	Townend, John (Bridlington)
Pollock, Alexander	Townsend, Cyril D. (B'heath)
Powell, William (Corby)	Tracey, Richard
Powley, John	Trippier, David
Prentice, Rt Hon Reg	Trotter, Neville
Prior, Rt Hon James	Twinn, Dr Ian
Proctor, K. Harvey	van Straubenzee, Sir W.
Raffan, Keith	Vaughan, Dr Gerard
Raison, Rt Hon Timothy	Viggers, Peter
Rathbone, Tim	Waddington, David
Rees, Rt Hon Peter (Dover)	Wakeham, Rt Hon John
Renton, Tim	Waldegrave, Hon William
Rhodes James, Robert	Walden, George
Ridley, Rt Hon Nicholas	Walker, Bill (T'side N)
Rifkind, Malcolm	Walker, Rt Hon P. (W'cester)
Rippon, Rt Hon Geoffrey	Waller, Gary
Roberts, Wyn (Conwy)	Walters, Dennis
Roe, Mrs Marion	Ward, John
Rossi, Sir Hugh	Wardle, C. (Bexhill)
Rost, Peter	Warren, Kenneth
Rumbold, Mrs Angela	Watson, John
Ryder, Richard	Watts, John
Sackville, Hon Thomas	Wells, John (Maidstone)
Sainsbury, Hon Timothy	Whitfield, John
Sayeed, Jonathan	Whitney, Raymond
Scott, Nicholas	Wiggin, Jerry
Shaw, Giles (Pudsey)	Winterton, Mrs Ann
Shaw, Sir Michael (Scarb')	Winterton, Nicholas
Shelton, William (Streatham)	Wood, Timothy
Shepherd, Richard (Aldridge)	Woodcock, Michael
Shersby, Michael	Yeo, Tim
Silvester, Fred	Young, Sir George (Acton)
Sims, Roger
Skeet, T. H. H.	Tellers for the Noes:
Smith, Tim (Beaconsfield)	Mr. Carol Mather and
Soames, Hon Nicholas	Mr. Robert Boscawen.
Speed, Keith

Question accordingly negatived.

Question, That the proposed words be there added, put forthwith pursuant to Standing Order No. 33 (Questions on amendments), and agreed to.

Mr. Speaker

forthwith declared the main Question, as amended, to be agreed to.

Resolved,

That this House notes that even after the changes in housing benefits announced as a result of the Chancellor's Autumn Statement, expenditure on social security benefits, including housing benefits, will continue to rise in real terms in 1984–85; considers that the greatest help Her Majesty's Government can give occupational pensioners and all social security beneficiaries is to conquer inflation; and congratulates the Government on the substantial progress made in bringing inflation down to the lowest levels for 15 years.